FEF: Charter amendments to boost FDIs, clear policies

The proposed Charter amendments expanding foreign ownership rights in key sectors could attract more foreign direct investments (FDIs) into the country and help drive economic growth, according to the Foundation for Economic Freedom (FEF).

In response to a discussion paper by the University of the Philippines School of Economics (UPSE), the FEF said amending the restrictive economic provisions of the constitution would also address the uncertainties of foreign investors.

“We believe that removing the restrictions is a necessary condition since we have to open the door first for investors to be able to come in. For foreign businesses to benefit from better institutions and processes, they must enter the country first,” the FEF said.

It said there is a need to signal that the country is open to FDIs and demonstrate “credible commitment” to this economic framework.

“Removing these anti-FDI provisions in the Constitution will signal our openness to foreign investment,” the group, chaired by former finance secretary Roberto de Ocampo, said.

The House of Representative approved on third and final reading a bill that seeks to remove foreign ownership limits in the 1987 Philippine Constitution.

Lawmakers have been deliberating whether to amend the 1987 Constitution’s economic provisions by inserting the phrase “unless otherwise provided by law” to ease foreign ownership restrictions in education, public utilities and advertising.

“Allowing for flexibility in our economic policy to be more responsive to changing local and global conditions does not throw out the rule book. It merely situates rule making in the proper venue. Adding ‘unless otherwise provided by law,’ merely allows Congress to craft laws that must still align with constitutional principles,” the FEF said.

The group added that the joint resolution of the House and the Senate giving legislators the discretion to determine future economic policies would greatly benefit rather than hurt the country.

“In summary, it is easy to find fault with proposed solutions to problems, while being completely comfortable with doing the exact same thing that created the problems in the first place. After 100 years of solitude from FDI, we believe it’s about time we try solving the problem,” it said.

The FEF disputed the arguments in the UPSE paper that said economic Cha-cha was unnecessary to attract FDIs.

The economists from UPSE had said removing foreign restrictions should not be considered a necessary first step in attracting foreign investments.