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The Philippine Star - House panel OKs economic Cha-cha

News & Interviews
3 February 2021

By Edu Punay | The Philippine Star

MANILA, Philippines — The move to amend restrictive economic provisions in the 1987 Constitution has hurdled the committee level at the House of Representatives.

As the nation marked the 34th anniversary of the ratification of the Charter yesterday, the committee on constitutional amendments decided to adopt Resolution of Both Houses (RBH) 2 filed by Speaker Lord Allan Velasco that seeks to allow Congress to pass laws that would open the economy to more foreign investments while recovering from recession caused by the COVID-19 pandemic.

The panel chaired by AKO Bicol Rep. Alfredo Garbin Jr. voted 64-3 with three abstentions to approve and endorse the measure to the House plenary for deliberations.

RBH 2 specifically proposed amendments of economic provisions of the 1987 Constitution under Articles XII (National Patrimony and Economy), XIV (Education, Science and Technology) and XVI (General Provisions) by adding the phrase “unless otherwise provided by law.”

This would then allow Congress to pass laws allowing foreign ownership of educational institutions, public utilities and mass media companies and lift the 40-percent foreign ownership restriction on corporations.

The measure prescribes a constituent assembly to propose amendments to the Constitution, which requires a vote of three-fourths of all the members of Congress, each house voting separately.

In approving the measure, the committee dropped the proposal to allow foreign ownership of lands in the country under Article XII, Section 7 following weeks of hearings and debates.

Foreign investments will play a crucial role in the economic recovery by supporting domestic jobs and the creation of physical and knowledge capital across a range of industries, according to Velasco.

“The need to attract foreign capital is critical to support our economy’s recovery from COVID-19,” the Marinduque congressman said.

In pushing for economic amendments, Garbin reiterated that the 1987 Charter is a “living Constitution” that is “far from being perfect.”

“When the people ratified the 1987 Constitution containing limitations on foreign ownership and participation on certain economic activities, it was their desire at that time to make the limitations specific. However, the Constitution is not unchangeable,” the ranking congressman said.

“It is about time we correct this unintended anomaly by introducing an amendment that gives the legislature the freedom to amend those time-bound laws that have been enshrined in the Constitution to the detriment of the common good of the Filipinos now and in the future,” he added.

The panel’s approval of the measure came after notable economists and legal experts supported the proposed amendments that they said would increase foreign direct investment or FDI inflows into the Philippines, particularly in areas restricted in the Constitution.

Relaxing the economic Charter provisions, they said, would open the door to establish a platform for promoting stronger investments and a more inclusive economic development.

Following consultations with economists and experts, House ways and means committee chairman and Albay Rep. Joey Salceda cited the projected economic benefits of the measure.

He said the resolution could lead to an additional average annual FDI of $6.8 billion or P330 billion and generate 6.6 million jobs over a 10-year period.

A recent report by the 38th Global Investment Trends Monitor also revealed that FDI in the Philippines for 2020 amounted to $6.4 billion.

RBH 2 is expected to breeze through the House plenary after all major political parties and power blocs at the chamber had earlier vowed to support the measure in a manifesto signed by their leaders.

The signatories to the manifesto were Majority Leader and Leyte 1st District Rep. Ferdinand Martin Romualdez for Lakas-CMD, Deputy Speaker and Oriental Mindoro 1st District Rep. Salvador Leachon, Rizal 1st District Rep. Michael John Duavit for the Nationalist People’s Coalition, Surigao del Norte 2nd District Rep. Robert Ace Barbers for the Nacionalista Party, Cavite 4th District Rep. Elpidio Barzaga Jr. for the National Unity Party, Davao City 3rd District Rep. Isidro Ungab for Hugpong ng Pagbabago, Deputy Speaker and 1-PACMAN Rep. Michael Romero for the Party-list Coalition Foundation Inc. and Aurora Rep. Rommel Rico Angara for the independent bloc.

Meanwhile, two members of the constitutional commission that drafted the Charter have issued contrasting opinions on the proposed amendments.

Retired Supreme Court justice Adolfo Azcuna supported the move while former Commission on Elections chairman Christian Monsod opposed it.

“I proposed this to Speaker (Sonny) Belmonte some years back. The whole idea is to render changeable by legislation those restrictive economic provisions in our Constitution which consisted of specific details as distinguished from bedrock principles, which should not be changed by legislation,” Azcuna told lawmakers during the hearing.

Azcuna, chancellor of the Philippine Judicial Academy who also sat as member of the 1971 Constitutional Convention, said these include “specific details, as distinguished from bedrock principles, which should not be changed by legislation.”

“The details can be changed by legislation – and should be changed by legislation – since they are not meant to last for a long time,” he added.

Azcuna pointed out that “economic policy should be flexible; it should not be written in stone.”

“And when we did write it in stone in the Constitution, I felt personally that we did not mean it to last for 34 years. And in fact, we provided that after five years, the Constitution may be amended, even by initiative, by the people themselves,” Azcuna added.

“And so it is high time for us to look and review at these restrictive economic positions, especially during the time of the pandemic, when there is a need for our economy to recover from the negative impact of the pandemic,” the retired justice said.

Monsod, however, did not agree and warned of the motives behind the renewed Cha-cha push.

“Once (Congress) convenes, it will have plenary powers and it can do everything. If they claim that it will be limited to economic provisions, that’s not true because constituent assembly will exercise plenary powers that will be independent of any instructions given by Congress,” he said in the episode of “The Chiefs” aired on One News/TV5 last Monday night.

Monsod expressed belief that RBH 2 would only provide an avenue for corruption in giving Congress the power to liberalize the economy to foreign investors.

“Given the transaction legislation that we have, this will only provide a continuous source of corruption,” he said.

In the same episode, Monsod’s wife Winnie also objected to the proposed economic amendments.

“There is no reason to believe that foreign investments will all of a sudden blossom here in the Philippines just because we change the economic provisions of the Constitution. Studies have shown that investments come in when you follow the rules of the game,” explained the prominent economist.

Incidentally, Azcuna and the Monsod couple all served in the Cabinet of the late former president Corazon Aquino.

Azcuna was Aquino’s chief presidential legal counsel and executive secretary. On the other hand, Monsod was Comelec chairman while his wife was director general of the National Economic and Development Authority.