Leader: Enrique, Francis Ann

Members:
Alquero, Aaron

Kwong, Joshua

Teodosio, Rochelle

Bautista, Jose

Marallag, Ellaine

Villocino, Rachelle

Evangelista, Cleto

Mendoza, Juancho

Freking, Princess

Tan, Carl

Should We Change/Amend The 1987 Constitution for the Economy?

I. Introduction

A constitution does not only serves as the primary structure of the government, it also
reflects the mood of the country at the time of its creation. Most constitutions are results
of certain significant events or situations that necessitates the state to conduct a
constitutional revision. One good example of this is the 1987 Constitution of the
Philippines.

The Marcos regime, a period full of violence and violation of human rights, kindled the
first EDSA Revolution which led to the rise of a new republic. Inherently, a new
constitution was also drafted in lieu of the self-serving 1973 Constitution. The newly
ratified 1987 Constitution was heavily influenced by the atmosphere of the revolution;
most attention of the writers was in the protection of the rights of the people, restoration
of democracy, and reorganization of the government. As the years passed by, the
government had already shifted from one leader after another, and the Philippines is not
the same anymore. There are many changes that our country had undergone, and that
revolutionary effect of the Marcos regime is gradually wearing off, yet in the span of 28
years, our 1987 Constitution remains unamended. Reforms, resolutions, and
amendments in different aspects have been proposed and attempted by different
administrations for several times but none have been successful so far. Despite the
firmness of our charter, we have to remember that the 1987 Constitution was produced,
although not solely, to address the current emergency of the time. But now the
government is much different to that of before the fifth republic, and we should then
divert our attention to the current demands of the country.

The Philippines is ever changing, and our constitution should be flexible enough to keep
up with these changes. There are recently arising needs that which might not yet be
there to be considered when the constitution was being written, there are provisions
which at the time were, but not anymore, suitable, effective, or advantageous to the
national interest, and there are surfacing problems in which the solutions cannot be
developed under the present constitution. However, these differences between the
years are not limited within the nation, because there also has been an increasing
globalization and progressing diplomatic interrelations among the countries.
Furthermore, our country needs to adapt with the newly developed technologies,
emerging industries, and our very own developing economy which has even earned the
reputation as the fastest growing economy in Asia (Belmonte, 2015). This is why there
should always be a careful evaluation and checking of our charter because after all, a
constitution is not meant to be permanent, it is never infallible or immortal (Yusingco,
2015), thus adjustments and modifications are normal and necessary for further
improvement and growth, for clearing, laying out the path, and directing the country into
achievement of its aspirations and promotion of its national interest.

Despite the recuperation of Philippine economy from the imbalances that were brought
upon by the previous republic, and from the crises that followed the subsequent years,
despite our countrys recovery from the -0.6% real GDP per capita of the 1980s to 2.7%
during 2000-2006, we cannot argue that the Philippines still straggled so far behind
compared to its neighboring Southeast Asian countries. The amelioration was not
enough for us to catch up with the other thriving countries, especially with the four newly
industrializing countries or NIEs which are now developed into successful modernized
nations with flourishing economies.

II. Problem
For the past decade, the Philippines have lagged behind the surrounding countries,
even earning labels such as the Sick Man of Asia (Noland, 2000), but in the recent
years, the Business Confidence rate of the Philippines have reached its highest of
54.9% in the second quarter of 2013, and at the year 2014, the inflow of net foreign
direct investments in our country have reached $6.2 billion. In 2013, the World
Economic Forum released its 2012-2013 Global Competitiveness Report in which the
Philippines reached the 65th spot from last year's 75th spot, and stated in the 20142015's report, "the Philippines (52nd) continues its upward trend. The countrys gain of
33 places since 2010 is the largest over that period among all countries studied. The
results suggest that the reforms of the past four years have bolstered the countrys
economic fundamentals." Fitch Ratings (one of the three nationally recognized statistical

rating organizations) upgraded the credit rating of the Philippines to investment grade
BBB- Stable, and even improved last September from Stable to Positive. Bernard Aw,
an economist in Singapore, have said that this upgrade will boost the country's
investment confidence, however there are still more works to be done, particularly
pushing through reforms to increase investment and government revenue.

