SPEECH OF SENATOR KOKO PIMENTEL
XAVIER UNIVERSITY FORUM ON CHARTER CHANGE
July 1, 2013

Fr. Roberto Yap, SJ, University President; Dr. Lina Kwong, Vice-President for Academic Affairs; Dr. Hilly Ann Quiaoit, Vice-President for Research and Social Outreach; Bro. Noel Cantago, SJ, Vice-President for Mission and Ministry; Dr. Dixon Yasay, Director of the Governance and Leadership Institute; Churchill Aguilar, GLI Magazine Editor; Recto Matinza Jr., GLI Project Assistant; officers of the university; faculty members; students; friends from the media and civil society groups; guests and friends; ladies and gentlemen, mga igsoon, maayong buntag kaninyong tanan.

I am honored to address you, members of Xavier University community, as your Resource Person in this assembly because I know that, through this healthy exchange of ideas, we will have the chance to better assess the pros and cons of charter change with only one thing in mind: to speed up not only the modernization but the development of our communities and people.

XU: AN AGENT FOR SOCIAL CHANGE

Xavier University was founded in 1933 as then the Ateneo de Cagayan. Since then, the University has established itself as a flourishing Filipino, Catholic and Jesuit institution known for its commitment to meet the highest standards of teaching, academic inquiry, and formation of its students, thus, serving creatively and well the needs of the people in Mindanao and the country as a whole.

I would also like to commend your University's Governance and Leadership Institute, headed by Director Yasay for organizing this annual public forum series in order to provide opportunities for various community stakeholders in tackling issues of great concern, such as our topic this morning, in the hope of stimulating more understanding of the topic of charter change.

BRIEF BACKGROUND ON CHARTER CHANGE EFFORTS

The Philippines is no stranger to charter change, having replaced its constitution many times in its history. Efforts to amend the 1987 Constitution have distinctively marked the national agenda in just a few years following the ratification of our national charter. Years of political instability and economic downturns have prompted key sectors of society to propose changes in the 1987 Constitution that still is the basic law of the land.

In the Ramos administration a group called PIRMA, or People's Initiative for Reform, Modernization and Action, tried to push for charter change through people's initiative, that is one of the ways of amending the Constitution. It was, however, stopped by a Supreme Court decision that ruled that to validly do so, there was a need for the enactment of an enabling law.

Another effort to change the Constitution was seen during the term of President Joseph Estrada. He created a Commission that studied possible changes in the economic provisions of the Constitution. It was named CONCORD or the Constitutional Correction for Development. But, the effort was shelved in the aftermath of the president's ouster from office in 2001. In President Gloria Macapagal-Arroyo's her second term - in 2004 - a Consultative Commission was created by Executive Order No. 453, under which made two major proposals: (1) the shift to a unicameral parliamentary-federal type of government, and (2) the liberalization of the economy. Nonetheless, the proposals were stalled by a lack of consensus on the process or mode of amending the country's fundamental law. Which is sad, in a manner of speaking because even if, indeed, the process of amending the Constitution is important, the failure to arrive at a consensus in that regard sidestepped the substantive elements of the debate.

LOOKING AT THE POLITICAL PROVISIONS

THE PARLIAMENTARY FORM

Among the major proposals espoused by advocates of Constitutional Change is the shift from the current presidential to a parliamentary form of government.

The parliamentary form has advantages and disadvantages.

By its design, parliamentary system is said to foster effective governance as it avoids the legislative-executive gridlocks.

Since the executive and the legislature are usually controlled by the same majority party or coalition of parties in a parliamentary form of government, it is easier to pass legislation in a parliamentary form of government than in a presidential type where deadlocks on policy decisions now and then occur, which usually happens when the President belongs to a party different from that of the controlling group in Congress.

It is argued that a parliamentary form is more flexible because electoral terms are not rigid and a vote of no confidence can depose a Prime Minister, and cause the dissolution of parliament, itself. It, therefore, allows efficient leadership change, and ensures stable governance. Since the Prime Minister and members of the Cabinet do not have a fixed term of office, they can be removed from office any time if their policies and performance fail to gain the support and confidence of the parliament.

