Wednesday, July 25, 2012

Will the So-Called "Economic Provisions" Charter Change Hold Sway with the Public?

Senate President Juan Ponce Enrile and House SpeakerFeliciano Belmonte have most recently made public their proposition and determined initiative to embark upon charter change. The two heads of the legislative bodies have made it clear however that the constitutional amendments would merely focused and limited to the economic provisions of the present 1987 Philippine Constitution.

While both Enrile and Belmonte encountered little immediate public censure on their not-so-expected pronouncements, they had been so careful with their wordings as previous charter change initiatives have been vilified so widely for being fraught with malicious intent, those that occurred especially during the Arroyo administration; with suspicions arising of self-perpetuation by the chief executive, particularly on the possible removal of presidential term limits, which presently constricts each term to six years. The limit have been so restrictive that at present, any person aiming to perpetuate himself or herself as a chief executive would have no way of pursuing such idea except through charter change. He or she is expressly banned for re-election for life. This is perhaps why previous cha-cha proposals had always been met gargantuan amount of dissent.

But now, there’s no talk about term limits. Senate President Enrile and Speaker Belmonte make promise that any charter change would merely involve the economic provisions of the constitution, particularly on foreign ownership of lands and properties.

Noticeably, President Noynoy Aquino does not have much comment on such cha-cha pronouncements. Does this mean he is favor with such initiative. If both leaders of the House is in consonance with the move, with the acquiescence of Pnoy, then what could begin would be a railroading of the charter change. That should what the public could expect.

At present, foreign entities are barred from owning any property except as a participant in a corporation with sixty percentum Filipino ownership. Foreigners are only allowed to own strata titles such as buildings and condominium units and none other in terms of real properties.

Upon examining Article 12 of the 1987 Constitution, I can somehow sympathize with both lawmakers as the provisions thereat are so leaning towards extreme Filipinism, the ‘Filipino first’ mentality. It states in no doubtful manner that “the State shall protect Filipino enterprises against unfair foreign competition and trade practices.”

Apparently, the target provision of both Enrile and Belmonte is this specific rule in our Constitution, Section 2, Article 12:

All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.

In the charter change move, the sixty percentum Filipino ownership would be taken out which means any foreign corporation of whatever ownership composition may embark upon exploration, development and utilization of natural resources as against prior restraint in the current system.

This setting aside of restrictions on land utilization is seen to invite more foreign direct investments as overseas corporation will now have more control and supervision over their projects here in the Philippines.
Now, despite that foreign investments is much desirable presently, in order to further augur our economic development and progress, there would be so much apprehension as to whether there would be abuses and mishandlings once foreign corporations would have full utilization of lands and natural resources in our territory, considering that their main motive for investment is to seek profit and maximize gains.

In an article written for The Manila Times, Atty. Dodo Dulayexpertly exposes the downside of the so-called ‘economic provision’ charter change stating for one that present laws such as Republic Act 7042 or the Foreign Investment Act since 1991 already allows 100% ownership of foreign corporations. And that in Indonesia, direct investments have blown by them at the staggering amount of $19 Billion despite restrictions on foreign ownership of real properties.

Is the gamble well worth it? Shall we open our patrimony to foreigners for full utilization?

In the Keynesian aspect, foreign direct investments would almost always result to more intense economic activity, in terms of employment and consumer spending. For this alone I could agree to the gamble. Yet, as I said, apprehensions would always be omnipresent.

Upward countries like Japan, Singapore and even America actually allows foreign ownership of their portion of patrimony.

Maybe, if such move would push through – through that arduous process of charter change – pertinent safeguards should be in place, with appropriate and sufficient regulations and supervisions.


  1. This corrupt politiciAns are the main reason why Philippines is at it worst economy,foreign investors or non ,as long as they are in the position,our country will be the same or even worse.

  2. That should be well-said Tess :-)

  3. rubenlicera2:55 PM GMT+8

    Yeah,that's true being corrupt country doesn't have a progress.

  4. @ Ruben : maybe we should 'ban' corruption in the Constitution, like really headlining it...

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