Given the country's improving performance, notable growth rates, and major
opportunities that this growing global interest is bringing, the Philippines, nevertheless,
is still unable to push on and seize those opportunities. This is largely attributable to the
restrictive economic provisions of the post-Marcos constitution which seems to be
aggressively protectionist against foreign interests and heavily regulatory against private
capital (Pangalangan, 2009). In our interview with Makati Business Club Executive
Director Peter Angelo Perfecto, he explained that although our constitution is a
document responding to the martial law wherein the framers wanted to create a
document for social justice, and wanted to protect the interest of the Filipino people, it is
still not completely antiquated because definitely, social justice never becomes
antiquated, it is always important especially in a country with high poverty rate, but the
economic restrictions and limitations doesn't necessarily need to be in the constitution
as these could be addressed by a more robust system of laws and regulations and
policies, but really, you dont need an economic restriction in the constitution to address
national economic problems particularly concerning foreign participation and equity. His
reason for this is the thing is though as long as you have the restriction in the
constitution, then as far as other countries are concerned, (...) you don't have any room
to maneuver, to negotiate. His statement aligns with Cesar Virata's observation that
"while numerous restrictions and regulations pertaining to foreign investment exist in
various Asian countries, only in the Philippines are these contained in the Constitution"
(as cited in Habito, 2014).

Our country had remained an unpopular investment choice for foreign business
corporations whom most are seeking non-heavily restricted countries, for we only allow
40% foreign ownership of the businesses. This is one critical constraint to the better
development of industries and further investments, and this is holding back the
economic potential and inclusive growth of the Philippines. Our ability to compete with
our neighbors for more investments are diminished. These restrictions also hinder the
flow of foreign direct investments and turns away investors, and the Philippines are
missing these full profits that our country might gain. The Philippines as well might miss
the job opportunities that these new foreign companies would be producing, thus the
unemployment rate, which is in 6.5% as of July 2015, might still remain stagnant.
Furthermore, the president of Foundation for Economic Freedom Calixto Chikiamco,
warned that due to restrictive policies, we get the adverse selection of foreign investors
those who are willing to evade or bend the rules in order to get greater participation
and control of strategic parts of the economy (as cited in Dumlao, 2013). The

Foundation for Economic Freedom (FEF) said in a statement that if we are able to lift
these provisions, be more encouraging, and give more clearances to foreign
participation, we will be attracting the better and right kind of foreign investors who are
transparent and willing to comply, and will lessen the incentive for those businesses to
violate those given restrictions (as cited in Dumlao, 2013). Furthermore, despite the
economic growth the president has been constantly broadcasting to us, the poverty rate
remains high. Mr. Belmonte said, we really need the amendment if we are to compete
with our neighbors in the ASEAN (2015). Furthermore, Mr. Perfecto noted that right
now, our foreign direct investments, although theyve increased, theyre still one of the
lowest in ASEAN.

III. Proposal

Our current 1987 Constitution includes certain provisions that are in favor of the
Filipinos in which the Filipino citizens, associations, or corporations should have at least
60% or 70% (Article XVI Section 11) advantage in:

Exploration, development, and utilization of natural resources in Article XII

Section 2
Holding of alienable lands of the public domain in Article XII Section 3
Conveyance of private lands in Article XII Section 7
Reserved certain areas of investments in Article XII Section 10
Grant of franchises, certificate or any other form of authorization for the operation
of public utility in Article XII Section 11
Ownership of educational institutions in Article XIV Section 4
Ownership and management of mass media and on the policy for engagement in
the advertising industry, executive and managing officers in Article XVI Section 11

In which Mr. Feliciano Belmonte wants to amend with his Resolution of Both Houses
No. 1.