Furthermore, parliamentary forms of government are said to be less corrupt because nationwide popularity-based elections are not held; elections are usually conducted in parliamentary election districts. Thus, corruption and patronage politics are supposedly diminished. "Supposedly" because there are instances where parliamentary governments have been toppled, because of, among other things, corruption. Thailand's Thaksin was ousted by people power demonstrations on charges of abuse of power and corruption.

If the Prime Minister feels he has popular support but is unjustifiably being opposed by the parliament, he may call on the President to dissolve it.

Incidentally, in parliamentary forms of government, there are officials who are theoretically, at least, vested with power of supervision over the Prime Minister. These officials are either hereditary kings or queens as in the UK or Thailand, or are elected as President as in France, and India.

In any event, new elections are held where the people will decide who they will support: the last occupant of the office of the Prime Minister or an entirely new parliament.

There is a common criticism that is leveled against parliamentary systems. And that is the tendency of the combined executive-legislative group in parliament to dominate the affairs of government. Under this set-up, for instance, the prime minister and his cabinet control the legislative agenda. They initiate legislation, and in effect reduce parliament's role to proposing amendments to the legislative agenda defined by them.

But adopting the parliamentary form of government in the country may surface because of the way we run our politics here. You see, the dynamics of parliamentary governments require a genuine multi-party system based on distinct ideologies or party platforms.

Our Republic, however, does not have such a political system either by mandate of law or by the demands of tradition. The malady of "turncoatism" is a national blight in the way we do our politics here. Without distinct parties that have strong party discipline, the parliamentary form of government here will likely lead to an oligarchy that will arise from the built-in fusion of executive and legislative powers in parliament.

There are many more points that we can talk about the parliamentary form of government. But I guess it would be better to bring up those issues during the open forum that is supposed to follow this discussion.

Hence, we will now talk about

THE UNICAMERAL SYSTEM OF LEGISLATURE

A second controversial issue in the move to amend the Constitution is the proposed shift to a unicameral from the present bicameral legislature.

Our country has had experiences under both systems -- unicameralism during the Marcos years, and early on in the Commonwealth era, and bicameralism before the 1972 Martial Law and then, in our present setup, after the ratification of 1987 Constitution.

Those arguing for unicameralism contend that the unicameral structure is efficient and less costly to maintain. It eliminates the time-consuming process of having two separate deliberations that may invariably lead to conflicts and deadlocks between the two Houses of Congress. Furthermore, a unicameral set-up affords a simpler, less redundant legislative organization. By unifying decision making under a single deliberative body, legislative activity becomes clearer, more accountable and more understandable to the public.

Moreover, a single legislative chamber can exercise more effective control over the country's fiscal policies and annual budget appropriations. Although it affords a second review or consideration of bills, the bicameral system does not necessarily preclude hasty passage of legislation. Finally, it is deemed more economical as funds will be allocated only to a single assembly and a smaller secretariat support organization. Government savings can run as high as P1.2 Billion per year, which can be allocated to more social services.

On the other hand, those arguing against a one-chamber legislature acknowledge that a second chamber (Senate) provides an opportunity to scrutinize the details of legislation more thoroughly. Since the two chambers are drawn - in our experience - from different constituencies, issues are examined from different perspectives. A two-chamber legislature serves as a "check and balance" to abuse of legislative power.

Finally, since the Senators are elected nationwide, they are expected to be less parochial than district-wide elected representatives. They are said to be better able to tackle broader issues of national importance.

IS FEDERALISM THE ANSWER?

The third - and arguably - the most interesting option is the shift to a Federal System of government. Incidentally, this is an option that is most vigorously advocated by my father, former Senate President Nene Pimentel - which I am also inclined to support.

What exactly is Federalism? Federalism is a system where government and administration are exercised in two levels: the national (or the federal) and the regional (or state). Each is assigned specific functions and is independent of each other. Each state exercises individual autonomy, the separate powers of which are assigned in the Constitution.

