THE chairman of the House committee on constitutional amendments is eyeing the start of plenary deliberations on the proposal to amend the “restrictive” economic provisions of the Constitution on the first week of February.
Ako Bicol party-list Rep. Alfredo Garbin Jr. said he will come up with a report on the proposed Resolution of Both Houses (RBH) No. 2 after one or two more hearings, with the next one scheduled on January 26.
Garbin announced the House panel’s timeline despite calls from some senators to put Charter change efforts to the backburner and for lawmakers to focus on supporting measures that would address the health and economic shocks caused by the COVID-19 pandemic,
Garbin said among the invited resource persons next Tuesday are Dr. Bernardo Villegas, one of the framers of the 1987 Constitution and founder of the Makati Business Club; international trade lawyer Anthony Abad, and representatives from the Joint Foreign Chambers of the Philippines.
“We want to send the signal to the business community that we are now open and that the restrictive policy will be lifted,” Garbin told the weekly Ugnayan sa Batasan when asked if it is the right time to push for the amendments now that the country is still battling the COVID-19 pandemic.
Garbin earlier drew flak for saying that the House was already acting as a constituent assembly when it began tackling the Charter change initiative in the committee level last week.
“We want to better our position or business climate, we want to be proactive in promoting our investment. So we will not be left behind,” he said.
Garbin said Speaker Lord Allan Velasco, the author of RBH No. 2, has the full backing of the majority bloc after party leaders signed a manifesto of support for the measure’s approval.
The manifesto, which makes it clear that only the economic provisions will be changed, also stated that the House of Representatives and the Senate shall vote separately on the amendments.
A study prepared by a University of the Philippines think-tank indicates that 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, thereby reducing the country’s unemployment rate by 40 percent.
A paper prepared by the UP Research and Extension Services Foundation-Regulatory Reform Support Program for National Development (UPPAF-RESPOND), which was submitted to Garbin’s panel, said easing the constitutional provisions that bars foreign ownership on certain industries would cut down joblessness rate 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%), construction (35%), other services including health and tourism (25%) and transport & storage (19%),” said the preliminary study by UPPAF-RESPOND.
The paper, which was submitted by Dr. Enrico Basilio, RESPOND chief and professor at the UP National College of Public Administration and Governance, also said foreign direct investments (FDI) “will increase by 57 million US dollars for every unit point improvement in the Regulatory Restrictiveness Index (RRI) Equity Restriction score.”
The RRI measures the statutory restrictions on FDI of a country based on foreign equity limitations, screening or approval mechanisms, restrictions on the employment of foreigners as key personnel, and operational restrictions on branching, capital repatriation or land ownership, according to the Organization for Economic Co-operation Development.
“In the case of the Philippines, the removal of all Foreign Equity Restrictions (or allowing 100 percent foreign ownership in all economic activities) is equivalent to the improvement of the FER score of 0.281 in 2019 to zero which translates to a nominal increase of FDI amounting to $16.2 billion,” the study said.