The push for economic charter reform in the Philippines continues to gain momentum, with lawmakers advocating for amendments to the 1987 Constitution's restrictive economic provisions. Representatives Joey Salceda and Teodoro Haresco Jr. argue that lifting these restrictions will maximize the country's economic potential and align with President Rodrigo Duterte's vision of prosperity [5d5e26b6].
However, a group of nine current and former professors from the University of the Philippines School of Economics (UPSE) have released a discussion paper critiquing the economic charter change debates. The paper, titled 'How to change a constitution by hand-waving (Or, the unbearable lightness of evidence in support of lifting foreign ownership restrictions),' challenges the notion that lifting equity restrictions is necessary for attracting foreign direct investments (FDIs) [a21095af].
The authors argue that factors such as ease of doing business and corruption perceptions have a greater impact on promoting FDIs than lifting equity restrictions. They emphasize the need to focus on the quality of FDIs, not just their quantity, and caution against the potential abuse and uncertainty that may arise from legal flexibility afforded by economic charter change. The authors call for a more nuanced approach to FDIs and highlight the importance of identifying technology and know-how that can benefit local firms. They also warn against the unintended consequences of economic charter change [a21095af].
Despite this critique, the House of Representatives in the Philippines is prioritizing the proposed amendments to the economic provisions of the 1987 Constitution, as requested by President Duterte's political party, Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban). The House Speaker, Lord Allan Velasco, has stated that they will work on the proposed amendments and submit them to the Senate for further deliberation [4b9d5fcf][1527ce68].
Lawmakers supporting economic charter change argue that it will boost investor confidence in the Philippines. Albay 2nd district Rep. Joey Salceda agrees with NEDA Secretary Arsenio Balisacan that completing the charter change process quickly will benefit the economy [1527ce68].
Salceda assures that the House's proposals to lift restrictive economic provisions will expand the scope of the economy open to foreign investment and make investing in the Philippines easier. Under the House's proposal, existing limits in the Constitution will be subject to an enabling law [1527ce68].
However, the UPSE discussion paper raises concerns about the potential negative consequences of economic charter change. The authors caution against the abuse and uncertainty that may arise from legal flexibility, which could turn off potential investors [a21095af].
The challenges at the Subic Bay Metropolitan Authority (SBMA) are also highlighted as a factor that could impact the country's economic progress. SBMA Chairman and President Johnson D. Tan's policies have rankled many businesses in the port area, leading to higher costs of doing business and the revocation of certificates without due process. This goes against the principle of due process enshrined in the Constitution. The government's vision to move the country to upper middle-income status and reduce poverty incidence relies on a vibrant economy with more jobs and income. The country's debt is approaching P13 trillion, and any additional economic shock could push it beyond repair. The SBMA should not be allowed to let businesses stagnate, and the government needs to ensure that all government bureaucrats align with the economic vision. The Philippines has earned investment grade ratings from Moody's, Standard and Poor, and Fitch Ratings, but the Covid pandemic has weakened the country's economic and fiscal strength. The burden of fiscal instability is a concern due to the country's debt and potential increase in interest rates [7d484182].
A Pulse Asia survey conducted in March revealed that 64% of Filipinos believe that lifting the constitutional restrictions on foreign investments would lead to a better economy. The survey also found that 56% of respondents said services to stakeholders will be better while 54% believe the prices of goods and services will decrease. The Stratbase Institute, in partnership with Democracy Watch Philippines, held a consultative discussion among multisectoral experts on the potential repercussions of amending the restrictive provisions of the Constitution. The consensus was that Filipinos stand to benefit greatly from the entry of foreign investments. The lifting of ownership restrictions would create more and better jobs, increase competition and contestability in the market, and lower energy costs. It is argued that keeping the Constitution as it is would keep out investors. The Philippine economy has been stalled by many factors, and opening up different sectors of the economy to foreign investment is seen as a way to release the nation's potential and jump-start economic prosperity and total well-being. The hope is that lawmakers will seize the opportunity to enable constitutional reforms that will be responsive to the evolving dynamics of the global economy [7e5d02c0].
During debates in the Senate’s Constitution and Justice Committee (CCJ), biologist and PhD in Marine Sciences Marinez Eymael Garcia Scherer criticized the proposed constitutional amendment (PEC) that modifies the ownership of lands owned by the Brazilian Navy and opens the way for broader privatization of the Brazilian coast. She stated that the approval of the measure would increase the ecological risks imposed on the Brazilian coastline, especially in terms of erosion due to predatory human action. Scherer mentioned cases of erosion in the states of Ceará and Santa Catarina, costing the latter losses of over BRL1 billion in 2022. She argued that ecosystems provide ecosystem services that give ecological, cultural, and economic values and human well-being, and losing these structures would have negative impacts on the economy and the entire Brazilian population. Scherer also cited examples of countries that impose strict limits on coastal protection and argued that putting an end to the 'institution of Marine Lands' in Brazil would reduce the safety zone for the preservation of the Brazilian coast, posing various risks to the country. The proposed amendment, known as PEC 3/2022, is currently in the National Congress and has already been approved by the Chamber of Deputies. Critics argue that the measure creates a legal environment favorable to the further occupation of the coast in a way that harms the environment and the rights of the population to benefit established economic power. The PEC's rapporteur in the Senate is Flávio Bolsonaro, the eldest son of former president Jair Bolsonaro, who has presented an opinion in favor of approving the measure. The proposal was targeted by protesters in the Senate during a debate on the issue. [6e1415e5]