With the recent majority vote in favor of a constituent assembly (con-ass) by the House of Representatives (HOR), research group IBON warned that one of the primary reasons behind the push for Charter change (Cha-cha) is the lifting of foreign ownership caps. This will lead to the further stunting of the Philippine economy, said the group, as this will allow foreigners to further enroach on the country’s various industries. Government will also give up its responsibility to provide the public accessible and affordable goods and services, leaving Filipinos at the mercy of corporations.
The HOR recently passed a resolution seeking to convene a con-ass that would propose amendments to the Constitution, while a Senate version is still being deliberated. Among the proposed amendments is the removal of ceilings on foreign ownership, particularly with regard to land, natural resources, public utilities, education, media and advertising. Cha-cha proponents claim that such restrictions curtail the entry of foreign investments into the country, thus limiting job creation and the Philippine economy’s development. They say that the Philippines should follow its Asian neighbors and do away with its protectionist measures.
But IBON said that decades of neoliberal policies that have opened up the Philippine economy and benefited foreign firms and investors have resulted in the country’s socioeconomic decline.
Foreign direct investments (FDI) have risen from US$558 million in 2011 to US$2,082 million in 2016. Majority of these investments have gone to foreign manufacturing, business process outsourcing, commercial and residential real estate, and transport infrastructure, instead of domestic industry and agriculture.
Despite increasing FDI over the years, however, IBON estimated 11.5 million unemployed and underemployed in 2015. The group also noted that recent labor force data shows total job losses of 134,000 and 148,000 more unemployed in October 2017 compared to the same period in the previous year. This was primarily due to job losses of 1.4 million in the agriculture sector. The gross domestic product (GDP) share of agriculture has fallen from 11.5% to 9.5% from 2011 to 2015, while manufacturing has been nearly stagnant.
IBON also noted that there is a trend of increasing protectionist policies particularly among the world’s largest economies. This indicates that globalization, which calls for neoliberal policies such as lifting of foreign restrictions, is not working. Data from Global Trade Alert (GTA) indicates that following the 2008 global financial crisis, the number of protectionist measures implemented by all countries per year increased by 89.3% from 295 in 2009 to 585 in 2017. The 21st GTA Report also stated that the largest industrialized country members of the Group of 20 (G20), which is made up of the world’s largest and emerging economies, accounted for 54.9% share of the group’s protectionism in 2017.
IBON said that for foreign investments to be beneficial to the Philippines, these must be programmed in line with the genuine development of the country’s domestic industries, and closely regulated by the government. The Philippine government should prioritize national interest and public welfare, and maintain control of key industries, services, and utilities. ###