They didn’t understand

I was wrong, totally wrong. I had confidently predicted that the consultative committee would be forward-thinking and liberal in its devolution of a new, modern constitution.

Then I read the economic section, and my disappointment was vast. The protectionist, isolationist and fearful terms of the 1987 Constitution, of the 1935 Constitution even, were essentially maintained.

Mass media will be “limited to citizens of the Philippines.” I watch CNN every morning beamed from Atlanta into my house. There are no borders in media anymore. This is a country that supports freedom in an open society and with a free press, so how can it put limits on that? The internet didn’t exist in 1987; it does now. There are no media borders anymore.

The committee added a modifier — that law can change the capital requirement. But why should that be necessary? We need to send a message in the Constitution that this is an open, welcoming society, not one scared that foreigners might dominate industries. Believe me, after 44 years here, I know that they can’t. Filipinos can match anybody without need of artificial protection.

Making it worse, if a foreign business is allowed by law, a Filipino must manage the business. Why? Do we have enough managers with the requisite specific experience? For startups, we don’t. I, as a foreigner, came here to build a factory after eight years of training and experience in the industry. How could a Filipino without that experience have done it?

It’s the same narrow thinking for public utilities, an area we all recognize as being in need of massive capital and innovative technology, if for no other reason than to accelerate the administration’s “Build, build, build” program. What is the committee afraid of? Even the major Filipino companies in public utilities do not object. So who are they protecting?

Here is a key point: Economists and leading businessmen, Filipinos all, want the economic restrictions removed entirely, and are coming out publicly to say so.

It’s strange to me that there is only one economist/businessman, Art Aguilar, in the committee. And business wasn’t consulted. Yet business is what drives a country. Without business, no one has a job; no one survives except those in simple (no processing) agriculture.

I believe Aguilar made the case, but wasn’t listened to. Why? He’s an expert and his recommendations should have been convincing enough.

In the grant of rights, privileges and concessions covering the national economy and patrimony (that’s pretty much everything), preference should be given to qualified Filipinos. I wonder what the qualifications must be, and who decides them. And why is this needed anyway?

Preference must also be given to Filipino labor. So I presume that, with this, even foreign experts could be denied work permits. Laws protect a state, not nationality. But the draft charter goes beyond that; preference must also be given to domestic materials (even if higher-priced?) and locally produced goods (even if of inferior quality?). The section then goes on to say “… and adopt measures to help make them competent.” Does government, generally run by nonbusinessmen, have the competence to do that?

Nowadays, many of the more advanced materials and goods can only be commercially viable when produced in large volumes. The Philippine market wouldn’t call for such volumes to justify local production. You can’t force a business to exist and survive — unless you subsidize it, and subsidies are very much the wrong way to go.

The section on labor still mandates security of tenure. As I’ve argued endlessly, this is not good for labor, and not good for business or the country. It mires us in unproductiveness, uncompetitiveness and a preference for Vietnam by job-creating foreign investors. No advanced country restricts labor in this ill-considered way. And they succeed where we don’t.

I’m no expert at writing a Constitution, but here’s my attempt for the Economic Section:

“The Philippines promotes a society that protects its citizens, and ensures they are fairly treated in all aspects of their lives.

“The Philippines adopts a policy of an economy that is fair to all, open in its investment and trade, encourages competition and ensures that unfair activities do not arise.

“Congress may pass laws to guide business under this general philosophy as the conditions require, to ensure all are treated fairly.”

I believe something like this is all that is needed.

I’ve not yet read the rest of the document, but on its economic provisions, I totally reject the committee’s position.

E-mail: [email protected]