What I’ve learned after helping write the 1987 Constitution

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By Patricia B. Mirasol, Reporterspeaking to Bernardo M. Villegas

WITH EVERY CHANGE of administration comes the question of what needs to change, and what needs to be retained. In this episode of BusinessWorld B-Side podcast, multimedia reporter Patricia B. Mirasol takes a look back at how the 1987 Philippine Constitution was drafted with Bernardo M. Villegas, an economist and one of its framers. They also discuss foreign ownership liberalization, the additional factors driving foreign direct investments, plus the key area the next administration needs to focus on.

Don’t enshrine provisions that can change with circumstances.

“Except for vital issues like the right to life and the family as a foundation of society, all other issues are debatable and should not be enshrined in the constitution,” Mr. Villegas said in response to possible drawbacks to the recent constitutional amendments pertaining to foreign ownership and liberalization.

Things can change decades down the road that can necessitate changing the laws, he added. Right now, however, “we need (foreigners) badly, because we’re buried in debt.”

The ideal constitution is a short constitution — a defect the 1986 Constitutional Commission was not able to address, according to Mr. Villegas.

“It’s too verbose…” he said. “You should understand that we were traumatized by Martial Law and the EDSA revolution. We overdid it by putting in too many restrictions.”

The Filipino First mentality is backward and must be expunged.

“I’m very happy we have those three amendments,” Mr. Villegas said, referring to Republic Act (RA) No. 11647 (The Amended Foreign Investment Act), RA 11595 (The Amended Retail Trade Liberalization Act), and RA 11659 (The Amended Public Service Act).

RA 11647 eases restrictions and requirements on foreign ownership in businesses. RA 11595 removes the categorization of enterprises and reduces the minimum paid-up capital of foreign retailers from $2.5 million to P25 million. RA 11659 allows full foreign ownership in sectors like telecommunications, railways, subways, and airlines.

All three are expected to generate more jobs, improve basic services, allow the exchange of technology, and help the economy recuperate from the COVID-19 pandemic.

These are also expected to inject much-needed foreign capital into the economy that will ultimately help fund programs such as “Build, Build, Build.”

He was one of the few in the constitutional commission who wanted to do away with the “Filipino First” provisions, Mr. Villegas told BusinessWorld. Because there wasn’t much competition from overseas, the ultra-nationalist protections soon gave rise to oligopolies, an outcome he described as “Rich Filipinos First, Damn the Rest of Us.”

While the Duterte administration has done a good job with “Build, Build, Build,” Mr. Villegas added that the next two administrations will have to do even better, since the country’s infrastructure as compared with its neighbors is “still so poor.”

AGRICULTURE IS THE ACHILLES HEEL OF THE ECONOMYThe National Economic and Development Authority’s AmBisyon Natin 2040 vision of having every Filipino “enjoy a strongly rooted, comfortable, and secure life” is doable, Mr. Villegas said.

It will, however, hinge upon equality of education, infrastructure development, and a focus on agriculture. The latter alone will reduce the poverty rate, Mr. Villegas added, as about three-quarters of the poor are from rural areas. 

“I would like to emphasize — for the next administration — the importance of rural and agricultural development,” Mr. Villegas said. “Our biggest failure came from decades of neglecting poor farmers.”

Apart from continuing to build farm-to-market roads, Mr. Villegas told BusinessWorld that small-scale farmers can adopt models, such as the nucleus estate, to achieve economies of scale even with their small landholdings.

In such a model, small-scale farmers lease their land to corporations, who are then responsible for coordinating the transfer of technology, as well as the processing of the produce to higher-value products. 

“We were able to do it with pineapples. (We can do it) in cacao, coffee, durian, avocado… but that requires leadership,” said Mr. Villegas. “That requires cooperation between the executive and the legislative.”