Foreign Equity and Professionals NewsLegislation NewsPart 4 News: General Business Environment

Economic Cha-cha set for Dec House debate

Jovee Marie de la Cruz | BusinessMirror | October 28, 2019

Citing the need to liberalize the restrictive economic policies of the Philippines, the chairman of the House Committee on Constitutional Amendments said the House of Representatives will start in December the plenary debates on the measure amending the economic provisions of the 1987 Constitution.

Cagayan De Oro Rep. Rufus Rodriguez, the panel chairman, said there is already “a large consensus” in favor of amending the Constitution by lifting the restrictive economic provisions of the 32-year-old Charter.

“In December, the committee will approve [at least] these economic amendments and it [the measure] will be brought to the plenary for debates,” he added.

Before transmitting the amendments to the Constitution or the economic Charter change to the plenary, Rodriguez said his committee will first hold regional consultations on the measure.

“Our Committee on Constitutional Amendment has conducted three hearings already last September. In November we will have regional consultations,” he added.

According to Rodriguez, such economic Charter amendments will allow more foreign investments and increase employment in the Philippines.

Constraints to growth

Earlier, the Joint Foreign Chambers of the Philippines (JFC), which backed the economic Cha-cha, said restrictions on foreign investment make the economy less competitive by imposing constraints to growth that result in lower investments, fewer jobs, poorer infrastructure and less inclusive development.

The group said the Philippines is one of the most restrictive countries in 11 sectors measured by the World Bank in its “Investing Across Borders 2012” report that surveyed 105 economies.

JFC recommended the removal of the restrictions at the earliest date, saying this can best be accomplished by deleting the restrictions without adding the phrase “unless otherwise provided by law”—a shortcut earlier suggested by some lawmakers, including Rodriguez.

The group also noted that there have been major economic changes since the 1973 and 1987 constitutions were drafted.

Rodriguez said these constitutional amendments will further improve the rank of the Philippines in the World Bank Ease of Doing Business (EODB) report as proven by the 29-notch leap from 124th to 95th in the annual report.

For his part, House Committee on Ways and Means Chairman Joey Sarte Salceda said the lifting of restrictive economic provisions of the Constitution will greatly boost the economy, as the constitutional restrictions represent the biggest source of rigidity.

Deputy Speaker Michael Romero said the Philippines’s ability to leapfrog into the circle of nations with the best ease of doing business systems in place, as well as the positive peace and order situation will boost investors’ confidence—making economic progress “sweet and very long” for the country.

Pending measures

In the 18th Congress, there are several pending measures seeking to amend certain provisions of the 1987 Constitution.

These measures seek to amendment Articles VI (Legislative Department), X (Local Government), XII (National Patrimony), XIV (Education, Science and Technology, Arts, Culture and Sports) and XVI (General Provisions) of the 1987 Constitution of the Republic of the Philippines.

One of these measures—House Concurrent Resolution 1—is authored by Rodriguez. According to Rodriguez, he considered the version of the Consultative Commitee in filing the measure.

The Consultative Committee, chaired by former Chief Justice Reynato S. Puno, and its senior member, the late former Senate President Aquilino Q. Pimentel Jr., led the review the 1987 Constitution. It transmitted to the Office of the President its proposed changes to the Charter in July 2018. Its main provision is to create 18 federated regions with more autonomy to control and utilize their revenues.

The Rodriguez resolution seeks to amend the provisions of the Constitution, particularly Section 2, Section 3, Section 4, Section 7, Section 10, Section 11, of Article XII or the National Patrimony and Economy by inserting the phrase “unless otherwise provided by law.” These amendments seek to relax the restrictive foreign ownership to attract more foreign direct investment.

Besides amending the economic provisions of the Charter, Rodriguez’s resolution also seeks a presidential bicameral-federal system of government.