Senators on Monday, February 12 reiterated that the Philippines is already open for business without the need for any constitutional amendments.
Sen. Sonny Angara presides over the continuation of the Constitutional Amendments and Revision of Codes Subcommittee hearing on Senate Resolution of Both Houses No. 6 Monday, February 12, 2024. (Senate PRIB/Office of Sen. Angara)
Lawmakers at the Upper Chamber highlighted the significant strides that Congress has already made in recent years to liberalize the economy through legislation, among them is amendment to the Public Services Act or PSA, and other laws aimed at attracting foreign investments as they continue discussions on the Resolution of Both Houses No. 6, which seeks to amend the economic provisions in the 1987 Constitution.
Senators also cited the passage of the Foreign Investment Act and the Retail Trade Liberalization Act.
“The legislation aims to define and differentiate public utilities from public services while addressing the constitutional limitation on foreign equity,” Angara said in the case of the law amending the PSA.
The senator pointed out the amendments done to the 86-year old law has made sure that t60-40 foreign equity limitation applies to essential public utilities such as the distribution and transmission of electricity, petroleum and petroleum products, pipeline transmission systems, water pipelines distribution systems, waste water pipeline systems, seaports and public utility vehicles (PUVs).
These amendments, according to Angara, are vital to safeguarding our national interests and ensuring equitable access to essential services for all Filipinos.
“It’s imperative that we strike a balance between promoting foreign investments and protecting our domestic industries,” he pointed out.
Angara also cited the empowering provisions granted to the President under the PSA, including the authority to reclassify a public service as a public utility.
“The legislation grants the President important powers to oversee and regulate public utilities, safeguarding our national security and interests,” he said.
Sen. Risa Hontiveros also said the amendments to the PSA safeguarded the country’s vital utilities from foreign ownership, citing potential national security risks from foreign control.
Hontiveros fears the potential risks to national security should future congresses give away control of the country’s public utilities to state-owned foreign companies.
“It’s fair game for future congresses to give away, yes even to state-owned foreign companies, which pose grave national security risks,” Hontiveros said.
For his part, Sen. Joseph Victor “JV” Ejercito also pointed out that the PSA was really scrutinized thoroughly by the Senate to make sure that the law would truly benefit the Filipino people.
Another law, the Public-Private Partnership Code, which aims to enhance services, infrastructure, energy and utilities is capable of opening the Philippine business sector to more opportunities.
“I think we just have to give these measures the chance to be realized. Is Charter change really needed at this point now that these two legislations were already passed, which are intended to improve our utilities and others?” Ejercito pointed out.
Sen. Grace Poe, who chairs the Senate committee on public services, said the amendment to the PSA already played a crucial role in encouraging new players in sectors such as airports, railways, expressways and telecommunications.
“We did this to encourage new players in sectors like telecommunications, which truly need expanded competition to improve service and lower prices,” Poe explained.
Very imperfect Constitution
But for Dr. Raul Fabella, economist and national scientist, said he still favors the lifting of constitutional restrictions on foreign ownership and for a “quick Chacha” process as much as possible—“separate assembly, separate voting.”
“The development experience of nations is that all progress boils down to investments specifically the share of income that nations set aside for investment,” Fabella said.
“The country that invest less will overtime eat the dust of countries that invest more,” he said.
Compared to other major ASEAN countries, the Philippine investment rate is traditionally the lowest.
“For example in 2022, our investment rate was 22.4 percent of the GDP, we are now at 33, Thailand at 27.9, Indonesia at 29 and Vietnam at 33,” he pointed out.
“We, by contrast, by 2022, was a typical year…over the last four decades,” Fabella lamented.
“We have in other words, an anti-investment culture…the task before this generation, in this administration, is to reverse the downward march in the bottom of the investment ladder,” he pointed out.
Fabella said among the many reasons why the country’s investment rate is abysmal is how agriculture was closed from all large private investors and mining and forestry were from time to time forbidden for domestic, private and foreign investment.
“The constitutional restriction on foreign ownership adds to this anti-investment climate, which together signaled to the world our national fundamental discomfort with investors here, foreign and local,” he said.
Dr. Bernardo Villegas, chairperson of the Committee on National Economy and Patrimony during the 1986 Constitutional Commission (Concom), said he too shares the sentiment of the senators that there is no need to amend the Constitution, especially with regards to media advertising, education, and ownershi of land “at this stage of our development.”
As of now, the government has to deal first with the pressing problems of the country which is poverty.
“Right now, we should have a single-minded focus on the scandal that we have 21% of our population living in dehumanizing poverty. That's a scandal because all of our neighbors in Southeast Asia have single-digit poverty incidents. And how do we approach this problem?” Villegas said.
“As I see it, there are two major challenges to this (Marcos) administration. And I'm glad that...the focus, at least in theory, is being made first, agricultural productivity, food security. To really address the decades-old neglect of agriculture and the countryside. And I have a target for this administration. It's good news that for the first time in 2023, in all four quarters, agriculture production was not negative,” he stressed.
“Actually, that was not the case for many years before the present administration…That’s why, yes, today, we need to attract…” he said.
But “sooner or later” it will be imperative for the government to tinker with the economic provisions of the 1987 Constitution.
“I’m the first one to say that sooner or later we have to amend this very imperfect Constitution of 1987. Because 1986 was not the appropriate time to write with serenity, peace and quiet the basic law of the land,” Villegas pointed out citing the aftermath of the 1986 people power revolution.