'Economic Cha-cha' House approval draws mixed reactions

RG Cruz, ABS-CBN News

Posted at May 27 2021 12:07 AM

MANILA - The approval of Resolution of Both Houses No. 2 which seeks to amend the constitution and empower Congress to relax constitutional limits to foreign investments in the country drew mixed reactions.

In a statement, House Ways and Means chair Albay 2nd District Rep. Joey Salceda, a principal sponsor of the RBH 2, said he hopes the Senate starts deliberating on the issue soon.

"We will approve this on third reading and send it to the Senate. It’s their move now. The House wants this done, soon. That is for certain. But we hope the Senate begins deliberating soon. The timing is efficient, since we could have the plebiscite along with the 2022 elections," he said.

Salceda also maintained their proposal shuts out changes to the political provisions of the constitution. 

"RBH 2 is pure economic reform. We know and understand that any political charter change will be dead on arrival," he added.

In his sponsorship remarks on the proposal, Salceda called on the country’s lawmakers to "simply do what already worked for our neighbors" in Southeast Asia.

He cited the success of foreign investment liberalization reforms undertaken by Vietnam.

“Vietnam began to overtake us in FDI-to-GDP by 1990, just 3 years after Doi Moi and the 1987 Constitution. Due to this underperformance, the average Vietnamese will be wealthier than the average Filipino over the next decade," Salceda said.

"You have to remember, this country began poorer than us, had more conflict that we ever had, was nearly completely bombed, and had to rebuild almost from scratch. And yet, they have leapfrogged us. The simple difference: they opened their economy to the world. We didn’t," he added.

Salceda added that the 1987 Constitution "hardcoded paranoia" and "limited the progress of future generations with the fears of the past."

Salceda also cited a study from the Organization for Economic Cooperation and Development (OECD) which outlined top investment barriers. Three of those barriers, Salceda pointed out , are present in the Philippines because of the economic restrictions in the Constitution.

The Constitution-related barriers in the top 10 are “foreign ownership restrictions in the law, stipulations on management, such as regulations that nationals or residents must form a majority of the board of directors, and nationality-based restrictions on operations.

Salceda also said the Philippines is the most FDI-restrictive country in the Association of Southeast Asian Nations (ASEAN).

"We have the most doors closed of any ASEAN country. And we expect visitors to come. This makes no economic or logical sense. We need investments to come. So, what makes sense is to open the doors that we can," he said.

“The Philippines has locked itself out of significant foreign investments, and therefore job creation. We have spent hundreds of billions of pesos in foregone revenue for tax incentives, when we have not tried a simpler, cheaper solution: opening industries in need of capital to foreign investment through legislative action. Instead of sending our labor force abroad, let us attract foreign investment and create the jobs here in the Philippines,” Salceda added.

Meanwhile, Kabataan Party-list condemned the approval of the measure.

"Lugmok na nga ang ekonomiya, ibubukas pa lalo sa mga dayuhang kumpanya na siyang magpipiyesta sa kung ano ang natitirang likas na yaman at rekurso para isalba ang kanilang mga dambuhalang negosyo mula sa epekto ng pandemya," Kabataan Partylist national spokesperson Raoul Manuel said in a statement.

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