FEF calls for relaxation of 'restrictive' economic provisions in 1987 Constitution

Advocacy group and think tank Foundation for Economic Freedom (FEF) on Thursday expressed its support for amending the 1987 Constitution to liberalize restrictive economic provisions.

In a statement, the FEF said the removal of restrictive economic provisions in the Constitution “sends a clear and compelling message to foreign investors, signaling a warm welcome to investment and business operations in the Philippines.”

The group’s statement came after Speaker Ferdinand Martin Romualdez said  the House of Representatives would focus its attention this year on proposals regarding restrictions in the entry of foreign capital and investments including Charter change or “Cha-cha.”

The FEF, in supporting Cha-cha, proposed to fully liberalize and lift the following restrictions in the 1987 Constitution by allowing up to 100% foreign ownership:

• Section 2, Article XII (National Patrimony and Economy) which provides that the State may enter into co-production, joint venture or production sharing agreements for exploration, development, and utilization of natural resources
• Section 3, Article XII (National Economy and Patrimony) which provides that private corporations or associations may not hold alienable lands of the public domain except for lease for not more than twenty-five years and not to exceed one thousand hectares in area
• Section 7, Article XII (National Patrimony and Economy) which provides that no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands in the public domain
• Section 10, Article XII (National Patrimony and Economy) which provides that certain areas of investments must be reserved for companies whose capital is owned by sixty percent of Filipino citizens
• Section 11, Article XII (National Patrimony and Economy) which provides that operation and management of public utilities be reserved for corporations whose capital is owned by Filipino citizens
• Section 4, Article XIV (Education, Science and Technology, Arts, Culture, and Sports) which provides that educational institutions shall be solely owned by citizens of the Philippines or corporations or associations whose capital is owned by at least sixty percent of citizens
• Section 11, Article XVI (General Provisions) which provides that ownership of mass media be wholly owned by citizens or to corporations or associations wholly owned by citizens, and that only citizens or corporations or associations of which at least 70% of the capital is owned by citizens can engage in the advertising industry. Participation of foreign investors in the governing body of entities in such industry shall be limited to their proportionate share in the capital and all the executive and managing officers of such entities must be citizens of the Philippines

The FEF also proposed amendments to the “Filipino Firsts” provisions in the Constitution.

In particular, the group said Section 19, Article II (Declaration of Principles and State Policies) which states that “The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos” be amended to read as “The State shall develop self-reliant and independent national economy for the benefit of all Filipinos.”

Moreover, the group said Section 10, Article XIII (National Economy and Patrimony) which states “…in the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos…”  be changed to “...in the grant of rights privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified investors…”

The group said that while commendable liberalization laws have been enacted in the previous administration, such as the Amendments to the Public Service Act, the Foreign Investment Act, and the Retail Trade Liberalization Act, “the Philippines still lags behind its ASEAN neighbors in foreign direct investment inflows.”

The FEF said it strongly emphasizes that constitutional amendments should be limited exclusively to economic provisions.

“This focused approach reduces the risk of political controversy and division, ensuring the swift passage of crucial amendments to the economic provisions of the Constitution,” the group said.

“This move toward greater economic freedom will empower our people to independently navigate their paths forward, benefiting themselves, their families, their communities, and the nation as a whole,” it added. — RSJ, GMA Integrated News