Charter change: The 2014 version

By Christian S. Monsod

The House of Representatives is currently debating Joint Resolution No. 1 (JR-1) to amend six “economic” provisions of the Constitution on land, natural resources, public utilities, media, advertising and educational institutions.

The proposed amendment is the wholesale insertion of the phrase “unless otherwise provided by law” with respect to the foreign equity caps and management limitations on foreigners in these provisions.

Read on…



  1. manuel buencamino

    Monsod – “The proposed amendment is the wholesale insertion of the phrase “unless otherwise provided by law” with respect to the foreign equity caps and management limitations on foreigners in these provisions…. JR-1 is a worrisome if not a dangerous move because it gives too much power to Congress. It also opens the door wider to corruption… it sets a bad precedent in trivializing amendments to our basic law and forecloses debate at this time because no specific changes are being proposed on the foreign equity caps. The only issue on the table is the wholesale insertions…
    The implication of the insertions is that Congress will have the power to increase the foreign equity cap from 40 percent to, say, 60 percent, 75 percent or even 100 percent through ordinary legislation, without a need for a plebiscite.”

    We have an elected representative form of government. The elected representative is the people. The elected representative has, in effect, power of attorney from the people. And so it is an oxymoron to say that the wholesale insertion of the phrase “unless otherwise provided by law” gives too much power to Congress.

    Adding “unless otherwise provided by law” is not a bad idea because it allows succeeding generations to exercise their right to upgrade the Constitution according to their needs in a timely manner. The Constitution is written on paper not etched in stone like the 10 Commandments. The Constitution should pretty much be fair game except the provisions on universal human rights and the relationship between the three branches of government and the powers and duties of each.

    But having said that, there seems to be a need to review the Constitution’s distribution of power provisions. There used to be a wall between political and justiciable questions. Unfortunately that wall was removed as a reaction to the Supreme Court’s decision on martial law. The result is the Supreme Court became the most powerful branch of government.

    An appointed body now has the power to overrule the people’s elected representatives – Congress and the President – on purely political matters like PDAF, DAP, and even martial law. There is a need for a better thought out provision on the political/justiciable question, one that will protect the people from the tyranny of demogogues and crooks unwittingly elected without giving in to the tyranny of an appointed body which also has its share of tyrants and crooks.

    I am against lifting caps on foreigner ownership and investment. Maybe in the future when we are stronger and able to compete we can welcome all comers.

    I wish Monsod would cut out the rabble rousing and just focus on why lifting the caps is bad for business and the welfare of the people. His points on those matters are sound enough as they are.

  2. ricelander

    Most of the discussions on the links pertain to landownership which does not seem to be the be-all and end-all of the proposal, correct me if I am wrong. Anyway, I understand the fears with respect to ownership.

    But you touched on something very significant:

    “What would be sound would be if the elite, the rich, who invest their millions in China, Vietnam, the U.S., start investing here at home. What would be sound would be if the elite were to start plowing back business profits into the local economy instead of piling it up in foreign banks or behaving like foreign investors quick to pull out their money at the first sign of unrest.”

    Indeed. Are you in favor somehow of controlling the investment practices of our economic elites? I do. But I am afraid some very powerful forces would be up against it, will call it Marcosian.

  3. ricelander

    So to continue…

    See, it all boils down to what are the alternatives. Business investments could only come from either local sources or foreign through FDIs. Or, wait, through government too, but this is frowned upon because government is not supposed to be in business for one reason or another.
    Indeed we can be extremely nationalistic and do away with FDIs altogether, why not, but you have to look at the alternatives and what needs to be done to fill up the colossal shortfall in investment. Are you thinking maybe our economic elites will eventually find enlightenment by themselves one fine day? Obviously, you have to employ some heavy hand in this respect. Are you amenable? This is what Park Chunghee did with South Korea: carrot and stick—carrot in the form of financial favors, huge subsidies and and behest loans and stick in the form of heavy sanctions the most extreme being the threat of execution if they failed to deliver —dangled on the heads of the economic elites. With much success, it seems.
    Marcos attempted this too in another variant. But where Park retained the old economic elites and hammered hard on them, Marcos drove them away, then got his own cronies in their stead. This is probably his biggest error. As a result he made enemies of wealthy, smart, headstrong individuals who would then use their combined resources and their shrewdness to undermine his every effort. While Park exploited the innate entrepreneurial skills of the old economic elites, if with a spiked whip on one hand, Marcos had to make do with the mediocre business skills of his friends who were mostly lawyers. And perhaps because of friendship, he could not employ the stick but just the carrots. To be fair, he was successful with a few.
    Finally, Marcos also tried government’s hand in business. He had GOCCs, many of which became white elephants or subsidy dependent in later years.
    These are the other options. So okay, let us restrict FDIs, in the name of nationalism, but what remains of our options to enlarge investment? I think the problem is at some point we have decided to walk a nationalistic trail but lacked the stamina to carry out tough actions so the easy way out is send our compatriots to alien lands to find jobs instead.