Constitutional Re-Write: Aquino vs Kritz

Rappler did a nice wide-ranging interview with President Aquino on October 17. It touched on everything from Chief Justice Sereno to Best Friend Puno to the Cybercrime Law to re-writing the Constitution.

I’d like to extract a few remarks from the President on the subject of re-writing the Constitution to bring more foreign investment into the Philippines. The re-write effort is termed “cha-cha”.
Foreign investment has been a burning point of passion for some bloggers like Ben Kritz. Ben works as a business consultant in the Philippines. Open up the floodgate to overseas ownership and Ben’s services are mighty useful, I’d think. He knows Philippine commerce inside out. So he has a point of view on the need to re-write the Constitution, and it is hard. Hard in the sense than anyone not sharing that view is an idiot.

But maybe it is useful to pause and recognize that ignorance – accidental, negligent, or purposeful – allows all of us to see only a part of the whole picture.
I’ve opined myself that raising permitted ownership of businesses from 40% to 100%, and allowing land ownership, would be beneficial to bring both money and management expertise into the Philippines. So I am on the same side as Ben K. And I am influenced myself by the fact that I have bought two substantial properties in the Philippines with my money, but have not owned anything.
So I ask, from the comfort of my desk chair in the nice home I do not own, why the rigamarole?  Why do I have to play games like own property through a trust, for example? Or place all my assets in the name of my wife? Some wives would be inclined to take the money and run. Certainly there are a great many moneyed people who are held back from investing because the path to ownership is blocked.
So I, too, come at this from a point of view derived from personal circumstances. I sit in my desk chair surrounded by a forest of my own ignorance about historical precedent on rewrites or the ways and means of business owners in the Philippines. And a part of me says “rewrite it!”
How does President Aquino come at it?
Well, his view is much broader than that of Ben Kritz or Joe America. And he has the whole of his government giving him ideas, information and advice. Neither Ben Kritz nor Joe America get this depth of intelligence.
Another circumstance is that he actually has to ACT, or FAIL TO ACT, whereas Kritz and America only need to type at their keyboards. They bear no risk from acting or failing to act.
As I read the President’s remarks on the subject of re-writing the Constitution to get more foreign investment into the Philippines, I have to give him credit.
He makes good sense.
First of all, he points out that the Constitution is a good basic law and there are many other more important priorities that need to get straightened out before the Constitution is looked at. 
President Aquino:
  • “When they conduct surveys, cha-cha is, at the most, 7th in the list of 10 priorities. We talk about red tape, policies, corruption, infrastructure, cost of electricity, etc., as more pressing concerns,” he said.
There you go. Perspective and priorities. Opening up the spigot for foreign investment is priority number 1 for Mr. Kritz, no fault there. It is important for JoeAm. No fault there. But it is not for President Aquino.
No fault there.
Unquestionably, until Customs, for example, is cleaned up, both of immense snarls of red tape and stained hands in every fee jar, why bust one’s buttons trying to lure money into the Philippines. Importers and exporters would turn sour . . . or turn away. Futile. It’s like trying to attract tourists who have to deal with trashy airports and swarms of beggars to get to the jewels of Philippine beaches.
Kritz complains mightily about the lousy airports in the Philippines. He gets the point of “infrastructure supporting tourism”. The lack of infrastructure gives him ammo to ridicule the whole tourism push, and the President for not getting the airports rebuilt in a year.
But Ben ignores the point of “infrastructure supporting investments” it seems to me. The President wants to work on that infrastructure before rewriting the Constitution.
Well, the point is the same for both, tourism and foreign investment. They both need a framework that works. Policies and practices and regulations and transportation that turn outside interest, and money spent, into real value. Smoothly. Efficiently. It will be interesting to see how the ambitious “More Fun in the Philippines” tourism push turns out given the weak infrastructure supporting it.
President Aquino also makes the point that property ownership is not crucial to success. He cites the case examples:

  • “China is the biggest growing economy in the last 10 years and they only have long term leases, [they] cannot own land. Vietnam, the darling for such a long time, [foreigners] also… cannot own land. So that doesn’t seem to be an argument born by the facts,” Aquino said.
I have to sit here in my cozy home and chuckle. Yes, I suspect that it true.  “Where there is a will, there is a way.” If there is money to be made, or there are other values (like retiring in the Philippines), investors will find a way around ownership restrictions.
That said, I think the restrictions are a part of the framework that eventually needs to be fixed. But perhaps it is not a critical part. And for sure, it needs to be weighed against the big gorilla in the room, the room where the rewrite of the Constitution would occur.
It has to be weighed against the fact that we can’t predict what the Gorilla will do, what the re-write will produce. President Aquino’s take on this:
  • “Until I am shown empirical evidence, I don’t think the risk of opening up the Constitution is worth the theoretical possibility that it might have,” he added. 
So he share’s the wariness JoeAm has expressed about re-writing a document that could, if disassembled, get reassembled as an entirely different form of government. Those who believe that we are finally getting THIS ONE rooted in sound principles and honesty are not inclined to throw everything up in the air creating opportunity for people to run around scooping up as much fame, power and wealth as they can glom onto. Whilst not getting much done to build a wealthier, healthier Philippines.
It’s better to work on progress within the rules of the existing Constitution, a reasonable document, if not a perfect one.
President Aquino also addressed the point of “need” or “objective” in re-writing the Constitution, saying that he has asked his staff to draw up a list of matters warranting attention. I would imagine such an exercise would list things now in the document that need to be removed or changed, and additions to it. It will be interesting to see what they come up with.
Certainly, without a clear road map of changes to be effected, the risks to opening up the Constitution to rewrite are huge.
I come down agreeing with the President’s take on this, and leave it to Ben to argue from the vantage point of his own priorities.

