The Sound of Economic Chacha Express

Who's afraid of opening up the Philippine economy to foreigners?

Not the House of Representatives, which, as of last report, has finished the period of interpellation for a resolution that seeks to amend the so-called 60-40 rule in the 1987 Constitution limiting  foreign ownership on certain activities in the Philippines. No less than Speaker Feliciano Belmonte is the foremost supporter of the move in the House.     

Nor the Senate, which, like the House, favors the move to allow foreigners to gain a foothold in vital sectors of the economy. Sen. Ralph Recto has been openly seeking support for economic Cha-cha in the Upper Chamber.

Under Article XII of the Constitution, ratified during the term of President Corazon Aquino, foreign investors are prohibited from owning more than 40 percent of real properties and businesses.

Foreigners are likewise prohibited from exploiting the country’s natural resources and from owning any company in the media industry.  

Some groups, particularly the militant ones, are the ones stoutly opposed to opening up the economy to foreigners, claiming that as it stands, the economy is already under the tight grip of foreign interests, especially the Americans. They espouse the nebulous and antiquated concept of "nationalist industrialization" that apparently calls for closing the door on foreign participation in all sectors of the economy. They are silent on how the money to finance "nationalist industrialization" will come from. 

Current geo-political realities leave us no option but to open the doors of the economy to support a rapidly growing population. The lifting of caps on foreign ownership of land, public utilities, natural resources, media and advertising industries could actually stimulate economic growth by creating more jobs that will give the poor the means to improve their lives.

Economic Cha-cha, we must hasten to add, is not the silver bullet that will rescue the economy from the doldrums.

Equally important are a level playing field, clear and predictable rules, lower costs of doing business, lower power rates and a stable peace and order situation.

But the single most important step is opening up key sectors of the domestic economy to foreign participation. It’s about time.  -end-

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