House reviewing Constitution to attract FDIs: Romualdez

Romualdez cited the cases of Singapore and Indonesia that have successfully used their sovereign wealth funds. (File Photo: House of Representatives of the Philippines/Facebook)

MANILA – Speaker Ferdinand Martin G. Romualdez on Wednesday said congressional deliberations on the proposed Constitutional amendments are more focused now on the need to encourage investments that would further stimulate economic activities, create job opportunities, reduce poverty and lower prices of goods and services.

“Thirty-six years after the ratification of the 1987 Constitution, there are questions that linger in our minds. As we gathered here today, we continue to ponder. Is the Constitution still relevant to our people as they envisioned it to be? Is it still reflective of the aspirations and ideals of the Filipino people? Nilalaman pa rin ba nito ang pangarap ng bawat pamilyang Pilipino (Does it still embody the aspiration of every Filipino family)?” Romualdez said in his speech at Malacañan Palace during observation of the Philippine Constitution Day.

He said he and other House members are currently swamped with requests from their constituents on the need to revisit certain provisions of the 1987 Constitution.

“That is the reason why a number of congressmen have filed several bills proposing amendments to the Constitution for various reasons, ranging from lifting economic restrictions to structural reforms,” said the Speaker, who also sits as the Philippine Constitution Association (Philconsa) president.

“It is the mandate and the duty of the members of the House of Representatives to deliberate on the legislative measures filed, including the direct petition from the people which takes precedence in this discussion,” Romualdez said.

He noted that the House Committee on Constitutional Amendments is currently conducting public hearings and consultations on proposed changes in the 36-year-old Constitution.

Aside from House committee hearings at the Batasan complex in Quezon City, the committee chaired by Cagayan de Oro City 2nd District Rep. Rufus Rodriguez has scheduled public consultations in other parts of Luzon, Visayas and Mindanao.

Romualdez said the proponents agree that opening the economy for inflow of foreign capital is the key to addressing the aspirations and ideals of Filipinos in present times.

He highlighted the need for foreign direct investments (FDIs) by citing data and the experiences of other countries, culled from the reports of the Congressional Policy and Budget Research Department, which show how FDIs stimulate economic growth.

Based on the United Nations data, he said FDIs account for the largest source of external financing in developing countries, greater than remittances, private debt and portfolio equity, or official development assistance.

“Higher FDI inflows can ease capital constraints and contribute to output and employment growth. Given the appropriate host-country policies and a basic level of development, a preponderance of studies shows that FDI triggers technology spillovers, assists human capital formation, contributes to international trade integration, helps create a more competitive business environment and enhances enterprise development,” he said.

“All of these contribute to higher economic growth, which is the most potent tool for alleviating poverty in developing countries,” he added.

Romualdez lamented that the country has not been getting as much FDIs as its neighbors are receiving.

In 2020, he said the Philippines ranked third-most restrictive out of the 84 countries in the Organization for Economic Cooperation and Development’s (OECD) foreign direct investment regulatory restrictiveness index (FDI Index).

“Barriers to foreign direct investment (FDI) in the Philippines comprise of four main types of restrictions: foreign equity limitations; discriminatory screening or approval mechanisms; restrictions on the employment of foreigners as key personnel; and other operational restrictions, like restrictions on branching and capital repatriation or land ownership by foreign-owned enterprises,” he said.

He said investment restrictions on foreign ownership range from requiring at least 60 percent Filipino ownership to total prohibition.

He added that the Constitution prohibits foreign ownership in mass media and allows only 30 percent foreign capital in advertising agencies and 40 percent in educational facilities.

“In the education sector, foreign ownership caps prevented the Philippines from hosting topnotch universities seeking to establish a presence in Asia,” he emphasized.

He pointed out that while the country has been addressing foreign ownership limitations that has constrained investment in many sectors through legislation such as the Public Services Act, the Retail Trade Liberalization Act and the Foreign Investment Act, “fundamental investment restrictions enshrined in the Constitution could not be corrected by simple legislations nor by executive decisions.”

“Ang pangarap ng bawat pamilyang Pilipino sa ngayon: isang mapayapang komunidad na may trabaho, mataas na sahod, murang bilihin, at pag-asang umunlad pa sa buhay (The aspiration of every Filipino family now is a peaceful community with high-paying jobs, lower prices and a hope for a better life),” he said.

“That is why, when the President in his travels as the number one salesman of the country, we are often asked that after you have made so much progress and gains in opening up the Philippine economy, the last missing piece of the puzzle remains, how about your restrictive Constitution? That is why we in Congress are facing up to this question and to this issue that burns to our minds today, and may actually open up the aspirations of the Filipino people for tomorrow,” Romualdez said.

Romualdez thanked President Ferdinand R. Marcos Jr. for inviting Philconsa to hold its 36th year Constitution Day celebration at the Palace and for being its guest of honor and speaker.

He also expressed his gratitude to Philconsa for being “the vanguard that not only promotes vigilance in protecting and defending the Philippine Constitution but also in promoting its growth as a vital and relevant document for the Filipino nation.”