Cleaning up after Cory

"Can we use 1.6 million new jobs?"


Last week I called out PNB for its six-month delay in cleaning up my credit card account after I was victimized by fake transactions somewhere in the Balkans.

I’m happy to report that within literally minutes of my column hitting Facebook, no less than PNB’s president and CEO, Wick Veloso, contacted me. Within the same day, my problem was resolved.

My thanks to Wick, who joined PNB in 2018 after serving as HSBC’s first Filipino country manager. Last year, Singapore-based The Asian Banker commended him and PNB for their “best management performance during COVID-19” in the Philippines. We’re hopeful that Wick’s excellence will continue to spread throughout his organization.

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I’m also reminding the reader to sign up for this Friday’s webinar on “Tapping the $1 Trillion China Market” sponsored by CenSEI, the consulting company run by former Civil Service Commission chair Ric Saludo and former DAP president Tony Kalaw. Powerhouse co-sponsors are Microsoft, San Miguel Corp, Globe Telecoms, and RCBC.

Scheduled to speak is our Ambassador to China, Chito Sta. Romana (a LaSallite like Wick); our commercial attache there, Glenn Penaranda; China’s commercial counsellor here, Jiang Jiangjun; and local China business experts Allen Cheng and George Chua Cham.

The webinar is scheduled for Friday the 26th from 9AM to 12PM. Just go to this Microsoft Teams link:

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RBH2, the resolution seeking to relax constitutional restrictions on foreign investment, was recently reported out of the House Committee on Constitutional Amendments, headed by Rep. Alfred Garbin, with an impressive 63-3-3 vote. This week it’s scheduled for plenary deliberations on the floor.

As the congressmen meet, they ought to note that our Constitution is truly the most restrictive on foreign investment in the region, if not the whole world. For comparison, courtesy of international trade expert Atty. Tony Abad, here are relevant passages from the constitution of the Lao People’s Democratic Republic, the only other ASEAN constitution that says anything about foreign investment in general:

“Article 14. The state protects and expands all forms of state, collective and individual ownership, as well as private ownership of domestic capitalists and foreigners who make investments in the Lao PDR. The state encourages all economic sectors to compete and cooperate with one another in expanding their production and business. All economic sectors are equal before law.”

You certainly can’t get more innocuous than that—and from a country that remains firmly in the camp of nominally communist China. It’s a far, far cry from our own constitution, under which 30 economic sectors have 60/40 foreign ownership caps, with 11 closed to any foreign presence at all.

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Let me also share with our congressmen the following two research findings from UP National College of Public Administration and Governance Professor Henry Basilio and his research team in RESPOND (Regulatory Reform Support Program for National Development):

First, Dr. Basilio’s statistical regressions show that foreign direct investment will increase by $57.5 million for every one unit point improvement in the country’s foreign equity restriction (FER) score that is tracked by the developed countries in OECD. That score was 0.281 in 2019, the 4th highest in the world (only behind, of all places, Libya, Algeria, and Palestine).

Bringing that score down to zero (allowing 100-percent foreign ownership in the entire economy) would increase our nominal foreign investment by another $16.2 billion, more than triple the $5.25 billion level as of last October.

Second, Dr. Basilio’s input-output analysis shows that the above potential increase in foreign investment would lead to 1.6 million new jobs. This would recover more than half of the job losses from the COVID-19 lockdown and raise total family incomes by nearly P200 billion, or by P8,000 per family, over the long term.

The job recovery rates would be particularly significant in manufacturing (+38 percent); construction (+35 percent); other services including health and tourism (+25 percent); and transport and storage (+19 percent).

Of course, whether or not our government would ultimately allow 100 percent foreign ownership in all sectors is the 64-peso question. Even now, land is already off the table. And we’d have to depend on the probity of future congressmen in exercising discretion over equity restrictions that could now be relaxed under the condition “unless otherwise provided by law.”

Having said that, I prefer to see the cup as half full and not half empty. Even a simple additional phrase like the one above will do wonders for the backward Cory Constitution.

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Today’s Gospel is preceded by this verse (Mt 4: 4b): “One does not live on bread alone, but on every word that comes forth from the mouth of God.”

As we move deeper into the Lenten season, it’s a reminder that we’re not only expected to fast (from “bread”), but also to give alms (“love our neighbor”) and pray (“love our God”), following the two reformulated commandments for Christian living.

Readers can write me at [email protected]

Topics: Gary Olivar , PNB , Wick Veloso , Ambassador to China , Chito Sta. Romana
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