In order to gear the Philippines towards this long desired expansion, spur economic
growth, and fully unleash our strong economic potentials, we need to make expedient
adjustments, develop, and maximize beneficial and productive use of our economic
provisions into something that will not drive away, but entice more investors to invest
here in our country. Mr. Feliciano Belmonte's Resolution of Both Houses No.1 aims to

ease the restrictive economic provisions of the 1987 Constitution by adding the phrase
unless otherwise provided by law on certain sections of Article XII, Article XIV, and
Article XVI. The RBH 1 will not necessarily and automatically remove all these
constitutionally mandated foreign restrictions right away, it will just give the Congress
flexibility to respond to the times, to make changes in the future, and the authority to lift
them by enacting certain laws that are responsive to the current national and
international developments and needs of time, and open up the key components in the
economic section to foreign investors. According to Mr. Perfecto, in most other
countries, its congress that determines what are the limitations, and I think the wisdom
behind that is depending on the situation, the call, the times, then the leaders of the land
can make a decision; do we need to restrict? Do we need to open up? As
abovementioned, the confidence rate in the Philippines is getting higher by the time,
thus the need to encourage this growth. This is a promising situation for the Philippines
to start making amendments in our unaltered constitution, and reform it to be more
flexible concerning enactment of laws that will lead to economic liberalization. This way,
we will be able to sustain our improving economic condition.

An open economy attracts larger amounts and encourages the inflow of foreign
investments into the country. Mr. Perfecto stated that when the banking sector and the
Business Process Outsourcing sector more or less opened up, there was a lot of
progress and jobs were created. If we can do that for the rest of the economy, it will also
be good. He further added that other countries are still shying away from the
Philippines because, one of the things these countries cited is that there economic
restrictions. There are also other things like the cost of power, ease of doing business,
instability of policy, and changing regulations, but he stated that we also have to
address easing up on economic restrictions so that foreign investors can look at us
more seriously and can consider us as well for their long term investments because it's
hard to do any long term commitments to a country where there are economic
restrictions. In the studies of Asian Development Bank, inadequate infrastructure is one
of the critical constraints to investment and growth. In World Economic Forum's 20152016 Global Competitiveness report, we got our lowest score of 3.4 out of 7 in the
infrastructure pillar which is comprised by transport infrastructure and electricity and
telephony infrastructure. Meaning, the constitution's economic restrictions is not the only
growth hindrance the government is dealing with. Opening up the economy will not only
be one less deterrent, but will also attract more FDIs in which these investments should
help the government in facilitating infrastructure development, leading to the crossing
out of another critical constraint to our country's inclusive growth and poverty reduction.

The foreign direct investments or FDIs is an essential factor in generating enough

economic activity. Foreign direct investments contribute to the growth of an economy
and development of a country because it builds up capitals, brings more competition in
the market with better quality of goods and services, generates jobs, and brings far
more advanced technologies. More foreign direct investments will pave the way for new

firms to be established here in the country, which what the Philippines really needs. The
new firms, of course, would not employ employees coming from their own countries, but
will need Filipino workers. This will generate more job opportunities, and will lessen the
unemployment, underemployment, and overemployment rate. The new technologies
that will be brought about by the foreign businesses here in the Philippines will allow the
laborers to be trained and their skills to be honed and developed to the world's labor
demands, and the standard of our country's human capital will improve, making not only
a nationally-competitive, but a globally-competitive labor force.

In order for us to achieve the fullness of updating our economic provision we need to
remember where the country begun before anything else. The Philippines' progress
should also start with the resources of land and human. When we do open up, it is
important that we strengthen our own different sectors while we are gaining more
foreign direct investments. Together with policies that will relax the economic provisions,
the Congress should craft policies that will support and strengthen the local citizens as
well without holding back the foreign investments. We have to reinforce our human
resources for it is one of our countrys competitive advantage to offer for the rest of the
world. Other than the low labor cost, and high English proficiency, the Philippines
human capital has one more advantageits young labor force and population. In an
aging population of other countries, the Philippines will remain thriving and is even
projected to grow by more than 20%, according to Moodys. For the next decades, we
will have a more stable pool of workers and much larger labor force (Llave, 2014). This
is why the government should strengthen our labor supply, provide more assistance to
the overseas Filipino workers, for the workers welfare and rights, and most importantly
to the education sector so that hopefully the children that will be provided by this will
hopefully be professionals and contributory to national development. And first things
first, it is imperative that we lessen the employment rate and produce an efficient labor
supply, and after we give more jobs to the people, then we can open up more
opportunities to education. Not to mention that the skills of these Filipino workers will
now be an advantage to the Philippines, because together with more job opportunities,
the need to fly to other countries in order to find a job will be reduced. Our skilled
workers and professionals of different expertise will impart their masteries and services
here and will benefit the country.
In the long run, fortunately, the outcome of this risk that we have to take will result to a
better economy and better standing of the Philippines. And this should not only be felt
by the middle class citizens and the higher ups, because when we say enhancement of
life, it encompasses everyone in the society, and this is the inclusive growth that the
Philippines is aiming for. These advancements in the current economy of the Philippines
will trickle down to the lower sectors of the society through the cooperation of both the
citizens and the government. We have slow industrialization process because very few
Filipino businessmen have the financial capacity to set up businesses, but with more
investors, the government will have more budget to finance programs that will help and
support our own people who are willing to prove themselves and to rise from poverty.

