MANILA, Philippines — Foreigners doing business in the country want economic restrictions in the Constitution that limit foreign ownership of land and businesses, including media and telecommunications, totally lifted.
Their collective proposals are contained in a position paper the Joint Foreign Chambers (JFC) has submitted to the House of Representatives committee on constitutional amendments chaired by Cagayan de Oro City Rep. Rufus Rodriguez.
The committee held a daylong hearing on Wednesday on proposals to change the charter’s economic provisions authored by Rodriguez, Deputy Speaker Aurelio Gonzales Jr. of Pampanga, Lord Allan Velasco of Marinduque, and Teodorico Haresco of Aklan.
The JFC is composed of businessmen from the United States, Japan, Korea, Canada, Australia, New Zealand, and European Union, and representatives of multinational companies whose regional headquarters are located in the country.
“We recommend removal of the restrictions at the earliest date. This can best be accomplished by deleting the restrictions without adding the phrase ‘unless otherwise provided by law’ (as proposed by Rodriguez and his colleagues),” the JFC said in its position paper.
The JFC said if the policy objective of lawmakers and the administration in undertaking Charter change is to encourage foreign investments, “then the best way to do so is to remove the restrictions without conditions.”
The group said if the limitations are scrapped, Congress could re-impose any of them by passing the appropriate law.
“Placing restrictions on foreign business activity in the Constitution denies the government flexibility to adjust to future changes in technology, to meet requirements of international treaties, and to take advantage of new opportunities that benefit the economy,” the foreign chambers said.
They noted that few countries in the world place such restrictions in the constitutions.
They pointed out that the Philippines “is one of the most restrictive countries in 11 sectors measured by the World Bank in its Investing Across Borders 2012 report that surveyed 105 economies.”
“Removing restrictions increases competitiveness. Restrictions on foreign investment make the economy less competitive by imposing constraints to growth that result in lower investments, fewer jobs, poorer infrastructure, and less inclusive development. When there is less competition, the quality of goods and services goes down and prices go up, to the disadvantage of consumers,” they stressed.
They informed Rodriguez that their motivation in seeking foreign equity reforms “has been to permit more capital to flow into the Philippines to increase the rate of gross domestic product growth and employment.”
Deputy Speaker Gonzales said the JFC is proposing the relaxation of restrictions in the Constitution on foreign ownership of land and businesses so the country could attract more foreign investments.
“More investments would translate into more jobs and income for our people, and additional taxes for the government,” he said.
He said public utilities should be opened to foreign investors.
Aside from relaxing restrictions, Gonzales is also recommending that the validity of franchises and land lease be shortened to 25 years.
Rodriguez and his colleagues are suggesting the relaxation of economic restrictions through the insertion of the phrase “unless otherwise provided by law” in at least 11 parts of the Charter that have to do with the economy and national patrimony.
“This means that the limitations will remain but Congress would be allowed to lift or change them,” Rodriguez said.