Crossroads (Towards Philippine economic and social progress)
Philippine Star, 17 January 2018


In connection with the hearings being conducted by the Senate Committee on Constitutional Amendments and Revision of Codes, I have been asked for my views on the proposed amendments to the 1987 Constitution.

I am answering all the questions posed by the committee in this column. This is an issue on which I have spent a significant amount of exposition and advocacy.

The committee posed five specific questions. In today’s column, I take up the first two questions and I hope to cover all of them in the subsequent one.

Is there a need to amend or revise the Constitution. Why or why not?

Yes, there is an urgent need to amend some provisions of the Constitution on two major fronts.

First, it is important to address the problem of the restrictive economic provisions in the Constitution. The provisions have hampered our economic progress. It is time to remove the impediments and allow normal legislation to deal with the protection concerns of our nationalistic interests.

Second, there is need to amend the Constitution so that it becomes possible to accommodate the idea of a self-governing Bangsamoro entity within firm and fair constitutional lines that are uniform or equitable for other local government entities in the nation.

Indeed there are many issues of constitutional amendment proposals. The two above are the most pressing ones. I must warn, however, that the political issues – which are inherently tied with the federal structure of government being proposed and its many political ramifications – are quite complicated. They have to be dealt with great care. They also have major implications on the cost of running the national government.

It may be helpful to add that my book, Weighing In On the Philippine Economy and Social Progress (Anvil, 2014) contains various discussions of constitutional issues insofar as they affect our economic and social progress. Some of the ideas expounded on pages 99-137, which cover different topics related to the constitution, could be appreciated here.

If so, what parts of the Constitution should be amended and revised? Why?

The restrictive economic provisions of the Constitution. The restrictive economic provisions of the Constitution limited the participation of foreign direct investments in economic activities related to land ownership, public utilities, and the exploitation of natural resources.

These provisions were first introduced in the 1935 Constitution and were reaffirmed in the 1973 Constitution. The 1987 Constitution further embraced the provisions, but added more restrictive provisions concerning ownership of media, advertising, education, and the practice of some professions.

Although seemingly confined to a few sectors, these provisions in the Constitution helped to form a national psychological mindset – a “defensive mindset” – that led to more insidious nationalistic provisions in the many economic policies that were adopted by the government during subsequent periods of national economic development.

Actually, we are uniquely one of the few countries which have excessive details of economic policy written in our constitution. Economic policies are matters for ordinary legislative processes. The Constitution should really be a document embodying general principles and details of policy are supposed to be legislated. Many countries have simple constitutions and that is the reason they possess much greater flexibility in their economic policy-making.

By putting major economic restrictions in our constitution, our development policy-making has become very inflexible. This severely hampers our ability to cope with changes in the conditions of the times. We are, thus, left behind.

Think of the wrong measures that we have fixed ourselves into during the years immediately after independence. Between 1946 to 1973, we were the recipient of unique and special preferential trade agreement with the largest and strongest economy at the time – the US.

The opportunities were squandered because we pursued industrial promotion that sold mainly to ourselves (the Philippine domestic market). The experience of many of our neighbors that have opened their economies toward greater competition had brought benefits to them that we can only envy as they pass us by in our own accomplishments.

The gap between our advancement with that of Taiwan and South Korea is at least two decades, perhaps even more. We started at the same level of development like them. We were even much more ahead during the 1950s.

Today, we are in awe of the ability of all the following economies to develop fast and to overtake us in bringing in a great volume of foreign investments in their economies: South Korea, Taiwan, China, Thailand, Malaysia, Indonesia, and, of most recent of all, Vietnam (which came into the fold only in the early 1990s!).

We are far behind them in terms of yearly inflows, and certainly in total accumulated inflows of foreign capital over time that had created great wealth and employment in all these economies.

Among all these (not to mention even Hong Kong and Singapore, which from the beginning have had open economic policies), the record of economic participation of foreign capital, nationals and modern technology on a per head basis in creating output, productivity and wealth in these economies are multiples of what our nationalistic economic policies have done for us.

It is ironic, but it is instructive especially for our political leaders, that I quote from far afield to make an important point about the necessity of opening more to the world market than our policies have hitherto been able to do.

Deng Xiaoping was the leader who freed China from the excess of xenophobic fears of engaging the world, including foreign capital, in order to push his +country’s modernization program.

In 1984, Deng Xiaoping said: “I am a layman in the field of economics. I have made a few remarks on the subject, but all from a political point of view. For example, I proposed China’s economic policy of opening to the outside world, but as for the details and specifics of how to implement it, I know very little indeed.” (quoted in Henry Kissinger, On China, Penguin Books, New York, 2012, p. 339.)

(To be continued: The proposal for a federal form of government).