MANILA – The House Committee on Constitutional Amendments is aiming to finish its deliberations on the proposed amendments to the restrictive economic provisions of the 1987 Constitution soon so that it can be endorsed to the plenary by February.
In a media forum, Ako Bicol Rep. Alfredo Garbin Jr., panel chair, said they would come up with a committee report on the Resolution of Both Houses (RBH) No. 2 after one or two more hearings.
Asked on the timing of the proposal, Garbin said there is a need to prepare the economy and the needed policy to send a positive signal to the international business community.
“We want to send the signal to the business community that we are now open and that the restrictive policy will be lifted,” he said. “We want to better our position or business climate, we want to be proactive in promoting our investment.”
Citing data presented by the Organization of Economic Cooperation and Development (OECD) and World Bank, Garbin said the Philippines is on top of one of the most restrictive economies in the world.
The OECD data, he said, further states that countries with restrictive policies receive less foreign direct investments (FDIs) as compared to neighboring countries such as Vietnam, Thailand, Malaysia and Indonesia.
“Tingnan mo ang Pilipinas geographically isolated compared to our neighboring countries, pagdating sa economic policy isolated pa rin kasi masyadong restrictive (Look at the Philippines. It is already geographically isolated compared to our neighboring countries, and it is also isolated when it comes to economic policy because it is too restrictive),” he said.
A paper prepared by the UP Research and Extension Services Foundation-Regulatory Reform Support Program for National Development (UPPAF-RESPOND) said as many as 1.6 million jobs would be created if the restrictive economic provisions of the Constitution are amended to open up the economy to foreign ownership.
UPPAF-RESPOND said easing the constitutional provisions that bars foreign ownership on certain industries would cut down joblessness rate by 40 percent to 5.1 percent from 8.7 percent recorded in October 2019.
“The new jobs will totally offset the annual job losses in domestic trade, finance, real estate & business services, and allow for significant job recovery rates in manufacturing (38 percent), construction (35 percent), other services including health and tourism (25 percent) and transport & storage (19 percent),” the preliminary study by UPPAF-RESPOND said.
The paper was submitted by Dr. Enrico Basilio, RESPOND chief and professor at the UP National College of Public Administration and Governance, to the House of Representatives.
According to the study, the removal of all foreign equity restrictions, or allowing 100-percent foreign ownership in all economic activities, is equivalent to the improvement of the foreign equity ratio of 0.281 in 2019 to zero, which translates to a nominal increase of FDI amounting to USD16.2 billion.
The study said the additional FDI of USD16.2 billion “will raise economic demand and total output that will eventually lead to the generation of up to 1.6 million new jobs,” thereby improving the country’s employment rate. (PNA)