Economic Cha-cha deliberations resume

MANILA, Philippines - Plenary deliberations on a proposed resolution seeking to ease restrictive economic provisions in the 1987 Constitution resumed at the House of Representatives yesterday.

Discussions on Resolution of Both Houses No. 1 (RBH1) resumed as members of the Joint Foreign Chambers (JFC) and various business groups met with Speaker Feliciano Belmonte Jr. and other House leaders on various pending economic bills, including the resolution.

Belmonte, principal author of RBH1, indicated the plenary debates may soon be terminated and will be followed by voting on the resolution on second reading.

He did not give a definite timetable for the approval of the resolution.

Plenary deliberations on RBH1 began in August. The measure is listed as one of the priority bills of the House.

RBH1 seeks to insert the phrase “unless otherwise provided by law” in some sections of the Constitution, particularly Article XII on National Economy and Patrimony; Article XIV on education, science and technology, arts, culture and sports; and Article XVI on the general provisions.

The phrase means that the constitutional restrictions on foreign ownership remain until Congress enacts specific laws to remove them.

It effectively vests on Congress the power to set restrictions on foreign ownership in key economic sectors, including public utilities, property, mass media and advertising, educational institutions and development of natural resources.

Ako Bicol party-list Rep. Rodel Batocabe defended the resolution on the floor against Gabriela party-list Rep. Luzviminda Ilagan, who warned that removing the restrictions would not lead to more investments.

Ilagan warned foreign interests could swallow the country, with Filipinos on the losing end.

“The proposed amendment does not mean we are automatically removing the restrictions, we are just providing the government, Congress, flexibility to take advantage of opportunities or protect the country in fast-changing economic developments,” Batocabe explained.

“Our economic policies must be allowed to evolve, our country had various economic phases, from purely agricultural, slowly turning to commercial and industrial, and now we’re in the data and information age,” he said.

Batocabe said there are only a few countries aside from the Philippines that have economic provisions in their respective constitutions, but they have passed laws to amend them.

He said the Constitution remains too protectionist when the global economic environment has become borderless, with transactions and trade decisions made in seconds because of technology.

“If (we) continue with our restrictions, our country will further stagnate and will be left behind by countries that have already recognized the need to open their economies to capital that now can easily be moved,” Batocabe said.

Batocabe, in an interview, said the chamber hopes to approve the resolution on second reading before Congress adjourns on Dec. 19.

Belmonte, for his part, said the proposed amendment is just a key to allow the government to adapt or take advantage of global developments.

Belmonte apprised the JFC of the urgent need to sustain the country’s economic growth to create more and better jobs for the people.

“Our unemployment and underemployment rates, while registering improvements, have remained high. Average unemployment and underemployment rates in the January, April and July 2014 Labor Force Surveys were recorded at 7.1 percent and 18.7 percent respectively – that is 2.8 million unemployed Filipino workers and seven million underemployed,” Belmonte said.

“We are determined to solidify these gains in our macroeconomic fundamentals with the enactment of laws that would further empower our monetary and fiscal authorities, while making them more accountable, to respond to the changing needs of the time,” he said.

Belmonte said the House is taking positive actions toward promoting competition and the growth of foreign direct investments, including “liberalizing very restrictive legal provisions on foreign participation in strategic sectors of our economy.”

He also pushed for amendments to the Foreign Investment Act, particularly those on the Foreign Investment Negative List.

The amendments include lowering paid-in capital requirements for foreign enterprises, redefining “export enterprises” to remove discrimination against foreign investors for BOI incentives, allowing foreign investment of up to 100 percent of equity for manufacturing and radio communication, rationalizing the entry of foreign companies in the construction, operations and maintenance of large public works projects, and the easing of restrictions on the practice of professions.

Belmonte said the House will also prioritize an anti-trust and competition law that would consolidate and update statutes on competition and establish a strong regulatory agency to deal with anti-competitive practices.