Government to relax foreign ownership limit, protect BPOs
SPEAKING before an audience of business leaders on Monday night, President Rodrigo R. Duterte gave assurance that he remains firm on his plan to change the Constitution’s 40% foreign ownership cap — adding that a plebiscite seeking the approval of Charter changes could happen alongside the 2019 midterm elections.
“About the Constitution, I am ready to reverse the 60-40 (Filipino-foreign ownership rule). As long as Congress is also ready, I will go along with it,” Mr. Duterte said during the Wallace Business Forum Dinner with the President at Malacañang.
Mr. Duterte added that he has no problem with foreign companies owning 100% of public utilities as long as they “pay their taxes.”
However, the President emphasized that land ownership will remain restricted.
“You know, because I said, most of the Filipinos are poor. And with the growing economy of the super-giant, China and the rest, you know, they can always come here and buy the land and they can buy the whole of Tondo and relocate there and we’ll have with nothing and everything [is] sold.”
Mr. Duterte — whose campaign toward federalism is in keeping with his campaign promise to have the country decentralized — also said he would rather create a Constitutional Commission (Con-Com) to support the Charter Change than form a Constitutional Convention (Con-Con) with members “full of vested interest.”
“Given my term, six years, it’s still very early [and] I can afford a constitutional convention. Just the same, everybody who has the money will prevail. And you still have a convention full of vested interest… given the electoral experience of our country. We have not matured politically,” Mr. Duterte said.
Early this month, Mr. Duterte signed Executive Order No. 10 creating a 25-member consultative body tasked to review both political and economic provisions of the Constitution.
Sought for comment, Peter Angelo V. Perfecto, executive director of the Makati Business Club (MBC), said: “MBC has consistently called for amendment of restrictive economic provisions in the Constitution that studies and experts have proven can unlock many more opportunities for inclusive growth. Similarly, any other amendments should be well informed by thorough studies and inclusive consultations.”
Mr. Perfecto added, “MBC and the other business groups would be open to supporting government’s proposals and participating in the dialogues that will be called for this.”
Asked if 2019 is a reasonable year for the plebiscite to happen, the business leader said, “It will really depend on the process that they will recommend.”
‘FORGET YOUR FEARS’
In the same event, Mr. Duterte allayed fears of business process outsourcing (BPO) companies in the country amid growing uncertainty in his administration’s policies as well as US presidentelect Donald Trump’s protectionist pronouncements.
“Forget your fears, this is a democracy, we follow the free enterprise. There will be changes — changes for the better, [ but] not to kill businesses,” Mr. Duterte said in response to a question of Craig Ryans of BPO firm Sitel about the government’s possible policy changes that “may spook or create concern from some of our investors.”
“I am a lawyer and I believe in free enterprise, I believe in democracy that’s why I ran for President. I’m duty- bound by the Constitution. And about the outsourcing there, I would even guarantee to you that the Philippines would honor its contractual obligations,” Mr. Duterte said.
The chief executive then slammed the previous administrations for “not honoring” the contracts of foreign investors and creating “an economic situation whereby there would be a tilt of balance there somewhere and destroy the economy and blame it on me.”
“Unlike the previous administrations, they were known for the notoriety of not honoring contracts or bending the rules. It will not happen during my term. I assure you, it will not happen. Bending the rules for the favor of somebody, that’s b*** s*** to me,” he said.
Several business groups had previously noted the potential negative impact of Mr. Duterte’s unconventional style and methods in policy and diplomacy.
Moody’s Investor Service had joined S&P Global Ratings in flagging the country’s “less predictable policy rhetoric” as a fresh source of anxiety among overseas investors, although its impact on the economy and sovereign credit rating is cushioned by the fact that economic and fiscal policies have been insulated from the president’s belligerent language for now.
Recent months have seen similar warnings from private sector economists that the marked increase in killings both by cops and suspected vigilantes in the course of the administration’s war on drugs could eventually erode the confidence of business, which regards rule of law as an anchor of any investment environment.