Let’s talk about economic patriotism

It seems that President Aquino continues to be a clone of the first President of the Philippine Commonwealth, Manuel Quezon. In a recent speech to officers and members of the alumni associations of US universities, he expressed his opinion that businesses in the Philippines will better promote the common good if they are predominantly owned and managed by Filipino citizens. I beg to disagree.

I have always contended that loving the Philippines or seeking our nation’s common good is first and foremost working for the good of every Filipino citizen, especially the poorest of the poor. It is not necessarily ensuring that “the national economy is effectively controlled by Filipinos” as mandated by the 1987 Constitution. Ever since the concept of “Filipinization” was introduced to economic policymaking in the 1935 Constitution, and reinforced in both the 1972 and 1987 versions of our fundamental law, giving preference to Filipinos in the ownership, control and management of natural resources and strategic industries has just worsened the feudal and monopolistic character of our society. Unwittingly, well-intentioned “nationalists” and “activists” have handed the control of the national economy to an elite in whose hands the wealth of the country is concentrated. There has been very little evidence that “Filipinization” has liberated the masses from poverty. There has been very little evidence that the Filipino nationals who have managed to control the economy have a greater interest in the common good, especially of the underprivileged, than individuals who are not Filipino citizens.

Why is it then that “Filipinization” continues to be a major concern of our policymakers even in economic sectors that are not covered by constitutional provisions (which, I think, have to be amended sooner or later)? I maintain that the answer here is that a concept that was legitimate in the first three quarters of the last century has become completely anachronistic and counterproductive given the dramatic changes in both the national and international orders. Those who framed the 1935 Constitution under the Commonwealth were completely justified in being wary of the continuation of colonial control of the economy by the Americans once the Philippines is granted political independence. With memories of Spanish colonization still fresh in their minds and looking forward to being free of US political control, they were just exercising prudence and foresight when they included in the 1935 Constitution many provisions limiting significantly the foreign ownership of natural resources and strategic industries (like public utilities). They could be forgiven for believing in the hyperbole that they “preferred a Philippines run like hell by Filipinos to one run like heaven by Americans.” Unfortunately for the masses, however, subsequent events proved that a Philippines run like hell by the Filipino elite did very little damage to the wealthy families (who could always have access to luxurious living both here and abroad) but condemned the poor to literally a hellish existence.

Although I chaired the committee on the national economy that drafted Article XII of the Constitution on the national economy, my views on liberalizing the provisions contained in both the 1935 and 1972 Constitutions concerning foreign direct investments were generally disregarded. On both the left and right of the ideological spectrum, the idea of giving to Filipino citizens the control of vital sectors of the economy continued to be the preponderant opinion, especially because the mood prevailing during the deliberations in both the committees and the plenary sessions was an anti-Marcos stance (i.e. anything that Marcos promoted had to be reversed). Marcos tried to allow more foreign investments in mining and other strategic industries. Therefore, the new Constitution should make it harder for foreigners to invest in these sectors. There was also the unfortunate confusion about the “dummy” corporations put up by the dictator. There was the mistaken notion that most of these “dummies” were foreigners. The truth of the matter was that practically all of them were the then President’s Filipino cronies and his close friends and relatives.

There is no longer any rationale for “economic nationalism” in this day and age. The idea of having Filipinos control the vital sectors of the economy has worked against the majority who belong to the lower-income groups. We should talk about “economic patriotism,” a true love of country whose main concern is what is called in the Philippine Development Plan 2012-2106 “inclusive growth” (i.e. economic growth that liberates the masses from the bondage of poverty, a growth that truly trickles down to the poorest of the poor). With an honest and efficient government, the nationality of private investments should not matter. Governed by a just state, both Filipino citizens and foreigners can equally contribute to the common good of society. Those industries in which national sovereignty can really be at stake, such as products for national defense, strategic natural resources and other politically sensitive economic sectors, should be in the hands of the state, not “Filipino citizens.” In all other sectors, there should be no differentiation based on citizenship.

An economic patriot is a Filipino who welcomes every investor, whether Filipino or foreigner, who can contribute most of all to eradicating poverty in the Philippines.

Bernardo M. Villegas is senior vice president of the University of Asia and the Pacific. E-mail [email protected].