Retired Supreme Court Senior Associate Justice Antonio Carpio on Monday said there seems to be a lack understanding among national leaders on the laws on foreign ownership in the Philippines amid the push to relax economic restrictions in the 1987 Constitution.
During the continuation of the Senate Subcommittee on Constitutional Amendments and Revision of Codes hearing on Resolution of Both Houses 6, Carpio noted that the Philippines has one of the most liberal foreign investment laws in the ASEAN and in Asia.
Even without amending the Charter, Carpio said the Philippines has passed several laws to open the economy to 100% foreign ownership, particularly the recently-amended Public Services Act, Retail Trade Liberalization Act.
“There appears to be a lack of understanding by our national leaders of the extent of foreign ownership under the law of businesses in our country,” Carpio told the subcommittee.
He specifically mentioned President Ferdinand “Bongbong” Marcos Jr.’s interview with GMA Integrated News where the President initially expressed openness to the idea of amending the economic provisions of the Charter except for critical sectors.
“Power generation has always been open to 100 percent foreign ownership for the longest time…In an interview, President [Ferdinand] Marcos Jr. declared that he wants to open the economy to foreign investments and I quote, ‘except in critical areas such as power generation,'” Carpio said.
“Our generation from coal, oil and gas plants has been opened to 100 percent foreign ownership for the longest time. The Supreme Court has also allowed 100 percent foreign ownership of power generation from dams or hydro power plants,” he added.
Carpio also said the Department of Justice (DOJ) and the Department of Energy (DOE) under the Marcos administration have recently allowed 100% ownership of power generation from solar and wind through a “mere implementing guideline.”
‘False reasons’
He also criticized the individuals behind the current people’s initiative, whom he said are blaming the restrictive economic provisions of the constitution for the economic situation of the Philippines.
“The proponents of the present people’s initiative blame the restrictive economic provisions of the constitution for the low foreign direct investments, the high unemployment, and the slow economic growth of our country. These are all false reasons,” Carpio said.
“We have to address the real causes. The real cause is not the Constitution. Nobody cares. The President has been going abroad and has been saying, ‘I have secured almost P500 billion in foreign investment’ and not one of those foreigners who plan to invest here required an amendment to our Constitution,” he emphasized.
For Carpio, the real causes for the low foreign direct investments in the Philippines are the high cost of power, bureaucracy, and the infrastructure.
The retired justice pointed out that the Philippines has the highest power rate in ASEAN region and second to the highest power rate in Asia next to Japan.
“In manufacturing, energy accounts for at least 30 percent of your cost and if you locate your plant here in the Philippines, you cannot compete with your competitor in Vietnam because they have lower power rates. They will never come here in the Philippines,” he said.
Comparing the bureaucratic process in other countries, Carpio said foreign investors would need to get permits from the barangay, mayor, national agencies, and specialized regulatory bodies in the Philippines. In China and in Vietnam, he said, foreign investors would only need to go to one office to secure the necessary documents.
Carpio also explained that foreign investors are not concerned about land ownership in the countries that they will invest in.
“You don’t have to spend that much to use the land. You only need a 25-year lease and you don’t want more than a 25-year lease because in 25 years, the labor situation might change. The labor in the Philippines could be more expensive than the next country. So, they don’t want to buy land actually, [especially] foreign investors who are engaged in manufacturing,” he said.
The Resolution of Both Houses 6, which seeks to lift the 40% restriction on foreign ownership in advertising, education, and public utilities, is still under deliberation by the Senate. The House of Representatives, for its part, has vowed to adopt the Senate version as soon as it is approved. —KBK, GMA Integrated News
