Today’s hot topic: Constitution (2)

In 1985, Vietnam was way behind us, with a per capita income of only $231 versus the Philippines’ $566. Latest data from the International Monetary Fund show that by end-2020, Vietnam’s GDP per capita was likely to reach $3,500 versus the Philippines’ $3,370. They’ve overtaken us in a short 35 years.

A factor in this was the huge difference in foreign direct investments that flowed into Vietnam. From 2010 to 2019, Vietnam attracted $112 billion in FDIs versus the Philippines’ one half of that, $58 billion.

Vietnam opened up and changed its laws to welcome foreigners. It didn’t need to change its constitution, because there were no business restrictions in its constitution.

China is now essentially an open economy, having joined the WTO in 2001. It has taken off dramatically since it opened up. A closed economy is an archaic concept that, quite simply, probably doesn’t work today.

In 1935, there were rudimentary AM radio, negligible commercial air travel, cars that could reach 100 kph if they struggled hard enough. TV was unheard of. The only household appliances were a simple refrigerator and toaster.

Today, I can turn on the TV and CNN is right there in my living room. It doesn’t need a transmitter here, or even an office, so why not let it have one if it wants? Technology has removed borders. So why do we restrict media in this modern age? They are a part of our lives today, so we may as well let the foreigners in as they’re already in.

Tied to that is advertising. That never made sense to be restricted, and certainly doesn’t now. Instead, we should target harnessing our creative talent and English abilities to become a global hub of this industry in partnership with foreign firms. Thailand is doing this, and without our advantage in English. Forgive me if I don’t get it.

The dream of many Filipinos is to gain a foreign education to add to what they’ve learned here. They dream of going to Yale, but the cost is prohibitive. Yale has a campus in Singapore. Why not bring Yale here? Do we want to protect colleges, or open up opportunities for students? Foreign colleges can bring research and new technologies to the Philippines, too, an area where we have been much too weak.

Mining should not be restricted. As Secretary Carlos Dominguez III said, the Philippines owns the natural resources, it just allows others to exploit such resources and share the revenue with government, which means the people. Mining can generate vast exports and provide jobs.

There are two areas where allowing the law to decide restrictions is already being applied or considered. Those restrictions can be considered already in practice, so you might as well take them out of the Constitution. Foreigners are not allowed to practice their profession here, and to own and operate public utilities. But all professions, except lawyers and radio and x-ray technologists, are now allowed by law as the Constitution has allowed. And Congress is now considering amendments to the Public Service Act of 1936, including the definition of what a public utility is. Talk about slow to change! With the heavy negative economic impact of the pandemic, we should welcome the tens of billions of dollars that will flow in when this law is signed. We will attract FDIs in these services from the best global private companies, while protecting our national security.

In 2011, the broad framework for a Trans-Pacific Partnership (TPP) was developed; it is a comprehensive and ambitious agreement that will enhance trade and investment, promote innovation, boost growth, and create more jobs in TPP partner countries. There are 11 countries in the TPP, but the Philippines isn’t one of them. Trump pulled the US out, but Biden is keen to rejoin.

For the Philippines to be eligible, it has to change its constitution and laws to become a member. And a member it must be, in order to greatly expand trade and business with those countries.

As Dominguez highlighted during a House hearing: “Over the longer term, opening up our economy is indispensable to achieving a truly inclusive investments-led economic growth that will open more employment opportunities for our people. It will help produce a modern, efficient, and robust economy that will guarantee prosperity for all Filipinos.”

A more comprehensive coverage of this subject is available online. Please email mcamacho@wbf.ph

Email: wallace_likeitis@wbf.ph