The House of Representatives has approved on second reading a measure seeking to amend economic provisions of the Constitution, which when ratified would allow more foreign ownership of certain classes of assets.
In a viva voce vote during the Wednesday plenary session, the chamber approved Resolution of Both Houses (RBH) 1, which foreign investors see as a positive move towards attracting more investment to the Philippines.

The measure, however, would have to wait until the final stretch of Congressional sessions as the Senate will not be picking up such talks until the bill secures final approval from the House.

“Once we receive RBH 1 as passed by the House, it will be referred to the Committee on Constitutional Amendments which will conduct hearings and submit a report to the Senate plenary,” Senate President Franklin M. Drilon said via text.

“We cannot take it up in plenary in June,” Mr. Drilon clarified.

House Speaker Feliciano R. Belmonte, Jr. introduced the bill during the opening of the 16th Congress, which seeks to insert the phrase “unless otherwise provided by law” to the portions of the Constitution which restrict foreign ownership of land, natural resources, public utilities, media, and advertising.

Plenary debates on the measure started in August 2014, shortly after the opening of the second regular session. Mr. Belmonte has since identified RBH 1 as a priority, despite a cool reception from Malacañang.

Once passed, the amendments will make the Constitution more flexible, and will give the green light next Congresses to enact future laws allowing foreigners to own more types of assets in the Philippines.

RBH 1, however, will not expressly lift ownership caps, as it only provides future Congresses leeway to enact future laws to accommodate full foreign ownership of companies in selected industries, which is explicitly prohibited under the 1987 Constitution.

At present, foreign firms are only allowed to own up to a 40% stake in such companies, with the bulk reserved for local investors.

“This is the first attempt to amend the 1987 Constitution which has reached this point. I am very happy,” Mr. Belmonte told reporters.

The crucial point, however, is assembling the required three-fourths vote of the entire chamber, or least 218 of 290 members. Mr. Belmonte said congressional leaders are considering such a vote next week.

Foreign business leaders welcomed the development, saying it gives a boost to the local business climate.

“We are encouraged by the historical move of the House and congratulate the lawmakers,” Henry J. Schumacher, executive vice-president of the European Chamber of Commerce of the Philippines said in a text message.

Ian W. Porter, president of the Australian-New Zealand Chamber of Commerce of the Philippines, added to say that progress on RBH 1 is “a step in the right direction.”

The lifting of the constitutional restrictions on foreign ownership is one of seven priority legislative reforms sought by foreign and local business groups for the home stretch of the Aquino administration.

Nobuo Fujii, president of the Japan Chamber of Commerce of the Philippines, said the ownership bar has been “an important hurdle for foreign investment,” adding that the liberalized ownership rules would effectively impact on investments.

“Foreign business will welcome any and all legal changes that level the playing field,” added John D. Forbes, senior advisor of the American Chamber of Commerce of the Philippines.

Should the RBH 1 secure the needed votes for third and final reading approval at the House, it still needs to secure the three-fourths vote of the Senate.

Should it be approved by both chambers, the bill must be ratified by Filipinos through a plebiscite before it is deemed in effect.

Source: Business World Online