The Joint Foreign Chambers of Commerce (JFC) in the Philippines has reiterated its call to remove economic restrictions in the 1987 Constitution to facilitate more foreign direct investments (FDI) in the country.
“We recognize that the government’s mandate to protect vital national interests by placing some restrictions on FDI,” JFC said in a letter to Speaker Ferdinand Martin G. Romualdez. “In this respect, we note that most national economies use legislation or executive regulations to respond to such an important consideration.”
The group maintained the advantage of putting the restrictions in legislation or executive regulations instead of the Constitution is the flexibility “to quickly adjust the regulatory environment for FDI in order to adapt to changes in technology, comply with requirements of international treaties, or take advantage of new opportunities to benefit in the global economy.”
While FDI flow in the region rose by 5.5 percent in 2022 to a record $224 billion, or around 17 percent of global FDI, the Philippines has not significantly gained from it, as its share declined to $9.2 billion from $12 billion in 2021.
The stock of FDI in ASEAN stood at $3.6 trillion in 2022, double the level in 2015.
According to the ASEAN Investment Report 2023, lower FDI in 2021 kept the Philippines behind five other countries led by Singapore, with a lower share of 4.1 percent of the total compared with 5.7 percent in 2021.
The JFC said the proposal to insert the phrase “unless otherwise provided by law” in amending restrictive provisions in the Constitution is welcome, although it isn’t likely to send a strong signal to foreign investors as a direct revision of the restrictive provisions.
Even so, JFC said if Congress goes that route, it could still help in addressing changes in the global economy from the time the Constitution was framed in 1987, including signing of free trade deals and joining free trade blocs.
“Many of these developments emphasize the need for free movement of capital across borders and a level playing field between foreign and domestic investors without undue restrictions,” it said.
The JFC is comprised of the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers of commerce as well as the Philippine Association of Multinational Companies Regional Headquarters.