In my appearance before the Committee on Constitutional Amendments concerning my position on the desirability of amending the restrictive provisions to open the economy to more foreign investments, I briefly summarized the contents of my column of last week.
Then I expounded on two other important reasons that our policy-makers need to heed to work on passing the amendments. I present these additional points today.
(1) Strong economic reforms produce ‘signals’ that the government is serious in doing the right thing. Amending the Constitution at this time is the boldest signal to the world community – the source of foreign investments – that the country is serious in improving the investment climate.
When significant economic reforms take place, they send strong signals to actors on the investment front – in this case the foreign investment community. They signal that major bottlenecks are removed to make sure business processes and economic activity take place without unnecessary interruptions.
The worst advertisements for the Philippines before the world is when economic projects, whether ongoing or just about to start, become hostage to litigations that involve issues about their constitutionality. Many of these litigations – or threats of litigations – trace themselves to the restrictive economic provisions.
Such litigations have held up projects, prevented good investments from happening. The nation gets punished when other countries are able to set up similar projects involving foreign investments with ease while we often got bogged down to stoppage or huge delays.
These delays only serve to enrich lawyers and rent-seekers who help to block the projects and, of course, the special interest groups that get protected from competition.
When we succeed to break down the barriers and have a more open economy, a wide range of Filipinos will experience an improvement in their livelihoods, including all kinds of lawyers, not only the smart ones. In a high growth economy, lawyers are essential to enable contracts and markets to function smoothly.
Amending the restrictive provisions at this time of pandemic crisis, strongly create strong signals that the country is ready to push investments. Hence, the measure to amend the Constitution is an accelerator of the economic recovery program.
Undertaking the reforms during this time when the country is pushing for economic recovery from COVID-19 is the right thing to do, as it will help accelerate the inflow of foreign investments. Doing nothing on this front might makes for a frail and inadequate recovery.
The country’s leaders need to heed the advice that our country has a reputation of being closed to many forms of foreign investments, and that for this reason, we have lagged behind in attracting needed foreign investments compared to our neighbors.
Doing nothing or little in this direction of reforms might cause us to miss another stage of development when the world’s economies and major investors are re-balancing and making major investment decisions.
(2) Long term impact: raising the capacity to improve the development of culture, the arts, educational institutions, and sports in the country. The penultimate, 7th major benefit that I cited in my column last week is the all-inclusive phrase, “rise of living standards for all Filipinos.”
Let me elaborate one important aspect of this statement that is often not expounded enough.
An economy that undergoes rapid economic transformation also experiences an enhancement of leisure and community well-being for its citizens. This happens because governments (both national and local), economic enterprises, and educational and social institutions are also able to increase the sources of support for the common pool of funding needs for their activities.
As countries in our immediate neighborhood in East and South East Asia raised their economic growth, they have likewise become more able to uplift the well-being and diversity of their cultural, educational, and social institutions.
There is perceptible upgrade of their public buildings, the quality of their educational institutions advance, their public museums become better and meaningful in their displays and services. Their cities and countrysides are better able to support a greater variety of artistic, leisure, and sporting activities.
Have we noticed that during the years when our economy had been subject to booms-and-busts, such activities in our midst also moved in sympathy? They are interrelated.
In short, all these aspects of life – seemingly unrelated to economic reforms when they are made – enjoy some beneficial uplifts that make a difference in people’s lives.
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The north-south connector road is now open
On Jan. 9, coming home from a “bubble activity” in Southern Luzon, I experienced traveling along the newly opened connector road from Alabang to Quezon City, bypassing the EDSA route.
Once I was able to enter the new roadway along the second level of the express route, it took only around 20 minutes or less to reach the Quezon Boulevard-Araneta Avenue exit to Quezon City. From there it was a very quick ride home.
The problem that motorists will experience is the slow crawl of cars lining up to enter the elevated highway. Conversely, as one nears the exit point, depending on the time of day, there will also be a problem of queuing.
Manila’s traffic congestion will continue, although eased considerably on low-traffic days. We need more diversion roads to connect north and south of Manila.
But the connector road is a great help!
But think of this.
Such roads were conceived way back before 2000. Before 2010, the contracts to undertake them were already awarded. Between 2010 and 2016, indecisions on what to do with the projects took too long to be decided and time flew by. The decision to undertake and commit to construction was made only shortly after 2016.
If only the connector Skyway 3 years had been built before with greater sense of immediacy, how many more miles of connector-and-bypass roads we could we have built by now! And how much less expensive they might have been too.