‘Cha-cha not solution to Phl economic woes’

Amending certain provisions of the 1987 Constitution is not a guarantee that economic problems in the country will finally be addressed, a research and advocacy group said.

In a statement, IBON Foundation expressed its opposition to Charter change (Cha-cha), noting that the administration’s reasons in amending economic provisions are erroneous.

IBON raised some points as to why an economic Cha-cha is not a solution and that it could only worsen the country’s problems.

“Cha-cha will only bring more of the same foreign investment liberalization that has stranded the country’s development for decades and left millions of Filipinos struggling amid a jobs crisis,” IBON said.

First, IBON noted that more foreign investment does not mean development, emphasizing that the stock of foreign investment is now nearly 30 percent of gross domestic product (GDP) and yet this remains insufficient for development.

“Foreign investment has not fundamentally developed the Philippines, with only fleeting short-term gains,” the group said.

Data showed that foreign investment inflows have increased significantly from measly $187 million in the 80s to as much as $10.6 billion two years ago.

However, the majority of total approved investments have gone into foreign-dominated manufacturing rather than domestic agriculture and Filipino industries.

“Despite allowing 100 percent foreign ownership, the manufacturing sector is at its smallest GDP share in 75 years at 17.6 percent for the first three quarters of 2023,” IBON said.

“This is the lowest since the 16.3 percent in 1949. There has also been a conspicuously large decline in the sector’s employment to its lowest in 20 years. Meanwhile, the GDP share of agriculture is at its lowest in history at 8.4 percent,” it said.

Further, IBON argued that the context of accelerating globalization that Cha-cha proponents are clinging to is antiquated, especially after the 20082009 global financial and economic crisis.

The group said protectionism and investment regulation have been growing since then and foreign trade and investment have plateaued amid slowing global trade and growth.

It should be noted that global growth is expected to slow for a third consecutive year to 2.4 percent in 2024.

Likewise, international trade is losing its steam as a growth driver with global trade growth weakening to 0.6 percent.

“The foreign investment the government hopes to attract with economic Chacha will only benefit local oligarchs and foreign corporations,” IBON said.