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The Philippines Needs Economic Charter Change Now!

Listen to him and those who think alike, not the naysayers!

I created this blog without the intent of writing politics into it. I for one am for constitutional reform every now and then. One of these provisions of the constitution I believe that really needs reform is the economic provision. I may be no economist or constitutionalist but I can see (to a certain extent) where it's going. I've read the Filipino First Policy by Carlos P. Garcia. The aim was to make sure that at the end of the day, Filipinos will become the majority of the shareholders. However, decades of Filipino First Policy have caused us to be left behind. That's why I believe it's time to change it. 

Naysayers against economic constitutional reform

However, some people (such as Hilario Davide Jr.) would end up saying something like, "I don't believe that anything needs to be amended. The 1987 Constitution is the best in the world." Davide Jr. even went on to say that the 1987 Constitution of the Philippines is the only constitution that says the public office is a public trust. Please, Thomas Jefferson had long said that, and he was born way before Davide Jr. was born! Singapore's Public Trustee Act of 1915 was there before Davide Jr. was born into the world. Any good constitution in the world will specify itself as a public trust. Ironic that Davide was a diplomat to the United Nations (UN) for some time just like Singaporean-Indian Kishore Mahbubani. I'm simply amazed at the ignorance that Davide had told reporters that removing 60-40 will turn the Philippines into a "colony of foreign businessmen". This really makes me laugh because Mahbubani was also a UN Diplomat like he was. I even wonder how Mahbubani would react if Davide Jr. would say to him in Singapore, "If the Philippines will remove 60-40--we will become a colony of foreign businessmen." Mahbubani might end up saying, "Are you trying to kid me? Didn't you listen to me? Foreign investment create jobs, bring in capital, bring in markets, develop and train our labor force. Look at Singapore now." 

Teodoro Casino of Bayan Muna even wrote his opinion piece in Rappler about how charter change reverses the gains of EDSA. I would confess that I wouldn't be able to blog right now without EDSA. However, it's best to point out the mistakes after EDSA and rectify them. I'm amazed that Casino himself where says that without definite limits, foreign investors will "conquer" the Philippines. Casino operates with a very leftist view. Having been a lawyer and lawmaker--is he totally aware that the government still can control foreign investments even if there are no definite limits such as 60-40? Who says that the state isn't involved? The state is involved when it allows foreign investors to do business provided that they follow business laws and pay taxes. All Casino does is talk and talk without results.

IBON Foundation is another. I'm amazed at how Sonny Africa, a graduate of the London School of Economics, even dares to say that the latest industrialized such as South Korea, Taiwan, and China allegedly had lesser foreign investments in their periods of economic takeoff than the Philippines does today. I wonder where Africa got his empirical evidence to back up his claim? That's why I really can't even take IBON Foundation seriously. True, they have gathered numerical data but they also tend to engage in pie-in-the-sky statistics. A good example is was it the fault of outing Philippine President Rodrigo R. Duterte that gasoline prices are higher? Did they not consider the war in Ukraine that's going on? Worse, people at IBON have that deadly obsession with ayuda or government handouts--something that's also holding back the nation from development. 

The naysayers will do everything to stop it. There have been many lies such as that only foreign investors will get rich, that they will rob the resources, exploit the people, that it automatically means environmental destruction, etc. Yet, North Korea and Venezuela, two isolationist countries have been suffering from higher degrees of pollution. Meanwhile, China has had an active role in trying to curb air pollution and they have the money to do so. Though, I still feel China needs to lift the ban on Google and Facebook, not to meddle too much in political views (hence causing Lotte to leave). North Korea and Venezuela are practicing economic nationalism but at what cost? The empirical data of these two countries are working against the naysayers. These naysayers either believe their lies or are lying for their own convenience. 

Why I stand for economic charter change

Constitutional reform or charter change can be good or bad. If we're talking about the 1973 constitutional convention--it's a bad thing. Benigno Simeon A. Aquino Jr. otherwise known as Ninoy revealed that it was a fake parliament, to begin with. Any real parliament would have a ceremonial president. Instead, it was revealed by the late Lee Kuan Yew in his book From Third World to First that the late Cesar Virata was no political leader. Virata was picked by Ferdinand E. Marcos Sr. to be the prime minister. A real parliamentary system would have the people vote for the party with the party having picked its prime minister. The majority party becomes the government and its lead candidate becomes the prime minister. The minority party becomes the opposition and its lead candidate becomes the opposition leader. If the Philippines were a parliament today--Ferdinand "Bongbong" R. Marcos Jr. would become the prime minister and Maria Leonor "Leni" Gerona-Robredo would become the opposition leader. Both leaders will face off against each other weekly. 

