`
Eyeing to create about 2 million jobs and double foreign investments in the Philippines, the House of Representatives on Wednesday approved on second reading Resolution of Both Houses (RBH) No. 7, lifting foreign equity on education, public utilities, and advertising of the 1987 Constitution.
Through viva voce, lawmakers approved RBH 7, entitled “A Resolution of Both Houses of Congress Proposing Amendments to Certain Economic Provisions of the 1987 Constitution of the Republic of the Philippines, Particularly on Articles Xll, XlV, and XVl.”
The final approval of the RBH 7 is expected next week, after which it will be transmitted to the Senate.
RBH No. 7 is almost an exact reproduction of RBH No. 6, introduced by Senate President Juan Miguel Zubiri and Senators Loren Legarda and Juan Edgardo Angara.
The proposed House and Senate changes are on the grant of legislative franchises to and ownership of public utilities in Article Xll, the ownership of basic educational facilities in Article XlV, and advertising firms in Article XVl.
The suggested principal amendments are the insertion of the phrase, “unless otherwise provided by law,” which would empower Congress to lift or relax present economic restrictions in the nation’s basic law, and the addition of the qualifier “basic” in Article XlV.
RBH No. 7 and RBH No. 6 also restate the provision of the Constitution that Congress may propose amendments “upon a vote of three-fourths of all its members.”
House Committee on Appropriations Vice Chairman Teodorico Haresco Jr. said adopting economic amendments to the Constitution, particularly the removal of barriers to foreign ownership, could lead to the creation of around two million jobs and support the ongoing efforts of the Marcos administration to reduce the unemployment rate.
“Removing economic restrictions on foreign investment in our Constitution is the lowest hanging fruit, especially for an emerging economy like ours,” Haresco said.
Referring to a 2020 study by the UP Research and Extension Services Foundation-Regulatory Reform Support Program for National Development (UPPAF-RESPOND), Haresco highlighted that opening up the economy to foreign investors by amending restrictive economic provisions in the 1987 Constitution could generate 1.6 million jobs and potentially double foreign direct investment (FDI) to approximately USD 16.2 billion (P 777 billion), adding to the existing USD 9.2 billion recorded in 2022.
Haresco presented data indicating that the Philippines lags behind its ASEAN neighbors, ranking last in cumulative FDI inflows among the five largest ASEAN economies—Indonesia, Malaysia, the Philippines, Singapore, and Thailand—from 2010 to 2020.
“We hold the highest foreign investment restrictions among the ASEAN-5 because of the limitations set in our Constitution, and it’s also the reason why we cannot maximize foreign investments, which could generate jobs and alleviate poverty,” the veteran economist-solon said.
Reports indicate that the leading industries for foreign investments in ASEAN are financial and insurance services (31.2%), manufacturing (23.7%), wholesale and retail trade, repair of motor vehicles and motorcycles (15.1%), transportation and storage (10.3%), and real estate activities (5.0%).
In December 2023, data from the Philippine Statistics Authority (PSA) revealed the country’s lowest unemployment rate in nearly two decades, at 3.1%. However, by January 2024, it had risen to 4.5%.
According to PSA reports, the services sector led in terms of the number of employed persons with a share of 58.2%, followed by the agriculture sector with 23.8%, and the industry with 18%.
“The fruits of our economic and fiscal policies in the past decade are almost ripe. It’s high time we removed the barriers so not only a few benefits. Our country must work together with the global community so we can reap this bountiful harvest and have the Filipino people and their families benefit from our labor of love,” Haresco added.
‘Risky investor’
Cagayan de Oro City Rep. Rufus Rodriguez said on Wednesday that Congress can exclude China and other “risky” investors from the enabling law on foreign investments in case the proposed economic amendments to the Constitution are ratified.
He said the phrase, “unless otherwise provided by law,” which is proposed to be inserted in the Charter’s restrictive economic provisions to give Congress the power to change foreign investment limitations, would not mean that all foreign capital would be accepted.
He said Congress can include a “screening process” in the enabling law that would prevent countries that have a conflict with the Philippines from coming in with their investments.
“I can mention one, and that is China, with which we have a dispute over the West Philippine Sea,” he added.
“In other words, Congress can craft a law to make sure that risky countries or investments with implications for our national interest and security can be checked and barred from coming in,” he stressed.
The Makabayan bloc of House members has expressed concern that China might control the country’s electricity generation and transmission if these are opened to full ownership by foreigners.
At present, they said transmission is 40 percent controlled by China.
Rodriguez cited the examples of the United States and the United Kingdom, where similar legislation exists.
He said that in 2018, the US enacted its Foreign Investment Risk Review Modernization Act to monitor and screen foreign capital.
“Their obvious targets were Russia and China, with which they are in conflict,” he said.
Three years later, he said the UK passed its National Security and Investment Act of 2021.
He said the Philippine Congress can pattern an enabling law on foreign investments after the US and UK legislation if the proposed amendments to the Constitution’s economic provisions are ratified by the people in a plebiscite.
No-term extension
In response to former President Rodrigo Roa Duterte’s persistent assertions, House leaders unequivocally denied any intention of pursuing term extensions through the ongoing constitutional amendment process.
House Committee on Muslim Affairs Chairman Mohamad Khalid Dimaporo and Assistant Majority Leader Francisco Paolo Ortega emphasized that the primary objective is exclusively centered on amending the restrictive economic provisions embedded in the 1987 Constitution.
“It’s very clear; it’s in black and white that we’re only dealing specifically with the economic provisions,” Dimaporo said during the regular daily press conference at the House of Representatives.
The lawmaker was referring to two identical resolutions being discussed in both the House and the Senate, focusing on amending particular economic constitutional provisions related to public utilities, education, and advertising.
Dimaporo acknowledged Duterte’s esteemed reputation in Mindanao but suggested a potential lack of awareness regarding the ongoing economic amendment discussions in Congress.
Ortega emphasized that discussions related to constitutional amendments have been strictly confined to economic matters. “It’s purely economic Cha-cha.”
Duterte has consistently asserted that the primary aim of the Charter change efforts is to extend the term of incumbent elective officials, particularly President Ferdinand “Bongbong” R. Marcos Jr.
Input your search keywords and press Enter.
