Teves: Time to amend restrictive economic provisions in Charter

By Mario Casayuran | Published July 27, 2018, 9:16 PM

Former Finance Secretary Gary B. Teves views the current exercise of amending the 1987 Constitution to a federal form of government as an opportunity to amend the restrictive economic provisions in the Charter.

Teves said these restrictive provisions should be removed and let Congress later pass legislations and make adjustments if there is a need to modify some of these liberalized situations.

“Most countries do not have these economic restrictions in their Constitutions. Congress in most countries in the world provided some restrictions. If the situation changes, they can modify it,’’ he told Manila Bulletin after the public hearing.

Asked to comment, Gatchalian said he supports the position of Teves.

Former Senate President Juan Ponce Enrile and former House Speaker Feliciano Belmonte pressed for the deletion or amendment to the restrictive economic provisions, particularly the 60-40 capital sharing between Philippine corporations and foreign investors because domestic corporations are asset-strapped.

Protectionist

Because of these restrictive provisions, foreign chambers of commerce and investors pointed out that the Philippines, among members of the Association of Southeast Asian Nations (ASEAN), is behind Vietnam and Indonesia in foreign direct investments (FDIs) in 2017.

Indonesia topped the list with $24.1 billion followed by Vietnam, with $14.1 billion, Philippines and Malaysia with $9.5 billion each and Thailand with $7.3 billion.
“The Philippines received only seven percent of the ASEAN total FDI in 2017,” the Joint Foreign Chambers of the Philippines (JFCP) said.

“Several major international ratings show the Philippines remains more protectionist than other ASEAN-6 economics that have attracted higher inflows of FDI. When potential investors look to the Philippines in these ratings, they may turn to other countries they consider more open and welcoming,” it pointed out.

The JFCP cited “negative” reports on the Philippines from other international financing institutions such as the World Bank and the Organization of Economic Cooperation and Development (OECD) covering 2017.

The World Bank said the Philippines was rated as more protectionist that the East Asia and Pacific average in eight out of 11 sectors in its report.

The OECD, in its 2017 FDI Restrictions on 66 countries listed the Philippines as the most restrictive than Cambodia, China, Indonesia, Japan, Korea, Laos, Malaysia, Myanmar and Vietnam.

Open up

Teves stressed that removal of these current restrictive provisions would have dramatic effect on the perception of investors because the Philippines has finally adjusted and allowed foreign investors to come in, including management and control.

With the deletion of these restrictive provisions, “expect more FDIs to come in and if other reinforcing factors are available such as peace and order, (absence of) corruption, and infrastructure,” he said.

“I am not saying that removing these will be the formula,” he noted.

A member of the Foundation for Economic Freedom (FEF),Teves said for a developing country like the Philippines there is much to be gained from opening up the economy and taking full participation in the global market.

“Removing restrictions on foreign investments is a necessary first step to get the fundamentals right, but further delaying the amendments will also further delay our opportunity at development,” he added.

Source: https://news.mb.com.ph/2018/07/27/teves-time-to-amend-restrictive-economic-provisions-in-charter/