STANDARD EDITORIAL: NO BETTER TIME FOR CHA-CHA
MANILA, OCTOBER 6, 2011 (STANDARD) UNLIKE President Benigno Aquino III, we believe there is no better time than now to remove the economic restrictions in the Constitution that have been holding this country back.
If there were any doubts about the impact of these constitutional restrictions, one only need consult a World Bank 2010 report that listed the Philippines as among the world's most restrictive countries in allowing foreign capital into the country.
"Among the 87 countries covered by the Investing Across Sectors indicators, the Philippines imposes foreign equity ownership restrictions on more sectors than most other countries," said the Investing Across Borders 2010 report, which lumped us with Ethiopia.
The Philippines, along with Bosnia and Herzegovina, were listed as the only nations that do not allow foreign companies to lease public land. The Philippines also received poor scores for imposing ownership limitations on many industries, in particular on the public utilities and service sectors.
The World Bank study notes that foreign capital participation in the country's mining and oil and gas industries is limited to a maximum share of 40 percent by the Constitution. In the service sectors, the Constitution limits foreign capital participation in public utilities such as telecommunications, electricity and transportation to a maximum of 40 percent.
Newspaper publishing and television broadcasting are closed to foreign equity ownership.
The constitutional hostility to foreign capital is also reflected in how difficult the country makes it for foreign investors to set up.
"It takes 17 procedures and 80 days to establish a foreign-owned limited liability company in Manila, slower than both the average for East Asia and the Pacific and the global average," the World Bank report said.
With this kind of an environment, is it any wonder that foreign investors have taken their funds elsewhere?
Of course, it is as yet unclear if a proposal from Mr. Aquino's allies in Congress to pursue constitutional reforms through the legislative process will survive a challenge before the Supreme Court. But now is certainly the time to pursue this question.
For far too long, we have been held back by fears born of economic xenophobia that were foolishly incorporated into the basic law of the land. The 1987 Constitution, drafted by the handpicked delegates of Mr. Aquino's mother, was a flawed document. There is no shame in amending that document now.
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Chief News Editor: Sol Jose Vanzi
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