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We need foreign investment

We need foreign investment"We need capital that would translate to jobs."

 

 

One big problem of the country amid the COVID-19 pandemic is joblessness with the imposition of restrictive health protocols which limit the activities of small and big businesses. They create a lot of joblessness, which in turn worsens poverty nationwide.

According to the latest statistics, we now have 5 million to 6 million of jobless adult Filipinos, my gulay! That’s a lot of people who are getting hungry. Unless something is done, the increasing number of people going hungry nationwide can create problems like more crimes that can affect national security.

Santa Banana, considering the fact that COVID-19 health crisis won’t go away for more years yet to come, there have been numerous proposals to ease joblessness! Among them is to attract more foreign investments to create more jobs. But, the problem is that our Constitution has adopted a very restrictive and repressive policy to limit foreign investments to 40 percent under the 60-40 provision.

There is an urgent need to amend the Constitution, but calling a convention to amend the 1987 charter and what mode presents a big problem. It is for this reason why the Senate has deemed it necessary and even critical to amend the Public Service Act to open up for a start on two sectors of the economy, specifically the transportation and telecommunication sectors, to facilitate the entry and infusion of much-needed foreign investments.

I have been to many of the foreign trips of Presidents, like Fidel V. Ramos, Erap Estrada and Gloria Macapagal Arroyo, and foreign businessmen continue to deplore the prohibitive and restrictive 60-40 mandate of the Constitution. And this is the reason why among Southeast Asian countries, the Philippines continues to be at the bottom of the totem pole when it comes to foreign investment. Vietnam, Indonesia, Thailand, Malaysia, and my gulay, even Laos and Cambodia have opened their countries to  foreign investment.

The last group of businessmen that have been pressing for a start to attract foreign investments are the Foundation for Economic Freedom, the Makati Business Club and the UP School of Economic Alumni Association. My gulay, foreign chambers of commerce have also been urging the government to do away with that restrictive and prohibitive policy in the Constitution.

I would like to quote portions of the resolution of business groups. This was passed on to me by my good friend, former Finance Secretary Gary Teves: 

“We, the undersigned, express our strong support for the liberalization of the Philippine economy through the passage of the amendments to the Public Service Act. We believe that this is the most consequential piece of legislation towards maximizing opportunities to attract foreign investments to create jobs and build the infrastructure for economic recovery and growth as the country struggles against the effects of the pandemic.

“The intention of the amendments to the Public Service Act is to open key sectors of the economy, specifically the transportation and telecommunications sectors to facilitate the infusion of much-needed foreign investment. Any moves to retain the 60-40 foreign equity restrictions and add legislative franchise requirements where none existed prior to the Act, will thwart the intention of the bill and the positive impact that can bring to the business community and consumers.

“Furthermore, a main objective of the amendments to the Public Service Act is to define public utilities. A key criteria in the proposed definition is that public utilities must be natural monopolies. Both transportation and telecommunications companies that operate are not natural monopolies. There are numerous transportation companies and three telecommunications companies that operate viably in the country. We caution the Senate against including favored subsectors under the public utilities definition in order to protect them from competition. It is crucial to apply the propos definition consistently in identifying the sectors that should be considered public utilities to maintain the internal integrity of the bill.

“There is strong interest among foreign investors from various countries to invest in the Philippines. We must maximize the opportunity by sending a strong signal to the global community that the Philippines is open for business to facilitate the entry of a wider range of investors and new technologies to help the country transition to a digital economy.

“At this juncture, instead of keeping our service sector closed to foreign investments in the guise of national security, it is important for the country to carefully balance our need to attract foreign investments while protecting our national security. The proposed Senate bill incorporates safeguards that address the nature of the risk, instead of using an ownership ban as a blanket solution.

“The status quo has proven insufficient to address the needs of the country. Retaining the 60-40 foreign equity restriction will prevent the accomplishment of the intentions of the proposed reform to liberalize the Philippine economy to attract greater foreign investments, facilitate competition, fund infrastructure and improve the quality of public service in the country.”

We have seen how vital transportation is to workers and the labor sector amid all the restrictions and health protocols because of the inadequacy of transportation when people have to walk for miles to go to work and for them to wait hours on end to wait for transportation.

The three telecommunications firms -- PLDT-Smart, Globe and Dito can stand foreign competition. But, more importantly, since we are in the age of digital technology, there is a need for foreign technology. And I know how inadequate our Internet is. This Senate bill to seek amendments to the Public Service Act is not only needed, but extremely critical and urgent if the country must claim to belong to the community of nations.

The proposed amendments to the Public Service Act, to my mind, is just the start of a new Philippines. If we have a new President next year, we should know what is needed in the country, which is the need to create jobs, which is a priority.

•••

The entry of Manila Mayor Isko Moreno in the race for presidency in 2022 makes the polls more interesting. There are now five candidates to choose from. There is Sara Duterte-Carpio, who I believe is still in the race even if her father, President Duterte says he wants to be Vice President. There is  also former Senator Bongbong Marcos who I think will probably slide to Vice President under Sara. If not, I think he will run on his own. Then there are Senator Ping Lacson and Senate President Tito Sotto, who are running as President and Vice President, respectively. Senator Manny Pacquiao is also there, with no Vice President yet, and I believe Vice President Leni Robredo will run if she can make a go of her efforts to unite some of the opposition candidates. But, under whom, is the question.

Topics: COVID-19 pandemic , joblessness , foreign investment , Public Service Act
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