In essence, Federalism is the equitable distribution of powers and resources between the federal and the states. Under the federal system, the country may be reconstituted into any appropriate number of states. This will allow each state to address their peculiar and particular diversities, but all flowing from the basic framework defined in a federal constitution.

We have a long history of a centralized system of governance. As far back as the colonization of Spain, the country has been governed from Manila, the nation's capital. The inability of the government to effectively address the needs of the regions has resulted in the inequitable development among the regions.

In the current debate for Charter Change, proponents of Federalism believe that it is the answer to the age-old problems of inequitable distribution of wealth, slow pace of development in the country side, and the law and order situation in Mindanao.

There is a rather detailed proposal made by my father to consolidate the existing regions into ten states with Metro Manila becoming a Special Administrative Region. Luzon will have four states (Northern Luzon, Central Luzon, Bicol, and Southern Tagalog), while Metro Manila will be converted into a Federal Administrative Region along the lines of a Washington D.C., a New Delhi or a Kuala Lumpur. Visayas will have four states (Minparom, Eastern Visayas, Central Visayas, and Western Visayas), while Mindanao will have three states (Northern Mindanao, Southern Mindanao, and Bangsamoro).

He recommended that the states be constituted out of bigger political territories to provide the environment for competitiveness and sustainability rather than create states out of provinces that, in many instances, might simply be too small to survive as a state.

In terms of allocating the resources of the Republic, a formula is provided: 30% will go to the Federal Government and 70% to the States. Of the 70% accruing to the States, 30% will go the State governments and 70% to the provinces, cities, municipalities and barangays. In this formula, the shares of the provinces, cities, municipalities and barangays will be bigger than what is currently provided for under the local government code.

There are many advantages of a Federal System of Government, but let me mention three:

First, a federal republic hopes to bring about peace and unity in the midst of ethnic, religious and cultural diversities of our people. This is especially true in Mindanao where for generations, the Christian settlers have not found just and lasting peace with Muslim residents. The traditional policy of assimilation and subordination has failed. On the other hand, it is submitted that responsive Federalism will lead to accommodation within the Republic and discourage secessionism.

Second, Federalism will improve governance through a new division and specialization of government functions. There will be a broad devolution of power, authority, and the needed revenues and resources from the national government to the States. Local governments will be closer to the people and have greater impact on their lives.

And, third, Federalism will hasten the modernization of the country, and more important, it's development. Since planning and policy decision making will be given to the States, there will be less bureaucratic obstacles to the implementation of economic programs and projects. There will also be inter-state and regional competition in attracting domestic and foreign investments and industries. Resources will be better distributed among the provinces/regions since government revenues will be devolved. The Federal States will have more funds for infrastructure and other economic projects. Federal grants and equalization funding from the federal government and the more prosperous states will help support the less endowed and developed regions, and the poor and the needy across the land. This will result in more equitable and speedy modernization and development.

Allow me to underscore the fact that the move to federalize the country is not simply a "political" undertaking; it is also an economic effort. By creating eleven Federal States and by converting Metro Manila as a federal administrative region, we immediately establish twelve centers of power, finance and development throughout the country. Under the unitary system that has characterized the government for centuries we only had one center of power, finance and development: Metro Manila.

The federal proposal will hopefully provide a just and lasting redress of the grievances of the powerless and the neglected sectors of society, like the Moro peoples of Mindanao.

A DISCUSSION ON ECONOMIC PROVISIONS

After our discussion on the political provisions of our Constitution, allow me to discuss arguments with regard to amendments on its "economic provisions."

As I indicated earlier, President Joseph Estrada issued Executive Order 43 that created the Philippine Commission on Constitutional Reforms, or PCCR, in 1999 because his administration recognized that the economic provisions of the 1987 Constitution were rather restrictive, thereby stifling the government's flexibility to formulate and implement economic policy that would attract investments. Indeed, I tend to agree that the restrictive provisions of the 1987 constitution have limited the ability of our country to compete in the global economy. It has limited the flexibility of the government to respond to the changes in the global environment, hence adversely affecting the economy's capacity to achieve higher growth.

