Amending our economic provisions
On my way to the Ninoy Aquino International Airport (NAIA) Terminal 1 on Monday night last week, I could already see from a distance the sea of red lights, a signal, no doubt, that traffic was at a standstill.
It’s one of those days when there were more passengers than usual.
On one side were hordes of departing Filipino workers, their lives packed in suitcases and boxes of different shapes and sizes as they prepared to leave their home country to toil in distant shores.
Adding to the crowd are their loved ones sending them off.
Roughly 4,000 to 6,000 Filipinos leave the Philippines every day to find gainful opportunities abroad.
What if, says House ways and means chairperson and Albay 2nd District Rep. Joey Salceda, instead of sending our labor force abroad, “we attract foreign investments and create jobs here in the Philippines?” I agree with the lawmaker on this. Perhaps if there were more better-paying jobs in the Philippines, our fellow Filipinos wouldn’t be forced by circumstances to work abroad.
This is Salceda’s case in pushing for amendments to the economic provisions of our 1987 Constitution.
The only way the Philippines can attract more foreign direct investments (FDI) is to ease restrictions as Vietnam did.
Thus, we now have Resolution of Both Houses No. 6, which essentially proposes to ease limits on ownership of public utility franchises, currently restricted to Filipino citizens and corporations, as well liberalize educational institutions, among other proposals.
A tale of two cities
Vietnam used to have tighter FDI restrictions, Salceda said. However, in 1987, it passed the Foreign Investment Law with the aim of attracting foreign capital for local development.
Soon after, Vietnam’s economy grew to a stellar $31.173 billion in 2000 from $6.472 billion in 1990, while GDP per capita grew to $390 in 2000 from $95 in 1990.
Where are we in this? In 2022, the Philippines attracted $9.2 billion in net FDI inflows compared to Vietnam’s $22.4 billion, according to available data.
Oligopolies
Another argument for easing economic provisions, Salceda said, is that it is expected to lead to greater competition in the domestic market.
He noted that our local companies and conglomerates find it convenient to just keep their production and investments below competitive levels.
I agree with the lawmaker on this, too. It’s perhaps the reason the Philippines has failed to industrialize.
We also have to contend with our local companies’ sometimes poor services because there are no alternatives.
If economic provisions in the Constitution are lifted, Salceda estimates that by 2031, we would see an annual average increase of P330.45 billion in FDI and 660,897 new jobs.
As I said before, I agree with calls to amend some economic provisions of the Constitution, like, say, easing foreign ownership caps in education and the media.
Filipinos who could not afford to send their children to study abroad have missed out on the chance to experience education from topnotch global universities. Yale University, for instance, has a branch in Singapore but none in the Philippines.
However, I don’t agree with allowing foreigners to exploit our natural resources. Foreigners should not get a free pass and our lawmakers must guard against this.
Attracting FDIs More importantly, I argue that there is no single solution in attracting FDIs.
Easing economic provisions in the Constitution won’t bring in FDIs for as long as it remains difficult to do business in the Philippines, no thanks to corruption and political patronage.
Foreign investors want stability and good governance, not bureaucratic cobwebs and shakedowns.
This means that even if we change the entire Constitution, it’s useless if we don’t change our rotten culture of corruption.
Foreign investors will continue to shy away and sadly, as a result, thousands of Filipinos will continue to fly out everyday to toil in distant lands.
Corn production shortfall
How is the Department of Agriculture addressing the shortage in corn, especially with El Niño seen persisting until next year?
I’m wondering about this after a discussion with a livestock producer who said that their industry faces a perennial shortfall in the domestic production of corn. This producer supplies to a major local poultry brand.
Even the Foreign Agricultural Service (FAS) of the US Department of Agriculture has said there is a domestic production shortfall.
As such, it estimates that corn imports will increase to one million metric tons for marketing year 2023 to 2024 because of the shortfall.
Corn production is expected to decline to 8.2 million MT because of recent typhoons and the continued presence of army worm, FAS said in a September 2023 report.
The El Niño weather disturbance has also dried up some cornfields.
Clearly, our local corn producers have not been able to keep up with the demand of livestock producers who rely on corn as feedstock.
Industry estimates show local production is short by roughly 30 percent to 50 percent.
Unfortunately, industry players are unable to bring in the required corn requirements because of government efforts to withhold the MAV volume for select commodities such as corn, my sources say.
Industry players are now wondering where they will get their corn if local farmers cannot provide them with the much-needed inputs for animal feeds. “It’s a perennial problem,” said my source. As such, they are pushing for higher import volumes for corn at lower tariffs.
And while we’re at it, the government should also work double time to help local corn farmers boost their production.