Business Bayani PH

The battle for foreign direct investment (FDI) in the Philippines heats up, with former NEDA Secretary Winnie Monsod clashing against calls for constitutional amendments. Drawing on research, Monsod argues that tackling deeper issues like governance, not lifting ownership restrictions, holds the key to unlocking FDI potential.

Monsod’s data-driven case

Citing studies by the Philippine Institute for Development Studies (PIDS) and the Center Bank of the Philippines (BSP), Monsod asserts, in an interview with ANC Headstart host Karen Davila, that the Philippines’ lag in FDI inflows is not due to constitutional constraints, but rather its struggle with poor governance, rampant corruption, and a challenging business environment. 

These studies, she emphasizes, “found that the Philippines’ low FDI is due to poor governance, corruption, and a difficult business environment, not constitutional restrictions.”

Monsod goes beyond simply opposing amendments, arguing that even if ownership restrictions were lifted, it would not be enough. “Lifting restrictions in the Constitution is neither necessary nor sufficient to boost FDI,” she declares. True progress, she suggests, lies in addressing the core problems identified by the studies.

Key points from Monsod’s arguments:

• Focusing on Governance and Corruption: Strengthening governance and tackling corruption are crucial to creating an environment conducive to foreign investment, regardless of ownership restrictions.
• Data-Driven Approach: Citing credible research strengthens Monsod’s argument, grounding it in evidence rather than subjective opinion.
• Shifting the Dialogue: By reframing the issue from “lift restrictions” to “improve governance,” Monsod directs the focus towards broader, more impactful solutions.
• Looking Beyond Smokescreens: The real motive of the proposed amendments is to extend term limits for politicians, says Monsod. She argues that the politicians who are pushing for the amendments are not really interested in boosting FDI. Instead, they are using the amendments as a cover to extend their own terms in office.
• Aiming for Informed Decisions: Filipinos should make an informed decision based on evidence before supporting the amendments. Monsod urges the Filipino people to carefully consider the evidence before supporting the proposed amendments to the Constitution. She maintains that the amendments are not necessary or sufficient to boost FDI, and that they are more likely to benefit politicians than the Filipino people.

Contrasting views

Despite Monsod’s well-supported claims, proponents of amendments, like Palawan Representative Jose Alvarez, argue that both addressing broader issues and lifting specific restrictions are necessary. They point to examples like Vietnam’s relaxed ownership rules attracting more Korean investors as compared to the Philippines.

Alvarez, relaying information from the Korean ambassador to Manila, highlights a stark disparity: only three Korean investors chose the Philippines, compared to 340 opting for Vietnam, attributing this disparity to Vietnam’s more relaxed ownership rules.

“The laws opening up the economy are not enough,” Alvarez states, highlighting the need for further reforms, including constitutional amendments.

Representative Teodorico Haresco Jr. of Aklan pointed out that several countries in Southeast Asia, such as Indonesia, Vietnam, Malaysia, and Thailand, have revised their constitutions multiple times to attract foreign investments. 

He argued that these countries have adapted to the changing global landscape. The assumption that discussing changes to the Constitution would divide society is unfounded. 

Haresco emphasized the importance of reviewing the Constitution to prevent the Philippines from falling behind other countries in the region. He also expressed the House of Representatives’ willingness to engage in a constructive dialogue with the Senate on the matter.

The debate continues

This clash of perspectives highlights the complexity of the issue. While Monsod presents compelling data-driven arguments, the potential benefits of specific amendments cannot be entirely dismissed. Finding a way to address both governance issues and potential roadblocks posed by ownership restrictions remains a key challenge.

Does amending the Constitution guarantee a significant FDI boost? What alternative solutions exist beyond lifting ownership restrictions? How can we ensure safeguards are in place to mitigate potential drawbacks? By addressing these questions and fostering open dialogue, the Philippines can chart a course towards sustainable FDI growth that benefits all stakeholders.

The Philippines’ quest for increased FDI requires careful consideration of all sides. While data suggests broader governance reforms are paramount, addressing specific restrictions through amendments might also be necessary. Ultimately, striking a balance between attracting foreign capital and protecting national interests remains the key challenge.