UNESCAP economic affairs officer Steve Loris Gui-Diby suggested that the government
should also attend to the career mindset of the youth or the nation's next labor force so
that the government will be able to make programs that will help reduce the
unemployment rate (as cited in Rivera, 2015).

Not only by generating jobs, but also by refining our workers into well-suited jobs that
we can curtail and diminish the unemployment rate which is conducive to lessening the
poverty rate and sustainable development. And whether we open up or not, the
government should look at the different levels of poverty in the Philippines and build
programs that can help lessen the poverty rate, but by liberalizing our economy, we will
be able to provide more jobs to the unemployed, and when the people are employed,
they will also be able to pay taxes, along with taxes coming from the industries that will
be brought about by the economic liberalization, generating more revenues for the
government to use in improving the Philippines and provide services and will lead to the
enhancement of life of the Filipino citizens.

After further empowering our human capital, we have to invest in the education, science
and technology, and innovation, so that when we apply all those, we will not only purely
be the human resource or labor component. The status of the industry, agriculture, and
entrepreneurship should be raised as well. Our country is rich in natural resources
which we are not able to develop to their maximum usage with our current technology,
but with better methods and machineries, we might be able to utilize them to their
versatile and full application. We will be able to create and innovate our own products,
and we can bring in more value globally (Perfecto, 2015). Foreign businesses here in
the country will test the stability of local businesses, giving them the motivating force to
further enhance and strive to make their businesses competent, to reach the
international standards and leveled with those of the international businesses. These
local businesses will have no choice but to step up their game, to plan better, and to be
more strategic. Mr. Perfecto have spoken for the private sectors saying that he thinks
that the private sectors are ready to meet challenges, learn from others, and work to be
more competitive. Thus, we will not only be the laborers of these foreign businesses,
and we will be able to avoid the displacement of local firms, which the two
aforementioned issues are some of the arguments of those who are against the
economic liberalization.

There are still other sectors that could help in increasing the inclusive growth of the
country; the agricultural Sector in the Philippines is one of the best examples. The
Philippines has a total agricultural land area of 9.671 million hectares. Agriculture
accounts for 10% of the countrys gross domestic product (GDP) and 31% of total
employment. Our agricultural sector can be the most powerful sector we can ever have
if we are able to develop and improve it. The government, in opening up the economy,
should also craft safeguards for the agricultural lands owned by Filipinos, as well as

