The Department of the Interior and Local Government (DILG) welcomes the approval on Second Reading by the House of Representatives of Resolution of Both Houses (RBH) No. 2 on Wednesday, which aims to lift the restrictive economic provisions in the 1987 Constitution also known as “economic cha-cha.”

“We would like to thank our lawmakers in the lower house for recognizing the need to encourage foreign capital flow into the country in order to recharge the economy, especially since many of our countrymen have been affected by the COVID-19 pandemic,” said DILG Undersecretary and Spokesperson Jonathan E. Malaya.

Malaya, who is also the Executive Director of the Inter-Agency Taskforce on Constitutional Reform (CORE), said that the influx of foreign direct investments would help the Philippine economy attain “long-term recovery” from the COVID-19 pandemic, which has left many Filipinos jobless and has forced several businesses to shut down.

“RBH 2 will allow the country to not only bounce back from the pandemic but to achieve long-term development through an inclusive investment-led economy. We need this now more than at any time in our nation’s history,” he said.

He said that the opposition of the so-called Makabayan Bloc in Congress to the economic amendments in the 1987 Philippine Constitution is based on an impractical and outdated economic model that would lead to higher unemployment and suffering for our people.

“The so-called Makabayan Bloc opposes the lifting of the restrictive economic provisions in our constitution because they adhere to their own so-called ‘national industrialization program’ where the electric, water, mining, oil, telecommunications and transportation industries, among others, are to be confiscated from their owners and taken over by the State as dictated by their obsolete ideology,” said Malaya.

He said the alternative proposed by the so-called Makabayan Bloc is obsolete and impractical because it is pre-globalization and has been discarded by almost all nations across the world.

“I’m surprised that Gabriela Partylist Rep. Arlene Brosas calls RBH 2 as ‘most dangerous’ and ‘shameless’ when, in fact, it is their proposal that’s dangerous because they would want us to abandon the free market economy and be protectionist in a globalized world. If we will follow their proposal, we will be bringing back our country to the dark ages and we will be a pariah in the global economy,” he said.

He explained that the Makabayan Bloc follows the National Democracy ideological line which dictates that all strategic industries must be nationalized or owned by the State which is contained in their proposed Comprehensive Agreement on Social and Economic Reform (CASER).

Among the items in CASER is the confiscation of all land used by foreign corporations and landlords, take-over of all large plantations and corporate farms by the State, take-over of all industries deemed as strategic by the Left, and the closure of all large corporations – whether foreign or local – to give way to their national industrialization program.

He said that this type of economic model has been a disaster all over the world citing the collapse of the Soviet Union and its satellite countries in the 90s. "All the remaining communist countries like China and Vietnam which are ruled by Communist parties have adopted free market economies," he said.

He said that for the country to fully recover from the COVID-19 pandemic, the government must open up the economy to achieve a truly inclusive investments-led economic growth that will create more jobs for the people especially since many Overseas Filipino Workers (OFWs) returned to the country amid the pandemic.

Malaya further said that positive economic reforms in the Constitution would serve as a signal to the international business community that the Philippines is now truly open for a globally competitive economy.

In January 2020, the DILG submitted to the House Committee on Constitutional Amendments some 555,610 signatures and LGU resolutions in support of the relaxing of the restrictive economic provisions of the Constitution.

The signatures were gathered during provincial roadshows in 2019 up to 2020 before the pandemic, and additional signatures from a subsequent online campaign advocating for the constitutional amendments.

The DILG also presented a resolution of support for CORE from the League of Municipalities of the Philippines, composed of 1,488 members, and 23 LGU resolutions from Regions VI, X, XI, and CARAGA.

Mandanas-Garcia SC Ruling

The DILG Spox said that the passing of RBH No. 2 in its second reading is timely given the upcoming implementation of the Supreme Court (SC) ruling on the Mandanas and Garcia petitions.

The SC ruling on the Mandanas-Garcia petitions is expected to increase the total shares of local government units (LGUs) from the national taxes by 56.4 percent starting January 2022, relative to this year. Malaya said that the implementation of the SC ruling is seen as a “milestone in genuine local autonomy and empowerment”, as LGUs would have the necessary fiscal resources to provide better services to their constituents.

“The expected increase in LGUs’ total shares from national taxes and the expected increase of foreign investments into the country will surely create millions of jobs for Filipinos and help jump-start the economy,” said Malaya.

He also expressed confidence that the Mandanas-Garcia implementation and the possible economic CORE would allow development to “spread out in other regions of the country and not just in imperial Metro Manila.”

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