This outsider has it on good authority that in the recent past, former president Joseph Estrada has developed an admiration for Claro M. Recto, who over the course of his career evolved from traditional politician to consistent nationalist. Had Recto’s nationalism begun to work its magic earlier, there would have been no question of Mr. Estrada attempting to remove the nationalist safeguards from the Constitution during his abbreviated presidency. It would seem, however, that son Jinggoy has yet to fall under the Recto spell, for he is calling for the “outdated charter” to be amended.
Another senator supporting a review of the economic provisions is Antonio Trillanes IV. According to the Philippine Star report of Aug. 16, his main interest seems to lie in securing a reduction in domestic shipping rates (presumably by the introduction of foreign competition, although this is far from clear). He also argues that Congress should discuss and vote on the amendments one by one, in the same manner as normal legislation, thus obviating the need for a constitutional convention or constituent assembly, either of which might be railroaded into a sweeping revision of the Charter.
It is surprising to see Trillanes’ name associated with revision or elimination of the economic provisions because he is held to be a staunch nationalist. Indeed, when I interviewed Sonny Melencio earlier this year for my current book project (the third and final volume of a history of the Philippine left; the first volume was published by UP Press in 2007 as Forcing the Pace, while the second, A Movement Divided, will be issued by the same publisher very shortly), he recalled how, when he had visited Trillanes in detention, the latter had expressed opposition to socialism on the grounds that it was “foreign.” So too, Melencio pointed out, is nationalism, meaning that some ideologies, although originated in specific geographical/historical circumstances, can have universal application.
The nationalist economic provisions of the Constitution fall into three categories. First, there are those that totally prohibit foreign ownership in certain fields, for example the media or land. Then there are those which limit foreign participation to 40 percent in undertakings like public utilities. But there is also the succinct but potentially far-reaching Article II, Section 19, oft-quoted by this column: “The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.” This is the provision which, if implemented, could lift the Philippine economy out of its dependent status and the Filipino people out of poverty.
In December 2008, the American Chamber of Commerce issued a statement saying that there was no need for Charter change (Cha-cha) at that time. More recently, of course, it has changed its tune, and this year both the US trade representative and the US Embassy have said that the nationalist restrictions will have to be deleted if the Philippines is to be included in the Trans-Pacific Partnership negotiations.
This change of stance may be attributed to opportunism. In late 2008, there was little chance of Cha-cha succeeding and, indeed, the issue threatened political stability. Now, with a president with no interest in prolonging his term, Cha-cha is viewed as more achievable. Foreign interests thus find themselves confronted with the future possibility of being able to purchase rather than lease land, and to exercise 100-percent ownership of companies. Given that opportunity, they and their representatives are obviously going to say that Cha-cha is desirable.
It is quite another thing, however, to argue that the existence of the nationalist provisions of the Constitution deters investment. This is the argument advanced by Rep. Loreto Leo Campos, chairman of the House committee on constitutional amendments, who predicts that foreign direct investment (FDI) would increase threefold. If that is so, why should the US Chamber of Commerce have said in 2008 that Cha-cha was unnecessary? They are the guys who do the investing, after all, and the same nationalist safeguards were in place in 2008.
There is an argument to be made (indeed, Akbayan has recently made it) that foreign investment does little for job-creation or the alleviation of poverty. One can go further (as this column often does), and say that most foreign investment goes into projects which, located in economic zones, are completely divorced from the real Philippine economy and thus play virtually no role in genuine development. But has the existence of the constitutional restrictions really held back the increase of such investments?
A piece by Lala Rimando posted on the ABS-CBN site over two years ago listed the real reasons why the Philippines is “a laggard in FDIs … Business groups have perennially cited the cost of electricity, which is the second highest in Asia next to Japan. This has largely discouraged investments in factories, which could have been the main sources of jobs.” Then there’s corruption, with the Philippines regularly scoring poorly on the international indices (although one hopes the current government will make inroads here), and frequent “political shocks.”
The same piece refers to the World Bank’s “Doing Business in the Philippines,” which in 2009 placed this country at 140 out of 181 for ease of doing business. “It requires 15 procedures, takes 52 days, and costs 29.76 percent gross national income per capita to start a business in Philippines. It takes and costs less to start a business in Malaysia, Thailand, New Zealand, and even in Laos.”
The restrictions on foreign ownership are vulnerable because they are often circumvented by the employment of “dummies,” whereas Article II, Section 19 is open to attack because it represents an alternative (a constitutional requirement, indeed!) that has been flagrantly ignored. With the economic dominoes falling in the USA and Europe, thus reducing demand for Philippine exports (including labor), isn’t now the time to put that alternative on the agenda?
Are Senators Estrada and Trillanes really opposed to that momentous venture?
(Feedback to: [email protected])
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By: Ken Fuller
Source: The Daily Tribune, Aug. 30, 2011
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