16 Responses to “Constitutional Re-Write: Aquino vs Kritz”
  1. Anonymous says:

    An area of our Constitution I'd like to see changed in my lifetime-Party List. It's a mockery of democracy.DocB

  2. Cha says:

    Senator Enrile, a Cha-Cha enthusiast, explained in an interview with Inquirer earlier this year (Congress Pushes Charter Change, Jul 20) that "the plan was not to alter the ratio or control of assets in the Philippines". Apparently, they are not after changing the 60-40 ratio. They are supporting this rule but just don't want this captured in the Constitution. They would rather "Let it be delegated to Congress so that it can have flexibility to maintain or relax (the ratio) If there is a need for it."Now, why does that feel like Ali Baba and his forty thieves offering to install a security alarm system in my house?

  3. Yes, given the low trust earned by the Congress, I'd agree with your assessment. However, I do think the ownership rules SHOULD be moved outside the Constitution if there is clarity in the Constitution that ownership is a right granted to those who reside in, or generate taxes for, the Philippines, with exceptions made by Congress for national security or safety reasons. The Constitution should preserve the principle of "right of ownership" while Congressional or judicial cases determine the particulars that ensure security and safety. I can't imagine manipulating the ownership percentage; it would really screw up private ownership. It ought to be 100% unless there is a clear reason to restrict, say by industry.

  4. Edgar Lores says:

    Just dropped by to say I love the hilarious photos!And to agree with DocB.

  5. andrew lim says:

    If appropriate, can you share more info on this Ben Kritz, Joe? What companies he's worked for, etc.?

  6. Cha says:

    You should just move to Australia. :)You will not even need government approval to buy commercial or residential real estate if you are a Permanent Resident.

  7. The way it should be. Ownership limits are for the insecure I think. Or those who hold that an immigrant does not have the required qualities to be a real Filipino.

  8. I don't have that background, andrew. I just know he is a "business consultant" and got angry when President Aquino pulled the plug on a lot of contracts when he took office. Like a lake dredging project.

  9. Anonymous says:

    Land ownership is overprotectionism not conducive to free market in a democracy. Protectionism is not good for business. PAL is best example. Losers are the locals. China and Vietnam are communist countries, they can dictate. Comparing our foreign ownership policy with these two countries is illogical, insensible and irresponsible. It is like choosing cancer if one has a choice. Choose the least deadly. In foreign ownership, 1987 constitution cared for a moderate killer form. Relaxing the law will nurture more foreign investors leading to healthy economic growth. Senseless a large international corporation will give away its assets by using dummy Filipino land owners. It is the precursor of corruption. Johnny Lin

  10. Yes, good sense, as usual.1987 was 25 years ago if my abacus is working correctly. It was a time of considerable insecurity after disposing of Marcos and enduring reflections on various occupations. So the Constitution reflects that insecurity about outsiders and being occupied or controlled. The greater insecurity today is poverty and internal unrest, and the laws ought to reflect that and recognize a need for more investment, more jobs, more wealth. Managed, not conceded to others. Ownership is so fundamental to a State being willing to GIVE back value to anyone willing to put their money to work within that State, and bearing the risk and tax burdens and good-citizen responsibilities, of setting up shop or home in the Philippines.

  11. J says:

    I agree. I'm being too liberal, but for me, foreign residents should be allowed to own land, and naturalized Filipinos be allowed to run for president.

  12. J says:

    As General Prem said in response to those opposing his plans to open up Thailand to Japanese investors:"Why, dear, can they take our land to Tokyo?"

  13. J, I'm ambivalent about naturalized citizens running for president, but land is not really all that patriotic. It is an asset, a value. If you allow a foreigner to buy land here, you'll get most of his money. If not, he'll take it to Australia.Precisely your point made below, regarding General Prem. Cracked me up.Only mining companies can export the land, so I'd say regulate them ruthlessly, or nationalize mining. Even better.By the way, I don't think you are liberal as much as sensical.

  14. Anonymous says:

    I am against Cha-Cha because it will offer only short-term economic gains. True, 100% land ownership may convince foreign companies to do business here. But what the pro-Cha-Cha people will not tell you is that the cost of labor is the real deciding factor behind outsourcing a business. Suppose foreign companies here in the Philippines find a cheaper place to do business? Then they will move their companies there. The real solution (read: long-term solution) would be government support of local businesses.

  15. That's true. The profit potential is what drives decisions more so than the form of ownership. A lease is a reasonable real estate solution for a business. And, judging from the ample number of foreigners around, the ownership restrictions do not appear to be much of a block for people who want to be here.

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