House Deputy Speaker Bernadette Herrera said it is “now or never” for Congress to push for the much-needed, long overdue amendments to the restrictive economic provisions of the 1987 Constitution.
“If economic Charter reforms won’t push through this time, there’s no guarantee it will happen in the future,” the Bagong Henerasyon lawmaker said
“This is the moment we have all been waiting for. It’s time to amend the restrictive economic constitutional provisions that have held back the country’s development for more than three decades,’’ she added.
Herrera made the statement as she rallied support for Speaker Lord Allan Velasco’s Resolution of Both Houses (RBH) No. 2, which is up for plenary debates this coming week.
Last Tuesday, the House Committee on Constitutional Amendments, chaired by Ako Bicol Rep. Alfredo Garbin Jr., adopted RBH 2 that seeks to add the phrase “unless otherwise provided by law” to specific provisions of the Constitution, which restricts foreign ownership and participation on certain investment areas and activities in the country.
Backed by an overwhelming 64 panel members, the resolution prescribes a Constituent Assembly (Con Ass) to propose amendments to the Constitution, which requires a vote of three-fourths of all the members of Congress, each house voting separately.
Herrera insisted that the coronavirus disease (COVID-19) pandemic has made the matter of amending the economic constitutional provisions urgent, as domestic markets struggled to boost the economy during the lockdown period in 2020.
She said the time was ripe to amend the economic provisions of the 34-year-old Charter in order to attract more foreign investments that could help the economy recover faster from the negative effects of the pandemic.
“I’ve said it before and I will say it again now: we have nothing to lose but everything to gain if we liberalize the economic provisions of the Constitution,” Herrera said.
Earlier, Herrera said there was a strong indication that the proposed economic Charter amendments would make the Philippines more attractive to foreign direct investments (FDI), which is a driving factor to economic growth.
Citing a study by the University of the Philippines Public Administration Research and Extension Services Foundation Inc. (UPPAF), Herrera said the initial regression results show that FDI will increase by US$57.5 million for every one unit point improvement in Regulatory Restrictiveness Index (RRI) Equity Restriction score.
Herrera said the removal of all FER (Foreign Equity Restrictions) in the Constitution will be equivalent to the implementation of the FER score of 0.281 in 2019 to zero, which translates to a nominal increase of FDI amounting to US$16.2 billion.
This additional FDI will be more than triple the current FDI up to October of $5.25 billion and does not include yet the potential FDI gains from $0.94 billion per unit increase in GDP growth and $189 million per unit increase in the country’s percentile rank in the Global Competitiveness Index.
In terms of job creation, the additional FDI will raise economic demand and total output that will eventually lead to the generation of up to 1.6 million new jobs, which is sufficient to recover 58 percent of job losses from the COVID-19 pandemic.
It will also raise total family incomes by P197 billion or P8,000 per family in the long run.