Cha-cha, other reforms vital to peace and investments — PHL stakeholders

A slew of reforms including changes in the constitutional provision on foreign ownership are necessary to ensure a steady stream of investments in the Philippines and a lasting peace in Mindanao, an economist, a businessman, and a member of the Moro Islamic Liberation Front (MILF) told journalists in a forum on Thursday.

 

The Philippine economy is largely driven by consumer spending which accounts for 54 percent of the gross domestic product, according to the World Bank. In turn, 10 percent of the GDP is fueled by money sent home by about 10 million Filipinos who live and work as professionals and domestic helpers overseas, National Statistics Office (NSO) data showed. Investments, however, is roughly 20 percent of the GDP, according to the NSO. 

 

“Open up the Philippine economy,” former Budget Secretary Benjamin Diokno urged during the Foreign Correspondents Association of the Philippines' forum in Makati City.

 

The University of the Philippines School of Economics professor was referring to a provision in the 1987 Constitution which limits foreign ownership to 40 percent particularly in utility companies. The Charter was written during the time of then-President Corazon C. Aquino.

 

As to why the Philippines should allow foreign investors to control domestic enterprises, businessman Manuel V. Pangilinan noted it would, in the end, benefit the country.

 

“Foreigners would be more committed to the success of a project if they had a bigger stake in it than currently allowed,” said Pangilinan, who is a managing director of Hong Kong-based conglomerate First Pacific Co. Ltd.

 

Both panelists see how the 60-40 ownership rule – to protect Philippine interest – became a major stumbling block against investments.

 

The country has since “lagged behind Southeast Asian neighbors in terms of direct investments” because of the 60-40 provision, Diokno noted.

 

The MILF also sees the necessity of Charter change to implement the recently-signed Bangsamoro Framework Agreement.

 

“The government believes there is no need for Charter change and the present set up has all the flexibilities to accommodate any agreement. Our belief is that it requires structural change in the Constitution,” said MILF chief negotiator and spokesperson Mohager Iqbal.

 

However, the rebel group is not pressing hard on the issue so as not to complicate the matter. Instead it is leaving the task up to the yet-to-be formed BangsamoroTransition Commission to propose amendments to the Constitution should the commission see the necessity for such changes.

 

“(Giving a) proposal is not unconstitutional. We have to make a proposal if in case it requires amendment of the Constitution,” he said. 'A bold economic program'

 

In September 2011, congressional leaders batted for a bicameral constituent assembly – the Senate and the House of Representatives to vote on it separately – to review the Constitution.

 

Discussions on Charter change, however, took a back seat, with the Cabinet currently reviewing economic costs and gains to changes in the foreign ownership provision.

 

“This is hard. I believe he (Aquino) is attached to his mother’s Constitution,” Diokno noted.

 

Aside from Charter change – popularly known as Cha-cha – Diokno also called for a change in the country’s political system.

 

“Legislators are expected to pass laws and not build roads, school buildings and award scholarships,” he said.

 

“President [Aquino] and Congress should agree on a common agenda for addressing past neglect in infrastructure, education and health,” the economist added, noting that a weak political system is another “hurdle for investments.”

 

New and better infrastructure is necessary to usher in more investments, Pangilinan said.

 

He also noted business opportunities that offer the best of both profitability and interest of the people.

 

The government and private sector, Pangilinan said, should partner in developing oil and gas resources, promoting medical tourism and in addressing power and water supply problems.

 

“There is hope for the Philippines but only if our leaders do the right things. But by failing to act boldly, the Philippines run the risk of falling further behind its growing Asian neighbors,” Diokno said.

 

“The present and future Filipino leaders should design and implement a bold economic program with clear understanding that such requires strong leadership, a clear road map, and effective and competent government,” he added. — VS/OMG, GMA News