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Surian sa mga Pag-aaral
Pangkaunlaran ng Pilipinas
Vo l . X I V N o . 2 ( D e c e m b e r 2 0 1 4 )
COUNTRIES 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Brunei
61 230 124 113 175 88 258 222 326 496 – –
Darussalam
Cambodia 149 145 84 131 381 483 867 815 539 783 902 1,557
Indonesia (2,977) 145 (597) 1,896 8,336 4,914 6,928 9,318 4,877 13,771 19,241 19,618
Lao PDR 24 4 19 17 28 187 324 228 319 279 301 –
Malaysia 554 3,203 2,473 4,624 3,966 6,076 8,590 7,376 115 (10,886) (15,119) (9,734)
Myanmar 210 152 251 214 235 276 710 864 1,079 901 1,001 –
Philippines 195 1,542 491 688 1,854 2,921 2,916 1,544 2,712 1,635 1,816 2,797
Singapore 15,087 6,402 11,941 21,026 15,460 29,348 37,033 8,588 24,939 53,623 55,923 56,651
Thailand 5,067 3,342 5,232 5,860 8,055 9,455 11,327 8,538 4,854 9,104 7,780 8,616
Viet Nam 1,300 1,400 1,450 1,610 1,954 2,400 6,700 9,579 7,600 8,000 7,430 –
Source: NSCB Philippine Statistical Yearbook 2013
Economic Issue of the Day AMENDING THE CONSTITUTION
Vo l . X I V N o . 2 ( D e c e m b e r 2 0 1 4 )
to stimulate productivity, growth, and employment equity ratios between foreign and domestic capital in the
generation (Llanto 2014). A strong example is Thailand. matter of public utilities and natural resource exploitation
Massive FDI inflows in its manufacturing sector have by corporations in the country”.
been instrumental in the structural transformation of
the economy, with manufacturing as the main driver in Why the need for constitutional reform?
creating employment. Amending the economic provisions of in Constitution
The experience of East Asian nations in attracting is an ideal recourse for the Philippines if it wants to
foreign capital to achieve rapid growth shows that they benefit from the establishment of the ASEAN Economic
enacted laws needed to enable their countries to attract Community (AEC) in 2015. The country needs to be
FDIs. They did impose specific restrictions on foreign competitive in order to take advantage of the growing
capital as they saw fit for their national interests, but marketplace of opportunities, especially for small and
they had the essential flexibility to make adjustments in medium enterprises. Platforms like the AEC and other
these provisions. For the country to catch up and compete free trade agreements are gaining more success in terms
with its neighbors in the high-growth regions of East Asia of reducing or removing market entry and access issues.
and Southeast Asia, it is crucial to amend the economic Under the AEC, market access opportunities for
provisions that have caused binding constraints to the Filipino firms can expand as they can sell to 600 million
growth and productivity of the economy. people in the booming region and own majority of their
In the Philippines, constitutional change refers to ASEAN operations. This also means giving the same
the political and legal processes to amend the 1987 opportunity to ASEAN investors. Under the AEC, ASEAN
Constitution. Amendments can be proposed by one of companies, Filipino firms included, can own 100 percent
three methods: people’s initiative, constituent assembly, of companies in other ASEAN countries and should be
and constitutional convention. The amendments “shall able to own at least 70 percent of services companies
be valid when ratified by a majority of votes cast in a (Aldaba et al. 2012).
plebiscite...” Constitutional change does not necessarily The regional experience indicates that where countries
mean relaxing the restrictions outright. It can be done by have relaxed restrictions, FDIs have increased, providing
simply inserting the phrase “unless provided for by law” significant economic benefits to the receiving country.
to the foreign ownership restrictions of the Constitution Moreover, countries that have relaxed foreign ownership
in public utilities, land, mass media and advertising, restrictions have enhanced their competitiveness and
educational institutions, and development of natural achieved a higher trajectory of economic growth.
resources, particularly in Articles XII, XIV, and XVI
(Llanto 2014). References
Sicat (2005) notes: “Reform of the economic provision
requires a simple act of removing the provisions on foreign Aldaba, R., Briones, R., Israel D., Llanto, G., Medalla, E., and Milo,
M. 2012. The ASEAN Economic Community and the Philippines:
capital from the Constitution and placing them within the Implementation, outcomes, impacts, and ways forward. PIDS
domain, ambit, and control of the legislature. Specifically, Discussion Paper Series 2012-01. Makati City: Philippine Institute
the amendment to the Constitution means simply to delete for Development Studies.
Llanto, G. 2014. Comments on the proposal to amend certain economic
those specific provisions that delimit actions on the role provisions of the 1987 Constitution. Submitted to the House of
of capital in sectors of the economy. Then, legislature is Representatives, February 18.
empowered to enact the appropriate laws governing the Sicat, G. 2005. The economic argument for constitutional reform. UPSE
Discussion Paper 2005-12. Quezon City: UP School of Economics.
following issues: land ownership by foreigners and fixed
The Economic Issue of the Day is one of a series of PIDS efforts to help in enlightening the public and other interested parties on the concepts
behind certain economic issues. This dissemination outlet aims to define and explain, in simple and easy-to-understand terms, basic concepts as they
relate to current and everyday economics-related matters.
This Issue was written by Claudette S. Malana, Information Officer III at the Publications and Circulation Division of the Institute.
The views expressed are those of the author and do not necessarily reflect those of PIDS and other related agencies and sponsors.