A political advocacy group on Wednesday cited the need for constitutional reforms as part of the solution to the coronavirus disease 2019 (Covid-19) crisis.
Orion Perez Dumdum, the principal founder of the Constitutional Reform & Rectification for Economic Competitiveness & Transformation (CoRRECT™) Movement, said removing foreign direct investment (FDI) restrictions in the 1987 Constitution is necessary to help the government shore up the much-needed funds for its Covid-19 response.
“Constitutional reform–especially leading to the removal of the 60/40 (ownership clause) and other anti-FDI restrictions–is extremely urgent and important. It is the enabler that will allow us to have the funding we need for our country’s Covid-19 expenses, and it is also the only way to prevent our people from starving as millions have already lost their jobs,” Dumdum told the Philippine News Agency in an interview.
The House Committee on Constitutional Amendments is set to tackle the economic amendments proposed by some 1,486 town mayors across the country, including the lifting of the restrictions on foreign investments and inclusion of the Mandanas ruling on the sourcing of internal revenue allotments (IRA) for local governments from all national taxes.
Dumdum said these proposed amendments, particularly the removal of anti-FDI clauses, would have significant economic implications, particularly in attracting international investors and multinational corporations to come to the Philippines.
“Right now, the Philippine Government is known to have already spent tens of billions of pesos on Covid-19 expenses, and worse, an estimate of 7.3 million Filipinos have lost jobs while DTI (Department of Trade and Industry) claims that around 26 percent of all registered businesses in the Philippines have closed down,” Dumdum said.
By removing all of the anti-FDI clauses in the Constitution, he said the Philippines can become much more attractive and more enticing to many international investors and global companies “so that they can come to the Philippines, set-up offices and factories and hire Filipinos”.
“Those millions of Filipinos who lost their jobs – including so many have been repatriated – need these replacement jobs to replace the jobs and livelihoods they lost,” he added.
Dumdum also took a jab at some “obstructionist politicians” who insist that the constitutional reforms should not be prioritized during the pandemic, saying that they have a “very poor understanding of accounting and economics”.
“How will the government pay for its Covid-19 expenses if we do not amend the Constitution to easily allow international investors and global companies to come in and create jobs for the so many Filipinos who lost their livelihoods?” he said. “Yes, it definitely should be prioritized – at number 1… There is no doubt about it. These reforms have to be done now. In fact, these reforms should have been done decades ago.”
Philippines lagging behind
In terms of introducing reforms in the middle of the crisis, Dumdum noted that Vietnam and Indonesia have been making moves to remove any remaining restrictions against foreign investors, lessening any inefficiencies and red tape, as well as lowering tax rates to attract more investments.
“The rest of Asean’s (Association of Southeast Asian Nations) countries have been scrambling to make themselves much more attractive to foreign direct investors, and both Vietnam and Indonesia are at the top of the heap in their aggressiveness to change their laws to attract more investors,” Dumdum said. “Their biggest goal was to attract the ‘low hanging fruit’ of multinational companies currently based in China who were contemplating leaving China in the light of COVID-19, the looming US-China trade war, and China’s rising costs.”
He argued that the Philippines has been unable to attract the same kinds of investments because it is the only country in the Asean region that has anti-foreign direct investment restrictions “hard-coded” into its Constitution
“There is no other way around it. The Philippine Economy will need to be given the tools for it to recover rapidly, and bringing in thousands of new international investors and global companies to come to the Philippines as a result of removing all of those discouraging anti-FDI restrictions in the Constitution is a major prerequisite for such rapid economic recovery,” he said.
Cagayan de Oro City Rep. Rufus Rodriguez, chair of the House Committee on Constitutional Amendments, said he would call for a virtual meeting within the first two weeks after President Rodrigo Duterte’s State of the Nation Address (SONA) on July 27 to tackle the proposed amendments. (PNA)