Amid calls from foreign companies and officials that the Philippines relax foreign ownership restriction to attract more investments, Malacanang yesterday remained unsupportive of the charter change proposal in the House of Representatives that seeks to ease the restrictive economic provisions of the Constitution.
Communications Secretary Herminio B. Coloma, Jr. told Business World in a text message that charter change is not the only way to increase the country's competitiveness.
"We wish to be able to address their concern in a responsive manner. Charter change may not be the only feasible option for enhancing Philippine attractiveness as an investment venue," Mr. Coloma said.
Earlier this week, United Kingdom (UK) Trade Envoy to the Philippines George Freeman MP and British Ambassador to Manila Asif Anwar Ahmad said British companies are seriously looking to pour more money into the country, provided that the government relaxes the restrictions on foreign ownership of companies in certain industries.
In a courtesy call with Energy Secretary Carlos Jericho L. Petilla, the two officials said British companies are particularly concerned with the ownership rule, which prevents foreign companies from owning more than 40% of firms in the country that are under sectors on the Foreign Investment Negative List, as prescribed by the 1987 charter and other related laws.
News reports quoted Mr. Freeman saying that easing the cap on foreign ownership is one way of encouraging investors into the country, particularly on energy projects.
"You need certainty of ownership and be able to convince financiers that the project is secured for the long term...To promote that, we need to revisit the 6040 rule," he said then.
Former UK envoy to the Philippines Stephen Lillie made the same call in February 2013 as British companies expressed a desire to invest in the country's energy sector.
Last Tuesday, five energy firms from the UK arrived in the Philippines to check out business opportunities in the country. The UK trade mission visited different government agencies to promote potential partnerships in the renewable energy, and oil and gas sectors.
UK Trade and Investment Director Iain Mansfield has also said that trade missions to the country are part of the British government's efforts to double trade with the Philippines in the next five years.
The charter change proposal, contained in Resolution of Both Houses (RBH) No. 1, was filed by House Speaker Feliciano R. Belmonte, Jr., at the start of the 16th Congress last July 5 to amend the restrictive economic provisions of the Constitution. It secured panel approval on March 4.
In filing the resolution, Mr. Belmonte said the restrictive economic provisions in the Philippine Constitution hamper the flow of foreign capital investments in the country.
House committee on Constitutional amendments chairman and also Davao City Rep. Mylene J. GarciaAlbano (2nd district) delivered the sponsorship speech for RBH No. 1 last month, but the lower chamber of Congress has yet to approve the bill on 2nd reading.
Through RBH No. 1, the House seeks to add the phrase "unless otherwise provided by law" to the foreign ownership sections of the Constitution, particularly for land ownership, public utilities, natural resources and media and advertising.
Asked whether the House leadership will push for the approval of the charter change resolution despite the lack of support from the Palace, Mr. Belmonte told Business World: "Well, it has been sponsored, and we have entered the period of debate."
For his part, House Deputy Speaker and Isabela Rep. Giorgidi B. Aggabao (4th district) expressed confidence it will hurdle the plenary debates and will eventually be approved by the House of Representatives.
"The measure is the initiative of the Speaker. It is sure to pass the. House, even without endorsement from the Palace," he said in a text message.
The House Speaker earlier admitted he hasn't consulted Malacanang yet on the proposal, for fear that his pet resolution might be rejected.
"Have I talked to the President about this Chacha? The fact of the matter is that I have not. He might say 'No!' to me. Then I'd be compelled to say, 'Stop.' Yes, I'm afraid. So I've said, 'Let's go ahead and do our thing','' Mr. Belmonte has said.
He did say that, should the President tell him to stop pushing the resolution, he will obey.
Asked for comment yesterday, Henry J. Schumacher, executive vice-president of the European Chamber of Commerce of the Philippines (ECCP), said in a text message: "To get more foreign direct investment and get employment in new production ventures going, the uncertainties about rules, regulations and the limitations for foreign investors in the Foreign Investment Negative List and in the Constitution need to be addressed."
"The pragmatic approach of Speaker Belmonte in [RBH 1] is a good step forward. If this passes the House and finds support in the Senate, there will be more pressure on the President to let it happen. I am aware that inclusive growth is high on his agenda. [RBH 1] will help deliver this," he continued.
Addressing businessmen from the Association of Southeast Asian Nations during a courtesy call in Malacanang last month, President Benigno S. C. Aquino III listed other possible reforms, such as cutting down red tape "to allow businesses to set up shop more easily, or plugging leaks and instituting reforms in our budgeting process whether it is making massive investments in our people through skills training and education, health, and social services, or enhancing the state of national infrastructure."
Moves to amend the Constitution in the past administrations since former President Fidel V. Ramos have not prospered amid fears that it will be used to keep elected officials in power.
To allay fears that the Chacha push is politically motivated to extend elected officials' term, Mr. Belmonte earlier led the signing of a pledge stating that members of the House of Representatives will only introduce amendments to the economic provisions of the Constitution as he committed to personally block any attempt to do so.
Source: Business World, 20 June 2014
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