Belmonte bill on foreign ownership backed

A group of economists and socio-political analysts backed a proposal of House Speaker Feliciano Belmonte Jr. to vest on Congress the power to set restrictions on foreign ownership in key economic sectors, including public utilities, property, mass media and advertising, educational institutions and development of natural resources.

In a statement, the Foundation for Economic Freedom (FEF) supported Belmonte’s move to amend the economic provisions of the Constitution to include the phrase “unless provided by law” in the foreign ownership restrictions in the Constitution in these economic sectors.

“We believe that vesting on Congress, rather than the Constitution, the power to determine the restrictions in foreign ownership will send a strong signal to foreign investors that the government will level the playing field by opening up the economy as conditions permit.”

While the Constitutional amendment will not immediately liberalize the economy, FEF said this would provide an “evolutionary path” to making the necessary changes as needed. “The Belmonte proposal represents a practical political solution that provides the key to opening up the economy,” FEF said.

As such, the FEF urged President Aquino to reconsider his stand against amending the Constitution and to allow Congress to pass the Belmonte bill in time for a national referendum in 2016. “The millions of poor and unemployed are looking up to his government to live up to his promise of inclusive growth,” the group said.

FEF believes that opening up the economy to foreign investors is necessary to increase foreign direct investments in the country, which remain one of the lowest in Southeast Asia.

The group noted that poverty and hunger levels had remained unchanged despite the country’s 7.2 percent economic growth. “To attain inclusive growth, the country must boost investments by liberalizing foreign ownership rules in order to generate employment and reduce poverty,” the group said.

FEF said the country also risked being left out of the Trans-Pacific Partnership (TPP), an economic grouping of nations intended to boost trade and investments among member countries, if it would not amend the restrictive provisions in the Constitution and give foreign investors equal treatment as local investors.

“Opening up the economy to more foreign investors, especially in strategic industries where foreigners are presently prohibited from owning a majority, will help improve competition, increase consumer welfare, lower prices, raise productivity, and facilitate technology transfer,” FEF said.

The FEF is headed by former Finance Secretary Roberto de Ocampo as chair, with former Finance Undersecretary Romeo Bernardo as vice chair and Calixto Chikiamco as president. Economist Gerardo Sicat and former Prime Minister Cesar Virata sit as advisers while trustees include Ernest Leung, Thomas Allen, Art Corpus, Felipe Medalla, Vaughn Montes, Gary Olivar, Simon Paterno, Gloria Tan-Climaco and Francis Varela.