Watch more in iWantTFC Video courtesy of the Senate of the Philippines
MANILA — Sen. Franklin Drilon on Wednesday said it is possible to liberalize the economy from restrictive economic provisions in the 1987 Constitution without amending it, as some lawmakers pushed for charter change due to mounting economic and health concerns because of the pandemic.
During the Senate committee hearing on charter change, Drilon said there are 3 bills still pending in the Senate which could improve “in the great deal” investments made in the country. He did not, however, discuss in detail what those measures were.
“Yes there are strong arguments in favor of liberalizing our economy but it can be achieved without touching, in the meantime, the Constitution,” the senator said.
Short-term investments in the country, he said, have also been successful amid the COVID-19 crisis.
“The phrase ‘unless otherwise provided by law’ which appears to be the most convenient tool, will not bring the desired liberalization if we are talking about that because Congress still has to enact those laws,” he explained.
“I’m at a view that amending the Constitution by adding the phrase… is not a golden bullet which will bring everything in,” he added.
The Foundation for Economic Freedom (FEF) had earlier said that adding the phrase “unless otherwise provided by law” in those restrictive provisions would give Congress the flexibility and leeway to conform with present economic and technological conditions.
Lawmakers from both the Senate and House of Representatives have argued that amending such economic provisions in the Constitution will help the country battered by the pandemic.
Expert: Amending economic provisions in Constitution ‘ill-timed, not urgent’
Rosario Manasan, a senior research fellow at the Philippine Institute for Development Studies, said liberalizing restrictive foreign direct investment (FDI) was not urgent and could be politicized, noting that there are other ways to uplift the country’s economy despite the pandemic.
“I think the answer here is definitely no. Amending the Constitution now to liberalize restrictive economic provisions is ill-timed. First, it heightens the risk that controversial amendments will also be introduced very much like a trojan horse,” Manasan said.
Manasan, who specializes in public finance and fiscal policy, pointed out that studies showed that foreign direct (FDI) restrictions and flows are “highly negatively correlated with each other.”
An FDI flow is the “value of cross-border transactions related to direct investment during a given period of time,” according to the Organization for Economic Cooperation and Development.
“The statistical power of ownership restriction in explaining FDI flows is found to be low, indicating that other factors are also at play,” she said.
She also said it is possible for lawmakers to be distracted from more pressing issues, such as addressing the health and economic decline caused by the pandemic, due to the removal of economic restrictions.
The Philippine Chamber of Commerce and Industry, the country’s largest business group, had said that the government should instead focus on enacting bills that promote economic recovery.
The group also urged Congress to limit possible amendments to the Constitution's economic provisions should charter change be pursued.
Various business groups have been pushing for years to lift restrictions on business ownership in sectors like public utilities and retail.
One of the framers of the 1987 Constitution earlier warned that fresh moves to amend economic provisions of the charter were “very dangerous and insidious.”