Senate panel report: Economic Cha-cha by legislation

MANILA, Philippines — The Senate committee on constitutional amendments, chaired by Sen. Robinhood Padilla, has released its report on Charter change proposals and recommended that only economic provisions be amended, and merely by legislation.

The committee report, only nine pages long, proposed easing the restrictive provisions of the Constitution not directly, but through the enactment of laws by Congress.

This Charter change (Cha-cha) mode was tried by the Senate and the House of Representatives during the Aquino administration.

Padilla, in pushing for the adoption of his report by the Senate plenary, said since the ratification of the 1987 Constitution, “most Filipinos are still mired in poverty, millions remain jobless and economic distress persists.”

“These economic provisions are perceived to be barriers to trade and investment responsible for the continuous decline of foreign direct investments (FDIs) and placed the country as one of the most restrictive economies by international standards,” Padilla stated in his report.

He was referring to restrictions on certain activities of foreign investors in exploration, development and utilization of natural resources; ownership of private lands; grant of congressional franchises; ownership and operation of public utilities; ownership of educational institutions and ownership and management of mass media and advertising.

The country’s investment regulations are complicated because of the “prohibitive” economic provisions, which have left it lagging behind its neighbors in terms of FDI despite its offers of tax holidays and other fiscal incentives, he said.

“To accelerate economic growth and fulfill its international commitment, the Philippines must amend its Constitution by removing restrictive economic provisions to allow foreign businesses to directly invest in a more conducive landscape,” Padilla said.

The proposed amendments were simply the insertion of the phrase “unless otherwise provided law” in the restrictions imposed by the constitutional provision. The specific amendment would have to be passed by Congress and enacted into law.

Among the covered provisions of the simple amendment are Article XII, Section 2 (National Economy and Patrimony) that deals with the exploration, development and utilization of natural resources; Section 3 of the same Article on the prohibition of private entities to hold alienable lands of the public domain except by lease; Section 10, which deals with 40 percent foreign ownership restrictions to certain industries and Section 11 that restricts foreign ownership of public utilities.

There is, however, a proposed amendment to Section 7 that would allow aliens to acquire private lands not exceeding 1,000 square meters and foreign corporations to acquire rural private lands not exceeding five hectares.

Under the committee report, all provisions of existing laws, rules and regulations imposing protectionist or nationality prohibitions on the exploration, development and utilization of natural resources; ownership of private lands; grant of congressional franchises; ownership and operation of public utilities; ownership of educational institutions and ownership and management of mass media and advertising, “shall remain in full force and effect, until their enabling laws take effect.”

Padilla also cited Chief Presidential Legal Counsel Juan Ponce Enrile’s testimony before the committee that “Congress is supposed to be the guardian of the economy, of the progress of the country [and] its political stability” and that Congress should be given the flexibility by adding “unless otherwise provided by law” to the economic provisions.

This transfers the power to determine the advisability or non-advisability of the participation of foreign capital in the development of the country to Congress instead of shackling the people permanently to a restrictive constitutional provision, the senator said.