Remove the 60/40 equity limitations against foreign investments

House Speaker, Feliciano Belmonte (left) and Senate President, Juan Ponce Enrile (right). Credits to the Philippine Daily Inquirer.

This month, the talks about a constitutional amendment on certain provisions especially the economic ones of the 1987 constitution has been resurfaced once again as Juan Ponce Enrile suggested to amend the 25-year old constitution in order for the Philippines to compete militarily and economically and supported by the leadership of the House of Representatives lead by Feliciano Belmonte.

However, it never gained an approval from the President, Noynoy Aquino when he said that “if ain’t broke, don’t fix it” on which he referred to the economic provisions of the constitution especially the 60/40 equity restrictions against foreign individuals or corporations where any prospective foreign individuals or corporations who wishes to invest in our country needs to find a Filipino individuals or corporations to tap the 60% of equity shares asked by foreign individuals or corporations in order to operate their businesses in our country as stated in the Article XII, Section 10 of the 1987 constitution.

This is not the first time in 25-year lifespan of the 1987 constitution where the proposals for amendments or even revisions in our constitution have been in the conversation. Way back in 1997 when Fidel Ramos’ term as president was coming to fulfillment that time and when he felt that his economic reforms were not enough, it proposed for the revision of the 1987 constitution through the third method of amending the constitution which was the People’s Initiate where amending the constitution needed 12% of the total registered electorate in order to have a fulfillment however, in September 1997, he suffered a setback when the Supreme Court decided to grant the appeal of his political opponent, Miriam Defensor Santiago on the basis that there was no statutory law on People’s Initiative to give that constitutional provision with teeth (even until now) and also the People’s Initiative option of amending the constitution doesn’t apply for revising the constitution as what Fidel Ramos asked.

In 1999, after Joseph Estrada took over the Presidency from Fidel Ramos after the ill-fated initiative for the revision of the 1987 constitution, Estrada created a Preparatory Commission on Constitutional Reforms (PCCR) to study the possible amendments to the 1987 constitution and the recommendations of that commission was later approved by Estrada which the recommendations for constitutional amendment like the scrapping of the 60/40 equity restrictions against foreign investments, allowing foreigners to own land properties in our country, and allowing foreign investments in media sector. Later, this commission was renamed into a Constitutional Correction on Development or CONCORD. However, the CONCORD was faced with protests from different sectors in our society who felt that the 1987 constitution shall not be amended that time especially from Manila Archbishop, Jaime Cardinal Sin and former President Corazon Aquino, the president when the 1987 constitution was ratified. Later, Joseph Estrada dropped the CONCORD as he felt that he could not gain a traction from these two influential persons in our country that time.

After Joseph Estrada’s ouster in 2001 due to the aborted impeachment trial case against him regarding on his involvement, Gloria Macapagal Arroyo succeeded him on historic EDSA II Revolution on 20 January 2001. The entire Arroyo’s presidency from 2001 to 2010 was marred on severe political and economic instability due to lack of popular support in her installation as president in 2001 and she was nearly ousted many times in separate occasions during her entire span of her presidency. Her election for a full term in 2004 was marred on severe allegations of electoral fraud which made her most economic and political reforms unachievable for her entire term from 2004 to 2010 that includes her proposed revisions of the 1987 constitution from presidential to parliamentary system, from unitary to federal form of government, and from protectionist to free market economic system.

Right now, the both chambers of the Congress agreed the necessity of amending the restrictive economic provisions of the 1987 constitution which seems to be the most restrictive not just in Asia but also in the entire world as the economic policies of our country like the foreign investment laws are being stipulated to our constitution like the 60/40 equity restrictions against foreign individuals or corporations where any prospective foreign individuals or corporations who wishes to invest in our country needs to find a Filipino individuals or corporations to tap the 60% of equity shares asked by foreign individuals or corporations in order to operate their businesses in our country as stated in the Article XII, Section 10 of the 1987 constitution. That 60/40 equity restrictions almost covers the economic sectors in our country especially the sectors that really needs 100% FDI participation like mining, oil and gas extraction, agriculture, forestry, public utilities, transportation, education, construction and many others as these sectors that I have mentioned for many years have been deteriorated its services to the people and its technology is getting outdated by year because of lack of foreign capital inflows flowing in our economy as a result of that restrictive economic provisions stipulated in our constitution.

The 1987 constitution also restricts foreign individuals or corporations from investing or setting-up an advertising firms to 30% and also prohibits foreigners entirely of investing in media sector on which I believe it contributes to the deterioration of the Philippine media for the last half century as there is no much competition in producing movies, shows, and news in our media industry and being monopolized by the few rich local moguls who profiteered with no foreign competition policy of the 1987 constitution at the expense of the Filipino audience.

The restrictive economic provisions of our 1987 constitution are contributing to further and complex problem that our country plunging right now that is the severe unemployment and underemployment due to lack of competition in our job market as foreign investors are being driven out in our domestic economy and the local investors cannot provide the necessity of our growing labor force due to lack of capital and technology as foreign investors are reluctant to have a large-scale partnership with any local companies due to the notorious corruption in the Philippine business sector.

Those who were luckily educated were driven out of the country and forced to seek lucrative jobs abroad to earn money to support their remaining families here in our country at the expense of emotional troubles to their remaining children in a long-run which contributed to a further socio-economic problems among the Overseas Filipino Workers’ families where their remaining wife/husband in our country tend to dump their husband/wife who was working abroad or their remaining children tend to engage strange activities during their adolescence especially where some of them got married early of their ages or committed juvenile crimes due to the absence of one or two of their parents when they grew up.

If we, Filipinos wanted to have a real economic, political and social prosperity just just for today but also forever in our lives, let us support the initiate of Juan Ponce Enrile and Feliciano Belmonte of amending the restrictive economic provisions of our 1987 constitution.

REMOVE 60/40 EQUITY RESTRICTIONS! OPEN ALL ECONOMIC SECTORS TO 100% FOREIGN INVESTMENT!

One thought on “Remove the 60/40 equity limitations against foreign investments

  1. what is good for the nation should be implemented. this country is not only for the rich . we can easily see how much other countries has improved in their economy after lifting the restriction. this is about the national interest . the person who can change this will be the biggest achiver to change the economy of the philippines. i will salute that person. help philippines to be better..

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