House Speaker Martin Romualdez (center) (Speaker’s office)

The Joint Foreign Chambers of Commerce (JFC) in the Philippines is supporting the proposed amendments to the restrictive economic provisions of the 1987 Constitution, the office of House Speaker Martin Romualdez bared on Tuesday, Feb. 27. 

In a letter sent to Romualdez on Monday, Feb. 26, the JFC said that removing such restrictions would facilitate greater inflow of foreign direct investments (FDI) to the country--a laggard in Southeast Asia where global FDI has been steadily increasing. 

“We recognize that the government’s mandate to protect vital national interests by placing some restrictions on FDI. In this respect, we note that most national economies use legislation or executive regulations to respond to such an important consideration,” JFC said in the letter. 

It said the advantage of putting the restrictions in legislation or executive regulations instead of the Constitution representa the flexibility “to quickly adjust the regulatory environment for FDI in order to adapt to changes in technology, comply with requirements of international treaties, or take advantage of new opportunities to benefit in the global economy". 

The ASEAN (Association of Southeast Asian Nations) Investment Report 2023 showed that FDI flow in the region rose 5.5 percent in 2022 to a record $224 billion, around 17 percent of global FDI. The stock of FDI in ASEAN stood at $3.6 trillion in 2022, double the level in 2015. 

The Philippines hasn’t benefitted significantly from those positive gains, with FDI flow in 2022 declining to $9.2 billion from $12 billion in 2021. Lower FDI in 2021 kept the Philippines behind five other countries led by Singapore, with a lower share of 4.1 percent of the total compared with 5.7 percent in 2021. 

The 300-plus strong House, which Romualdez leads, is currently deliberating on Resolution of Both Houses (RBH) No.7. The measure seeks to facilitate the tweaks to the Charter's economic provisions. 

JFC, which includes the American, Australian-New Zealand, Canadian, European, Japanese and Korean chambers of commerce, as well as the Philippine Association of Multinational Companies Regional Headquarters, says the proposal to insert the phrase “unless otherwise provided by law” in amending restrictive provisions in the Constitution is welcome, although it isn’t likely to send a strong signal to foreign investors as direct revision of the restrictive provisions. 

Even so, JFC said if Congress goes that route, it could still help in addressing changes in the global economy from the time the Constitution was framed in 1987, including signing of free trade deals and joining free trade blocs. 

“Many of these developments emphasize the need for free movement of capital across borders and a level playing field between foreign and domestic investors without undue restrictions,” JFC said.