THE Joint Foreign Chambers of Commerce in the Philippines has backed proposals to ease the restrictive provisions in the Constitution saying this would facilitate greater inflow of foreign direct investments (FDIs) in the country.
The group, however, appears to favor executive action and legislation in lifting those restrictions.
“We recognize that the government’s mandate to protect vital national interests by placing some restrictions on FDI. In this respect, we note that most national economies use legislation or executive regulations to respond to such an important consideration,” JFC said in a letter to Speaker Ferdinand Martin Romualdez.
JFC noted putting the restrictions in legislation or executive regulations instead of the Constitution provides flexibility “to quickly adjust the regulatory environment for FDI… to adapt to changes in technology, comply with requirements of international treaties, or take advantage of new opportunities to benefit in the global economy.”
While JFC welcomes the proposal to insert the phrase “unless otherwise provided by law” in amending restrictive provisions in the Constitution, this “it isn’t likely to send a strong signal to foreign investors as direct revision of the restrictive provisions.”
JFC said if Congress goes that route, it could still help in addressing changes in the global economy from the time the Constitution was framed in 1987, including signing of free trade deals and joining free trade blocs.
“Many of these developments emphasize the need for free movement of capital across borders and a level playing field between foreign and domestic investors without undue restrictions,” JFC said.
JFC said the Philippines is a laggard in Southeast Asia in attracting FDIs, citing the Asean Investment Report 2023 which showed FDI flow in the region rose 5.5 percent in 2022 to a record USD224 billion, around 17 percent of global FDI.
The Philippines, in contrast, recorded a 23 percent decline that year to $9.2 billion from $12 billion in 2021.
The Philippines was the 6th largest recipient of FDIs in 2021 from other five Asean economies
JFC includes the American, Australian-New Zealand, Canadian, European, Japanese and Korean chambers of commerce as well as the Philippine Association of Multinational Companies Regional Headquarters. – Irma Isip
