RE-PUBLISHED: DUTERTE’S still pending Economic Reform Promises

President Duterte still has a long way to go when it comes to the pursuit of economic reforms. Most of the reform promises are, at this point in time, still pending. With him only having three more years remaining in his six-year term.

This article first appeared on this column on March 1, 2019, With on-going discussions both at the Senate and the House of Representatives about amending certain provisions of the 1987 Constitution, in particular those concerning the economy and the removal of the party-list system, I decided to have this republished.

Changing the economic provisions of the 1987 Constitution, especially the “60/40” rule that limits foreign ownership of equity to only 40 percent, is long overdue. At a time when the Philippines needs to recover from the economic effects of the COVID-19 pandemic, such amendments are badly needed to create new job and business opportunities for Filipinos. Lagging behind Vietnam, Thailand and other ASEAN counterparts in terms of attracting foreign direct investments (FDIs), amending the economic provisions of the 1987 Constitution is necessary to position the Philippines as a destination of choice for businessmen from all over the world to start their enterprises.

However, there is a proposal from the House of Representatives that may be controversial for many. That is the proposal to allow foreigners to own land in the Philippines on a limited basis. Land ownership is a contentious issue in the country, especially with many Filipinos wanting to have properties, especially farmland, that can call their own. Add to that the need to protect agricultural lands from conversion to non-agricultural purposes at a time when the COVID-19 pandemic proved the importance of food security in ensuring national survival. Expect the majority of Filipinos to vehemently oppose this proposal from the House of Representatives.

As for the removal of the party-list system, this is a proposed amendment that many may end up supporting. The party-list system has been abused, from traditional politicians who use it to expand their reach and have access to the House largesse to pseudo-ideologues who claim to be “pro-people” but are actually working for and protecting the interests of those who can be the highest bidder. However, instead of just abolishing the party-list system, why not replace both the Senate and the House of Representatives with a unicameral federal parliament with a closed list mixed-member proportional representation electoral system?

Frankly speaking, I do not have trust, confidence and faith in the current crop of senators and congressmen when it comes to pushing for long overdue political and economic reforms. Most of them operate with an agenda in mind and may actually be using the reform effort as a cover to do what they and their political patrons want. Like most Filipinos, I have more confidence when it is President Rodrigo Duterte himself who will initiate the institution of those political and economic reforms, especially if he will finally fulfill his campaign promise of doing so by abolishing Congress and establishing a revolutionary government.

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During a recent speech in Binan, Laguna, President Duterte said that he was able to fulfill most of his promises. Among those he mentioned include the Universal Health Care Law and the law that enabled State universities and colleges to offer free tuition to undergraduate students. However, he lamented that he was still unable to address the traffic congestion issues plaguing EDSA, citing Congress not giving emergency powers to do so as the reason.

Although not mentioned during the said speech, the President also fulfilled some of his economic promises. The Rice Tariffication Law addresses problems arising from lack of rice sufficiency (i.e., the ability of the Philippines or any country to make affordable high-quality rice stocks available to consumers at all times), rice price-driven inflation, rice smuggling, artificial manipulation of supply by members of the "rice cartel" and their cohorts in government and the bureaucracy, and inability of local rice farmers to gain production and cost competitiveness by allowing the private sector to import rice from suppliers in countries such as Vietnam and Thailand but with the government imposing tariffs, the revenue from which will be used to support the transformation, modernization, mechanization and competitiveness enhancement of Filipino rice farmers. The Ease of Doing BUsiness Law seeks to solve the perennial problem of bureaucratic red tape in government, as it aims to introduce streamlined procedures and simplified requirements, cutting processes by several days, in order to make the environment in the country more conducive to business, especially for micro, small and medium enterprises (MSMEs) and foreign investors. Of course, there is the on-going "Build! Build! Build!" massive infrastructure building drive, which aims to build key infrastructure that will further spur progress and bring economic development to all parts of the country.

However, President Duterte still has a long way to go when it comes to the pursuit of economic reforms. Unlike Thailand, Malaysia, Indonesia, China and Vietnam, the Philippines stil lags behind when it comes to foreign direct investment (FDI) inflow, no thanks to it having a semi-closed economy due to 1987 Constitution-imposed "60/40" rule, which limits foreign ownership of equity to only 40 percent, ban on foreigners doing professional work on certain career areas such as teaching and doing research at schools, colleges and universities, and other protectionist economic policies, a situation that can only changed when the 1987 Constitution is either amended or replaced altogether and the protectionist economic policies are ditched in favor of more liberal ones. Power rates remain expensive and telecommunications and Internet services are not only expensive but also subpar. Marxist/Leninist/Maoist labor groups continue to hijack industries and force unreasonable demands such as unsustainable salary increases, causing businesses of all sizes to close shop and move elsewhere.

Despite his repeated promises, most of President Duterte's economic reform promises are, at this point in time, still pending. With him only having three more years remaining in his six-year term, time may not be on his side, hence the need for him to push heavily for all of his promised political and economic reform measures against a seemingly anti-reform Senate and House of Representatives, especially with him still enjoying high trust and approval ratings, and support coming from the vast majority of Filipinos. Before pushing for federalism, which, honestly speaking, should be a long-term goal and must be done on a gradual basis, he should first push for the implementation of long overdue economic reforms that will further open the Philippine economy, create a a pro-MSME and pro-foreign investor business environment to expand work and business opportunities in the country, for nothing is more important than having at least three meals per day, the ability to pay the bills, expanded purchasing power, and greater savings and investment choices for the Filipino.

 

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About the Author
Benedict is an agricultural economist, academician and writer. He has gained experience and expertise in various fields of economics, business, political science and public relations after through professional ventures in the academe, and in the public and private sectors. He has authored or co-authored key publications on topics ranging from agriculture and food security to global affairs and politics.
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