Economic Cha-cha pitched anew in House hearings

As the plenary deliberations for Charter change begin on Monday (February 15), economist-lawmakers said the Resolution of Both Houses (RBH) No. 2 is necessary for the country to have the flexibility to respond to inevitable changes in world economic conditions.

In a letter to House Committee on Constitutional Amendments Chairman and AKO Bicol Party-list Rep. Alfredo Garbin Jr., Marikina Rep. Stella Luz Quimbo emphasized that “the only permanent thing in an economy is change.”

As the country prepares for economic recovery post-pandemic, Quimbo, however, added that “we need to act now. We need to introduce flexibility into the economic provisions of our Constitution so that the Legislature has leg room to steer the economy according to the demands of the time.”

She continued: “If the Constitution holds important economic structures such as control over capital, access to resources, barriers to entry as fixed, we will be left behind.”

Contrary to concerns that the proposed amendments would allow for the unregulated influx of foreign capital that would threaten local industries, Quimbo said “the proposal under RBH2 is not a free pass for all foreign investments to come in.”

That, she pointed out, “is the brilliance of it—it provides flexibility but still allows the legislature to address the fear of some of our countrymen that we will be inundated with foreign business leaving local industry to wither away.”

According to Quimbo, the phrase to be added, ‘unless otherwise provided by law,’ is “both liberating and serves as a protection clause. It allows our economic regulations to evolve with the times.”

The legislator pointed out that as  1987 Constitutional Commission member Dr. Bernardo Villegas had said in the Committee’s hearings, the economic provisions in the Constitution were originally written when the Philippines was the “Sick Man of Asia” and “had little to gain from opening up and arguably more to gain from protectionist policies.”

Today, she added, “the Philippine economy has metamorphosed. Like a Phoenix rising from the ashes, it was, prior to Covid, one of the most promising developing economies, slated to move up to upper-middle-income status in 2020.”

The pandemic showed, however, “that such status can only be achieved if we are in a better position to compete for foreign investments, which we are fast losing to countries such as Vietnam,” warned the lawmaker.

Benefits

For his part, Ways and Means Committee Chairperson and Albay 2nd District Rep. Joey Salceda, listed the following among the benefits of amending the restrictive economic provisions of the Constitution— more foreign investments, more competition and better services for Filipino consumers.

Salceda explained that foreign investors coming in as new players in different industries would provide local players much-needed competition that ultimately benefit consumers.

“It’s not just because it [FDI] is a source of capital. Consumer welfare requires competition, and FDI restrictions protect the oligarchs, breeds oligopolies, and therefore reduces consumer welfare,” added Salceda.

Voting 64 affirmative, 3 negative with 3 abstentions, the House Committee on Constitutional Amendments has adopted Resolution of Both Houses No. 2 filed by Speaker Lord Allan Velasco seeking to give Congress the flexibility to amend the restrictive economic provisions of the 1987 Constitution to help the Philippine economy recover from Covid-19.

The resolution seeks to amend certain economic provisions of the 33-year-old Charter particularly Articles XII (National Economy and Patrimony), XIV (Education, Science, Technology, Arts, Culture and Sports) and XVI (General Provisions).

It seeks to insert the phrase “unless otherwise provided by law” to several sections of the Constitution, which restrict foreign ownership of public utilities, educational institutions, media and advertising. The addition of this phrase will allow Congress to enact laws to free up the economy to foreign investors, or maintain the status quo.