The Recent Microsoft Global Outage Should be a Wake-Up Call to the Philippines' Need to Fix the 1987 Constitution's Economic Flaws
 |
| The Express Tribune |
This is still a little unclear.
CrowdStrike is known for producing antivirus software, intended to prevent hackers from causing this very type of disruption.
According to CrowdStrike boss George Kurtz, the issues are only impacting Windows PCs and no other operating systems, and were caused by a defect in a recent update.
"The issue has been identified, isolated and a fix has been deployed," he said.
"This is not a security incident or cyber-attack."
What exactly was wrong with the update is yet to be revealed, but as a potential fix involves deleting a single file, it is possible that just one rogue file could be at the root of all the mayhem.
Thankfully, those who created the CrowdStrike software are now working. The steps are to identify, isolate, and fix the issue. The news of what went wrong with the update is yet to be revealed. In programming classes, one single flaw in the program can cause the whole program not to run. It's very important to check for any Syntax Errors in the program.
What does this have to do with the constitution of the Philippines?
A bad update is just as bad as not updating at all. I'm not surprised that a certain fat jerk on Facebook (I will not directly mention him to avoid giving him clout here) even joked that it's the fault of the 1987 Constitution of the Philippines. The guy could even boast that people who want reform can't even read the preamble of the Philippines. Even the 1987 Constitution isn't at fault for Microsoft's current outage due to a CrowdStrike faulty update--it should still be a good illustration why the 1987 Constitution needs serious amendments in his weaknesses.
PREAMBLE
We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a just and humane society, and establish a Government that shall embody our ideals and aspirations, promote the common good, conserve and develop our patrimony, and secure to ourselves and our posterity, the blessings of independence and democracy under the rule of law and a regime of truth, justice, freedom, love, equality, and peace, do ordain and promulgate this Constitution.
What's the use of memorizing the preamble if one can't see where the 1987 Constitution of the Philippines got it right and got it wrong. The 1987 Constitution's aims in the preamble are not wrong. However, even an annoying old man on Facebook, who feels that shifting from presidential to parliamentary isn't necessary, thinks Article XII as a major weakness. Back then, the late Carlos P. Garcia gave a faulty update called the Filipino First Policy. By refusing to remove that update--it caused a huge domino effect that eventually led to the first Marcos Administration, often called the Marcos Years. Please, for the nth time, it was never a parliamentary form of government and neither was it a free trade economy either!
We need to take a look at one component called Article XII which is on the National Economy and Patrimony. I would like to say this is one severe flaw that prevents a full implementation of the constitution. How can you fully implement a program properly if there are so many holes?
Section 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full of efficient 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.
In the pursuit of these goals, all sectors of the economy and all region s of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership.
Nothing wrong with stating what's said in Section 1. It's said that the state shall protect Filipino foreign enterprises against unfair foreign competition and trade practices. Again, nothing wrong with that. However, the problem comes with the economic restrictions placed in the constitution rather than in legislation. Sure, one can pass new laws such as the Public Services Act of 2022. However, some people can still use the current Constitution to circumvent it. Come on, even the American Constitution has been amended 27 times--that's why there's a list of amendments.
Economist Andrew James Masigan states the following from the Philippine Star:
I would never undervalue the 1987 Constitution. It dismantled the legal framework of a repressive regime and established the democratic institutions we enjoy today. For this, I am grateful.
The 1987 Constitution was crafted with the best of intentions. It sought to put the Filipino first in all aspects of governance and to level the playing field amongst sectors and peoples. But it is far from perfect. It failed to consider the importance of foreign capital and technologies and the stiff competition we would have to face to obtain them. In short, its economic provisions were short-sighted.
So despite the Constitution’s patriotic bravado, reserving certain industries exclusively for Filipinos (or a Filipino majority) worked to our peril. It deprived the nation of valuable foreign investments, technology transfers, tax revenues, export earnings and jobs.
The Constitution’s restrictive economic provisions stunted our development for 36 years. From 1987 to the close of the century, Singapore, Malaysia and Thailand leapfrogged in development on the back of a deluge of foreign direct investments (FDIs). During that period, the Philippines’ share of regional FDIs lagged at a pitiful 3 percent in good years and 2 percent in normal years.
From the year 2000 up to the present, Vietnam and Indonesia took their fair share of FDIs, leaving the Philippines further behind. The country’s intake of foreign investments is less than half of what Vietnam and Indonesia realize. No surprise, our exports have also been the lowest among our peers. The lack of investments in manufacturing capacities have left us no choice but to export our own people.
