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Understanding the House's economic Cha-cha

The House Committee on Constitutional Amendments on Wednesday resumed its deliberations on the proposed amendments to the "restrictive" economic provisions to the 1987 Constitution.

The said amendments are contained in Resolution of Both Houses No. 2 authored no less than by Speaker Lord Allan Velasco.

In resuming the so-called "economic" Charter change (Cha-cha), both Velasco and House panel chair Alfredo Garbin Jr. had one thing in mind: lifting the restrictions in the economic provisions in the Constitution would help the country rise from the impact of the COVID-19 pandemic.

Still, some critics from both Congress and the public in general questioned the timing of the hearings amid the global health crisis, while others expressed fear that this would only pave the way for the introduction of political amendments to the Constitution like term extension for some elected officials or lifting their term limits.

What exactly, then, do the pro-Cha-cha lawmakers want to amend in the Constitution, and should the public be worried about these proposed changes?

RBH No. 2 at a glance

Filed in July 2019, RBH No. 2 proposes seven amendments which essentially aim to liberalize the "restrictive" economic provisions in the 1987 Constitution.

Five of these proposed amendments are for Article XII of the Constitution, which deals on National Patrimony, one for Article XIV on Education, Science, and Technology, and another one for Article XVI on General Provisions.

The amendments merely seek to insert the phrase "unless otherwise provided by law" in these economic provisions. For instance, the said phrase would be added in the provision that reserves certain areas of investments to citizens of the Philippines or to corporations at least 60% of whose capital are owned by Filipinos.

The same phrase is also included in the provisions which limit ownership of educational institutions and mass media to Filipinos.

The measure also introduces the same phrase to the provision allowing the State to undertake exploration, development, and utilization activities on the country's natural resources.

It provides that by a vote of three-fourths of all its members, the Senate and the House, voting separately, could introduce amendments to said provisions in the Constitution.

Garbin said the slight change in the Constitution's language "will improve the investment climate and generate much needed investments and jobs to counteract the economic contraction caused by the pandemic."

Deputy Speaker Rufus Rodriguez, meanwhile, said Congress will simply add the phrase "unless otherwise provided by law" to certain economic provisions in the Constitution to add flexibility to them.

“We are going to add the phrase ‘unless otherwise provided by law.' That’s it. We are not taking away the restrictions; those will still be there,” he said.

This amendment will also have to go through a plebiscite, which the House leadership envisions to coincide with the 2022 elections, Rodriguez added.

The need to open up the economy

During Wednesday's hearing, three economics experts testified to the importance of amending the "restrictive" economic provisions in the Constitution to help the country recover from the impact of the pandemic.

For one, former National Economic Development Authority director general Dr. Ernesto Penia said the amendments to the economic provisions are timely because "although the economy has really been clobbered by the pandemic, the economy is recovering slowly––it is getting out of the hole little by little––and we need to accelerate that getting out of the hole.”

“We really need to push that, including allowing FDI (foreign direct investments) in the country, so this recovery will accelerate," he added.

Dr. Gerardo Sicat, founder of the Philippine Institute for Development Studies, also said that amending the Charter, along with complementary and wise economic policies, would lead to a sustained and higher level of per capita GDP growth, higher level of employment for Filipino workers, improved overall level of productivity for the Filipino worker, among others.

Meanwhile, Dr. Raul Fabella, an economist and National Scientist, said lifting the restrictions on foreign ownership "will make the Philippines more foreign investment-friendly.”

“My belief is that who can make the land flower best should own it; the land should be able to produce as much as it can... and citizenship is not a condition for who makes the flower the best," he added.

Rosario Guzman, executive editor at the IBON Foundation, believes otherwise. She said that if the objective of amending the economic provisions is to help the economy recover from the impact of the COVID-19 pandemic, "meaningful fiscal stimulus is better and has more immediate effect."

"Addressing the lack of fiscal stimulus to help the economy recover is more urgent than charter change," she said.

"A large stimulus package closer in magnitude to the projected P1.74 trillion contraction in GDP (gross domestic product) in 2020 will immediately spur growth, raise employment, and improve the welfare of poor households compared to the distant and uncertain gains of merely speculated foreign investment years from now," she added.

Guzman also pointed out that the growing foreign investment in the Philippines has not contributed much to economic progress.

"Despite the supposedly restrictive provisions of the 1987 Constitution, FDI has grown substantially since the 1980s both in absolute amounts and as a share of GDP," she said.

"However, the share of industry and agriculture in the Philippine economy has fallen continuously over that period of globalization and rising FDI," he added.

Questionable process

Apart from its supposed benefits to the country's economy, the process through which the proposed amendments to the economic provisions in the Constitution are being discussed has also been questioned.

For one, opposition lawmaker Albay Representative Edcel Lagman, however, criticized RBH No. 2, saying that it provides for a "mongrelized" process for amending the Constitution.

The measure, he said, effectively authorizes Congress to make constitutional amendments by legislation, which is in violation of the amendatory procedures provided under the Constitution, namely Constituent Assembly, Constitutional Convention, and People's Initiative.

Lagman also questioned Garbin's statement during the hearing the House panel is already sitting as a Constituent Assembly as they tackle the proposed amendments.

"That is strange to me because no committee of the Senate or of the House including the Committee on Constitutional Amendments can sit as a constituent assembly. Because the constituent assembly is composed of members of the House and the Senate in a joint meeting or assembly," he said.

"The House by itself cannot meet as a constituent assembly," he added.

The Senate leadership also maintained that the House panel was not yet sitting as a Constituent Assembly when it resumed its hearing on the economic Cha-cha.

"Congress is on a break, the only way a Con-Ass can be initiated and considered to sit as one, is if it's done in plenary and session assembled," said Senate President Vicente Sotto III.

Meanwhile, ACT Teachers party-list Representative France Castro maintained that political amendments could still be inserted during the economic Cha-cha deliberations.

She said that even as the panel is only deliberating on "restrictive" economic provisions, the Senate could still go in a different direction and tackle political amendments as well.

House panel vice chair Lorenz Defensor assured Castro that the House will only push for amendments to the "restrictive" economic provisions and nothing more.

"Kung sakali mang may ibang bersyon ang Senado at wala yan sa saklaw ng ating House resolution.... dapat lang huwag nating ipasok yan when we approve the bicameral committee report kung sakaling pumasok man tayo doon," he said.

For now, the House panel has set another hearing to continue its deliberations on the economic Cha-cha, but Velasco is already aiming to finish the hearings before the end of 2021 so that it can be presented to the public for ratification alongside the 2022 elections.

Until then, both Velasco and Garbin vowed to make the Cha-cha hearings open and transparent to the public. —LDF, GMA News