The Department of the Interior and Local Government (DILG) commended on Wednesday, June 2, the House of Representatives for the passing in the third and final reading some key amendments on the economic provision of the 1987 Constitution.
“We congratulate Speaker (Lord Allan) Velasco for proving his detractors wrong. RBH No. 2 as approved by the House has no political provisions whatsoever. It’s an economic measure plain and simple,” DILG Undersecretary and spokesperson Jonathan Malaya
The DILG official described the passage of Resolution of Both Houses No. 2 (RBH No. 2) as “the game-changer that would pave the way for our country’s economic recovery in the long-term.”
Malaya assured that there is nothing to fear from RBH 2 because it does not amend any of the political provisions, like extension of terms, that critics have repeatedly claimed it would contain.
“Given how the pandemic has affected our economy, the timing of the economic amendments to the constitution is just right. This is what we need the most at this time so that Congress is given the flexibility to open up our economy to foreign capital, something we need urgently,” said Malaya.
“Now that the House has passed RBH 2, the Senate will have the entire third regular session to debate the economic amendments. Our Senators will have the time to consider the measure after the President delivers his SONA (state-of-the-nation address),” Malaya said.
By a vote of 251-21 with two abstentions, the House voted to insert the phrase “unless otherwise provided by law” in provisions that restrict foreign investments in natural resources, public utilities, educational institutions, media, and advertising.
Ako Bicol Party-list Rep. Alfredo Garbin, chairman of the House of Representatives’ Committee on Constitutional Amendments, said that allowing the flow of more foreign capital into the economy would improve the Philippines’ standing in the region and address labor surplus.
Based on the World Bank (WB) data, the Philippines’ low Gross Capital Formation (GDF) from 2010-2019 was the lowest among four neighbors in the Southeast Asian region, said Garbin.
The Philippines recorded an average of only 23 percent GDF, way below Thailand’s and Malaysia’s 25 percent, Vietnam’s 28 percent, and Indonesia’s 34 percent.
He said that Vietnam and Indonesia, countries with a relatively young population like the Philippines, have already surpassed the country’s FDI (Foreign Direct Investment) Net Inflow.
Garbin maintained that the country is not attracting enough foreign capital because it is among the world’s restrictive countries to FDIs adding that the Philippines has the most restrictive economy in the ASEAN (Association of Southeast Asian Nations).
“FDI is a very useful catalyst for kick-starting an economy which does not have enough domestic capability to jumpstart job creation in industries and starting new types of economic activities,” the lawmaker stressed.
Garbin stressed that an increase in FDI would lead to the improvement of practices of domestic firms as they will need to shape up to survive the competition. He noted that an increased FDI would also address the issue of job availability and, through the competition it fosters, promotes the welfare of the public.
A total of 119,596 businesses were closed in 2020, resulting in 4.5 million job losses, an underemployment rate of 14.2 percent, and an unemployment rate of 8.7 percent.
The budget deficit was at +48 percent while the national debt was at +26.7 percent.
“We have 10.07 million Filipinos who desire to work but cannot find work not because they are unemployable. It is because jobs are simply not available and if they are, there are hundreds of them fighting over one single position,” Garbin said.