Inclusive growth? Charter change needed, says MVP
MANILA, Philippines (UPDATED) - If the Philippines is serious in its goal of attaining inclusive economic growth, it must change the economic provisions of the 1987 Constitution, businessman Manuel V. Pangilinan said on Thursday, January 17.
In his speech at the Foreign Correspondents Association of the Philippines (FOCAP) conference, Pangilinan said inclusive growth can be achieved by growing the agriculture sector.
However, Pangilinan said the sector is stifled by the Constitutional prohibition on land ownership by foreigners.
“70% of our poor live in rural areas. A stagnant agricultural sector worsens rural poverty and incubates a second enclave economy by forcing massive migration to the cities. Regrettably, our laws affecting agricultural development are not investor friendly,” he said.
“Our Constitution forbids foreign ownership of land whereas agrarian reform restricts the size of landholdings, which stifles the development of the land market,” he added.
Pangilinan cited another problem that has stunted agricultural growth. He said farmers benefitting from land reform are not allowed to use their land as collateral for much-need capital to buy inputs such as seeds and fertilizers.
“You can't even borrow using agricultural land. These policies [work against] commercial farms, which require significant hectares, large investments, and long gestation periods.”
Panglinan’s statements came as regulators finalize revisions in the rules implementing a provision under the Constitution that states foreigners are allowed to own only up to 40% of local companies.
The Securities and Exchange Commission is revising the rules following a Supreme Court decision on a case involving Pangilinan-led Philippine Long Distance Telephone Co.
In the case, the high court ruled that the 40% foreign ownership limit must apply to common or voting shares, not the outstanding capital stock, which includes common and preferred or non-voting shares.
Pangilinan earlier warned of the possible negative impact of the SC ruling on foreign investments. - Rappler.com