Before we become distracted by the midterm elections, our legislators need to act on Cha-cha ASAP
In this interconnected world, the influx of foreign direct investments is pivotal for economic acceleration and development, especially for economies in transition like the Philippines.
These investments bring technology, management expertise, and access to global markets, highlighting the pressing need for constitutional amendments.
For years, Charter Change or the more colloquially term “Cha-cha,” aimed at lifting economic restrictions to encourage foreign direct investments and boost foreign participation, has stirred impassioned debates on the merits of modifying the 1987 Constitution, underscoring the crucial role of national policies and international frameworks in fostering economic growth through FDIs.
Amidst all the well-publicized pro and anti-Cha-cha debates, findings of the latest Pulse Asia survey commissioned by international think tank Stratbase Institute, 64 percent of Filipinos believe an increase in high quality jobs with high salaries and better benefits will result from the removal of restrictions against foreign investors or businesses in our Constitution, while 56 percent believe that Services to stakeholders/customers will be better.
The survey also reveals the red flags that are driving away investors like complicated rules and regulations, bureaucratic ‘red tape,’ constantly disruptive changes in government policies and regulations (56 percent), and restrictive rules on foreign ownership which is highly seen as a significant factor (55 percent).
During a recent consultative session on Charter Change organized by Democracy Watch Philippines, Stratbase Institute President, Prof. Victar Andres “Dindo” Manhit emphasized the need to create a business environment that enables growth and innovation through market-friendly public policies, transparency, and good governance to encourage more investments in the country.
“Investments are a crucial tool in increasing a nation’s productivity while also generating employment, providing income security, and alleviating other economic hardships being experienced by millions of Filipinos,” Manhit said.
Private sector investments, from local or foreign sources, are the prime economic drivers of any economy.
For every new enterprise that opens, an ecosystem of linked businesses and livelihood opportunities are created which multiplies the value of direct investment because of the manpower, services, and supply chains required by its operations.
While the Philippines is showing encouraging post-pandemic economic growth numbers at a rate of 6 percent this year (2024 Asian Development Outlook) and accelerating to 6.2 percent in 2025, experts are seeing new opportunities that would be critical to the country’s economic future that will be sorely missed, again, if the investment barriers in the constitution are not dismantled.
There are emerging sectors seen by economic experts that have great growth potential.
These are being driven by the global trend and fast pace of innovations towards digital transformation, and the urgency to find a planetary solution to climate change.
In the power and energy sector, the ongoing moratorium on new coal fired power plants and refocus towards renewable energy sources can spark an RE construction boom that will require thousands of manpower and construction related services.
Building the plants and facilities of a new green power industry will support jobs in construction, transportation, logistics, a plethora of equipment suppliers and support services.
The rising demand for electric vehicles for cleaner and cheaper commuting options and building developments investing in solar energy panels to lower their electricity costs.
Since this is an archipelagic country, all these investments to green technologies must happen in every inhabited island.
Another opportunity of global scale is the exponential acceleration in the demand for critical minerals required to manufacture all these environmentally friendly digital technologies.
It so happens the Philippines has significant untapped reserves of nickel, copper, chromite, and other metallic minerals believed to be valued at some US$ 1 trillion.
It is evident lifting the economic restrictions to foreign investments in the 1987 Constitution will serve as a pivotal strategy for fostering sustainable economic growth.
Now is the time for President Ferdinand Marcos Jr. and his administration to invest their political capital for what will be a historical policy reform legacy to cure the unresponsive provisions of the constitution that for decades rendered the country uncompetitive as an investment destination.
The current proposition of Constitutional amendments is not just about attracting foreign investment to the Philippines but about ensuring sustainable economic growth, sound expansion, and a new mindset in access to property rights.
Liberalizing the approach to international direct investment will redefine the country’s competitiveness and economic outlook.
We need an enabling Constitution that will effectively attract, instead of losing, opportunities for our people.
Before we become distracted by the midterm elections, our legislators need to act on Cha-cha ASAP.
