Cha-cha review continues

A STUDY on the merits of amending the Constitution has yet to be finished, a Cabinet official said, as economic managers continue talks with the private sector and multilateral agencies, particularly on the issue of foreign ownership limits.

“We are still conducting the review and gathering data from stakeholders,” Finance Secretary Cesar V. Purisima said last week when asked about the status of the study, ordered by Malacañang after Congress revived the issue last month.

Discussions are ongoing with industry representatives and international agencies such as the International Monetary Fund and the World Bank, Mr. Purisima said. He refused to give a timeline for the study, which he said earlier this month would be submitted within two weeks.

The Cabinet economic cluster, headed by Mr. Purisima, was tasked by President Benigno S. C. Aquino III to review the need and the implications of revising the 1987 Constitution. A foreign ownership cap is one of the focal points of the review and Articles 12, 14 and 16 will specifically be tackled, Mr. Purisima said.

Article 12 lays down the law on the national economy and patrimony. Among others, it limits the “exploration, development, and utilization of natural resources” to corporations that are at least 60% owned by Filipinos.

Ownership of land and public utilities are also limited to citizens of the Philippines or firms that are at least 60% owned by Filipinos.

“The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines,” it adds.

Article 12 also grants Congress the power to reserve “certain areas of investments” to firms at least 60% owned by Filipinos “when the national interest dictates.”

Article 14, meanwhile, which governs education, science and technology, arts, culture and sports, also imposes the same 60% ownership limit on educational institutions other than those established by religious groups and mission boards. Congress is also allowed to require “increased Filipino equity participation.”

Article 16, lastly, sets ownership caps on mass media and advertising. Only corporations, cooperatives and associations wholly owned and managed by Filipinos can own and manage mass media.

The advertising industry — “impressed with public interest, and shall be regulated by law for the protection of consumers and the promotion of the general welfare” — is limited to corporations at least 70% owned by Filipinos. All executives and managing officers of these entities must be citizens of the Philippines.

The prickly issue of Charter change was revived when Senate President Juan Ponce Enrile identified it as part of the agenda for the third and final session of the 15th Congress. The revisions could give “more flexibility in the ownership of certain industries, particularly those that are involved in the exploration, development and utilization of natural resources,” Mr. Enrile has said.

House Speaker Feliciano R. Belmonte concurred, pushing for the easing of “restrictive economic provisions” to bring in foreign capital and technology that could spur employment and growth in the Philippines.

The review ordered by Mr. Aquino was a softening of his stance against Charter change. He had earlier refused to consider changes to the Constitution that was drafted during the term of his late mother, former President Corazon C. Aquino.

Charter change has been proposed since the ’90s but these efforts never prospered over concerns that public officials were primarily concerned with lifting term limits. –DIANE CLAIRE J. JIAO, Senior Reporter, Businessworld