Federalism Cha-cha weakens nationalist provisions–IBON

August 16, 2017

by IBON Foundation

Research group IBON criticized the weakening of nationalist provisions of the 1987 Philippine Constitution in the proposed federalism charter of pro-administration solons. The group said that the insertion of the phrase “unless otherwise provided by law” in portions restricting foreign participation in essential sectors threatens prospects for the Philippine economy to develop independently.

Introduced by Representatives Aurelio Gonzales, Jr. and Eugene De Vera, Resolution of Both Houses (RBH) No. 08 proposes the transformation of the legislative branch into a constituent assembly towards the adoption of a federal form of government. Moreover, it inserts variations of the phrase “unless otherwise provided by law” to sections stipulating majority to full Filipino ownership of agricultural lands, enterprises, public utilities, educational and advertising institutions.

According to IBON, while decades of implementing pro-business and pro-foreign neoliberal policies have led to economic backwardness and underdevelopment, the 1987 Philippine Constitution still serves as legal basis to pursue social justice and economic independence to benefit Filipinos and the nation. Removing any protection over such vital sectors as the abovementioned will only worsen the country’s social and economic situation, the group said. Profit-seeking foreign investments in the said sectors, for instance, can lead to the further impoverishment of farmers and food insecurity, more labor rights violations and a dim future for national industries, and even greater commercialization of public utilities and social services.

IBON also refuted Charter Change (Cha-cha) proponents’ claims that foreign restrictions have discouraged foreign investments and thus hindered jobs creation and economic development.  According to the group, while foreign investments in the Philippines have increased through the years, unemployment and underemployment persisted and growth of the country’s production sectors has slowed.

Foreign direct investments have risen through 2011 (US$558 million) to 2015 (US$1,840 million). Yet, IBON estimates showed up to 11.5 million combined unemployed and underemployed  Filipinos in 2015 with the number of underemployed increasing from five years before. The share of agriculture in gross domestic product (GDP) meanwhile fell from 11.5% to 9.5% in the same period, while manufacturing remained almost stagnant.

The group said that foreign investments can benefit the country if intended for Philippine agriculture and local industries to spur inclusive growth. However, large portions of investments in the 2011-2015 period have been in foreign manufacturing or business process outsourcing, commercial and residential real estate, and in transport infrastructure rather than in local farms and Filipino industry. These  show that under the neoliberal frame, Cha-cha to increase foreign investments means greater opportunities for investors to profit but at the expense of the country and its citizens.