Imbedded in the Constitution are industries in which foreigners are precluded. These include agriculture, public utilities, transportation, retail, construction, media, education, among others. Further, the Constitution limits foreigners from owning more than 40 percent equity in corporations. Foreigners are barred from owning land too. These provisions caused us to lose out on many investments which would have generated jobs, exports and taxes. Not too long ago, we lost a multibillion-dollar investment from an American auto manufacturing company that chose to invest in Thailand instead. We lost a multi-billion smartphone plant by Samsung, who located in Vietnam.
Sure, the Public Service, Foreign Investment and Trade Liberalization Acts were recently amended, allowing foreigners to participate in a wider berth of industries with less rigid conditions. But it is still not enough. The Philippines remains the least preferred investment destination among our peers.
Our flawed economic laws are the reason why our agricultural sector has not industrialized and why food security eludes us. It is also why our manufacturing sector has not fully developed. It is why we lost the opportunity to be Asia’s entertainment capital despite our Americanized culture (Netflix located its Asian headquarters in Singapore, Disney in Malaysia, MTV in Hong Kong and Paramount Studios in Taiwan). It is why our education standards are among the lowest in the world. It is why many industries are oligopolies owned by only a handful of families.
As for the form of government, I am willing to give the federal system a chance. Let’s face it, the current presidential system fails to provide the checks and balances for which it was intended. Senators and congressmen still vote according to party lines, albeit in a much slower legislative process. So yes, I am willing to try a new form of government because 36 years of insisting on a flawed system is insanity.
The world has changed since 1987. Our Constitution must keep up with these changes if we are to be competitive. This is why I support Charter change, except in the extension of term limits of public officials.
In short, while there are some good intentions and things in the 1987 Constitution, however, there is still the need to fix the flawed economic laws. Some people continue in their long list of arguments against economic charter change. They say that it would only provide jobs to foreigners, only MNCs will get rich, the country will be in shambles, etc. I call it the scare tactics which I wrote in a Halloween post. It's a shame that the late Lee Kuan Yew is often cited about the Marcoses but never about the economy. LKY even recommended to the late Fidel V. Ramos the need to shift to a parliamentary system. However, even worse, you've got people on Facebook who are still what I call the Flor Contemplacion crybabies--they display an utter hatred for Singapore for her execution. They even call foreign investors as neo-colonialists and imperialists. Never mind that when an FDI goes to another country--they are to follow the rules of that country!
The failure of the 1987 Constitution's economic flaw is with the equity restrictions. Why should an MNC be required to find a local partner, only to split 60% of their net profits? Some apologists for that kind of thinking will say, "Well, it's because it's for the benefit of Filipinos, isn't it?" I wonder how they even view the profits. If they say that sales equal profits--that's really dead wrong! The sales don't account for how much will be left after expenses. Simple accounting will show that companies still need to pay for salaries, suppliers, utilities, and taxes. FDIs will only get rich with whatever is left after taxes are paid (read here). With current FDIs in the Philippines, I don't see Chinese working in Chinese establishments and Americans working in American establishments--they hire locals. They are all required to register with the Bureau of Internal Revenue (BIR) and they have to pay 12% VAT and all related taxes. When all income is deducted from expenses, the taxable amount is computed. Failure to pay taxes would put any business in trouble with the law.
People who think that 60-40 is a safeguard fail to see it for what it is--overpriced rent (read here). Why should tenants rent a space if they must let the real estate lessor own 60% of that business? No sane businessperson would ever rent a space with me if I ask for 60% of their net profits! Sure, it might give me more money but it's a short-term gain. However, if I simply charge them a just and fair rental--it would result in long-term gains. I may need to raise the rates in cases of stuff like inflation. However, for me to ask for 60% of their net profits after taxes is just plain insanity. That's what the 60-40 arrangement does--it turns the local oligarch into a bully landlord. It may boost money in the short run. However, no tenant would be sane enough to keep up with that arrangement. No investor would be sane enough to invest if they had to part with 60% of their net profits with a local oligarch. Even more ironic is that many people who defend 60-40 also claim to hate the oligarchy, saying only the oligarchy will benefit if 100% FDI share ownership is allowed (read my rebuttal here).
These people will laugh at me because I haven't registered this blog in a domain. However, such people may be all too beholden to the IBON Foundation or the free domain blog of Teodoro A. Casiño on WordPress. Right now, I really start to simply laugh at the insulting names they throw at me. It's because they're a reflection of what they truly are. I used to get mad and hiss. Now, I can get mad but then throw a laughing reaction, to further irritate them. It's because they want me to get angry. If I do fight back, they'll play that "poor innocent victim who did nothing to provoke me". The repeated Ad Hominems can only prove that insults are the losers' tool when the debate is lost.
