Foundation for Economic Freedom, Inc.
BOARD OF ADVISERS:
Gerardo Sicat
Cesar A. Virata
BOARD OF TRUSTEES:
Roberto De Ocamp...
105 Philippine Social Science Center (PSSC) Commonwealth Ave., Diliman, Quezon City
Telefax: (632) 4532375 (Main Office) T...
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FEF Statement on the Belmonte Resolution to Amend the Constitution

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PROMOTE INCLUSIVE GROWTH AND STRENGTHEN NATIONAL SECURITY BY
PASSING THE BELMONTE BILL ON CHARTER CHANGE

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FEF Statement on the Belmonte Resolution to Amend the Constitution

  1. 1. Foundation for Economic Freedom, Inc. BOARD OF ADVISERS: Gerardo Sicat Cesar A. Virata BOARD OF TRUSTEES: Roberto De Ocampo Chairman Romeo Bernardo Vice-Chairman Calixto Chikiamco President Ernest Leung Treasurer Atty. Ricardo Balatbat III Corporate Secretary Thomas Allen Art Corpuz Felipe Medalla Vaughn Montes Gary Olivar Simon Paterno Gloria Tan-Climaco Francis Valera Atty. Ricardo Balatbat III Executive Director 105 Philippine Social Science Center (PSSC) Commonwealth Ave., Diliman, Quezon City Telefax: (632) 4532375 (Main Office) Tel No.: (632) 8939602 (Accounting) Website: www.fef.org.ph Email: fefphilippines@gmail.com / fef@fef.org.ph FEF STATEMENT ON THE BELMONTE BILL TO AMEND THE CONSTITUTION PROMOTE INCLUSIVE GROWTH AND STRENGTHEN NATIONAL SECURITY BY PASSING THE BELMONTE BILL ON CHARTER CHANGE The Belmonte Bill on amending the Constitution, by inserting the phrase “unless otherwise provided by law” in the economic provisions in the Constitution limiting foreign ownership in certain areas of the economy, will promote inclusive growth and strengthen national security. It will provide the “key” to opening up areas of the economy to more foreign investments, thereby providing more competition, facilitating technology transfer, generating jobs, and improving consumer choice. Presently, our current growth has not led to more jobs and reduced poverty. Economic growth has been primarily consumption-driven, not investment-driven. Through the restrictive limits set in our Constitution, we are signaling to foreign investors that they are not welcome, especially in critical areas like the establish- ment and operation of public utilities. Our current level of Foreign Direct Investments (FDI) remains the lowest among the ASEAN 5, namely Vietnam, Malaysia, Indonesia, Thailand, and the Philippines. Enabling Congress to open up areas of the economy now currently prohibited by the Constitution will also strengthen national security: 1. By increasing FDIs, the country will increase the economic interest of our friends and allies in the international community to maintain our territorial integrity and to uphold freedom of navigation in the West Philippine Sea. 2. Well-capitalized foreign companies can help modernize and provide competition in strategic sectors of the economy like seaports, airports, telecommunications, shipping, and air transport. The modernization of these strategic areas of the economy is vital for our national security. 3. If well-capitalized world-class companies are allowed to own and operate public utilities like airports, seaports, shipping, and telecommunications beyond the present limit of 40% set by the by the Constitution, the quality and quantity of bidders for PPP (Public-Private Partnerships) will dramatically improve. This can only auger well for PPP Projects particularly in strategic infrastructure. 4. Well-capitalized foreign companies from countries that have an Anti-Foreign Corrupt Practices
  2. 2. 105 Philippine Social Science Center (PSSC) Commonwealth Ave., Diliman, Quezon City Telefax: (632) 4532375 (Main Office) Tel No.: (632) 8939602 (Accounting) Website: www.fef.org.ph Email: fefphilippines@gmail.com / fef@fef.org.ph Foundation for Economic Freedom, Inc. Act will be encouraged to invest in the Philippines, thereby improving the climate for transparency, morality, and good governance in doing business in the Philippines. Currently, the present Constitution encourages “adverse selection,” which means that only foreign companies which are willing to circumvent the rules on foreign ownership invest in the Philippines. It is a well-known fact that foreign companies already own and control media companies, telecoms, and power distribution companies, despite the Constitutional limitation on foreign ownership. Overall, the liberalization of foreign ownership restrictions will reduce the corruption of our institutions and advance Daang Matuwid. 5. The Philippines needs to join the Trans-Pacific Partnership, a free trade association of nations led by the United States. It is the main foundation of the US’s rebalancing toward Asia. Other ASEAN Nations like Vietnam and Malaysia have joined. However, membership requires that foreign investors receive equal treatment with local investors. Therefore, the country has to remove the foreign ownership restrictions in the Constitution to attain full membership. Not joining the TPP would put the Philippines at a competitive disadvantage vis a vis other member nations for access to markets like Japan, Australia, and the United States. Foreign investors will shun the Philippines in favor of member countries with easier access to the developed markets of the US, Japan and other member countries. Foreign companies will not put up factories here and generate jobs if their goods are not able to get preferential access to the United States and other TPP member countries. Not joining this US-led initiative would also be a strategic slap against our main ally at a time when the country is looking for strategic cooperation and assistance in its territorial dispute against China. Moreover, joining the TPP would enable the Philippines to diversify its markets outside of China, which is threatening to retaliate against Philippine goods for the Philippine government filing a legal case in UNCLOS over territorial disputes in the West Philippine Sea. The Comprehensive Agreement on the Bangsamoro has a greater chance of succeeding in building peace and prosperity in Mindanao if foreign investments are allowed to invest in the Bangsamoro region without the limitations on foreign ownership in the Constitution. Building internal peace and prosperity is needed if we are to confront external threats to our national sovereignty and territorial integrity. Any concerns that other parties may have in the liberalization of foreign ownership restrictions in the Constitution can be fully debated and addressed when the corresponding legislation is introduced in Congress after the Constitutional amendment to include the phrase “unless provided by law” is passed. We call on Congress to promote inclusive growth, reduce poverty, generate jobs, improve consumer welfare, enhance competition, modernize our strategic infrastructure, and strengthen our national security in an all-around way by passing the Belmonte bill to amend the Constitution. For more information, please check our website: www.fef.org.ph, or contact the following: Ethel Briones, Program Officer - ebbriones@fef.ors.ph /+63 2 453 2375 Ranna Pintor, Program Officer - rannapintor@yahoo.com / +63 2 453 2375

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