On Charter change

In February, President Ferdinand Marcos, Jr. said that Charter change was not on his list of priorities: “There are so many other things we need to do first, that we can still do.”

The President elaborated that many of the concerns over the economic provisions in the 1987 Constitution can and ought to be addressed through the legislation of reforms rather than through amendments or revisions to our Constitution.

Despite this clear pronouncement from the President himself, the House of Representatives rushed the process of initiating Charter change. After just six hearings held in a span of about five working weeks, the House Committee on Constitutional Amendments produced the Resolution of Both Houses (RBH) No. 6 and House Bill (HB) No. 7352. Both measures were sponsored on the House floor by the end of February and not more than a fortnight later, these were already approved on third reading.

RBH No. 6 calls for a “Constitutional Convention (Con-Con) for the purpose of proposing amendments to the economic provisions, or revision of, the 1987 Constitution, with the election and appointment of delegates to be held on October 30, 2023.”1 Meanwhile, HB No. 7352 represents the corresponding implementing legislation and details relating to the “specific apportionment, election and appointment of delegates, and the holding of the Constitutional Convention.”2

It is typical for the House of Representatives to fast-track the passage of laws which the President has signaled as priority measures — just take the recent example of the Maharlika Investment Fund. However, there seems to be a puzzling contradiction between the President’s pronouncements and the House’s haste in action on Charter change.

The Chair of the House Committee on Constitutional Amendments, Representative Rufus Rodriguez had this to say: “We respect the opinion of President Ferdinand Marcos, Jr. on constitutional amendment measures. We will of course consider it. But as an independent branch of government, the House of Representatives and Congress will proceed with its public dialogues on this issue.” Meanwhile, the President’s cousin and House Speaker, Martin Romualdez, admitted that the House was “rushing” to “amend the restrictive economic provisions of the Constitution.”

This has presented a befuddling scenario, and one might speculate over two possibilities: either the House has openly defied the President’s pronouncements, or the President is not being fully transparent about his true intentions on revising the Constitution.

In any case, the rush to amend or revise the Constitution is highly concerning. If we are to take him at his word, then we see the President’s earlier pronouncements as being completely apt in that legislative reforms are what are necessary to enhance the country’s ability to pull in foreign investments.

For one, the Duterte Administration had already enacted several key reforms to boost investment, such as the Public Services Act (PSA), the Foreign Investments Act, the Retail Trade Liberalization Act, as well as significant tax reforms embodied in TRAIN and CREATE (the Tax Reform for Acceleration and Inclusion Law and Corporate Recovery and Tax Incentives for Enterprises Act). The PSA already allows full foreign investment in non-utility public services.

Altering the fundamental law of the land would only represent uncertainty and might just push investors to take a wait-and-see approach which would defeat the intention of pulling new investments into the country.

The lack of alignment between the President’s direction and the House’s actions has created opacity. Representative Rodriguez has stated that only the economic provisions would be tackled in the House’s proposed hybrid Con-Con and yet neither RBH No. 6 nor HB No. 7352 outlines which specific “economic provisions” are to be tackled. Even worse, HB No. 7352 calls for the Con-Con “to propose amendments to, or revision of, the 1987 Constitution.” This implies that the body would have the power to propose either individual amendments OR wholesale revisions to the Constitution. Whether or not the House’s intention was merely to address the “restrictive economic provisions,” the passage of its bill might unwittingly open the door to much broader changes.

Even if we were to try to identify which specific economic provisions are to be amended, we must ask whether the form and substance of these amendments would be worth such an upheaval.

The proposals in the House can be boiled down to simply adding exemption clauses, i.e., “unless otherwise provided by law,” to the existing wording of the Constitution. The language is vague and perhaps intends to cover up intentions.

Thankfully, the House’s counterparts in the Senate are much more wary of the prospect of Charter change. Senate President Juan Miguel Zubiri has signaled that the Senate will not rush Charter change, and that the proposals will undergo thorough discussions. Senator Robin Padilla, who has championed a shift to federalism and chairs the Senate Committee on Constitutional Amendments and Revision of Codes, has yet to issue a proposal on amendments.

Congress has many more pressing matters to attend to. It must prioritize measures that will address the urgent main problems that obstruct our development.

Government, including Congress, must immediately tackle the current binding constraints. These include addressing growing short-term concerns over inflation, expanding the country’s fiscal space, and realizing a better and more resilient healthcare system.

1 https://hrep-website.s3.ap-southeast-1.amazonaws.com/legisdocs/third_19/RBH0006.pdf

2 https://hrep-website.s3.ap-southeast-1.amazonaws.com/legisdocs/third_19/HBT7352.pdf

AJ Montesa is a senior researcher of Action for Economic Reforms and heads its tax policy team.