RBH 7 passage not about economic Cha-cha but political self-interest

March 21, 2024

by IBON Foundation

The railroading and passage of the Resolution of Both Houses (RBH) No. 7 shows that the House had already decided on the bill as soon as it was filed. It was irrelevant that the arguments for economic Charter change (Cha-cha) did not hold water. The House was just going through the motions of deliberation and the measure is, in reality, a trojan horse for the Marcos-Romualdez clan’s self-interest to tighten their dynastic grip on political power.

Cha-cha proponents argue that amending the Constitution and removing economic restrictions will attract more foreign investments and thus lead to more development. But IBON and other advocates have established that these foreign investment arguments are erroneous.

The 1987 Constitution is restrictive to foreign investment? The Philippines is already among the most open economies to foreign investment in the region due to prevailing laws pushed by the government that have ensured openness despite Constitutional restrictions.

More flexibility is needed? Foreign investment restrictions are useful in protecting national interests and development which is why so many other countries in the region like Vietnam, Indonesia, Thailand and Malaysia choose to be restrictive. The so-called flexibility is a non-issue and just an attempt to make economic Cha-cha sound positive and political Cha-cha possible.

And isn’t it always said that foreign investors want predictability? There’s nothing more predictable than a rock-solid constitutional provision. If anything, it’s inserting the phrase “unless otherwise provided by law” and giving legislators greater power to tinker with the Constitution that increases volatility.

Will economic Cha-cha  guarantee more foreign investments? Self-serving foreign investors will always say they want a more open economy. But what is really stopping the Philippines from being more profitable for them is the small domestic market due to chronic poverty, poor infrastructure, corruption, and many other factors completely unrelated to the Constitution’s restrictiveness, if any.

Most importantly, the lack of foreign investment is not even the real barrier to economic development. If anything, it is exactly this kind of thinking that prevents the Philippines from developing and from focusing on what really matters. The government must step up and take a more active role in supporting Filipino firms to industrialize the country on a foundation of broad-based rural development. Foreign investment that can be regulated to contribute to this should be welcome, not foreign investment just after its own profits.

So much can already be done today under the 1987 Constitution to develop an independent, self-reliant, and industrialized economy providing a living wage, livelihoods, and social services for all Filipinos.

Congress can already do so much for the people if they really wanted to. Unfortunately, the fact that they are pushing economic Cha-cha without any solid arguments for this just goes to show that they really want something else – to further their self-interests and stay in power for as long as they can.