Amending the 1987 Constitution is one of the keys to kickstart the Duterte administration’s shift to a federal form of government and attract more foreign direct investments.
Speaker Gloria Macapagal Arroyo’s push for amending the 1987 Charter runs parallel with President Rodrigo Duterte’s aspiration of further spurring the economy thru his ambitious “Build, Build, Build” infrastructure program.
Even the influential Makati Business Club, Management Association of the Philippines and the Financial Executives Institute of the Philippines earlier said they backed Congress’s move to amend the 1987 Constitution. They particularly cited the lifting of economic restrictions in the Constitution, saying this will pave the way for a more conducive business environment.
They said that relaxing economic restrictions would be vital in the Philippines’ role as one of the major players in the Association of Southeast Asian Nations, as well as in its intent to pursue better trade relations with nontraditional partners, such as Russia, under President Duterte’s self-styled independent foreign policy.
President Duterte knows the Philippines remains a laggard compared to its neighbors in the Asean region in terms of attracting foreign direct investments. The Chief Executive fairly knows that lifting economic restrictions in the Constitution would pave the way for more foreign companies to locate in the country and possibly take part in the massive infrastructure program of the government.
Latest Bangko Sentral data showed that net inflows of foreign direct investments in the first eight months rose 31 percent to $7.4 billion from US$5.7 billion net inflows a year ago as investors remained optimistic about the Philippine economy.
But for the month of August alone, FDI net inflows fell 41.2 percent to $752 million from $1.3 billion net inflows recorded in the same period last year.
In a survey released by the Business Times-Standard Chartered Leader’s Survey on 129 leaders and business owners from various industry sectors in April 2018, foreign investors expressed a preference for Indonesia (34 percent), Malaysia (22 percent), and Vietnam (22 percent) as top destinations for business expansion.
Only 3 percent of the respondents conveyed interest in expanding business operations in the Philippines.
Experts said even as FDI in the Philippines has improved, the country still needs to catch up with the more favorable investment outlook for its neighbors.
But Finance Secretary Carlos Dominguez III earlier said President Duterte’s style of leadership has made the country a safer place for investors, with his campaign against corruption and criminality leading to a decrease in crime volume by 21.86 percent since the start of his administration.
Dominguez also said the increasing volume of FDIs supported the Duterte administration’s efforts to shift the economy from consumption to investments-led growth, which would then help create decent, well-paying jobs for the country’s young, well-trained Filipinos entering the workforce in the coming years.
In 2017, foreign businessmen also brought a record amount of investments into the country. FDI inflows reached a record high of $10 billion, up 21.5 percent from the previous year.
This year, the government expects net FDI to hit $9.2 billion.
Early this year, the American financial and business news website Business Insider put the Philippines on the top of the list of
20 best countries to invest in this year.
Indonesia came in the second place, followed by Poland, Malaysia, Singapore, Australia, Spain, Thailand, India, Oman, Czech Republic, Finland, Uruguay, Turkey, Ireland, the Netherands, the United Kingdom, Brazil, France, and Chile.
The Duterte administration’s ambitious P8.4-trillion “Build, Build, Build’ program is expected to create more jobs and further spur economic growth in the years to come.
The infrastructure program aims to build more roads, bridges, seaports, airports, railways and water and irrigation projects across the country to spur economic activities.
It also aims to build a subway in Metro Manila in a bid to decongest the metropolis of heavy traffic that costs around P3.5 billion in economic losses daily, according to a study by Japan International Cooperation Agency.