Rep. Villafuerte hails MAP and AmCham support for Cha-cha to boost FDI inflow


The fresh support of foreign and local business groups for Charter change (Cha-cha) to attract more investors is the latest proof that stripping out the outdated provisions in our Constitution restricting foreign participation in local businesses is the fast way to spell a dramatic jump in foreign direct investments (FDIs) needed to keep the economy on its high growth path and accelerate poverty reduction, a senior lawmaker said on Tuesday.

Camarines Sur Rep. LRay Villafuerte said the backing of the Management Association of the Philippines (MAP) and the American Chamber of Commerce of the Philippines (AmCham) for constitutional reform has shattered the position of other business groups that a makeover of constitutional provisions on the domestic economy has become superfluous because of four new laws designed to enhance the local investment climate.

“The full backing of such prominent local and foreign business groups as MAP and AmCham for constitutional reform to attract more investors has buttressed the position of Charter change advocates in the Congress like myself that only a makeover stripping out the antiquated, protectionist economic provisions of our 36-year-old Constitution could enable the Philippines keep up with, let alone overtake, neighboring economies that have become major FDI hubs way ahead of our country,” Villafuerte, one of the lead proponents in the House of Representatives of Cha- cha via the Constitutional Convention (Con-Con) route, said.

Villafuerte said the Constitution’s 40-percent cap on foreign ownership of certain major Philippine business “explains the nonstop decline in FDI inflows to our country despite its status as one of the fastest-growing economies in Asia before and after the Covid-19 pandemic.”

“Thus, tweaking our Constitution at the soonest to do away with its economic provisions that have apparently spooked overseas investors has become a must, because the President’s economic managers themselves have stressed the importance of investments to stimulate economic activity, creating jobs and attacking poverty,” said Villafuerte.

MAP and AmCham had separately supported Charter change for so long as such would only cover economic-related constitutional provisions.

“Our stand is that we agree, provided that it is limited to the economic provisions,” MAP president Benedicta Du-Baladad told reporters.

AmCham executive director Ebb Hinchliffe said, meanwhile, that his group is, likewise, supportive of the move to amend the Charter’s economic provisions, to help encourage more FDIs into the country.

“We support the economic changes to the Constitution. That is the best thing we can do to get more FDIs in the country,” Hinchliffe said.

Villafuerte also noted that in last week’s Philippine Economic Briefing (PEB) in Washington, D.C. Socioeconomic Planning Secretary Arsenio Balisacan said that creating more quality jobs is crucial to the Marcos administration’s goal to pull down poverty incidence to a single-digit level by 2028.

Other business groups earlier said they used to support Cha-cha but no longer do now because of recently enacted laws that have already addressed “many of the impediments” to higher FDI inflows.

These investor-friendlier measures that are being cited by the other business groups that believe constitutional reform is no longer necessary include the four laws co-authored by Villafuerte in the 18th Congress—the Corporate Recovery and Incentives for Enterprises Act (CREATE); and the amendatory laws to the Public Service Act (PSA), Foreign Investments Act (FIA) and the Retail Trade Liberalization Act (RTLA).

Villafuerte asserted, though, that this view by these business groups now opposing constitutional reform has been punctured by: (1) the position of MAP and AmCham that amending the economic provisions of the Constitution is actually needed to attract more overseas investments, and (2) the latest Bangko Sentral ng Pilipinas (BSP) data on the plunge of FDIs to a 20-month low in January to $448 million, or almost half (45.7%) of the $824-million investments that entered the country in the same month last year.

The same BSP data showed that January’s $448-million net inflows is lower than the $634 million-worth of net FDIs in December 2022, and is the lowest since the $426-million investments reported in May 2021.