These restrictive provisions can be found in Sections 9 & 19 of Article II, Declaration of Principles and Article XII on the National Economy and Patrimony.

ECONOMIC POLICY FORMULATION

Upon a closer look at our existing charter, I contend that Section 19 of Article II needs to be reviewed because of ambiguity in language. The phraseology aspiring for an "independent" national economy "effectively controlled" by Filipinos taken together with other provisions in the Constitution gives rise to controversial policy decisions that affect investments. A concrete example is the Supreme Court decision on the choice of site for a proposed petrochemical complex. When the decision was made in 1990, investments from Taiwan fell from P3.4 billion in 1990 to P329 million in 1991.

Another area of contention is the provision of Section 1 Article XII, which dictates that the economic base of the country shall be agricultural development and agrarian reform. This precludes a shift to other economic models for development. Note that in other countries the share of agriculture to total GNP ranges only from 5-16% as compared to the Philippines' 20%. According to the report, this provision, together with other provisions in the Constitution "prevents responsive government action to address problems in the management of economic affairs."

REMOVING EQUITY RESTRICTIONS ON FOREIGN INVESTMENTS

Compared to other Asian countries it is only in our Constitution where restrictions on foreign investments are expressly stated. In other countries, foreign investment policies are regulated by legislation. There are no provisions prescribing citizenship or foreign investment equity ratios in their constitutions. The only exception is the constitution of Thailand which restricts foreign ownership in mass media companies. Some quarters say that this kind of provision in the Philippines' and Thailand's Constitution is no longer relevant because of mass access to foreign satellite television and the internet.

Due to lack of time, I shall not delve into the arguments for or against foreign ownership of public utilities, franchises and infrastructure, educational institutions, as well as mass media and advertising. I will just say that the equity restrictions on these areas should be reviewed thoroughly, as these provisions may be denying Filipinos access to new technological innovations which require huge investments that local companies may find difficult to raise. Certain sectors oppose the liberalization of mass media because of the fear of foreign influence. However, this argument may prove archaic because foreign media are already accessible to Filipinos through cable television and the Internet.

Constitutional restrictions on land ownership and public utilities in place since 1935 are the most formal barriers to foreign participation in the Philippine economy. Relaxing them would ease the entry of foreign capital needed for further modernization and growth and could increase competition in these sectors, benefiting the entire economy.

The ban on foreign ownership of land, in Article XII of the 1987 Philippine Constitution, is total. However, foreigners may lease land for up to 50 years, renewable for another 25 years. Let us take another look at this provision.

In my view, leasing land involves legal expenses and complications, and as a result some foreign companies have either left the Philippines or not made investments. Allowing foreigners to own land for industrial and commercial and for residential purposes would simplify current arrangements and benefit the economy through increased investment in businesses using land, such as manufacturing, property development, and tourism.

Even among our ASEAN counterparts, our country's land ownership policy is viewed as more restrictive. In fact, even the Filipino business community generally supports some foreign ownership of residential, commercial, and industrial lands. Foreign ownership of agricultural land is, however more sensitive.

Because of the massive poverty that afflicts no less than a third of our people, I would like to add that it might still be necessary to place some reasonable restrictions on the total areas that foreigners may acquire if only to assure our people that it is not the intention of the proposed amendments to the Constitution to deprive them of the land they need for their own and their children's survival and security.

There are other constitutional restrictions that limit foreign investment in advertising, education, media, and natural resources. Time, however, has other demands.

CONCLUSION

In any attempt to change the Constitution, we have to understand that fundamental laws are not only legal documents; they are first and foremost products of political struggle about competing goals.

The attempts to revise the 1987 Constitution have its merits and demerits. The important thing is that all proposals and the manner of amending the basic law must be shared with the people.

As I close, it is my fervent hope that our discussions shall have stirred some interest on the salient points I have raised this morning that can lead to even more fruitful dialogues on the matter of charter change - now or at other opportune occasions.

Salamat kaayo kaninyong tanan.