Sure, making amendments had helped the late Benigno Simeon. C. Aquino creates a rising tiger. However, salaries are still not as high as in the neighboring ASEAN countries. There are still other sectors stuck on the negative list. Sure, Duterte may have signed but as economist Andrew James Masigan says, it's long overdue. Masigan, a critic of Duterte, deserves some praise for pointing out mistakes in Duterenomics on where they needed to be fixed. Unlike IBON Foundation, Masigan hasn't wasted his education at De La Salle University (unlike a certain Juan Dalisay Jr. who's a member of the Facebook group, CoRRECT Moderated Public Forum) and has taken his master's degree in the University of Asia and the Pacific--something I can only dream of. Masigan had even pointed out why we need economic charter change. Masigan is a proponent of constitutional reform. As Masigan says, charter change can be a good thing if done right. What I'm supporting is a charter change for the better and not all about charter change for the sake of it. 

There are still laws regarding businesses, after all. All businesses, whether local or foreign, will be subject to business rules. There are labor laws, environmental laws, intellectual property laws, and other laws to follow. Any business is required to be in agreement with the state that the business is to follow these rules. There are penalties to follow such as hefty fines, closure, imprisonment, and in the case of foreign investors, deportation like bad tenants who are kicked out. These laws will guarantee that foreign investors will not exploit the locals or destroy businesses directly. The only businesses that die (whether local or foreign) are those that don't evolve. If an incompetent foreign investor enters the Philippines then it will die under the feet of competent Filipino businessmen. If a Filipino investor is incompetent then it will die under the feet of any investor whether Filipino or foreign. Filipino businesses have their choice to either (1) evolve and match up to foreign investors, or (2) whine and eventually perish in competition. Either they say, "More competition? Well, I've got new customers and new networks!" or "Waaaaahhhh! I hate competition!" These choices will determine if they will fall under the mercy of foreign investors or if they will match up to them. Then again, there are also laws such as the Fair Competition Act that make sure all competitors are protected from unhealthy competition.

The issue is always supply and demand. Services are expensive and of lower quality because of supply and demand. Do you expect a duopoly in telecommunications to provide fast and affordable Internet to all 7,107 islands? Do you expect so few power companies to actually provide affordable electricity and restore power after a disaster at a faster pace? Once again, it's a bottleneck as these companies are biting more than they can chew. Having more competition will not only force local investors to improve their services--it will also fill in the supply and demand gap. Part of the supply and demand gap is employment demands. As Mahbubani says, foreign investors will also provide jobs for the people. These foreign investors will be registered and subjected to local law which means they'll have to pay taxes. They will also employ people and improve the economy through more taxes. This, in turn, will hopefully increase the minimum wage and the standard of living. True, the prices of goods will eventually go up (due to salaries going up) but it will be manageable. It's not exploitation at all in contrast to what Venezuela and North Korea are doing as they exploit their own people. 

If we want to prove Filipinos are great--let them face competition. Let the Philippines follow its neighboring ASEAN countries such as Malaysia, Indonesia, Taiwan, and Singapore. What we need is more than a rising tiger. Let foreign investors arrive, let them get registered, and let's follow the Singaporean model. Don't say Singapore is too small that it can't be followed. Deng Xiaoping of China, followed the Singapore model. Look where Deng brought China into. The Philippines should lay aside its Pinoy Pride economic nationalism for good. 

References

Books

"From Third World to First--The Singapore Story: 1965-2000) by Lee Kuan Yew
Harpers Collins Publishers

Videos

"The Singapore economic model - VPRO documentary - 2009"  by VRPO Documentary (September 8, 2018)

Websites

"Basic Obligation of Public Service" 


"Carlos P. Garcia, Third State of the Nation Address, January 25, 1960"

"From ‘Airpocalypse’ to Olympic Blue: China’s Air Quality Transformation" by Lili Pike

"Long overdue laws finally passed" by Andrew J. Masigan (April 06, 2022)

"Lotte to pull out of China, focus on Southeast Asia" (Posted: May 23, 2022, 08:39 A.M., Updated: May 23, 2022, 02:16 P.M.)

"NINOY AQUINO’S SPEECH IN LOS ANGELES"

"No Mavericks Among Economic Top Guns" by Sonny Africa

"New report pieces together toll of environmental damage in Venezuela in 2021" by Maxwell Radwin (April 20, 2022)

"North Korea: The Missing Link in Northeast Asia’s Air Pollution Fight" By Jihyun Cha and Taeheon Lee (June 11, 2019)

"[OPINION] Duterte’s Cha-Cha reverses gains of EDSA" by Teodoro Casino (March 02, 2018)

"PUBLIC TRUSTEE ACT 1915: 2020 REVISED EDITION" 
https://sso.agc.gov.sg/Act/PTA1915

"Understanding Charter Change" by Andrew J. Masigan (January 22, 2018)
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