John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines (AmCham), said Charter change is critical and will go along way to ensure that economic development will continue after the current administration bows out.

“The Palace has many priorities and the business community is working with the government on many of its economic reforms. But with millions of jobs needed and poverty still extensive, additional reforms such as the resolution of Speaker [Feliciano R.] Belmonte, [Jr.], remain very important in the ‘last two minutes’ to sustain economic growth. Diplomats, economists, business groups and investors have long supported replacing the equity restrictions with laws. We hope their recommendations will be implemented soon,” he said in a text message.

For his part, Peter L. Wallace, who heads The Wallace Business Forum, said: “The growth in the economy Malacañang is so proud of does not include the poor. We need a more open economy to do that. Opening the economy fully to FDI [Foreign Direct Investments] sends a strong signal to the world [that] this is a country with a truly level field open to all.”

When asked whether amendments to the Constitution’s economic provisions remain necessary even with the economic bills being pushed by Malacañang, Mr. Wallace said: “Yes definitely.”

“To rest on your laurels because you are doing ok is a reason the Philippines doesn’t win gold medals. The economy is doing well, it could do much better with an open economy. Don’t they want to do better? Are they happy with 6% (growth)?,” Mr. Wallace added via text.

Citing a survey conducted by the Wallace Business Forum, he noted that 85% of businessmen in the Philippines support the economic changes to the Constitution currently being subjected to plenary debate at the House of Representatives.

Palace officials have said that President Benigno S. C. Aquino III will continue to push for his 29-item list of priority bills submitted to the Senate and the House of Representatives in June.

The administration’s legislative priorities include amendments to the Build-Operate-Transfer (BOT) and Road Right of Way (RRoW) laws; the Cabotage law; the rationalization of fiscal incentives; the rationalization of the mining fiscal regime; the Tax Incentives Management and Transparency Act; the Antitrust Act; the National Land Use Act; the Strategic Trade Management Act; and the Customs Modernization Act.

Amid the potential for the government to become bogged down in managing many legislative initiatives, Management Association of the Philippines (MAP) President Gregorio S. Navarro threw his weight behind the Constitutional amendment route, saying this approach “will enhance Philippine competitiveness and fuel FDIs further.”

“We can do better than our current performance,” he added.

European Chamber of Commerce of the Philippines Vice-President Henry J. Schumacher also contends that the economic amendments are “needed if jobs are going to be created in manufacturing and agriculture.”

“The consumption-based growth we see presently and during the last few years is not sustainable. Infrastructure development would also have led to job creation but the implementation of infrastructure PPPs [public-private-partnership programs] has been poor,” he said.

Business groups have backed Speaker Belmonte since he submitted a resolution on economic amendments when the 16th Congress opened in July 2013. On the other hand, Malacañang has contended that Charter change is “not the only way to increase the country’s competitiveness and attractiveness as an investment venue.”

Mr. Aquino cited economic gains achieved by the Philippines without tinkering with the Constitution, and his continued preference for pursuing this line was confirmed last week by one of his spokesmen, Secretary Herminio B. Coloma, Jr., who said “the President has not changed his position” on the matter.

Despite the lack of Malacañang’s backing, Mr. Belmonte said via text that the House of Representatives will continue its interpellations on Resolution of Both Houses (RBH) Number 1, when session resumes today.

“It remains a priority and we will continue interpellations and vote. We will continue to debate and approve it in the House. The majority needed is quite big so we have to plan the voting carefully,” he said via text. The House of Representatives requires at least a two-thirds vote from its members to pass the proposal.

The Charter change proposal contained under Resolution of Both Houses (RBH) No. 1 seeks to amend the Constitution’s economic provisions, particularly to relax the 60-40 rule that limits foreign ownership in certain industries. It secured panel approval last March 4.

In filing the resolution, Mr. Belmonte said the restrictive economic provisions in the Philippine Constitution hamper the flow of foreign capital investment.

RBH 1 seeks to add the phrase “unless otherwise provided by law” to the foreign ownership sections of the Constitution, particularly for land, public utilities, natural resources, and media and advertising.

The phrase will specifically be added to Sections 2, 3, 7, 10 and 11 of Article 12 on the National Patrimony and Economy. It will also be added to Section 4, paragraph two of Article 14 on Education, Science and Technology, Arts, Culture and Sports, and to Section 11, paragraphs one and two of Article 16 -- the General Provisions of the 1987 Constitution.

The amendment, Mr. Belmonte has said, would not immediately benefit the economy “but would allow Congress to make amendments to the economic provisions of the Constitution when they deem the need to do so.”

“In order to realize the full benefit of inclusive growth, the restrictive economic provisions of the Constitution must be lifted. Growing global interest in Asia provides an opportunity for the Philippines to compete,” he said. 

Source: Business World