The Joint Foreign Chambers of Commerce (JFC) in the Philippines agreed that removing economic restrictions in the 1987 Constitution would facilitate greater inflow of foreign direct investments (FDI) in the country.
JFC manifested its position in a letter to Speaker Martin Romualdez. They said that while they recognize the government’s mandate to protect vital national interests by placing some restrictions on FDI, it might help to open up some room for flexibility through legislation or executive regulations.
By doing so, it would allow the government “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,” the group said.
The ASEAN Investment Report 2023 showed FDI flow in the region rose 5.5 percent in 2022 to a record USD224 billion, around 17 percent of global FDI. The stock of FDI in ASEAN stood at USD3.6 trillion in 2022, double the level in 2015.
According to JFC, the Philippines has not benefited from those gains with FDI flow declining from USD12 billion in 2021 to USD9.2 billion in 2022. This kept the country behind its ASEAN neighbors with only a 4.1 percent share of the total FDIs compared to 5.7 percent in 2021.
JFC said the proposal to insert the phrase “unless otherwise provided by law” in amending the restrictive provisions in the Constitution is welcome although it isn’t likely to send a strong signal to foreign investors as direct revision of the same.
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 the 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,” JFC said.
The House is currently convened as Committee of the Whole to deliberate on the proposed specific amendments to the economic provisions of the 1987 Constitution.
JFC includes the American, Australian-New Zealand, Canadian, European, Japanese and Korean chambers of commerce as well as the Philippine Association of Multinational Companies Regional Headquarters.