NextGen Day

An examination of the costs and benefits of changing the Constitution to loosen limits on foreign investment is required.

House Minority Leader Marcelino Libanan urged the National Economic and Development Authority to provide Congress with a thorough report on the anticipated benefits, especially in terms of the amount of foreign direct investment expected to enter each industry, the number of new jobs that would be created, and the additional tax revenue that would be produced.

He also requested accurate cost estimates from the Department of Budget and Management.

Libanan stated in a news release on Sunday that “if we actually want to change the economic provisions of the Constitution to attract more international investment, then we would need a baseline assessment of cost and benefit.” This is the most logical course of action for us to determine whether the advantages exceed the disadvantages.

He pointed out that the Constitution limits or forbids foreign ownership in a number of sectors.

For example, foreigners are not permitted to acquire any equity in the mass media, which is exclusively reserved for Filipinos or companies that are 100% controlled by Filipinos. The country’s maritime resources in its exclusive economic zone, territorial sea, and archipelagic oceans cannot be used by foreigners, he added.

He emphasized that a number of industries, including the management of public utilities, educational institutions, private radio communications networks, and property ownership, are also subject to the Constitution’s foreign equity limitations.

A motion for the organization of a constitutional convention to revise the 36-year-old charter was adopted by the House Committee on Constitutional Amendments last week.

Rufus Rodriguez, the committee head and a representative from Cagayan de Oro City, stated that the Constitution has many limitations on the flow of foreign capital in particular economic activity when he introduced the motion before the plenary.

“Despite the fact that the restrictions on foreign ownership are intended to give Filipino nationals priority, it should be highlighted that the nation severely lacks the necessary funds to strengthen its economy and exploit its natural resources. In order to promote the free flow of capital throughout the nation and open the door to increased international competitiveness, it is past time to relax these prohibitions, according to Rodriguez.

The third-most restrictive constitution in the world and the most restrictive in Southeast Asia, he claimed, needed to be reviewed.

Rodriguez cited a 2020 graph from the Organization for Economic Cooperation and Development to argue that the Philippines’ Constitution is the most restrictive when it comes to foreign equity capital.

“The Philippines’ FDI (foreign direct investment) restrictiveness limits the flow of much-needed international investments,” he added. “Despite the efforts of Congress to solve the unfavorable economic position of our country.”

He claimed that switching to a more liberal approach would boost the nation’s capital, company productivity, government income, imports, exports, and the growth rate of the gross domestic product.

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