Understanding Charter Change

Last week, Congress attempted to bamboozle its way to get the ball rolling on charter change by proposing to convene both the House of Representatives and the Senate in a constituent assembly (Con-Ass). Through the hasty approval of Joint Resolution No. 9, the House proposed that members of both Houses vote jointly on constitutional amendments.

The following day, senators held a caucus during which they unanimously agreed to oppose any joint voting or joint session under a Con-Ass.

In an official statement, Senator Koko Pimentel said that the chamber prefers to vote on a separate basis, not jointly. With that, the speeding cha-cha train came to a screeching halt.

The spate of events suggest that two things are imminent. First, that charter change is now a priority agenda in both houses and will be tackled sooner than later. Second, that the manner by which constitutional change will be carried out will be through a constituent assembly.

The constitutional reform agenda of the Duterte administration includes two major components. The first has to do with economic laws and the second relates to shifting our form of government from a Unitary-Presidential form to a Federal-Parliamentary form.

Before getting into the pros and cons of economic charter change and federalism, let me first share what I think about Con-Ass.

CON-ASS VS CON-CON
There are three ways to amend the constitution — through a constituent assembly, a constitutional convention (Con-Con), or a people’s initiative. Constitutional experts agree that a constitutional convention is the superior model. I agree.

A constitutional convention allows the citizenry to elect their own constitutional members according to their constituencies (localities). These representatives are responsible for drafting the constitutional amendments for which members of congress have no direct hand in the deliberations.

On the other hand, in a constituent assembly, the congressmen and senators themselves draft and vote on constitutional changes. A three-fourths vote will get the amendments passed.

A constitutional convention is the more democratic and participative method. However, it is also a longer process and a more expensive one, not to mention more divisive. The Department of Budget and Management estimates that a Con-Con will cost P7 billion to undertake.

In the Philippine context, the more contentious issue surrounding a Con-Ass is the people’s level of confidence in our congressmen and senators.

Given that only a handful of them are lawyers, let alone constitutional experts, many doubt whether they have the competencies to draft the laws of the land. And since history has taught us that the majority of our lawmakers vote accordingly to party lines, personal interest, and those of their benefactors, many fear that the amendments may be self-serving. As it stands, they are already talking about extending their own allowable years in office.

To assuage fears, Speaker Pantaleon Alvarez committed to establish various committees representing different sectors of society. These committees will be made to participate in the deliberation process, so as to make it an inclusive undertaking. Whether this will be enough to mitigate the personal interests of self-serving legislators remains to be seen.

ECONOMIC CHARTER CHANGE
Economic charter change is long overdue.

The restrictive provisions of the constitution, especially those that relate to foreign direct investments (FDI), has held back the country’s development for more than 30 years.

From the 1980s up to the close of the century, Singapore, Malaysia, and Thailand leapfrogged economically on the back of a deluge FDIs.

During that period, the Philippines share of regional FDIs was a paltry 3% in good years and 2% on normal years. The flawed economic laws of the constitution are largely to blame for this.

Imbedded in the 1987 constitutions is a list of industries in which foreigners are precluded from participation. These industries include agriculture, public utilities, education, and media, among others. The absence of foreign investors in these sectors has starved us of capital, technology transfer, and competition to push local companies to be more efficient. This is the largely reason why we have the slowest Internet service today, the most expensive power rates in Asia, and why we still have not attained self sufficiency in food production.

The protectionist flavor of the 1987 constitution clearly favored the interest of select Filipino families who are/were involved the media and broadcasting, power generation and telecommunications.

The Constitution further limits foreigners from owning more than 40% equity share in corporations. This has lead investors to either invest their money elsewhere or use several levels of dummies to evade the law. The latter breeds a domino effect of illegal acts.

The fact that foreigners are barred from owning land has proven to be a great disincentive for those building manufacturing plants, factories, and buildings with a useful life of more than 30 years. Land is used as equity for business financing and to take this away from the business model is enough reason for investors to take their business elsewhere.

Even Vietnam has beaten us to a pulp in the FDI race over the last 10 years.

In 2017, Philippine FDIs are seen to top $8 billion while Vietnam is poised to take-in $28 billion. The difference between our levels of FDIs represents our opportunity loss. Its high time something be done to even the score.

FEDERAL-PARLIAMENTARY GOVERNMENT
As mentioned earlier, the Duterte administration plans to a shift our form of government from a Unitary-Presidential form to a Federal-Parliamentary form. To better appreciate how a Federal-Parliamentary system works, it s best to look at it in contrast to a Federal-Presidential system.

A Federal-Presidential system offers no change to the current system where the President is elected through a national election and heads the executive branch. He has no sway on the judicial or legislative branches except through party-line influence. The United States operates under a Federal-Presidential framework.

A Federal-Parliamentary system , on the other hand, encourages people to vote according to political parties. Here, the citizens elect their Members of Parliament (their representatives), most often, based on the ideology of the party they belong to, not on their personalities. The party with the most number of elected representatives is declared “the parliament.” The parliament elects its Prime Minister (PM) from among themselves. The PM, in turn, selects the members of his Cabinet (his ministers) from among the members of the parliament.

There are multiple advantages to this. First, the system does away with expensive and divisive presidential elections. It puts an end to the vicious cycle of presidential candidates resorting to corruption and incurring political debts just to raise funds for their campaign.

Even the poor can run for office so long as they are capable. This is because elections are funded by the party. In a federal-parliamentary system, we do away with people who win on the back of guns goons and gold.

Moreover, since the members of parliament selects the Prime Minister, they can easily remove him through a vote of no-confidence should he fail to fulfill his mandate. We do away with the tedious process of impeachment. And since the ministers are selected from the Parliament, no one gets a free ticket to the Cabinet just because they are friends with the President or nominated by a political ally. The ministers all have mandates and are accountable not only to the PM but to their constituents.

The parliament is a unicameral legislative body. Thus, bills can be made into law faster and cheaper.

A parliamentary system is one where a “shadow Cabinet” exists. A shadow Cabinet is the corresponding, non-official Cabinet composed of members of the opposition. Each Cabinet minister has a shadow equivalent who is mandated to scrutinize every policy done by the official minister. The shadow minister may offer alternative policies which can be adopted if it is deemed superior.

In the end, the systems allows policies to be better thought out with appropriate safeguards to protect the interest of the people.

Among the seven wealthiest democracies (the G7 nations), only US and France follow a presidential system. the rest subscribe to a parliamentary system.

The intentions of charter change is good. Done right, it could be a game changer for the nation.

 

Andrew J. Masigan is an economist.