Amid the ongoing talks of Charter change (Cha-cha) in both chambers of Congress, Finance Secretary Benjamin Diokno on Tuesday said amendment in the Constitution should pave the way to opening more sectors to foreign investors.
“I think times have changed and I think we should be open to more improvement so personally I am for opening up some sectors of the economy [that are] still closed,” Diokno said in a press conference in Manila.
The Finance chief, in particular, said the foreign ownership restrictions on the education sector as well as the mass media should be relaxed.
The 1987 Constitution provides that ownership and management of mass media shall be limited to Filipinos, while educational institutions are subject to the 60-40 rule on equity in favor of Filipinos.
“Why don’t we welcome branches of Yale or Harvard or other [foreign] universities in the Philippines? Also, media is closed under the current Constitution,” Diokno said.
Nonetheless, the Marcos administration’s chief economic manager said that the Philippines has “already opened up our economy.”
“The recent legislation, for example, the Public Service Act, we opened up many areas there - telco, shipping, toll roads, airports,” Diokno said.
President Rodrigo Duterte in March 2022 signed a law amending the Public Service Act and effectively allowing 100% foreign ownership of public services such as telecommunications and railways.
The new law reclassifies telecommunications, railways, airlines, and logistical facilities as public services from their previous classification as public utilities.
Under the 1987 Constitution, foreigners may only own up to 40% of public utilities.
Diokno also cited the recent decision which allowed 100% foreign ownership on renewable energy investments.
In November last year, the Department of Energy (DOE) amended a section of the Implementing Rules and Regulations (IRR) of the Renewable Energy (RE) Act of 2008 which effectively lifted the constitutional foreign ownership restriction on the exploration, development and utilization of sun, wind, and the ocean or tidal energy.
“So we have made advances even without a Charter change but admittedly there are provisions in the Constitution that are kind of protectionist,” the Finance chief said.
Inflation mitigation strategy
Diokno also provided an update on the Inter-agency Committee on Inflation and Market Outlook (IAC-IMO)’s strategies to mitigate inflation in the country.
The creation of the IAC-IMO was approved in a sectoral meeting on March 7, 2023 by President Ferdinand Marcos Jr. as a proactive measure to fight inflation.
The committee serves as an advisory body to the Economic Development Group (EDG) on measures that will keep inflation, particularly on food and energy, within the government’s target range.
It is co-chaired by the secretaries of Finance and the National Economic and Development Authority (NEDA), while the Secretary of the Department of Budget and Management (DBM) serves as the vice-chairperson.
Members of the IAC-IMO include the Department of Agriculture (DA), Department of Energy (DOE), Department of Science and Technology (DOST), and Department of Trade and Industry (DTI). The DOF serves as the committee’s Secretariat.
Diokno said that to provide additional information on the local production of key commodities, the IAC-IMO will be tapping advanced technologies to complement traditional modes of data and analysis.
This will allow the committee to submit a complete and detailed assessment of the country’s market outlook.
“[B]ased on our initial scoping and conversations with different agencies, there are various frameworks and tools that use satellite imagery to analyze demand and supply of key commodities,” Diokno said.
Three tools were discussed during the meeting, according to the Finance chief.
First is the Philippine Rice Information System (PRiSM), which is an operational system for nationwide rice monitoring that identifies the scale and magnitude of production gaps in rice.
Diokno said with the use of Earth Observation technologies, crop growth simulation models, and information technology; PRiSM provides timely information on rice area, start of season maps or planting dates, yield estimates, mid-season forecast, end of season yields, and extent of area affected by flood or drought.
The project is already institutionalized and housed within the Philippine Rice Research Institute (PhilRice).
The second tool is the Project Smarter Approaches to Reinvigorate Agriculture as an Industry (SARAI) in the Philippines – an action-research program that provides agricultural stakeholders with site-specific advisories in order to mitigate climate risks.
Project SARAI provides in-season crop forecasts and yield estimates; assessment of droughts and availability of rainfall; and crop advisories on how to maximize crop growth while addressing potential pest or disease problems, according to the Finance chief.
Lastly, the Data Analytics Technologies and Operation Services for Space Data (DATOS) project developed by the DOST-Advanced Science and Technology Institute (ASTI) uses remote sensing, space technology, and data science applications to support critical activities on disaster mitigation, analysis, and advice.
The Philippine Space Agency (PhilSA) also uses satellites for disaster risk management, defense and security, and planning and econometrics.
“We want to introduce science into decision making and that’s what we’re going to do,” Diokno said.
At present, the Finance chief said the IAC-IMO is in close coordination with the Philippine Statistics Authority (PSA), Philippine Space Agency (PhilSA), DOST - ASTI, and various government agencies in order to apply advanced science and technology into their assessments.
“We need to increase production domestically and we need to increase productivity in agriculture because if we compare our agricultural output with other countries, we are way behind,” Secretary Diokno said.—LDF, GMA Integrated News