ECONOMIC managers of President Ferdinand Marcos Jr. on Monday expressed support for the move in the House of Representatives to amend the Constitution’s restrictive economic provisions.

Members of the economic team led by National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan articulated their support at the start of the Committee of the Whole House of Representatives deliberations on Resolution of Both Houses (RBH) No. 7.

Speaker Ferdinand Martin G. Romualdez opened the deliberations with remarks in which he stressed the need and urgency of effecting the envisioned economic Charter reforms.

Balisacan said the Philippines needs “massive amounts of investments in both physical and social infrastructure, as well as human capital.”

Hence, NEDA recognizes the importance of updating the economic provisions in the Constitution so the country could attract more foreign direct investments (FDIs), he said.

He said over the last few decades – during which the Philippines was overtaken by its neighbors in terms of attracting foreign investments and economic development – the restrictive provisions, “in conjunction with other binding constraints to investments, have resulted in lower levels of foreign direct investment or FDI flows to our country.”

“Compared to our dynamic neighbors, historical data show that the Philippines has obtained a smaller share of FDI inflows that could have generated more economic and social opportunities crucial for inclusive growth and development,” he stressed.

Balisacan pointed out that globally, evidence suggests a significant connection between the extent of the country’s statutory and equity restrictiveness to the country’s realized FDI flows.

He added that the Philippines “has missed several chances to attract FDI, technological know-how, and managerial talent that our economy needs to raise its productivity and competitiveness in the global arena.”

“Though we have made significant progress, our neighbors have proceeded at a far more desirable pace. We must catch up, not be held back by uncompetitive markets dominated by a few players, expensive inputs that result in higher prices for end- consumers, and incomplete value chains that prevent us from producing more technologically complex goods and services,” he said.

The NEDA chief proposed the lifting of restrictions on critical sectors such as public utilities, education, mass media, and advertising so that we can realize their untapped potential and enable them to contribute to the country’s economic progress.

“Opening up public utilities to foreign investment will improve the quality and affordability of services, such as energy and water distribution, and offer viable options to address the financing gaps in the infrastructure sector,” he said.

Balisacan however urged Congress to address other issues that hinder investments, whether foreign or domestic.

“Amending these economic provisions is one complementary strategy to unlock the country’s economic potential. Let me emphasize that we only reap the benefits I mentioned if we also address the other problems involving energy costs, inadequate connectivity infrastructure, slow bureaucratic processes, inconsistent local and national regulations, and highly concerning learning poverty and malnutrition,” he said.

Speaking for the Department of Trade and Industry, Assistant Secretary Agaton Uvero said the proposed economic amendments “are expected to result in more foreign direct investment, international education, globally competitive mass media, international advertising, and modern utilities.”

“Increased investments expand the economy and create jobs. Access to world-class education and research facilities nurtures a culture of innovation, entrepreneurship, and creativity among Filipino students, teachers and researchers,” he said.

He said the DTI “supports the amendment of the economic provisions of the 1987 Philippine Constitution to enable the country to adapt and respond to current and future socio-economic conditions.”

“This support is driven by a collective desire for economic and social transformation that will accelerate the uplifting of the lives of all Filipinos,” he added.

For his part, Monetary Board Member Romeo Bernardo said the Bangko Sentral ng Pilipinas (BSP) “supports efforts that will promote inclusive economic growth of the country including, among others, easing restrictive economic provisions in the 1987 Constitution.”

“BSP believes that reducing, if not removing, restrictive provisions will facilitate increase in foreign capital investment and hasten the growth of the economy, which, in turn, can expedite the ability of the nation to realize inclusive economic growth,” he said.

He said the proposed economic Charter amendments “address major challenges in attracting foreign investments that, in turn, help achieve growth and financial resilience.”

“To fully realize the economic benefits of such amendments, it would be instructive to advance policies that would enable domestic industries to develop and enhance their productivity,” he stressed.

A fourth state agency, the Department of Finance (DoF) led by Sec. Ralph Recto, supported the economic amendment proposals.

In a position paper presented to the Committee of the Whole House, the DoF said it supports the opening up of certain sectors of the economy to foreign ownership, including public utilities, mass media, advertising, education, and mining.

However, the DOF opposed foreign ownership of land.

AUTHOR PROFILE

Ryan Ponce Pacpaco