Today’s hot topic: Constitution (1)

There is growing debate on whether we should remove the economic restrictions in the Constitution. Anyone who is at all knowledgeable of the world knows that that world has evolved considerably since 1935, which was when most of the economic restrictions in the 1987 Constitution were introduced. There have been vast changes since 1987, when the restrictions were just thoughtlessly copied. In 1935, our population was 15 million; in 1987, it was 57 million. By mid-century, it will be some 150 million, ten times that of 1935. To provide suitable jobs for so many today and in the future will require the help of all the domestic and foreign investors our economy can attract.

We are in a globalized world where everything is interconnected, so that restrictions on who does business here no longer makes sense. The only ones who might object to opening up are Filipino businessmen who’d see their business opportunities threatened. But they, who are the only ones who might be negatively affected, want the restrictions removed. So there’s no opposition, except those on the left who oppose anything. Isn’t it interesting that a communist dictatorship in Vietnam is much less restrictive regarding foreign direct investments than the Philippines, welcomes foreign investors more, and thus receives four times as much FDI?

Where opposition lies is in the fear that the politicians will hijack the review to include political changes beneficial to them and not to the nation. But that fear has been with us through four presidencies; time and time again, constitutional change has been deferred because of this fear. Well, that fear will be with us in the next administration and the next, and the one after that. We have to bite the bullet some time. I believe that time is now, while we have a President in favor of opening up the economy. And also during a global depression, when we will need as much FDI as possible for our economy to recover.

In a roundtable discussion the Wallace Business Forum, Inc. held recently, Senate President Tito Sotto had a very interesting solution to this fear: to put forth a Resolution of Both Houses (RBH) that is mandated to look only at the economic provisions. An RBH can only investigate one subject. Speaker Lord Allan Velasco introduced a resolution, RBH2, in July 2019, that does just that. More recently, House Concurrent Resolution No. 1 was also introduced.

A joint resolution, once approved by a three-fourths vote in both the House and the Senate, can then be taken to the people in a plebiscite during the national elections in May 2022. The problem with both these resolutions is that they still put openness in question. Instead of just removing the restrictions, they insert the phrase “unless otherwise provided by law.” This leaves a risk that future Congresses may never pass a law or, worse, reverse one passed by a prior administration. Look at the anti-dynasty law where the Constitution called for its prohibition “as may be defined by law.” That law was never raised, let alone passed as the Constitution mandated.

No other country in the world has economic restrictions in its constitution—so why should we? Remove them entirely, and then if a restriction is deemed desirable, introduce it in a law. Congress has the power to do so any time. That achieves the same result, as a law can still decide how to manage investment in a sector, but from a positive point of view: We’re an open society that has occasional restrictions, and not a closed society that has discretionary openness.

The right move is to remove the restrictions entirely. Restrictions bear no place in this technological, global world, and never will again. To ensure swift passage, the President should call for regular and frequent Legislative-Executive Development Advisory Council meetings during this review to speed up the process, agree on the changes to be made, and monitor progress.

The only area where there is considerable controversy is land ownership. This is an emotional issue where great fear exists of foreigners taking over our land. Here, the suggestion in the RBH can be retained: Retain the restriction on land ownership “unless otherwise provided by law,” which could then allow Congress to allow foreigners to own limited amounts of land where it makes sense to do so.

We are the most closed economy in the Asean region and probably in all of Asia. In the OECD 2019 ranking of 84 countries, only three are more closed than the Philippines: Occupied Palestinian Territory, Algeria, and Libya. Certainly not a group we should want to belong to. We are also the slowest in attracting job-creating foreign investments. There’s a causal link there.

The Filipino people have suffered because foreigners can’t come in to help us advance the development of our public utilities, or help us with their expertise as professionals. The Constitution is imposing senseless restrictions that benefit no one.

More next week.

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