Is there a need to change the Constitution amid the Covid-19 pandemic? This was the repeated question during the resumption of hearings of the House Committee on Constitutional Amendments on the proposal relaxing the restrictive economic provisions of the Charter.
While economists and several lawmakers strongly backed the lifting of the economic provisions as the Philippines is currently one of the most restrictive countries in terms of foreign investment in Southeast Asia, Ibon Foundation Executive Director Rosario Guzman said economic Charter change will have “zero efficacy for recovery, while having huge adverse side effects.”
“Economic Cha-cha is no vaccine for recovery and development,” Guzman said at the hearing on the Resolution of Both Houses No. 2, authored by Speaker Lord Allan Velasco, seeking to amend the economic provisions of the Constitution to include the phrase “unless otherwise provided by law.”
According to Guzman, the economy’s development lies in using the protections in the Constitution to gain from foreign investment, and not in taking away the protections and giving self-interested foreign investment free rein over the domestic economy.
She said foreign capital can contribute to development but “we are of the view that responsible government intervention and regulation is needed to create meaningful linkages and long-term benefits for the economy.”
Guzman said IBON’s position is to retain the economic provisions as they stand and not to open up the 1987 Constitution for any revisions or amendments.
“We have five major points—all together seeking to break the prevalent dogmatism and put foreign investment in its proper historical and development context,” she said.
First, Guzman said if the objective is to help the economy recover from the Covid-19 shock then a meaningful fiscal stimulus is better and has more immediate effect.
“The amendments are supposedly targeted for ratification alongside the May 2022 national elections. This is much too late and the economic damage from not having a real stimulus package today only means bigger problems for the economy in the years to come,” she said.
Guzman said addressing the lack of fiscal stimulus to help the economy recover is more urgent than Charter change.
‘Now is the time’
However, UP School of Economics Professor Emeritus Dr. Gerardo Sicat said the restrictive economic provisions on foreign capital “have long been blamed for impeding the country’s attractiveness to foreign direct investments.”
“This is the time to do it because when will we do it, when we have a crisis that needs enormous effort by the government to organize itself?” he asked.
“We have to lay the foundation for making the Constitution more progressive in attacking new reforms that will help the country move forward even better…. If we do this, I think we can undertake more economic reforms,” he said.
UP School of Economics Professor Emeritus and national scientist Raul Fabella agreed that lifting of the constitutional limitation will make the Philippines more foreign investment-friendly.
“Who can make the land flourish best should own it. The land should be able to produce as much as it can and citizenship is not a condition,” he said.
However, he said these amendments alone would not result in a “tsunami of foreign investments.”
He added, “We must also look at high cost of power, difficulties of doing business, flawed judicial system, unsettled peace and order, which affect both local and foreign investors.
“If we are not investing more of ourselves, I don’t see why foreign investors will do so.”
Former National Economic and Development Authority (Neda) Director General Ernesto Pernia also backed an economic Cha-cha, saying this will help the economy amid the pandemic.
“We cannot be competitive with our Asean and global neighbors if we do not open our economy. If we don’t do it, we will be locked into only a 5-6 percent economic growth which we shouldn’t be having,” he added.
Also, economist-lawmaker Joey Sarte Salceda of Albay, citing the OECD FDI restrictiveness index, said the Philippines is among the world’s most restrictive countries for foreign direct investments.
“No other Constitution has our foreign restrictions,” he said.
Salceda said the Philippines has locked itself out of significant foreign investments and, therefore, opportunities for job creation.
“We have spent hundreds of billions of pesos in foregone revenue for tax incentives, when we have not tried a simpler, cheaper solution: opening industries in need of capital to foreign investment through legislative action,” he said.
“Instead of sending our labor force abroad, let us attract foreign investment and create the jobs here in the Philippines,” he added.
Con-Ass?
Meanwhile, House Committee on Constitutional Amendments Chairman Alfredo Garbin Jr. on Wednesday claimed his panel is now sitting as a constituent assembly (Con-Ass).
“Every time we deal with proposing amendments or revising the Constitution, we are sitting as a constituent assembly exercising constituent power,” he said.
“Once Congress initiates the procedure to propose amendments to the Constitution, it is deemed to have entered into the exercise of its constituent power. There is no need for a prior act of organizing itself as a body exercising constituent power,” he added.
But he said the required three-fourths vote under the Con-Ass will be applied during the third and final reading voting.
“The three-fourths vote of all members of Congress, voting separately, will only apply on third reading,” he said.
Resolution of Both Houses (RBH) No. 2 seeks to amend restrictive provisions of the Constitution by adding the phrase “unless otherwise provided by law” to sections of Articles XII, XIV and XVI. Doing so would delegate to Congress the authority to determine whether economic policies dictated by the Constitution, such as limits to foreign equity ownership, should be retained or changed or completely abolished.
“These provisions have given rise to monopolies and oligopolies by some Filipino-owned industries at the expense of consumers,” the Ako-Bicol Party-list Representative said.
Former constitutional amendments committee chairman and now Deputy Speaker Rufus Rodriguez disputed Garbin’s stand on Con-Ass. He said committees can never be a Con-Ass and “they are [only] preparatory to the Constituent Assembly.”
Rodriguez said the Con-Ass can only be constituted by the plenary of the entire Congress.
Bayan Muna Rep. Carlos Isagani Zarate also said the constitutional amendments committee “cannot just declare motu propio that it is now being constituted as a Constituent Assembly.”
“Amendment via legislation route of House is not the Constituent Assembly contemplated by the 1987 Constitution,” he added.
Also, Albay Rep. Edcel Lagman said no committee of the Senate or of the House including the Committee on Constitutional Amendments can sit as a constituent assembly, “because the constituent assembly is composed of members of the House and the Senate in a joint meeting or assembly.”
Signature campaign
Meanwhile, Undersecretary Jonathan Malaya of the Department of the Interior and Local Government (DILG) turned over to the committee the 555,610 signatures from different provinces in the country signifying grassroots support for “surgical” amendments to the 1987 Constitution, especially its economic provisions.
Malaya, who is also a part of the Inter-agency Task Force for Federalism and Constitutional Reform, gathered the signatures in a roadshow promoting education in different parts of the country of the merits of amending certain provisions in the Constitution.
Besides the 500,000 signatures, Malaya said 1,489 municipal mayors also support amending the Charter.
Malaya presented a resolution by the League of Municipalities supporting surgical amendments to the Constitution, including the restrictive provisions cited in RBH No. 2.
Source: https://businessmirror.com.ph/2021/01/14/cha-cha-in-a-pandemic-stirs-debates/