IT is “encumbent” upon Filipino lawmakers to redo the Constitution because foreign ownership restrictions in the Charter are a “complete turnoff” to foreign investors, international trade lawyer Anthony Abad said.
“As a corporate lawyer, I do not see the logic of a 60-40. What’s the scientific basis for the 60-40 protection? And then again as a lawyer, the sad thing is the moment somebody asks: ‘what are the restrictions? Oh the Constitution has a 60-40 thing?’ Complete turnoff so they just go to Vietnam,” Abad told the forum titled “Breaking Economic Barriers: Making the Philippines an Investment Destination,” which was organized by the British Chamber of Commerce of the Philippines (BCCP) last Thursday.
The 1987 Philippine Constitution limits foreign ownership of land and certain businesses to only 40 percent, while the 60 percent is set aside exclusively for Filipino citizens or corporations.
With this, the trade lawyer said, “So I think it is encumbent upon us to really redo the Constitution. Not because it’s wrong to regulate investments. It can be done but it should be done by law and by regulation and not by the Constitution.”
Abad said the Constitution is there to “set up society—to establish relationships within our society.”
In relation to easing the restrictions on foreign ownership, Abad emphasized that the Philippines needs foreign direct investments (FDIs), saying this will “eradicate poverty.”
“We cannot depend on our own natural resources because we are producing too many people. Our population is not in keeping. We are not able to use our own natural resources to leverage it into high economic growth,” Abad pointed out.
Further, he said, the capital that is accumulated from abroad is “what is going to absorb unemployment and poverty.”
The trade lawyer also allayed the fears in relation to opening up the economy to multinationals, saying capitalism can be fought if a country promotes a “level-playing field” through competition laws.
“We worry about evil multinationals to take over the country and oppress the people but if you think about it, capital doesn’t have a nationality. It just wants to maximize profit. But what we do is to prevent the abuse of capitalists—is you have to make sure that there’s a level-playing field. That’s why the trend in the world is to have antitrust or competition laws and make sure that there is competition,” Abad noted.
Meanwhile, he also stressed that in the age of artificial intelligence (AI), it is crucial to attract technological investments, as this will also have a hand at reducing poverty in the country.
“It is technology that reveals new ways of doing things so we think we are going to run out of food or medicine but somehow technology will always find a way to resolve these problems. But you cannot get that technology unless you open your economy. That’s why empirically and statistically, those countries that have opened up their economy in the last 20 or 30 years are the ones fastest at alleviating poverty,” the trade lawyer added.