Economists yesterday called for the removal of what they said were “restrictive economic provisions” in the 1987 Constitution.
The provisions “have, for decades, served as binding constraints to economic growth development,” the Foundation for Economic Freedom (FEF) said in a press statement.
“We believe that the removal of restrictive economic provisions sends a clear and compelling message to foreign investors, signaling a warm welcome to investment and business operations in the Philippines,” the FEF said.
While commendable liberalization laws have been enacted in the previous administration, such as the Amendments to the Public Service Act, the Foreign Investment Act, and the Retail Trade Liberalization Act, the Philippines still lags behind its Asean neighbors in foreign direct investment inflows, it said.
The FEF cited data as of 2022 showing that Indonesia, Vietnam, Malaysia and Thailand have surpassed the Philippines in attracting foreign direct investment.
“It is crucial to emphasize that the Philippines is open to foreign investments, especially as one of the last countries where restrictions on foreign ownership are embedded in the Constitution,” the FEF said.
While investments in solar and wind energy have been liberalized, for example, it said there is still a lot of uncertainty for foreign investors because of the 60/40 rule in investments in natural resources and ownership of land.
The FEF proposes instead to fully liberalize and lift the following restrictions in the 1987 Constitution by allowing up to 100 percent foreign ownership for the following, unless otherwise provided by law: co-production, joint venture or production sharing agreements for exploration, development, and utilization of natural resources; ownership of alienable lands of the public domain; certain areas of investments; public utilities; educational institutions and; mass media.
The FEF also called for amendments to the Filipino First provisions in the Constitution.
If necessary, the FEF said, Congress can impose the appropriate restrictions, conditions for ownership, or safety nets based on the needs of the country to sustain economic and social development through legislation.
The removal of economic restrictions from the Philippine Constitution will provide policymakers with greater flexibility to respond effectively to changing global and domestic economic conditions and the evolving needs of the economy, it said.