give more attention and assistance to the its further development. The Filipino farmers
are moving from the countryside to the urban areas where their exceptional skills in
farming cannot be applied resulting to unemployment, or mismatch of jobs. These
people tend to refuse farming for there are not enough advancements and aid from the
government, and the cost of production is high. Cherri Atilano of Agricool said that
"farmers now need support for business development more than support in training.
Only when they can be wealth-creators and not wealth-seekers can the country keep
them from leaving the countryside." (as cited in Geronimo, 2014) If we are talking about
inclusive growth, we should always go back to this sector. Economic liberalization will
bring new technologies and more investments here in the Philippines, and advanced
equipment, infrastructure, irrigation, and facilities used by the neighboring countries
could be provided and applied to the farmers to cut-off the cost of labor. We need
mechanization in the agricultural sector in order for us to catch up with our ASEAN
neighbors.
Mining and other extractive industries is also a concern in respect to the amendment of
the constitution. Mr. Perfecto mentioned that the problem is not actually whether we
open up or not. With a closed economy, there are already a lot of small-scale mining
going on that is unregulated, and a lot of it get smuggled. We have been very weak at
addressing those, so whether the economy is open or closed, if the Philippines is not
going to enforce the laws, then those problems will really arise and the extractive
industry in the Philippines will be more damaged. He added that many large
corporations abroad are bound by very strict laws in their own countries that even if they
violate laws in other countries, the Philippines can actually report them and they can be
held liable to their own countries. The point is that there are global companies that are
bound by their strict rules in their own countries and at the same time have the best
practice in terms of responsible mining, better technologies, even including restoring a
mine site. If we allow them to come in, then our local small mining industries can learn
from them for definitely, our local small-scale companies are not yet best practiced and
some even still use elements that are destructive to the nature like Arsenic and Mercury,
which large corporations have already been prohibited from using.

The amendments that will be made will cause an increase in foreign risk capital inflows
thus more direct investments in the economy may occur. This will not only raise the
potential for the expansion of output in the affected sectors but also increase
productivity in the economy. Furthermore, as the level of competition rises, the unit cost
of production will be reduced in the economy. Although the foreign investors may pose a
challenge to existing Filipino entrepreneurs, this would improve the overall efficiency as
enterprises will seek methods to reduce their costs and will find niches of activity that
will enable to prosper and develop. These changes will improve our external trade and
payments, specially the stability of exchange rate as most of these foreign firms are
geared for export. If the investment is profitable and the country's investment climate
remains bright, profits could be rechanneled back to the firm. Benefiting mostly, the
Filipinos.

IV. Conclusion

It is still up to us if we will accept these changes in the constitution because we will still
be the ones who will follow and live by those rules. We should be open to these
provisions in the constitution for the betterment of the Filipinos and the country because
new technologies and advancements are being discovered every day. For us to cope
up, we need to adapt. Change needs to be incorporated overtime. It needs to be
instilled and accepted by every Filipino for the good of the country. Greatness does not
happen overnight. Cooperation, trust and faith are essential components for changes to
work. Every issue has its own advantages and disadvantages. It is inevitable that
people would not react because it concerns them. We are a democracy. People have
their own platforms and ideas. Even though we think differently about these provisions,
we should be united as a country and come up with a single decision. One problem or
habit of the Filipinos is that they talk without knowledge about the said issue or topic.
That is why the government should let the Filipinos understand, so that they can decide
whole heartedly.
So together we should adapt so that we'll be able to cope up with the old and the new
problems coming our way for our era is different from the era before. We should have
the "out with the old, in with the new" mind set for accepting new things means
accepting new knowledge that can be of great help when we encounter new problems.
The Filipino people should learn to do that because if they still use and practice the old
ways until now, our economy wouldnt flourish and will remain the same or worst case
scenario our economy will suffer from a depression. So in order to have prosperity in
our economy we must accept new terms even though we may lose some of our
resources. Its a give and take situation; we will get and accomplish a flourished and
prosperous economy while the foreign investors will take our resources but, a point of
clarification, not all our resources for our government will apply safeguards to protect
our remaining resources for this is still our country and even though some or most of our
economic departments and industrializations would dominated by the foreign investors,
the government will still protect our Filipino workers for the government prioritize the
Filipinos more than the aliens. The important thing here is that we have to accept
change and should transcend our limits in order to achieve the goal that weve been
reaching for a long time. We are the change that we seek.
We should also tackle the disadvantages of this amendment if ever there would be
some complications, for this amendment will not be perfect, but it will sustain and
dramatically increase our economic stability and will improve our industrialization within
our economy. This will help our economy flourish and be prosperous in the process.

