‘Cha-cha needed to hike investments’

Business leaders yesterday said constitutional reforms to fix the country’s defective political and economic structures are crucial to turning the Philippines into one of Asia’s magnets for overseas investments.

Francis Chua, who heads the Federation of Filipino-Chinese Chambers of Commerce and Industry (FFCCCI), said the gridlock-prone bicameral presidential setup has grievously hampered the passage of urgent reform measures, which should help attract foreign capital.

Meanwhile, deposed President Joseph Estrada, his political party Pwersa ng Masang Pilipino (PMP) and seven opposition senators led by Senate Minority Leader Aquilino Pimentel supported the Aug. 31 decision of the Commission on Elections (Comelec) junking the people’s initiative petition of the Sigaw ng Bayan Movement (SBM) and the Union of Local Authorities of the Philippines (ULAP).

In a 22-page comment-in-intervention filed through his lawyer, Rufus Rodriguez, Estrada asked the Supreme Court to junk the petition filed by SBM and ULAP seeking the nullification of the Comelec resolution.

Pimentel and Senators Sergio Osmeña III, Jamby Madrigal, Jinggoy Estrada, Luisa Ejercito, Alfredo Lim and Panfilo Lacson filed a separate motion opposing the proposed people’s initiative.

In a statement, Chua likened the claims of anti-Charter change groups that the Philippines can become globally competitive even without amending the 1987 Constitution to saying that a reed-thin wrestler can fight a hungry lion with his bare hands and still expect to win.

To top it off, Chua said, the Constitution’s inward-looking economic provisions have choked the entry of foreign capital and hobbled efforts to replicate the investment boom experienced by the Philippines before the onset of the 1997 Asian financial crisis.

"The Philippines can only become a magnet for investments in the league of Thailand, Singapore and Malaysia if it discards the outmoded economic provisions of the Constitution and abandons its conflict-ridden, gridlock-prone political system," Chua said.

He said "we cannot keep up with, much less surpass, the vibrant pace of growth in most of our Asian neighbors for so long as we are stuck with a Constitution that says we cannot allow all foreign investments to come in."

As a result of a Constitution that is out of sync with global realities, the government has sometimes come out with laws and policies to circumvent these restrictions on foreign investments so it can entice more investors in capital-intensive industries like mining and natural gas exploration, Chua said.

He issued this statement in response to a report by the International Monetary Fund (IMF), which said Asian countries hit by the 1997 financial crisis had sprung back to their pre-crisis growth rates but have yet to restore the investment boom they enjoyed then.

The IMF listed the Philippines among the countries hardest hit by this regional economic turmoil.

The Philippines, the IMF noted, has performed poorly in terms of total factor productivity or TFP, which measures the output of an industry or economy relative to the size of all its primary factor inputs. It factors in any effect on total production not caused by productivity.

"Compared with South Korea, Malaysia and Thailand, the Philippines will always end up as the perennial tailender in the investments race because of one distinct disadvantage: it has a very restrictive Constitution that has become inutile in addressing the tough and fast-changing challenges of the global free economy," Chua said.— With Jose Rodel Clapano, Mike Frialde