Yesterday’s approval of the economic amendments in the 1987 Constitution by a committee of the House of Representatives is a big step towards the country’s long-term recovery from the impact of the COVID-19 global pandemic.
Usec Jonathan Malaya, Department of the Interior and Local Government (DILG) spokesman, said that the 62 aye, 3 nay and 3 abstain votes on Resolution of Both Houses No. 2 authored by Speaker Lord Allan Velasco by members of the House committee on constitutional reforms would lead to faster and longer-term economic recovery.
“The passage of the resolution is one giant step towards achieving our goal of improving the investment climate of the country which has been curtailed for the past 34 years by the outdated economic provisions of the constitution and devastated by the global pandemic,” he said.
Malaya thanked Ako Bicol Party-list Rep. Alfredo Gavin Jr., the committee chair, as well as other committee members for voting in favor of constitutional reform. RBH 2 will now go to the plenary for debate.
He said the DILG would help Congress in explaining to the people the benefits to be derived from lifting the economic restrictions in the 34-year-old Charter. “We are confident that the lifting of these restrictions would lead to the entry of more foreign investors and capital to pump-prime the economy and replace the jobs that were lost because of the pandemic,” Malaya said.
He said that the Constitution was written 34 years ago when the dominant idea was protectionism. “The world has changed, and so must our laws,” he added.
RBH 2 proposes to add the phrase “unless otherwise provided by law” to constitutional provisions that provides that only Filipino citizens can control, own, and/or lease alienable lands of public domain, natural resources, public utilities, educational institutions, mass media companies, and advertising companies in the Philippines.
As such, lawmakers can legislate a law to lift the current prohibitions on foreign investors. The committee, however, dropped RBH 2's previous proposal to allow foreigners to own private land in the Philippines.
“The DILG fully supports the decision of the Committee to prohibit foreigners from owning private land in the country. Foreign investors can always do long-term leases for their factories and houses, so this will have no impact on the quality of foreign investment,” he said.
According to Malaya, opening the economy to foreign investors would yield more jobs, generate more funds for the treasury, and strengthen foreign partnerships for economic growth and sustainability.
He cited a study by the UP Research and Extension Services Foundation-Regulatory Reform Support Program for National Development (UPPAF-RESPOND) which indicated that easing the constitutional provisions that bar foreign ownership of certain industries would cut down unemployment by 40 percent to a rate of 5.1 percent from 8.7 percent recorded in October 2019.
The House Committee on Ways and Means chaired by Rep. Joey Salceda in its study concluded that the passage of the economic amendments will create some 6.6 million jobs in 10 years as well as 330 Billion in annual foreign direct investments.
“The approval would send a strong signal to the world that the Philippines, like other governments which instituted constitutional reforms, is now ready to provide an attractive investment climate and make the necessary adjustments in the economy to make progress trickle down to the poor,” he said.