Local, foreign investors show mixed reactions toward Cha-cha

MANILA, Philippines - Local and foreign businessmen and economists interviewed by GMANews.TV have mixed reactions regarding congressional moves that may lead to charter change. House Resolution 1109 – which transforms Congress into a constituent assembly (con-ass) to change the 1987 Constitution – triggered widespread opposition, Action for Economic Reforms coordinator Filomeno S. Sta. Ana III said. "From a political perspective, it is re-igniting popular protests. From an economic perspective, it aggravates the uncertainty and risks, further undermining investors' confidence in the Philippines amidst a global recession," he added. This sentiment was shared by Eduardo V. Francisco, chairman of Financial Executives Institute of the Philippines (FINEX) Foundation. "Preference of the market is no con-ass until after peaceful and successful elections. A con-ass may distract elections," he said, referring to the Philippines’ financial capital. AB Capital Securities Inc. also warned that many believed the con-ass may result to the extension of President Gloria Macapagal-Arroyo's "stay in power." "With the railroading of the Con-Ass resolution, many investors are now worried that it could cause some political instability and tension. For now, it remains uncertain as to how and when congress plans to convene the constituent assembly," it added. Similarly, Peter Wallace, president of the Wallace Business Forum, does not agree with the said congressional move. "It is in blatant disregard of the intent of the Constitution. And “intent," not nit-picking over legalities is the way the Constitution should always be read. It is also in blatant disregard of the people's wishes, where some 70 percent don’t want [Charter change] now. These are the representatives of the people, their constitutional mandate is to represent the people's wishes, not flagrantly violate them," he said. The move introduces a high-level of political uncertainty at a time when stability, consistency, and continuity are most needed. Although he believed that allowing foreigners to own Philippine land — a move that requires a constitutional amendment — “would be nice," Wallace emphasized that “there are no urgent economic amendments to the Constitution that must be rushed." While the Makati Business Club supports constitutional change, executive director Alberto A. Lim said it should be done after the 2010 elections and by way of a constitutional convention. "There is no urgency to change the constitution at this time. We are able to survive this crisis under the present constitution," he said. "We reject House Resolution No. 1109 as being unconstitutional because the House of Representatives proposes to amend the constitution by itself without the Senate's participation. Our system of government is a bicameral legislature so if a constituent assembly were to be convened, the Senate should be involved and vote as a separate body. We are confident that what the House of Representatives has passed will eventually be struck down by the Supreme Court, unless that body has also lost its integrity due to utang na loob," he added. But these sentiments was underplayed by Nestor S. Aguila, former president of the Philippine Association of Securities Brokers and Dealers Inc. “[Charter change] would always be positive for markets as long as due process is followed," he said. Early this week, the Joint Foreign Chambers of the Philippines (JFC) urged the government to avoid complacency amid the global recession and to embark "ambitious" targets and reforms. These initiatives would help the country achieve double-digit economic growth by 2013 or 2014 and implement plans to further boost the Philippines’ gross domestic product (GDP). "I do not think it is timely [for con-ass]. With the economy close to recession, we encourage early passage of economic reform legislation such as Pre-Need Code, Real Estate Investment Trust and Anti-Money Laundering Act amendments," American Chamber of Commerce of the Philippines chairman for legislative committee John D. Forbes said. The JFC cited the need to pass reform legislations such as Custom Brokers Act amendment, Department of Information and Communications Technology, Rationalization of Investments and Incentives Code, Reproductive Health Act, Residential Free Patent, Revised Kyoto Convention and Freedom of Access to Information. The foreign chambers have been batting for reduction of barriers to foreign participation, urging the government to review old restrictions on foreign equity and foreign professionals and special taxes and fees on foreigners. It has also sought forceful and effective actions against corruption and smuggling, establishing modern infrastructure, improvement of education, creation of a more efficient and competitive business environment among others. Nobuo Fujii, vice president of Japan Chamber of Commerce and Industry of the Philippines, said most of his Filipino friends pay their respect to members of the constitutional convention that framed the 1987 Constitution. “It comes from the common sense that those members are looking for the future of the Philippines through discussions aside from their existing benefit or political privilege," he said. Fujii noted the JFC believed there is a “big chance" for the Philippines to attract more foreign direct investments. “The Philippines has a potential power to attract such trend with enough volume of human resources holding nice, diligent and friendly character. The constitution is the fundamental and basic law. It must be amended through enough time of discussion from various view points especially thinking about future and next generations to shoulder this country! It should be considered by next administration after 2010," Fujii said. MBC's Lim said the double digit growth urged by the JFC does not rest on changing the Constitution. "While it may help, there are many other reforms necessary to achieve that objective," he said. He believed there is an immediate urgency to restore legitimacy for the government to be more effective. "In any country in the world, when a government loses the confidence of its people, the only remedy is an election, unless it is an authoritarian government. This is a sine qua non to achieving a higher growth rate. We do not believe this Congress deserves to be the body to change the constitution because many of its incumbents have shown that they serve their own selfish interest," Lim said. Donald G. Dee, Philippine Chamber of Commerce and Industry (PCCI) chairman emeritus and special envoy for trade negotiations, believed discussion of constitutional change would only take place if at all after the 2010 elections. "Our understanding of the actions of the House of Representatives is just to force the issue to the Supreme Court. If there is going to be any moves under a new administration, we will then discuss in more details proposal on economic provisions," he said. - With Cheryl M. Arcibal, GMANews.TV