Costly ‘mistake’

In the last few days, President Benigno “Noy” Aquino III has been trumpeting how the Philippine economy has grown by leaps and bounds under his administration during the past five years. Now on the last stretch of his six-year term, the President cannot be begrudged his continuing to make sales pitches to attract foreign and local investors even in his remaining days at Malacañang.

The President took this opportunity in his opening address at the Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ Meeting in Cebu last Thursday. The next day, President Aquino highlighted anew the performance of the Philippine economy before participants and delegates attending the 23rd Pacific Economic Cooperation Council (PECC) general meeting at the Sofitel Philippine Plaza in Roxas Boulevard.

From 2010 to 2014, the President cited, the Philippine economy posted a gross domestic product (GDP)) growth rate of 6.2 percent – “the fastest period of economic growth for our country in four decades.” President Aquino also noted “the Philippines received 22 positive credit rating actions – the most prominent of which occurred in 2013, when the world’s most prominent agencies unanimously gave the country investment grade rating.”

In the last five years, the President pointed to the country’s improving by several notches in the global competitiveness ranking – from 85th to 52nd in the World Economic Forum’s Global Competitiveness Index, and from 144th to 95th in the World Bank’s Ease of Doing Business Report, among other indices.

But while indeed these are very good performance indicators, a large part of the Philippine economy remains close to foreign investments, largely due to ownership restrictions embedded in the fundamental laws – our 1987 Constitution. They continue to turn away overseas investors despite our country’s new investment-grade status and credit ratings.

Framed in the aftermath of the 1986 EDSA people power revolution against the Marcos dictatorship, our country’s Constitution contained rather restrictive provisions no longer compatible with world realities of seamless global economies of the present time.

But since the Constitution was framed during the term of his late mother, former President Corazon Aquino, P-Noy would hear none of the proposals to touch the Charter no matter how well meaning the economic amendments may be.

Then why make these sales pitches if the Philippine economy is not even open to all investors?

Leaders from the business and academic communities, including many of our political leaders, back a Charter makeover to let the Philippines keep up with – or even surpass – our more prosperous Association of Southeast Asian (ASEAN) neighbors. But they believe that a quicker and easier approach is for both the Senate and the House of Representatives to just pass a pending measure that aims to lift constitutional restrictions on foreign ownership.

Authored by Speaker Feliciano Belmonte Jr., this measure is Resolution of Both Houses No. 1 (RBH 1), which seeks to add a five-word phrase – “unless otherwise provided by law” – to seven (7) economic provisions of the country’s 1987 Constitution. A counterpart measure was filed in the Senate by Sen. Ralph Recto.

By simple legislation as the means to amend the 1987 Charter – not the tedious and time-consuming modes of amending it, if not more expensive and divisive means – would require approval by both chambers of Congress and then subjected to a plebiscite.

The inclusion of the phrase in the proposed constitutional amendment would lift existing restrictions and allow greater participation of foreign capitalists in Philippine businesses ranging from agriculture and mining to public utilities and mass media.

Any constitutional amendment – unlike ordinary legislation – requires absolute three-fourths votes by both chambers of Congress. Thus, for RBH 1 to move on to a plebiscite, it needs to muster at least 217 votes in the 289-member House of Representatives and at least 18 votes in the 24-member Senate.

But once approved by the 16th Congress, RBH 1 does not have to be signed by President Aquino into law like any regular enrolled bill passed by both chambers. It merely needs to be ratified. Perhaps if there is still time for the Commission on Elections (Comelec), this could be done through a plebiscite synchronized with the May, 2016 polls.

Since RBH 1 is in advanced stage of the legislative mill at the lower chamber, there is still enough time for both the House and the Senate to do it. The 16th Congress still has more than six working months until it adjourns in February next year ahead of May’s national elections.

As of this date, the RBH 1 is up for plenary voting at the House. But like the equally controversial Bangsamoro Basic Law (BBL), RBH 1 also needs to hurdle the quorum problem at the House. If Speaker Belmonte would be able to muster the required number of votes for the approval of RBH 1, the House leaders must be able to crack the whip on absentee lawmakers.

The most damning evidence that something is wrong with the 1987 Charter was the candid admission by one of its framers – economist Bernardo Villegas. Speaking for himself, Villegas admitted one “mistake” of the Constitutional Commission (ConCom) was their collective failure to give the resurrected Congress “flexibility” to let the country best adapt to changing global conditions.

”That is why, the formula suggested by Speaker (Feliciano) Belmonte et. al. (adding a clause stating “unless otherwise provided by law”) gives our Congress the flexibility to adapt legislation to changing circumstances,” Villegas pointed out. “Speaker Belmonte will be remembered by posterity as the legislator who planted the seeds for the eventual triumph of authentic nationalism,” he averred.

Our country has been paying for this costly “mistake” in terms of lost opportunities. Unfortunately for us, our lost opportunities are gains for our neighboring countries that have openly welcomed these foreign investments in to their economies.