About 1.6 million new jobs for the country would be created and household income would be substantially increased by relaxing the economic restrictions in the 1987 Constitution.
Leandro Tan of the University of the Philippines Public Administration Research and Extension Services Foundation-Regulatory Reform Support Program for National Development (UPPAF-RESPOND) said that economic reforms could reduce the 7.1 percent unemployment rate reported in March 2021 to only 3.8%.
“The unemployment situation in the country has escalated since April 2020 while a negative net of -1.3 million remains,” Tan said during the second session of the webinar series on the impact of opening the economy on jobs and labor sponsored by the Department of the Interior and Local Government (DILG).
Removing foreign equity restrictions, he said, would also yield a potential foreign direct investment (FDI) of $16.2 billion. Tan said that infusing more FDIs into the economy would remove manufacturing, electricity, gas, water, real estate, and business services job deficits.
“Other sectors such as transportation, public administration and defense, education, and other services will be reduced by 390,000 or 33%. Even family or household incomes would rise by P197 billion or Php 8,000 per family with relaxed FDI,” he added.
Tan said the Gross Domestic Product (GDP) growth rates showed that the Philippines was lagging behind other neighboring countries like Thailand, Singapore, Malaysia, Indonesia, and Vietnam.
“The imposed economic lockdown brought by COVID-19 has derailed the country from the sustained GDP growth path, from 6.1 in 2019, -9.6 in 2020 down to -4.2 in the first quarter of 2021,” Tan stressed.
DILG Undersecretary and Spokesman Jonathan Malaya said that the potential investment and labor impacts of economic reforms would speed up economic recovery.
“This will have a significant impact on the long-term phase of our recovery solutions to beef up investments, employment, incomes, labor workforce, and other sectors greatly affected by this health crisis,” Malaya said.
Malaya said explaining to the people the benefits to be derived from lifting the economic restrictions would be much easier now as proponents have stipulated in their studies and simulations on the said reforms.
“Most of our lawmakers in Congress, business groups, economists, and experts send an overwhelming support to the proposal because they know that this would send a strong signal to the world that we are ready to an attractive investment climate, create more jobs and livelihood, and make the necessary adjustments in the economy for progress,”Malaya said.