MANILA — House Speaker Lord Allan Velasco on Thursday said he is “open” to relaxing the constitutional restriction on foreign investments, but said the 18th Congress may no longer have time to pursue it.
In his message at the 2020 Arangkada Philippines Forum, Velasco said while he is open to relaxing the “restrictive provisions” in the Constitution regarding the matter, the Congress might not have the time to do it given the things lawmakers need to attend to.
“I am also open to amendments towards relaxing the very restrictive provisions of our constitution on foreign capital… [But] maybe we don’t have time for it anymore in this 18th Congress," Velasco told the Joint Foreign Chambers of the Philippines.
Notwithstanding, this overdue constitutional amendment should be tackled and addressed with finality in the next Congress,” he added.
Section 11, Article XII of the 1987 Constitution limits foreign equity to a maximum of 40 percent of a public utility enterprise.
But the Speaker said the House of Representatives has passed on third and final reading bills seeking to make the Philippines “more friendly” to foreign investors. These include amendments to the Public Service Act, the Retail Trade Liberalization Act, and the Foreign Investments Act.
The Joint Foreign Chambers of the Philippines targets to secure $50 billion in foreign direct investments and create 3 million jobs in the Philippines in the next 10 years.
COVID-19 economic stimulus
For economist and House Deputy Minority Leader Stella Quimbo, the Philippines’ relative difficulty in controlling the spread of COVID-19 compared to ASEAN neighbors makes it “less attractive” to foreign investments.
Quimbo pointed out that the country’s COVID-19 economic stimulus in the Bayanihan 2 and the proposed 2021 national budget is not enough.
“The national budget for 2021 should be a COVID budget, meaning, it must have a sufficient COVID response. Yet only P248 billion worth of programs are lodged in the 2021 budget for COVID response... If we add P165 billion to that P248 billion, that would mean only a total of P413 billion as fiscal stimulus,” she explained.
“To offset the multi-trillion peso loss, P413 billion in stimulus is not enough. This is like using a garden hose to save a burning skyscraper,” said the lawmaker.
She is pushing for a Bayanihan 3 bill, which will augment the country’s COVID-19 war chest by P400 billion.
“Even if we grow at 7 percent next year, GDP levels will still be less than 2019 levels, and the GDP per capita will drop by 5.9% in 2021 compared to 2020. So clearly, pump priming is urgently needed,” she said.
Senator Ralph Recto and Rep. Sharon Garin, meanwhile, expressed support for a bigger stimulus package.
Garin said talks are still ongoing on funding for the measure.
“If you look at the treasury reports, there [is] a lot of cash. There’s over a trillion pesos of cash… There is hope for more aggressive spending behavior. That’s the clamor of pretty much many sectors of society,” she said.
Recto, however, expressed belief that funds under the Bayanihan 2 law may still be used next year.
“As far as Bayanihan 2 is concerned, I think that it does not lapse by the end of the year. That interpretation will be good for the executive. They will have more leeway to spend not only the 2021 budget, but also Bayanihan 2,” Recto said.
He is confident the proposed 2021 national budget will be passed on time, and expects the lower house to adapt the Senate’s version of the bill.
Security of tenure bill
Recto also shared his sentiment about the Security of Tenure bill, which recently hurdled the lower chamber.
“The government has the most number of contractuals and job orders. So [the] government should not tell the private sector how to do their business, if we cannot do our own security of tenure,” he said.
Last year, President Rodrigo Duterte vetoed a version of the bill, after some business groups warned that removing the option to engage in contractualization may weaken investment in the country.
The Security of Tenure bill, which was approved by the lower house, seeks to end labor-only contracting, but allows legitimate job contracting if it satisfies the conditions.
“The main driver is the executive for this bill. It has been pending in the House for so long,” Garin said.