Civil Society for
Constitutional Reforms (Part 2)
Dr. Bernardo M. Villegas
06 July 2017
TanDem, a part of civil society organized by concerned citizens to
promote inclusive growth through political reforms, has proposed to amend the Philippine
Constitution of l987 by removing the restrictions, limitations and prohibitions
against foreign direct investments. After consulting a group of experts
over a period of six months, the members of TanDem summarized the major reasons
for their proposed amendments. I enumerate their major arguments.
The Philippines has embraced massive poverty since the birth of the Republic
until today. Out of the present estimated 104 million population, where some 65
million are in the labor force, about 4 million are unemployed while 12 million
are underemployed. To address massive poverty, it is necessary to raise
equally massive capital to create or support sustainable jobs. It costs
about Php100,000.00 to employ a single employee for one full year, based on the
lowest minimum wage and cost of business operations. It would, therefore,
cost at least a staggering 400 billion pesos to employ all the unemployed for
just one year.
Unfortunately, instead of making use of all available capital resources,
whether local or foreign, for job generation, the 1987 Constitution—together
with numerous congressional statutes and implementing rules and
regulations—have instead chosen to restrict foreign direct investments in
several sectors of the economy, to protect the monetary interests of Filipino
business people belonging to the “mayaman” class, at the expense of Filipino
workers and consumers of the middle and the “masa” classes, who are then
systematically deprived of better job opportunities and cheaper goods and
services. These restrictions curtail the fundamental right to employment,
which is the most important labor right that gives life to all other labor
rights, such as those providing for the minimum wage, working conditions,
social security, security of tenure, and self-organization. Without the
actual jobs, all other rights under the labor laws and social legislation mean
nothing to the workers.
About 10.2 million Filipinos live overseas of which some 2.4 million are
overseas Filipino workers. Common sense tells us that it is better to
allow foreign investors to move into the country and hire Filipinos locally,
rather than force Filipinos to move overseas, many of whom leave their families
behind, and then work for foreign employers in a foreign land under a foreign
government. The liberalization of foreign investments, to complement
local investments, reasonably lead to job creation (by establishing new
business enterprises or expanding existing business enterprises); consumer price
reduction (by increasing the supply of goods and services); technology transfer
(by adopting and improving foreign technology); access to foreign markets (by
tapping foreign investors to sell Philippine goods and services in their
homelands); and anti-corruption (by allowing the entry of independent foreign
competitors that can counteract the monopoly power of existing Filipino cartels
of government suppliers.
The fear of foreign investors taking over the Philippine economy is
outdated. We are no longer in colonial times during which foreign
investors came with their foreign colonial armies who helped them take control
of the national economy. Foreign colonial armies have long gone, with
only the Philippine security forces remaining to protect the interests of the
Filipino people. It is furthermore proposed that a Foreign Investment
Council be established to address the risk of foreign governments, cartels and
other groups who may pursue agendas prejudicial to the basic securities
(external, internal, food, water, energy, environmental, resource, etc.) of the
Filipino people. The institution of a Foreign Investment Council may
strike a balance between the need to liberalize foreign investments for
economic and social gains, and the need to protect the basic securities of the
people and the State. The existing inflexible legal framework
providing for blanket restrictions and criminal liability for violations drive
away the legitimate foreign investors while endowing Filipino business people
the license to capture the local market for themselves, disregarding the
divergent interests of the Filipino workers and consumers.
These arguments were not arrived at willy nilly. They were distilled from
volumes of proceedings of many hours of discussion of members of the academe,
government, business and civil society. The only guiding principle was
the common good of society, defined as a juridical or social order that enables
every member of society to attain his or her fullest integral human development.
By being more open to Foreign Direct Investments, countries like China and
Vietnam, have within the last twenty or so years attained higher levels of
human development that we have. It is about time that we do amend the
Constitution for the sake of future generations who will benefit most from a
more open economy than the one we have lived with over the last thirty
years. For comments, my email address is bernardo.villegas@uap.asia.
http://www.bernardovillegas.org/index.php?go=/Articles/723/
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