This will be an advantage for our country but with a few minor setbacks but we can cope
up with it if we adapt to it rather than resist the fact that we need change. Change is
essential nowadays for change is a benefit. Its a benefit because if we change, we will
be ready with the new problems coming our way if there would be some setbacks or
failures in this amendment but this amendment for sure will be an asset rather than a
liability for even though it has its own cons, it also has a lot of pros that would benefit
the Filipino race. This, in the process will help us rise from the ashes and be the nation
that weve all been dreaming of becoming for it will slowly become real because of this
following amendment. Change will not come if well wait for other persons or some other
time, we are the ones weve been waiting, we are the change that we seek.
(Obama,2015)
The people and the government should meet halfway. They need to cooperate and unite
as one. If these changes will occur, we need to adapt what the government wants for
us. We as people should support what the constitution is proposing because as our
generation pass by, there are many problems that our society is facing, there are times
that the need of the people are not sufficient enough to sustain the necessities or scarce
resources. As we meet up in the middle, we will slowly realize the impact if all of us are
inclined with one decision and one goal. This change will have a good impact to our
economy. At the scenario of our country, we still have no recovery from economic
depression. We need to lift up our economy to meet the needs of the people. As we try
to compare our country from the others we can clearly see that our country is lack of
foundation it needs to be moulded in order for our country to catch up with others
because our country is dependent with others just like the K-12 program. We dont have
our own stand.

V. Bibliography

Bangko Sentral ng Pilipinas. (2013). BSP: Business Outlook Remains Bullish in Q3

2013 Enthusiasm Rises Sharply for Q4 2013.
Retrieved from http://www.gov.ph/2013/08/30/bsp-business-outlook-remains-bullish-inq3-2013/
Benigno, S. Aquino III, Sixth State of the National Address.
Retrieved from http://www.gov.ph/2015/07/27/president-aquino-sixth-sona/
Canlas, D., Khan, M. & Zhuang, J. (2009). Diagnosing the Philippine Economy: Toward
Inclusive Growth.
London: New York: Anthem Press, Manila Philippines: Asian Development Bank.
Dumlao, D. (2013). Business Groups Backs Belmonte Call for Constitutional
Amendment.

Retrieved from http://newsinfo.inquirer.net/442931/business-group-backs-belmonte-callfor-constitutional-amendment

Fitch Revises Philippines Outlook to Positive; Affirms at BBB.
Retrieved from https://www.fitchratings.com/site/fitch-home/pressrelease?id=99125
Foreign direct investment net inflows, intra- and extra-ASEAN.
Retrieved from http://www.asean.org/images/2015/June/FDI_tables/Table%2025.pdf
Francisco, R. & Lema, K. (2013). Philippine Wins First Investment Grade Rating from
Fitch.
Retrieved from http://in.reuters.com/article/2013/03/27/philippines-economy-fitchupgrade-idINDEE92Q02Y20130327
Geronimo, J. (2014). Inclusive Growth Must Start with Agriculture.
Retrieved from http://www.rappler.com/business/economy-watch/66204-agricultureinclusivegrowth
Habito, C. (2014). Outdated Restrictions.
Retrieved from http://opinion.inquirer.net/78697/outdated-restrictions#ixzz3sCGM8hPH
Llave, P. (2014). The PH Advantage? Its Young Labor Force and Population! .
Retrieved from http://kmcmaggroup.com/blog/2014/10/1/the-ph-advantage-its-younglabor-force-and-population!/
Moody's publishes latest edition of "Inside ASEAN".
Retrieved from https://www.moodys.com/research/Moodys-publishes-latest-edition-ofInside-ASEAN--PR_303148
Noland, M. (2000). The Philippines in the Asian Financial Crisis: How the Sick Man
Avoided Pneumonia.
Retrieved from http://www.jstor.org/stable/3021153?seq=1#page_scan_tab_contents
Pangalagan, R. (2009). Philippine Constitutional Framework for Economic Emergency:
Expanding the Welfare State, Restricting the National Security Apparatus.
Retrieved from http://www.law.ntu.edu.tw/ntulawreview/articles/4-3/05.pdf
Rivera, D. (2015). Still a lot of Work to Achieve Inclusive Growth.
Retrieved from http://www.philstar.com/business/2015/06/13/1465152/still-lot-workachieve-inclusive-growth?nomobile=1
Yusingco, M. (2015). Diagnosing Pathologies in the 1987 Charter.
Retrieved from http://opinion.inquirer.net/87017/diagnosing-pathologies-in-the-1987charter