Letter of appeal to President Noynoy Aquino to scrap the 60/40 equity restrictions against foreign investments

If you really love the Philippines, you should admit that the 1987 constitution is flawed and needs to be amended for the betterment of the Filipino people.

August 4, 2012

Dear Mr. President,

I am really disappointed with your stand that we need no constitutional amendment to gather more foreign investments for our country and in fact, you even said that retaining the 60/40 equity restrictions will assure Filipino shares in any foreign investment projects which for me was wrong as forcing any foreign investors to find a Filipino partner who rich enough to front the 60% of a foreign investment project or transaction would never assure the financial security and flexibility on the part of foreign investors to utilize his/her investments as much as possible as he/she have to abide what the Filipino partner says.

Mr. President, to whom Filipinos you referred? the common people or your financiers who rich enough to swindle 60% of foreign investments.

Many countries around the world like Argentina, Brazil, Cambodia, Canada, Chile, China, Colombia, Czech Republic, France, Georgia, India, Indonesia, Ireland, Japan, Kazakhstan, Korea, Malaysia, Mauritius, Mexico, Peru, Poland, Russia, Singapore, Spain, United Kingdom, and the United States allows 100% foreign equity ownership of businesses at most of their economic sectors including mining, oil and gas, tourism, manufacturing, transportation, telecom, infrastructure, banking, and electricity sectors which are crucial to our future economic growth and these sector really needs 100% foreign investment participation as our own local companies doesn’t have enough capital, technology, and expertise.

Mr. President, there is no enough valid reason not to support the initiatives to amend the restrictive economic provisions of our 1987 constitution in Article XII, section 2, 11 and 12 in particular where the 60/40 equity restrictions are being stipulated if you really care the Filipino people not your financiers during the 2010 presidential campaign.

For the last 77 after that 60/40 equity restrictions being stipulated by our Founding Fathers like Manuel Quezon and Claro M. Recto in reaction to the Great Depression that time, our country became an economic laggard to the point that our country is one of the poorest in Asia as the rest of the world catches-up the standard of living of the United States and Europe through the usage of FDI and export oriented economic model in contrast of ours that we used the import-substitution economic model where we have to protect our own local industries from foreign competition regardless of the inefficiency of our own local industries and also breed a massive dependence on IMF/World Bank loan to finance the import-substitution economic model and therefore, breeds corruption among the government elites.

The restrictive economic provisions of our 1987 constitution is 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 you, Mr. President 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.

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My personal critique of 2012 State of the Nation Address

President Benigno Simeon C. Aquino III before the Congress, 23 July 2012.

On Monday, President Benigno Simeon Aquino III delivered his third State of the Nation Address (SONA), a yearly tradition in which the President reports about the status of the Philippines.

He delivered the lists of his economic and political achievements for the last two years, but what he said for me was not enough to impress not just for me but also for the millions of poor Filipinos who never tasted the fruits of relative economic and political stability that he maintained from the efforts of his predecessor, former President and not Pampanga Representative, Gloria Macapagal-Arroyo, on which he despised personally (for me).

During his one-and-a-half-hour speech, he lambasted his predecessor, Gloria Macapagal-Arroyo for the third time before the Congress while never he realized that the relative (although not enough) economic stability was formulated by Gloria Macapagal-Arroyo.

He bragged in front of millions of Filipino people through the cameras facing on him that the Business Process Outsourcing (BPO) brought more job opportunities for the skilled people on which I never disputed, however the credit of that accomplishment shall not be bragged by any single person not even President Noynoy nor his predecessor as for the last 12 years, American and European companies outsourced some of their low-paying service jobs to the developing countries like the Philippines. Also the Business Process Outsourcing (BPO) is not enough to keep the Philippine economy afloat nor to generate more employment opportunities for the millions of Filipinos as these kind of jobs needs enough English proficiency to be hired as a BPO worker on which majority of the Filipinos cannot achieve that kind of proficiency. Also, it is not a capital-intensive investment unlike mining, manufacturing, or tourism.

He trumpeted the latest 6.4% 2012 1st quarter GDP annual growth over the same quarter of last year as his achievements. Actually, our economic growth never really made a good economic multiplying effects to the majority people as significant of that economic growth was a result of our economy’s dependence to our millions of Filipino workers abroad and the money they remitted never funneled for future investment purposes but instead, that money went for consumption purposes which only created a short-term economic stimulus at the expense of long-term economic growth sustainability.

He used the recent outstanding performance of the Philippine Stock Exchange Index (PSEi) as a proof of the effectiveness of his economic and investment policies. He never realized that the recent inflation of the Philippine Stock Exchange was a result of massive “hot money” inflows flowing to our economy by massive monetary quantitative easing done by the Federal Reserve of the United States to stimulate the American economy and the excess dollars went to the developing country like the Philippines as foreign investors find economically stable countries to deposit their investment portfolios for short-term purposes and that “hot money” inflows never really converted into a real direct invest for our further economic upgrades as most foreign investors are reluctant to invent in our country in long-term basis due to our constitutional barriers on foreign equity ownership of businesses like the 60/40 equity restrictions against foreign investment.

Before I conclude my critique, I would like to appeal to our President Benigno Simeon Cojuangco Aquino to further reform our economic and political system through revising our flawed and outdated 1987 Constitution like scrapping the protectionist economic provisions once and for all and allow 100% foreign equity ownership of business at all economic sectors as much as possible; shifting from unitary to federal form of government where the grip of the national capital on economic, cultural, educational, and health affairs of provinces and instead let the provinces to decide their economic, political, and social development under the umbrella of our country; and finally adopt the real parliamentary system derived from Britain in order to give the best minds of our country to become leaders and never let undeserving people to become our leaders in order to achieve economic and political stability. Thank you.