Lifting foreign equity restrictions on critical sectors, such as public utilities, education, mass media and advertising, will create more jobs and enable them to contribute to the country’s economic progress, according to the National Economic and Development Authority (Neda).
Socioeconomic Planning Secretary Arsenio M. Balisacan said in his opening statement during a committee hearing at the House of Representatives on Monday that the Constitution must be updated to prepare the country for the future.
“President Marcos has given his directive: the Constitution must be updated to meet the daunting challenges of the present and prepare us for the uncertainties and complexities of the future,” said Balisacan.
He said opening up public utilities to foreign investment will improve the quality and affordability of services, such as energy and water distribution, and offer viable options to address the financing gaps in the infrastructure sector.
“In the education sector, this initiative will ensure that Filipinos can access global knowledge, skills, and technology that can nurture a culture of innovation, positioning the Philippines as a competitive hub for knowledge exchange in the region,” he said.
In this era of globalization, Balisacan said allowing foreign investment in mass media will enable local media professionals to increase their global presence.
“More importantly, this will allow the industry to modernize, expand markets, and keep pace with international trends,” he added.
As for advertising, he said foreign investment will introduce new ideas, technologies, and best practices that can enhance the effectiveness and reinvigorate the creative excellence of the Philippine advertising industry.
Aside from the Neda, the Department of Finance (DOF), the Bangko Sentral ng Pilipinas (BSP) and the Department of Trade and Industry (DTI) also expressed support for the proposed economic amendments to the 1987 Philippine Constitution “to achieve rapid and inclusive economic growth.”
The DTI noted that restrictions on foreign direct investments (FDI) in these sectors are enshrined directly in the Constitution rather than in an investment law or sectoral legislation.
“Increased investments expand the economy and create jobs. Access to world-class education and research facilities nurture a culture of innovation, entrepreneurship and creativity among Filipino students, teachers, and researchers,” the DTI said in a statement read by Trade Assistant Secretary Agaton O. Uvero.
“Allowing for foreign participation in mass media allows more convergence of media, information technology and telecommunication industries. Collaboration with global counterparts enriches local expertise, refines skills, and positions the Philippines as a hub for creative excellence in advertising,” he added.
Finance Undersecretary Zeno Ronald Abenoja said the DOF also proposed the outright deletion of foreign restrictions in education, mass media, and advertising due to the need for a policy environment “adaptable to current realities.”
Abenoja proposed the insertion of the phrase “unless otherwise provided by law” to allow Congress flexibility in enacting laws for public utilities and resource exploration. The DOF viewed these amendments as part of a broader package aimed at enhancing FDI.
“This will also send a clear signal to the international community that the Philippines is open for business, making way for foreign investments. As a result, liberal foreign ownership rules would stimulate economic productivity, growth, employment generation, and healthy competition. Hence, it would be beneficial to delete references to preferential treatment of Filipino citizens in the aforementioned fields, as currently provided in the Constitution,” he added.
‘Complementary strategy’
Balisacan said, however, that amending the Constitution is not a panacea for all of the country’s economic woes.
“To be sure, this initiative will not solve all our economic ills. Amending these economic provisions is one complementary strategy to unlock the country’s economic potential,” he said.
“Let me emphasize that we only reap the benefits I mentioned if we also address the other problems involving energy costs, inadequate connectivity infrastructure, slow bureaucratic processes, inconsistent local and national regulations, and highly concerning learning poverty and malnutrition,” he added.
Balisacan said a policy environment promoting openness to foreign investment can exert more significant pressure on the government to urgently address the complex challenges he mentioned.
“I urge our legislators to proceed with deliberation and prudence in considering these amendments. Let us work together to ensure that any of the changes we make are not only responsive to the needs of our time but also serve as the foundation for a more prosperous, resilient, and inclusive future for all Filipinos,” he said.
As a member of the academic community and student of Philippine economic development, Balisacan said he witnessed how the Philippines missed “several chances” to attract FDIs, technological know-how, and managerial talent that it needs to raise its productivity and competitiveness.
“Though we have made significant progress, our neighbors have proceeded at a far more desirable pace. We must catch up, not be held back by uncompetitive markets dominated by a few players, expensive inputs that result in higher prices for end-consumers, and incomplete value chains that prevent us from producing more technologically complex goods and services,” he added.