VP Binay backs easing foreign-investment rule
WASHINGTON - Philippine Vice President Jejomar Binay, considered a frontrunner for the presidency in 2016, said on Thursday he favored relaxing constitutional restrictions on foreign investment to create jobs.
Binay, who has been preparing a run for the past two years and has a strong following among poor Filipinos, was asked after a speech at a Washington think tank if he would support constitutional changes to promote foreign investment.
"Personally I am in favor of revisiting the constitution of the Philippines, particularly that portion of the 60-40 requirement of investors in the Philippines," he said, adding that the aim was to overcome unemployment and poverty.
"More investment, more employment," he said.
The so-called 60-40 rule in the 1987 constitution limits foreign ownership of local firms to 40 percent and is blamed for the low level of foreign direct investment in the Philippines.
President Benigno Aquino has not addressed the issue and Philippines Finance Secretary Cesar Purisima indicated this month that the president did not intend to do so in the remainder of his term.
Among other things, the restriction has prevented the Philippines from joining 12 other nations involved in negotiations on a Trans-Pacific Partnership (TPP) aimed at regionwide market opening.
Binay, who has spent the week in Washington, said the Philippines wanted more job-generating U.S. investment, of which it was receiving less than any of its partners in the 10-nation Association of Southeast Asian Nations.
In a speech that would suit the campaign trail, he sketched out an liberal economic agenda he said was aimed at alleviating poverty and maintaining and spreading the benefits of the country's current economic boom.
The first priority should be to strengthen economic fundamentals by expanding tax revenues - not by raising taxes, but by improving collection and compliance.
He also spoke of the need to increase infrastructure spending from a current 2 percent to 5 percent of GDP and to enhance education, health and environmental and social welfare conditions.
Binay said the "Philippine economic miracle" was too narrowly based on a booming outsourcing industry and record-high remittances from Filipinos working abroad.
"To provide sustainability, as well as greater employment opportunities, the Philippine economic portfolio must diversify equally into the manufacturing, agricultural, tourism and other sectors of the economy," he said.
"We must further liberalize the economy to improve competitiveness and attract investments both local and foreign. We must harmonize local and national laws to ensure investors of orderly business operations."
Boosting tourism, he said, required "a true open skies policy with an aggressive airport development program," while reform of the electric power industry was needed to address high costs to consumers and energy shortages in the south.
The agricultural sector needed modernization to raise some of the lowest productivity levels in the region and to weed out middlemen depriving farmers of the full value of their produce.
Binay also pledged to keep up efforts to combat corruption.
"We must keep our promise to keep a clean and transparent government with a stable policy regime into 2016 and beyond," he said.