Padilla files bill seeking to convene con-ass
Sen. Robinhood Padilla has filed a resolution seeking to convene the Senate and House of Representatives into a constituent assembly to amend the economic provisions of the Constitution and make the economy responsive to present times.
Padilla, chairman of the Senate committee on constitutional amendments and revision of codes, filed Resolution of Both Houses No. 3 for Charter change through a constituent assembly with both chambers of Congress voting separately.
“To accelerate economic growth, and fulfill its international commitment, the Philippines must amend its Constitution by removing these restrictive economic provisions to allow foreign businesses to directly invest in a more conducive landscape,” the senator said.
Speaker Martin Romualdez cited four provisions in the 1987 Constitution – Foreign equity limitations; Discriminatory screening or approval mechanisms; Restrictions on the employment of foreigners as key personnel, and other operational restrictions – that have hindered the economy from taking off.
These are all related to foreign direct investments enjoyed by most Asian neighbors for the longest time, like what the Organization for Economic Cooperation and Development’s data had shown in 2020, ranking Manila “third-most restrictive out of 84 countries.” Manila obtained the ranking in OECD’s FDI regulatory restrictiveness index.
Two constitutional experts – professor Clarita Carlos, chief policy adviser on national security and other affairs at the House of Representatives, and former finance secretary Margarito Teves – also yesterday pushed for constitutional amendment, particularly on its “restrictive economic provisions,” saying the country’s “Filipino First” principle is already “outdated.”
According to them, it is time to remove these provisions to allow more foreign investments in the country.
But for Senate Minority Leader Aquilino Pimentel III and Senators Grace Poe and Nancy Binay, government efforts should be focused more on job generation, sufficient food supply, better infrastructure, health care, and other basic daily living problems.
They said issues on economic provisions have already been addressed during the previous Congress with the passage of the Public Service Act, Retail Trade Liberalization Act, and the Foreign Investments Act.
In filing his resolution, Padilla noted that the Philippines, with its complicated investment regulations stemming from the Constitution’s prohibitive economic provisions, is now lagging behind its neighbors in the Association of Southeast Asian Nations in terms of foreign direct investment registry “despite its offer of tax holidays, and other fiscal incentives.”
He said while the Philippines ratified international trade and investment liberalization treaties to secure foreign investments and foster economic cooperation, the Constitution’s current economic provisions “restrict certain activities of foreign investors on exploration, development and utilization of natural resources; ownership of private lands; grant of congressional franchises; ownership and operation of public utilities; ownership of educational institutions; and ownership and management of mass media and advertising.”
“These economic provisions are perceived to be barriers to trade and investment responsible for the continuous decline of foreign direct investments, and placed the country as one of the most restrictive economies by international standards,” he said.
Under the resolution, the Senate and the House – by a vote of three-fourths of all members, with each chamber voting separately – will tackle amendments to Article XII, Sections 2, 3, 7, 10 and 11; Article XIV Section 4(2), and Article XVI Section 11 (1) and (2).
The proposed amendments generally touch on the insertion of the phrase “unless otherwise provided by law” to selected restrictive sections, meaning, the provisions stay the same or will not be amended by the constituent assembly until Congress passes legislation to relax them.
The same tack of amending the Constitution through the inclusion of the phrase was attempted during the 16th Congress.
Political provisions, including the terms of elected officials, are not included in the resolution.
Romualdez, a banking lawyer, cited UN data that show FDI account for the largest source of external financing in developing countries, greater than remittances, private debt and portfolio equity, or official development assistance.