Congress of the Philippines
Congress of the Philippines
02/08/2023 | Press release | Distributed by Public on 02/08/2023 02:59
House panel reviews Constitution to attract foreign capital
PRESS RELEASES
SOURCE: Press and Public Affairs Bureau
House panel reviews Constitution to attract foreign capital
08 February 2023 04:40:07 PM
Members of the House of Representatives who are pushing for Constitutional amendments have reached a consensus to lift its overly-protective economic provisions that restrict the inflow of foreign capital.
Speaker Ferdinand Martin G. Romualdez on Wednesday said congressional deliberations on the proposed Constitutional amendments are more focused now on the need to encourage investments that would further stimulate economic activities, create job opportunities, reduce poverty and lower prices of goods and services.
He gave an indication this Wednesday morning of his colleagues' inclination in a speech celebrating Constitution Day in Malacañang, with President Ferdinand "Bongbong" R. Marcos Jr. as guest of honor.
Speaker Romualdez, who is Philippine Constitution Association (Philconsa) president, said the House Committee on Constitutional Amendments is currently conducting public hearings and consultations on proposed changes in the 36-year-old Constitution.
He said aside from hearings in the House at the Batasan complex in Quezon City, the committee chaired by Cagayan de Oro City Rep. Rufus Rodriguez has scheduled public discussions and dialogues in other parts of Luzon, Visayas and Mindanao.
"The proponents of the lifting of the economic provisions in the Constitution agree on one thing, opening the economy wide for inflow of foreign capital is the key to address the aspirations and ideals of Filipinos in present times," Speaker Romualdez said.
"Ang pangarap ng bawat pamilyang Pilipino sa ngayon: isang mapayapang komunidad na may trabaho, mataas na sahod, murang bilihin, at pag-asang umunlad pa sa buhay," the Speaker stressed.
"That is why, when the President in his travels as the number one salesman of the country, we are often asked that after you have made so much progress and gains in opening up the Philippine economy, the last missing piece of the puzzle remains, how about your restrictive Constitution? That is why we in Congress are facing up to this question and to this issue that burns to our minds today and may actually open up the aspirations of the Filipino people for tomorrow," he said.
He highlighted the need for foreign direct investments or FDIs by citing data and the experiences of other countries, culled from the reports of the Congressional Policy and Budget Research Department, which show how FDIs stimulate economic growth.
He said based on UN data, FDIs account for the largest source of external financing in developing countries, greater than remittances, private debt and portfolio equity, or official development assistance.
"Higher FDI inflows can ease capital constraints and contribute to output and employment growth. Given the appropriate host-country policies and a basic level of development, a preponderance of studies shows that FDI triggers technology spillovers, assists human capital formation, contributes to international trade integration, helps create a more competitive business environment and enhances enterprise development," he said.
"All of these contribute to higher economic growth, which is the most potent tool for alleviating poverty in developing countries," he said.
Speaker Romualdez lamented that the country has not been receiving as much FDIs as its neighbors are getting.
In 2020, he said the Philippines ranked third-most restrictive out of the 84 countries in the Organization for Economic Cooperation and Development's (OECD) foreign direct investment regulatory restrictiveness index (FDI Index).
"Barriers to foreign direct investment (FDI) in the Philippines comprise of four main types of restrictions: 1) Foreign equity limitations; 2) Discriminatory screening or approval mechanisms; 3) Restrictions on the employment of foreigners as key personnel; and 4) Other operational restrictions, e.g., restrictions on branching and capital repatriation or land ownership by foreign-owned enterprises," he said.
He said investment restrictions on foreign ownership range from requiring at least 60 percent Filipino ownership, to total prohibition.
He added that the Constitution prohibits foreign ownership in mass media and allows only 30 percent foreign capital in advertising agencies, and 40 percent in educational facilities.
"In the education sector, foreign ownership caps prevented the Philippines from hosting topnotch universities seeking to establish a presence in Asia," he emphasized.
He pointed out that while the country has been addressing foreign ownership limitations that has constrained investment in many sectors through legislation such as the Public Services Act, the Retail Trade Liberalization Act and the Foreign Investment Act, "fundamental investment restrictions enshrined in the Constitution could not be corrected by simple legislations nor by executive decisions."
The House leader noted that 36 after the Charter was ratified on Feb. 2, 1987, there are questions being raised about the Charter, such as: "Is the Constitution still relevant to our people as they envisioned it to be? Is it still reflective of the aspirations and ideals of the Filipino people? Nilalaman pa rin ba nito ang pangarap ng bawat pamilyang Pilipino?"
He said he and other House members "are currently swamped with requests from our constituents on the need to revisit certain provisions of the 1987 Constitution."
"That was the reason why a number of congressmen have filed several bills proposing amendments to the Constitution for various reasons, ranging from lifting economic restrictions to structural reforms," he said.
He noted that political group Kapatiran filed a People's Initiative petition in Congress for constitutional amendments.
"It is the mandate and duty of the House of Representatives to deliberate on the legislative measures filed, including the direct petition from the people which takes precedence in the discussion," he added.
Romualdez thanked President Marcos for inviting Philconsa to hold its 36th-year Constitution Day celebration at the Palace and for being its guest of honor and speaker.
He also expressed his gratitude to Philconsa for being "the vanguard that not only promotes vigilance in protecting and defending the Philippine Constitution, but also in promoting its growth as a vital and relevant document for the Filipino nation."(END)