US ‘Wish List’ Vs Philippine Constitution Behind American Lobby for Cha-Cha

Aggressive Business Lobby

The US Department of State reiterated these findings of the USTR in its 2009 Investment Climate Statement – the Philippines.  The said statement noted that while the Philippine government acknowledges the importance of foreign investment, “legal (i.e. constitutional) restrictions… persist in many sectors.” But the State department commended the Arroyo administration, which, it said, is “receptive to suggestions and criticisms from the private sector” as far as improving the investment climate for foreigners is concerned.[4] Was the State department alluding to charter-change moves of Arroyo for liberalization to “improve” the investment climate?

Apparently, it was. In the document, the State department lauded efforts by the American Chamber of Commerce of the Philippines (AmCham) in “identifying investment opportunities and barriers, and offering possible solutions to problems.” It cited the AmCham’s Investment Climate Improvement Project (ICIP), an advocacy that aims to seek “removal from the Constitution of all restrictions on foreign investment and professions” to “further liberalize the foreign investment regime to bring needed capital, skills, and technology into the country.”[5]

The AmCham is also leading the Joint Foreign Chambers (JFC) in the country in directly pressing Malacañang officials to implement more investment liberalization through cha-cha. In a March 2008 letter addressed to Secretary Peter Favila of the Department of Trade and Industry (DTI), a copy of which was obtained by think tank Ibon Foundation and made public, AmCham executive director Robert Sears forwarded JFC’s specific recommendations to “attract $3 billion a year” in foreign investments, among them “amending the Constitution to lift restrictions on FDI and further liberalize FDI laws.” Sears underscored the urgency of cha-cha and other pro-FDI reforms in his letter to Favila by noting that the Philippines is “underperforming in attracting FDI” and must “catch up with Malaysia, Thailand, and Vietnam.”

Just last month, the European Chamber of Commerce in the Philippines (ECCP), which is also a JFC member, said that it is pushing for the elimination of constitutional restrictions on foreign ownership in utilities and land, among others. The JFC has also written to President Arroyo herself to suggest “that a private public partnership group be set up in order to make revisions on the foreign investment negative list.”[6]

The Japanese, Too

Lastly, the country is also pressured to implement cha-cha to comply with its commitments in its bilateral free-trade deals, specifically its pact with Japan under the Japan-Philippines Economic Partnership Agreement (Jpepa).

Ratified only last October 2008, the Jpepa has been opposed by legal experts for violating at least 13 constitutional provisions covering, among others:

• * the protection of Filipino enterprises from unfair foreign competition
• * restrictions on foreign ownership of public lands and in the exploration and exploitation of natural resources
• * limitation to Filipinos of certain investment areas
• * preferential rights, privileges and concessions granted to Filipinos covering the national economy and patrimony
• * regulation of foreign investments
• * regulation of technology transfer and promotion
• * the promotion of preferential use of Filipino labor, domestic materials, and locally produced goods

The Senate ratified the treaty based on the argument that an exchange of diplomatic notes between Japan and the Philippines obliged the Japanese to respect the 1987 Constitution. But such exchange of notes is meaningless since it did not resolve the constitutional issues but in effect just deferred the question to be tested by actual legal conflicts over the treaty’s implementation that may arise in the future. Jpepa placed the 1987 Constitution under unnecessary duress because under the Vienna Convention on the Law of Treaties, the Philippines could not raise unconstitutionality for failure to comply with its Jpepa obligations.

In other words, we will have to rewrite our own Constitution to make it consistent with our Jpepa commitments, instead of the other way around.

In Defense of Sovereignty and Patrimony

The unquestionable presence of foreign pressure behind moves to change the 1987 Constitution makes the struggle against Arroyo’s charter change not only against moves by the regime to stay longer in power. To many Filipinos, it is also a struggle to defend whatever is left of Philippine sovereignty and patrimony, which have been under relentless and vicious attacks by transnational corporations and their governments, especially in the era of neoliberal globalization. Ultimately, this struggle is part of the continuing effort of the Filipino people to build an economy that is truly self-reliant, independent, and progressive. (Bulatlat.com)

Notes:

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[1] Data on trade from the National Statistics Office (2008) and on investments from the Bangko Sentral ng Pilipinas (2007)

[2] Foreword of the 2009 National Trade Estimate Report on Foreign Trade Barriers, Office of the US Trade Representative, March 2009

[3] Philippines (pp. 397-403), 2009 National Trade Estimate Report on Foreign Trade Barriers, Office of the US Trade Representative, March 2009

[4] 2009 Investment Climate Statement – the Philippines, Bureau of Economic, Energy, and Business Affairs, US Department of State, February 2009

[5] The entire text of the ICIP advocacy plan is accessible at the AmCham’s homepage <http://www.amchamphilippines.com/downloads_list.php>

[6] “RP needs to revise laws to draw more foreign direct investments,”  The Philippine Star, 2 June 2009