08/19/2011
A massive campaign has been
sustained in recent months to brainwash the public into thinking that
the Philippines is wretchedly in need of foreign investments. Its
proponents say that a Charter change (Cha-cha) scheme to open up our
already globalized property, corporate and natural patrimony rights to
foreigners is now of the essence. No less than our leading legislators
have aggressively pushed this, with mainstream newspapers echoing their
line.
The Philippine Star, in its Aug. 16 “Cha-cha can easily
triple investments” story, for instance, quoted House committee on
constitutional amendments chairman Misamis Occidental Rep. Loreto Leo
Ocampos as saying that “our FDIs (foreign direct investments) will
TRIPLE (emphasis mine) from the current $2 billion to $3 billion once
these constitutional reforms are implemented.” Well, looking at his
faulty “math,” one could already conclude that Ocampos’ FDI projections
will be massively off the mark, too.
In fact, the track record of
“reforms” by the Philippine Congress for the past 25 years doesn’t
inspire confidence at all. It is therefore quite scary that the term is
being brandished again.
Consider some of the key “REFORM packages”
since the Edsa I “People Power” government, beginning with the
Comprehensive Tax Reform Program (CTRP) that supplanted the progressive
income tax system with the regressive value added tax (VAT) set-up that
transferred the tax burden to the vast majority of middle and low income
consumers.
Consider the Trade Reform law passed in the early ’90s
that introduced liberalization, deregulation and privatization, which
are now a curse on the Philippine economy, spurring uncontrolled fuel
and power rate hikes, debilitating peso fluctuations, as well as
privatizations that socialize the debts but privatize the profits.
Consider,
too, the so-called Electric Power Industry Reform Act (Epira) that
raised our electricity rates to the highest in Asia. Aren’t these
alarming enough?
Unfortunately, those impervious Cha-cha for FDI
campaigners continue to call for the grant of full ownership of any and
all businesses — especially land — to foreigners, as well as allowing
them unlimited access to our natural resources. They have even spread
their sales pitch to the Internet, using as their bogeyman the
“privileged, favored and protected abusive and exploitative Filipino
oligarchs” who, they say, take advantage of the Constitution’s
protectionist provisions to monopolize businesses and keep out foreign
capital at the expense of free market competition. What they are silent
on, however, is the obvious fact that in many of these
oligarch-controlled companies, foreign capitalists are the major
partners of local oligarchs and, in certain cases, the ones who actually
control these companies through majority voting shares.
Moreover,
as these Cha-cha for FDI proponents try to draw comparisons with
countries that enjoy high FDIs — notably Vietnam, Thailand, and other
Asian countries — to point out that we are lagging behind due to
“restrictions,” the truth of the matter is that almost all Asian
(including Asean) countries are still “restrictive” or protectionist.
Land property rights, in the main, are still not given to foreigners —
only long-term leases. Corporate ownership is still limited — such as in
Thailand, where it is only up to 49 percent, notwithstanding its latest
FDI in 2010 hitting $6 billion, or four times more than the
Philippines.
Although Singapore is vastly more liberal, the city-state
of only 694 sq. km. (having not much land for others to own anyway with
five million in population) is the only exception.
As in the
Philippines since Marcos’ time, most Asian countries only allow
100-percent foreign-owned companies to do business in
especially-designated hi-tech, export processing zones.
One just
has to look at the Asean Web site with its bundled rice stalks logo
under Foreign Equity Policies to get an overview of how liberal
Philippine policy already is, which I quote: “100 percent foreign equity
ownership is allowed in all areas except those in the negative list
under the Foreign Investment Act of 1991 as amended.” For Thailand, it
states: “The 1972 Alien Business Law grants foreigners permission to
engage in certain business enterprises in Thailand only if more than 50
percent of the capital is owned by Thai Nationals. However, for BoI
promoted companies, majority foreign ownership is permitted for projects
that export not less than 50 percent of sales.”
And while the
likes of AntiPinoy.com continuously hold up Vietnam’s apparently lax
foreign equity rule to buttress their point, the truth is, a May 2011 US
State Department investment climate evaluation states otherwise:
“There
are ownership limitations for certain companies listed on the Vietnam
stock exchange and service sectors. Foreign ownership cannot exceed 49
percent of listed companies and 30 percent of listed companies in the
financial sector. A foreign bank is allowed to establish a 100-percent
foreign owned bank in Vietnam but may only own up to 20 percent of a
local commercial bank. Individual foreign investors are usually limited
to 15-percent ownership, though a single foreign investor may increase
ownership to 20 percent through a strategic alliance with a local
partner.”
Keep in mind that no sovereign nation will ever give
away protection of its interests and concerns, and the privileges of its
own people. Also know that other more important considerations, such as
the cost of electricity, are what matter in a country’s investment
climate.
Thus, Vietnam’s $0.05/kWh power rate is one of its main
attractions; same with Thailand’s $0.15/kWh, which are a far cry from
the Philippines’ $0.21/kWh. Even Bangko Sentral ng Pilipinas Deputy Gov.
Diwa Guinigundo was forced to admit to a select audience that “the most
difficult challenge for the national government and the private sector
(is) addressing the high cost of power in the country.”
But as he
and the rest of RP’s political players who are behind the extant
campaign don’t say this out loud to explain why FDIs are shying away
from the Philippines, they are simply pulling wool over the people’s
eyes as they lie about the real reason for Cha-cha: The sell-out of the
country through their many swindles.
(Tune in to Sulo ng
Pilipino/Radyo OpinYon, Monday, Wednesday, Friday, 5 to 7 p.m., and
Tuesday, Thursday, 5 to 6 p.m. on 1098AM; Talk News TV with HTL,
Saturday, 8:15 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable
Channel 8, on “More Power Outrages”; also visit
http://newkatipunero.blogspot.com for our articles plus TV and radio
archives)
(Reprinted with permission from Mr. Herman Tiu-Laurel)
Source: The Daily Tribune
URL:
http://www.tribuneonline.org/commentary/20110819com6.html
