The Philippine Institute of Development Studies (PIDS) is batting for the amendment of the economic provisions of the Constitution in order to seize the investment opportunities offered by next year’s ASEAN Economic Community (AEC).
"The country needs to be competitive in order to take advantage of the growing marketplace of opportunities, especially for small and medium enterprises (SME),” said Claudette Malana of PIDS.
Under the AEC, Malana said market access opportunities for Filipino firms can expand as they can sell to 600 million people in the booming region and own majority of their ASEAN operations. "This also means giving the same opportunity to ASEAN investors,” said Malana.
Citing another study, Malana said ASEAN companies including Filipino firms can own 100 percent of companies in other ASEAN countries and should be able to own at least 70 percent of services companies under an integrated regional market.
Malana said while the Philippines continues to show strong potential for further growth, the economy is also characterized by Constitutional restrictions.
These include limits to foreign equity in the exploration, development and utilization of natural resources; public utilities, build-operate-transfer projects and operation of deep-sea commercial vessels.
"To sustain the growth of the Philippine economy, these restrictions need to be examined and amended, as they have constrained foreign direct investments (FDIs),” Malana said.
Manala said the regional experience indicates that where countries have relaxed restrictions, FDIs have increased, providing significant economic benefits to the receiving country.
Countries that have relaxed foreign ownership restrictions have enhanced their competitiveness and achieved a higher trajectory of economic growth.
"For the country to catch up and compete with its neighbors in the high-growth regions of East Asia and Southeast Asia, it is crucial to amend the economic provisions that have caused binding constraints to the growth and productivity of the economy,” she added.//
PIDS calls for amendment of economic provisions in the present Constitution
