The last cha-cha

The House of Representatives is attempting the last cha-cha before the end of President Duterte’s term. The purpose of this last cha-cha attempt is as clear as mud. Senate President Tito Sotto revealed that President Duterte wants this cha-cha to remove the party list system because the communists have infiltrated the House through their party list representatives. Speaker Lord Allan Velasco promised that this cha-cha’s sole purpose is to add the phrase “unless otherwise provided by law” to seven economic provisions of the Constitution, which will allow, among others, ownership of land and telecom companies by foreigners. However, on Dec. 11, 2019, the same House of Speaker Velasco, in a closed-door executive session, approved a proposed amendment to extend the term of House members to five years.

We know that once the Senate and the House approve a Joint Resolution to convene as a constituent assembly, the die is cast. The Senate and the House may agree expressly in their Joint Resolution to amend only certain provisions of the Constitution and that the Senate and the House will vote separately. However, once Congress is convened as a constituent assembly, any member of the constituent assembly can move to amend any provision of the Constitution since the power of a constituent assembly is plenary.

Worse, any member of the constituent assembly can demand that the constituent assembly vote as one body and not separately, resulting in the 304 House members outvoting the 24 senators. Any constituent assembly member can go to the Supreme Court for a ruling that the constituent assembly can propose any amendment to the Constitution, and that the constituent assembly should vote as one body. There is no certainty as to how the Supreme Court will rule on these two crucial issues.

To insure that the Senate and the House will vote separately, Congress must first enact a law prescribing that even if Congress convenes as a constituent assembly, the Senate and the House shall approve separately by three-fourths vote any proposed amendment to the Constitution. This law can be questioned before the Supreme Court by any taxpayer or member of Congress. If this law is affirmed as constitutional by the Supreme Court, then and only then can the Senate be assured that it will remain a co-equal body with the House in proposing amendments to the Constitution.

The Constitution is not the reason why other Asean countries are receiving more foreign investments than the Philippines. In 2019, more than 80 percent of the $156 billion foreign direct investments (FDI) in Asean went to Singapore, Indonesia, and Vietnam. However, like the Philippines, Indonesia and Vietnam do not allow foreigners to own any kind of land. Although Singapore allows foreigners to own commercial and industrial land, land values in Singapore are prohibitive. What Indonesia and Vietnam allow are long-term leases on land, which our Congress can easily adopt by ordinary legislation without amending the Constitution.

Like the Philippines, Indonesia and Vietnam do not allow foreigners to own a majority interest in basic telecom companies, that is, those that provide fixed and mobile lines. While Singapore allows foreigners to own basic telecom companies, foreign companies have a hard time competing with Singtel and two other telecom companies that are owned and favored by the Singapore government.

Even China, which for several decades now has received the highest FDI in Asia, does not allow foreigners to own a majority interest in basic telecom companies. China does not even allow its own citizens to own any kind of land, including residential land. The House is obviously wrong in thinking that by removing the nationality requirement in strategic industries, foreign investments will pour into the country.

Foreign investors fear above all the absence of the rule of law in contract enforcement. This fear was institutionalized in the Philippines when the Duterte administration rejected publicly the arbitral award won by Manila Water and Maynilad Water. Worse, the Duterte administration is now openly forcing the two water concessionaires to accept government-dictated revisions to their concession contracts. Unless this heightened fear is addressed, foreign investors will avoid the Philippines like the COVID-19. Congress should find ways to remove this real and tangible fear instead of tinkering with the Constitution.

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