MANILA – The Joint Foreign Chamber of Commerce in the Philippines (JFC) has expressed its support for amending the “restrictive” economic provisions in the Constitution, although some of its members are cautious about the contentious debate surrounding Charter change.
During the hearing on Resolution of Both Houses 6 (RBH 6) chaired by Sen. Juan Edgardo “Sonny” Angara, chairman of the Senate Subcommittee on Constitutional Amendments and Revision of Codes, the JFC conveyed its sentiments. The group, representing a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers of commerce in the Philippines along with the Philippine Association of Multinational Companies Headquarters Inc., encompasses over 3,000 companies engaged in trade and investment.
Julian Payne, President of the Canadian Chamber of Commerce, representing the JFC, stated, “The Joint Foreign Chamber of Commerce supports the easing of foreign direct investments (FDIs) wherever possible.” He emphasized that removing economic restrictions would encourage increased FDI in sectors currently constrained by such limitations.
Florian Gottein, Executive Director of the European Chamber of Commerce of the Philippines, remarked that amending the Constitution is a matter solely for the Philippines to decide. He indicated that if the Filipino people opt to amend the Constitution, the JFC would support removing economic restrictions.
Responding to Sen. Mary Grace Poe’s query about concerns over Cha-cha issues, Gottein acknowledged some uncertainty among their members due to the ongoing political debate.
Sen. Angara cautioned that the JFC’s perspective reflects diverse interests aimed at profit in the country and should be considered accordingly.
National scientist Raul Fabella advocated for lifting the constitutional restrictions on foreign ownership, citing the country’s historically low investment rate compared to other major ASEAN nations.
Retired justice Antonio Carpio and Dr. Bernardo Villegas opined that constitutional amendments might not be necessary to open the public services sector to foreign investments.
Trade and Industry Undersecretary Rafaelita Aldaba emphasized that calls for constitutional economic reforms aim to align with global economic trends without compromising national interests.
Reservations
Senators Joseph Victor “JV” Ejercito, Ana Theresia “Risa” Hontiveros, and Mary Grace Poe expressed reservations regarding the necessity of pursuing constitutional reforms to attract more foreign direct investments (FDIs).
They noted that the Philippines has already made significant progress in opening up its economy through legislative measures in recent years, thereby creating an environment conducive to business.
“The legislation aims to define and differentiate public utilities from public services while addressing the constitutional limitation on foreign equity,” Angara said, referring to the law amending the 86-year-old Public Service Act.
“The Public Service Act was really scrutinized by the Senate to make sure that it would be for the benefit of our Filipino people to improve our utilities and other infrastructure,” Ejercito said.
He mentioned that the Senate had approved the Public Private Partnership Code Law, aimed at enhancing public services, infrastructure, energy, and utilities.
“So, is Charter change really needed at this point now that these two legislations were already passed?” Ejercito said.
He noted that although the Philippines lags behind its ASEAN neighbors in terms of energy and infrastructure, the country has taken steps such as privatizing the National Power Corporation and its power generation transmission distribution to stimulate competition.
“So, we really have to be very careful about all these things. We cannot be rushed. We cannot put deadlines nor can we be pressured because it is not easy to amend the Constitution,” Ejercito said.
Hontiveros warned about the potential dangers associated with future congresses relinquishing control of these utilities to state-owned foreign firms, which could pose a threat to national security.
Poe, who serves as the chairman of the Senate Committee on Public Services, advised proponents of Charter change to proceed cautiously when considering amendments to the Constitution.
“Would amending the public utilities provisions in our Constitution open the economy or open a can of worms?” Poe said.
She highlighted that Resolution of Both Houses 6 (RBH 6) suggests allowing, through legislation, all public utilities to be open to foreign ownership, investments, and management without the constitutional safeguards based on national security and domestic interests.
These utilities encompass the distribution and transmission of electricity; petroleum and petroleum products pipeline transmission systems; water pipeline distribution systems, including sewerage pipeline systems; seaports; and public utility vehicles.
“Because of the nature of these natural monopolies, we needed to ensure the security and supply of these essential utilities. Are we ready to compete with them (foreign firms)? Poe said.
She emphasized that the country has made significant progress in recent years by liberalizing the economy without jeopardizing national security or neglecting Filipino businesses.
Poe highlighted Republic Act 11659, or the amended “Public Service Act (PSA),” which she authored. This legislation has facilitated the entry of new players into sectors such as airports, railways, expressways, and telecommunications without the need to amend the Constitution.
“Guided by the long line of cases decided by the Supreme Court as to what ‘public utilities’ really are, we carved out public utilities which will remain covered by the 60 percent Filipino ownership requirement from public services that were opened up by the PSA to full foreign investments,” Poe said.
She emphasized that proponents of Charter change must carefully consider whether the solution to the country’s economic challenges lies in amending the Constitution or in implementing more efficient management of agencies, significantly reducing, if not eliminating, corruption, and streamlining bureaucracy.
