TUCP: 1987 Constitution a roadblock to full industrialization

TUCP: 1987 Constitution a roadblock to full industrialization
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Quezon City (7 September) -- The country’s biggest labor organization said Wednesday the 1987 Constitution is a roadblock to the full industrialization of the country because it restricts, more than promotes, economic development through foreign capital inflow.

The Trade Union Congress of the Philippines ((TUCP), through its spokesman Alex Aguilar, said the one-million strong labor bloc, as intervenor, is also supporting the joint petition filed by the Sigaw ng Bayan and the Union of Local Authorities of the Philippines (ULAP) with the Commission on Elections (Comelec) for a people’s initiative to amend the Constitution.

As intervenor, the TUCP is supporting the petition, endorsed by 6.3 million Filipino voters, seeking to shift the country’s political structure from the failed US-style bicameral presidential system to a parliamentary system with a unicameral legislature.

“The Constitution restricts the full flowering of all segments of the domestic economy because it limits industrialization only to agriculture and agrarian reform,” said Aguilar.

The TUCP favors lifting the constitutional economic restrictions, Aguilar said, to allow the entry of foreign capital and generate foreign investments that will energize the economy and create quality, decent-paying jobs.

The bulk of foreign investments in Asia have been flowing into China, Vietnam, Thailand and Malaysia, leading to their growth as economic powerhouses in the world’s fastest-growing region.

Aguilar said amendments to the Charter’s economic provisions “should promptly come next after the current efforts to first overhaul the country’s political structure.”

Once the shift to a parliamentary system is accomplished, the Interim Parliament could start working on amendments that will open the country’s inward-looking economy to overseas investments, Aguilar said.

“Despite our strong macro-economic fundamentals as attested by foreign credit rating institutions, Government cannot stimulate the economy to the point of creating the jobs we need to keep the unemployment rate down and significantly reduce it,” he said.

“This is because of a restrictive Constitution. We are losing by default to the rest of Asia simply by not acting on these Charter reforms,” he added.

Among these outmoded constitutional provisions is Article XII, Section 1, which states that: “The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.”

Aguilar said this provision limits industrialization only to the agricultural and agrarian sectors, and prevents the government from venturing into other fields not related to these two areas because it could be deemed unconstitutional.

As a result, he said, the Philippines has no choice but to stick to agriculture-related and agrarian-reform based industries like rice milling, fertilizer-making, forestry, and food canning, instead of entering into more lucrative fields like steel-making and machinery manufacturing.

Because many of our Asian neighbors are free from these restrictions in their respective Constitutions, they have long been into major industrialization ventures that helped to jump-start their respective economies, Aguilar said.

Compared with the Philippines that has discouraged the entry of foreign capital as mandated under the Constitution, Thailand, Malaysia and Singapore have opened up their economies to foreigners by making investments viable and profitable under their laws.

Citing official data, Aguilar said foreign investments had, over the 1993-2002 period, totaled $37.34 billion in Malaysia; $34.94 billion in Singapore; and $33.09 billion in Thailand.

In contrast, similar investments in the Philippines totaled less than half at just $15.18 billion during the same period, according to a study done by the Asian Development Bank.

Therefore, to bring in billions of dollars of capital into the economy, he said constitutional restrictions limiting foreign ownership in key segments of the economy should be removed.

This can only be done, Aguilar said, by amending provisions in Articles XII (National Economy and Patrimony) and XVI (General Provisions), which restrict foreign investments in the exploration, development and utilization of natural resources; operation of public utilities; and ownership of educational institutions and mass media facilities. (PIA)