Removal of restrictive provisions or removal of ‘EDSA’ Constitution?

The restrictive economic provisions in the 1987 Constitution were not the product of the EDSA Revolution as the People’s Initiative for Reform Modernization and Action (PIRMA) implied in its TV infomercial “EDSA Fuera.” Rather they are the reaction to the American exploitation of our country’s natural resources as per the 1935 Constitution.

The preamble of the 1987 Constitution says: “We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a just and humane society, and establish a Government that shall embody our ideals and aspirations, promote the common good, conserve and develop our patrimony, and secure to ourselves and our posterity, the blessings of independence and democracy under the rule of law and a regime of justice, freedom, love, equality, and peace, do ordain and promulgate this Constitution.”

The Merriam-Webster Dictionary defines a “preamble” as the introductory part of a constitution or statute that usually states the reasons for and intent of the law. The Britannica Dictionary describes it as a statement at the beginning of a legal document that gives the reason for what follows.

To conserve and develop our patrimony, the 1987 Constitution provides that: “All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum of whose capital is owned by such citizens. The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.” (Article XII National Economy and Patrimony, Section 2.)

The Senate Committee on Constitutional Amendments and Revision of Codes invited economists to its hearing on the proposed amendments in the economic provisions of the Constitution. Among those who came to the hearing on Feb. 5 was Gerardo Sicat, the first director-general of the National Economic and Development Authority (NEDA), which was created by President Ferdinand Marcos shortly after he placed the country under martial law.

According to Mr. Sicat, the restrictive economic provisions in the Constitution are the main cause for why the Philippines is still lagging behind its neighbors in the Southeast Asian region. “Those provisions have hampered this progress because we failed to invite or bring in foreign capital that is so critical to a country that has an insufficient amount of savings to generate that high level of development,” said he.

He explained that the country’s ASEAN peers — Singapore, Thailand, Malaysia, and Indonesia — have one thing in common, a fundamental law that is focused on the aspirations of the nation, the structure and form of government, the duties and responsibilities of the main officers of government. This contributed to their economic success as the financial policies and laws that were no longer attuned to the times were easily changed. “If they made mistakes, ordinary laws are so easy to adjust. They (can) correct them within a year or two. In our case, we made mistakes, we cannot make the changes. (It has been) three decades since the people power revolution… and we have not been able to correct them,” added Mr. Sicat.

At the same Senate hearing, Margarito Teves, Secretary of Finance of President Gloria Macapagal Arroyo, said, “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.” Mr. Teves is an officer of the Foundation for Economic Freedom (FEF), which has been advocating for the lifting of the restrictive economic provisions in the 1987 Constitution, seeing these as a binding constraint to the country’s economic growth and development. Mr. Sicat is a member of the advisory board of the FEF.

Mr. Teves was a delegate to the 1971 Constitutional Convention that crafted the 1973 Constitution, the preamble of which was, “We, the sovereign Filipino people… in order… to conserve and develop the patrimony of our Nation…” That constitution had a provision similar to Article XII of the 1987 Constitution — Article XIV, the National Economy and the Patrimony of the Nation. Section 3 provides, “The Batasang Pambansa shall… reserve to citizens of the Philippines or to corporations or associations wholly owned by such citizens certain traditional areas of investments when the national interest so dictates.”

Section 5, says, “No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least 60 per centum of the capital of which is owned by such citizens…”

I do not recall eminent economists like Messrs. Sicat and Teves advocating for the removal of those restrictive provisions from the Constitution during the 13 years that that Constitution was the basic law of the land.

The only substantive difference between the 1973 and 1987 constitutions is the term of office of elected officials. The 1973 constitution has no term limit. The 1987 Constitution limits the president to only one term of six years, the senators to two terms of six years each term, and the representatives and local official to three terms of three years each term.

The 1935 Constitution likewise had an article on the nation’s patrimony — Article XIII, Conservation and Utilization of Natural Resources. That was in accordance with its preamble, which stated, “The Filipino people… in order to… conserve and develop the patrimony of the nation…”

Section 1 of that article provides, “All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to corporations or associations at least 60 per centum of the capital of which is owned by such citizens…”

So, the restrictive economic provisions in the 1987 Constitution were not the product of the EDSA Revolution as the People’s Initiative for Reform Modernization and Action (PIRMA) implied in its TV infomercial “EDSA Fuera.” Rather they are the reaction to the American exploitation of our country’s natural resources as per the 1935 Constitution.

It is said that the negligence of Spain’s colonial rule in developing the country’s economy preserved our patrimony for future generations of Filipinos but America’s colonial regime exploited it to the hilt. The major agricultural export crops — sugar, copra, and hemp were — controlled by American interests. The sugar barons of California reached into the sugar mills of Pampanga and Negros Occidental and made their fortune from the sweat and tears of Filipino labor.

Despite those restrictive provisions in the 1935 Constitution and the devastation wrought on the country by the Japanese invasion and occupation in the 1940s, the Philippine economy prospered during the postwar period. The year 1950 marked the return to post-war levels of activity of most of the economic sectors. The growth of the economy from 1950 to 1966 was significant.

The economy began to slow down when Ferdinand Marcos assumed the presidency in 1966. His administration depended heavily on foreign loans to finance its massive infrastructure program. He established monopolies for his cronies. The main agricultural crops of sugar, copra, and banana, plus resin, cigarettes, cigarette filters, construction, and mass media came under their control. Using his cronies as dummies, he took over flourishing private enterprises, discouraging successful entrepreneurs from growing their businesses bigger for fear of their being grabbed by the power that be.

So, it is not necessary to change the entire 1987 Constitution to attract foreign investments for foreign companies to establish operations here. Even after the 1987 Constitution — with its restrictive economic provision — was promulgated, many foreign companies put up manufacturing plants in the industrial parks in the Calabarzon region. Foreign companies with long-established operations here like Unilever and Procter & Gamble expanded their operations. But some of them, like Intel, left while others, like Colgate-Palmolive, moved their manufacturing plants to another country.

The major reasons for leaving the country entirely or relocating their plant were inadequate infrastructure, high power cost, slow broadband connections, changing regulatory rules, low respect for formal contracts and agreements, high crime rate, highly corrupt bureaucracy and an unstable government. Talk of charter change, especially with the Marcos-Romualdez family back in power, will also deter foreign investment as foreign investors would not know what the political and economic environment in the Philippines would be until the new charter shall have been promulgated and ratified by the people. That could be a few years from now.

Or do those pushing for charter change really just want the “EDSA” Constitution removed from the psyche of the Filipino people just as Feb. 25, the anniversary of the EDSA Revolution, has been removed from the calendar of official holidays?