A former finance chief said that the Philippines stands alone in the Asian region with Constitutional restrictions on foreign ownership, emphasizing the need to ease these restrictive economic provisions.
Former Finance Secretary Margarito B. Teves said the Philippines trails behind its Southeast Asian neighbors in foreign direct investments, and has been overtaken by Indonesia, Vietnam, Malaysia, and Thailand.
“The Philippines is the only country in the Asian region, where restriction in foreign ownership are embodied in the constitution,” Teves said at the Senate hearing on Resolution of Both Houses No. 6 pushing for Charter change.
For this reason, Teves urged for revisions to the 1987 Constitution to enable foreign companies to have full ownership in key sectors, asserting that this would convey a "warm welcome" to foreign investors.
“We believe that the removal of these restrictive economic provisions would send a clear and compelling message to foreign investors, signaling a warm welcome to their investments and business operations in the Philippines,” Teves said.
Speaking on behalf of the think-tank Foundation for Economic Freedom, Teves listed items his group wants changed.
They include Sections 2, 7, and 11 of Article 12; Section 4 of Article 14 related to education, science and technology, arts and sports; Section 11, and Article 16 on general provisions related to ownership of mass media and advertising.
The think-tank also proposes amendments in Section 19 Article 2 Declaration of Principles and State Policies and Section 10 Article 12 on National Economy and Patrimony to reflect a less Filipino-centric state policy on the economy.
Teves noted that while the liberalization laws, such as amendments to the Public Service Act, the Foreign Investment Act, and the Retail Trade Liberalization Act, allow for increased foreign ownership, they are insufficient for the country to keep pace with the economic progress of fellow ASEAN members.
“We need to have a legal framework and market conditions that match our competitors,” Teves said.
“Increase foreign investment in the currently restricted areas will generate a higher quality, higher paying jobs whose incomes provide greater opportunity for more inclusive growth and development for our people and the country,” he added.
Teves said that removing the foreign ownership restriction in the constitution while necessary is not enough to attract more foreign investors.
“Other conditions such as the rule of law, good infrastructure, and ease of doing business among others must be present to compete with other countries in attracting foreign investments. However, removing these restrictions is a necessary first step,” he said.