The Senate committee on constitutional amendments will review the provision of the Constitution banning foreign ownership of certain key industries as it hampers the flow of much-need ed capital and technology into the country, thus affecting economic growth, committee chairman Sen. Edgardo Angara said yesterday. Angara said he would initiate a public discussion on the issue to determine whether such a provision is still relevant in a highly-globalized economy.
He pointed out that much-needed capital and technology in areas such as infrastructure, media and telecommunications cannot freely flow into the country because of the constitutional ban.
He said the country’s level of global competitiveness has been seriously hurt by the country’s decrepit infrastructure.
But while the country should open itself to investments and technology in certain restricted areas of the economy, the government should protect Philippine agriculture and allied interests from the ravages of reckless liberalization, Angara said.
"Free trade is not always fair trade. The loudest exponents of free trade — the rich countries — are often its worst violators," Angara said.
He noted that despite the World Trade Organization, the powerful economies have been pampering their farm sectors with domestic and export subsidies. In 1998 alone, he said the wealthy countries belonging to the Organization for Economic Cooperation and Development (OECD) poured more that $360 billion in domestic support to their farming sectors.
Angara added export subsidies amoiunt to $2.3 billion in Europe and $1.5 billion in the United States.
He added rich economies also employ arbitrary market rules and tariff distortions to restrict the entry of agricultural exports from developing countries such as the Philippines into their own markets.
While the trading rules under the WTO only allow developing countries to support their farming sectors by a meager 10 percent of their agricultural sectors’ gross value added, the powerful economies are only required to bring down their subsidies by 20 percent in six years, Angara bewailed.
He said rich countries are also permitted to retain 80 percent of their production and export subsidies while developing countries can only give little support to their farming sectors.
In the Philippine context, Angara said support to agriculture is not even four percent of agriculture’s gross value added. "I do not say globalization is evil. Only that its propositions should not be accepted hook, line and sinker," Angara said.