Businessmen, more legal experts weigh in on Cha-cha

MANILA, Philippines — Foreign business leaders yesterday weighed in on proposals to amend the economic provisions of the 1987 Constitution while legal luminaries said they see no need to change the Charter.

At the resumption of the public hearing of the Senate subcommittee on constitutional amendments, representatives of foreign business groups, legal experts and constitutional experts expressed varying positions – including one of apprehension – on lawmakers’ proposal to amend the economic provisions of the Constitution to facilitate foreign investments.

“In our opinion, the removal of economic restrictions would facilitate increased foreign direct investment (FDI) in sectors in which such investment is currently restricted. We recognize that the government’s mandate or duty in all countries is to protect national interests,” Julian Payne, president of the Canadian Chamber of Commerce, told the subcommittee chaired by Sen. Sonny Angara.

Florian Gotten of the European Chamber of Commerce of the Philippines said businessmen are already concerned about actions to amend the Constitution.

“I have to be honest. We got some calls from some of our members following the news and the political debate about how this might unfold or in which direction it could actually move further, so there is some uncertainty out there,” he said.

Gotten noted that businessmen are happy with the current Philippine Public Services Act, which boosted the number of member-businesses to 130.

“This law has finally been amended and as I mentioned earlier, it really has contributed to the attractiveness of the Philippines among the foreign investors,” Gotten said.

Bernardo Villegas, one of the framers of the 1987 Constitution, and former Supreme Court justice Antonio Carpio maintained that the Charter should not be amended.

Villegas said the government should focus on the “scandal” that 21 percent of Filipinos are “living in dehumanizing poverty.”

“I don’t think we need to change (the Constitution) at the moment. In the future, I may agree that probably we should be open, but they are not critical. Therefore, I do not think that we need the Cha-cha today,” he said.

He stressed that Cha-cha is unlikely to have great impact on poverty. “If we open advertising, media and education, there will be little that you can feel. They are not capital intensive, and they will not impact on poverty,” he pointed out.

“One day I would like to see this Constitution amended. The question right now is timing. I’m of the opinion that now is not the time but sooner or later, we must revise and remove all those restrictions,” he maintained.

Don’t blame Charter

Carpio also rejected the argument that the Constitution was to blame for the low foreign investments in the country.

“The Philippines today has one of the most liberal foreign investment laws in ASEAN as well as in Asia,” he said.

Carpio said the Philippines had passed several laws opening some of the country’s industries to 100 percent foreign ownership, including the Public Services Act.

“There appears to be a lack of understanding by our national leaders of the extent of foreign ownership under the law of businesses in our country,” said Carpio, noting that in an interview, President Marcos declared that he wants to open the economy to foreign investments, “except in critical areas such as power generation.”

“Our generation from coal, oil and gas plants has been opened to 100 percent foreign ownership for the longest time. The Supreme Court has also allowed 100 percent foreign ownership of power generation from dams or hydropower plants,” he noted.

“What our government should focus on is the real problems that cause low FDI in our country, that includes the very high rate of electricity in our country,” he said. “The Philippines has the highest power rate in ASEAN and the second highest in Asia. There is also the problem of the strict bureaucracy that requires many permits for those opening businesses in the country.”

Raul Fabella, a national scientist, admitted the importance of investments to the nation’s progress. “Development experience of nations is that all progress boils down to investments, specifically the share of income that nations set aside for investment,” he said.

“The country that invests less will over time eat the dust of countries that invest more… The Philippine investment rate is traditionally the lowest among the major ASEAN countries,” he added.

Can Pinoys keep up?

Sen. Grace Poe, chair of the Senate committee on public services, said the amendment to the Foreign Services Act liberalizing public utilities and allowing 100 foreign ownership is good enough for investments.

“We have done so… without violating or amending the Constitution. We didn’t have to do con-con, con-ass or fake people’s initiative,” Poe said.

Poe also pointed out that 100 percent foreign ownership of critical aspects like seaports should not be allowed.

“Our first line of defense are seaports against smuggling, piracy and any threat to security in our territory,” she said.

Poe warned that under Resolution of Both Houses No. 6, all public utilities would be open to foreign ownership and management without protection.

“Other countries can control our water, electricity, seaports, fuel and oil. Are we ready for this? Can Filipinos keep up with the entry of foreign competition in all industries?”

Sen. Risa Hontiveros said some resource persons during the first hearing described Cha-cha as divisive and not worth it. “I agree with them, but I also want to listen to what a resource person said that the patrimony provisions in our Constitution as a business model are passé. Is our Constitution that protects Philippine natural and man-made resources really obsolete?”

In an interview, Rep. Joey Salceda, chairman of the House ways and means committee, said there should be no more hindrance to convening a constituent assembly to pave the way for changes in the economic provisions of the 1987 Constitution.

“There’s no way that we cannot constitute as a constituent assembly. That has always been consistent from the framers of the Constitution,” Salceda told reporters yesterday.

“We are the third most restrictive economy in the world, next to Libya and Palestine,” the second district congressman from Albay said, as he called on senators to pass RBH6, which the House leadership had transmitted to the Senate.

“There is no sword of Damocles hanging over them anymore. The people’s initiative has effectively been shelved by the Commission on Elections. There’s no more PI. That should have cleared the air already,” Salceda pointed out.

‘Time for action’

Another lawmaker-economist, Rep. Stella Luz Quimbo of Marikina’s second district, stressed the need for quick action.

“The time for talk is over, and the time for action is now. We have spent the past three decades debating about this issue while opportunities have passed us by,” she said.

“Economic Cha-cha is an urgent and necessary step towards unleashing our full economic potential. It is a commitment to our people’s prosperity, a more competitive Philippines and a resilient future,” the former UP economic professor stressed.

Quimbo, senior vice chair of the House appropriations committee, lamented that the fundamental law of the land has remained “inflexible” over the decades. “Right now, we’re too hard-sell as an economy, where we need no less than our President for trade missions to other countries,” she said.

“Economic Cha-cha is a clear signal to the world that this is a new Philippines – flexible, equipped to adapt and ready to engage with foreign investors and compete with neighbors. It should also be a firm and constant reminder to us – to fix all that are broken to make business thrive and jobs grow.”

For Deputy Speaker David Suarez, President Marcos’ declaration last week of unequivocal support for economic Cha-cha is a vindication for all House members, led by Speaker Martin Romualdez, who had engaged senators in word war over people’s initiative.

“It was a vindication for the House, given all the insinuations and bad intents thrown at us. I wish the Senate will engage in a healthy debate, and I will stake our two best economists here for that,” Suarez said, referring to Salceda and Quimbo.

Meanwhile, the Freedom from Debt Coalition (FDC) has joined the anti-Cha-cha chorus, saying the squabble among lawmakers over approaches to changing the Constitution has only worsened the country’s already dire situation.

“The collective response of the coalition and the Filipino people is to immediately scrap People’s Initiative for Reform Modernization and Action and to expose the hidden political agenda of the ruling political families in Malacañang and in Congress,” FDC said in a statement.

The FDC said it is pushing for an alternative economy as well as for the strengthening of the manufacturing and agricultural sectors. It said it also wants public services back in government’s control.

FDC also said it advocates balanced trade, just debt policy and commitment to preferential policy to Filipino products, industries and workers.

“The attempts to change the Constitution should not be the priority as it would only benefit the vested interests of the few,” the FDC added.

According to FDC, the rampant land conversion should be stopped through the urgent passage of the National Land Use Act. – Delon Porcalla, Bella Cariaso