MBC urges changes to restrictive economic laws

MANILA, Philippines - Given the strong interest by foreign investors in the country, the government should consider making amendments now to the restrictive economic provisions of the Constitution to attract more investments and achieve inclusive growth, the Makati Business Club (MBC) said.

“The MBC believes that the opportune moment for addressing the restrictive economic provisions of the Constitution regarding foreign land ownership and equity participation is now upon us,” the group said in a statement yesterday.

The MBC said it is imperative that the country takes advantage of the opportunity to amend the portions of the Constitution that could further propel the country towards full progress while there is strong interest from overseas investors and there is a level of confidence that government officials would not take advantage of the amendment process to advance political agendas.

In particular, the group said it supports House Joint Resolution No. 1 filed by Speaker Feliciano Belmonte, Jr.

“We believe that this proposal—for the House and the Senate to surgically amend the restrictive economic provisions by inserting the phrase ‘unless otherwise provided by law,’ requiring the endorsement of 3/4 of each chamber, submitting the amendments to the public for approval in a plebiscite, to be followed by the necessary legislation - is a safe, streamlined, and effective way of pursuing this most significant undertaking,” the group said.

The Constitution sets a  40-percent limit on foreign ownership in the following activities: development of natural resources, investment in areas recommended by the national and planning agency to be of national interest, operation of public utility franchises, and  educational institutions, except those established by religious or mission groups.

Engagement in the advertising industry meanwhile, is limited to firms that are at least 70 percent Filipino owned.

Those which are only open to Filipino citizens are agricultural lands of public domain, ownership and management of mass media, as well as holding of executive and managing positions in the advertising industry.

The MBC said granting foreigners greater access to the Philippine economy does not equate to the diminution of Filipinos’ sovereign rights and the deprivation of economic opportunities for the Filipino people.

Even when the provisions on foreign ownership limits are amended the group said domestic interests could be protected through sensible legislation and regulation coupled with close monitoring of foreign investors’ compliance with Philippine laws, especially on the social and environmental impact of their participation in the economy.

Rather than depriving Filipinos the means to improve their lives, it noted that the expected increase in investment flows as a result of relaxing foreign ownership restrictions would translate to the acceleration of much-needed jobs generation and contribute to poverty alleviation, which are requisites for inclusive growth.

“The business community believes that increasing foreign participation in our economy would be a welcome development, as it would mean a fresh infusion of financial resources for our undercapitalized sectors, the introduction of new technologies to spur greater innovation and efficiency in our industries, and the promotion of healthy competition that will lead to better-quality and more competitively priced products and services for the people,” it said.

While the group recognizes that the removal of the Constitution’s restrictions on foreign ownership is not the only factor that would lead to greater foreign direct investment flows to the country, it is time for government to make a move now given the realities and challenges of the global marketplace.

“Let us set this initiative in motion now and ensure that our country does not miss the boat to national competitiveness and progress,” it said.

President Aquino has earlier said though that he does not support making amendments to the Constitution.