Foreign chambers back changes to Constitution

THE Joint Foreign Chambers of Commerce in the Philippines (JFC) backs the revision of the restrictive provisions in the 1987 Constitution to allow a greater inflow of foreign investments into the country.

The chambers added that removing economic restrictions would facilitate the inflow of foreign direct investments (FDI) to the Philippines, which lags in Southeast Asia in terms of FDI.

“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 a letter addressed to House Speaker Ferdinand Martin Romualdez.

It added that the benefit of easing restrictions through legislation or executive regulation rather than amending the Constitution is the ability to easily adapt the regulatory landscape for FDI to technological advancements, comply with international treaty obligations, and benefit from emerging global economic opportunities.

Citing the Asean Investment Report 2023, JFC said that FDI flow in the region rose 5.5 percent in 2022 to a record $224 billion, around 17 percent of global FDI.

“The Philippines hasn’t benefited significantly from those positive gains, with FDI flow in 2022 declining to $9.2 billion from $12 billion in 2021,” said JFC.

“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,” it added.

The JFC said that 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.”

The JFC includes the American, Australian-New Zealand, Canadian, European, Japanese and Korean chambers of commerce and the Philippine Association of Multinational Companies Regional Headquarters.

“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,” said JFC.

It added that recent developments underscore the importance of unrestricted movement of capital across borders as well as a fair level between foreign and domestic investors.