All 23 senators have signed a resolution rejecting moves by administration allies in the House of Representatives to unilaterally convene a Constituent Assembly  (Con-Ass) to tackle proposed amendments to the Constitution.

The Senate resolution, introduced by Senator Francis "Kiko" Pangilinan, declared the unilateral convening by the Lower House of a Constituent Assembly (Con-Ass) as “unconstitutional”.

The resolution was passed a day before the scheduled interfaith rally against Charter change in Makati City on Friday.

Senators are generally for the convening of a Constitutional Convention (Con-Con), which they said should be done after President Arroyo’s term in 2010. The Senate's position is supported by various sectors, including the influential Catholic Bishops’ Conference of the Philippines (CBCP).

"The argument is really a stretch. Kahit fresh law student, sasabihin niya mali ang argumento na pepwedeng amendahan ng House of Representatives lamang na may bilang na 197 kahit na hindi sumama ang Senado,” Pangilinan told ABS-CBN News Channel in an interview.

“If we are to amend, we are to change the name of streets....I remember we changed the name of Taft Ave. into Jose W. Diokno, just the name of the street requires separate action of both Houses. Just to adjourn for not more than three days, one House needs the consent of the other," said Pangilinan.

In a move that will effectively bypass the Senate, Camarines Sur 2nd district Rep. Luis Villafuerte, president of President Arroyo's party, Kabalikat ng Malayang Pilipino (KAMPI), has been gathering signatures for a yet-to-be-filed resolution that will call for the convening of a Constituent Assembly through joint voting.

A three-fourth vote of Congress - or 196 votes - is required to convene itself into a Constituent Assembly. In separate voting, that means 179 congressmen and 18 senators should approve. Assuming joint voting is constitutional, the 238-member House of Representatives can allegedly gather the necessary votes without the approval of a single senator.

Previous reports said that 167 signatures have already been gathered for the Villafuerte resolution, although this has yet to be confirmed.

Business rejects Nograles' cha-cha

Meantime, House Speaker Prospero Nograles is not getting the support of the sector he thought would back his proposal to amend the Constitution to scrap the 40 percent limit on foreign equity.

The influential business groups Makati Business Club (MBC), the Management Association of the Philippines (MAP), and the Philippine Chamber of Commerce and Industry (PCCI) have all made statements that current moves to amend the Constitution will be disastrous, given the politically-charged environment.

In particular, the businessmen also rejected Nograles’s argument that allowing foreigners to wholly own enterprises in the Philippines will allow the country to benefit from the US-led financial crisis.

"Our strong economic fundamentals should be our best selling point in offering refuge to relocating American investments. However, we cannot maximize our potential as an attractive destination for investments, which are now relocating out of the US because of our equity restrictions," Nograles said in a statement regarding House Resolution 737, which now has 163 signatures of support from fellow congressmen.

Businessmen sought by abs-cbnNEWS.com/Newsbreak provided the following reasons why they disagree with the chief proponent of Charter change in the House of Representatives:

1. Even without considering the politically-charged environment, the global financial crisis is precisely the reason why the businessmen don’t want Charter change for now.
2. Equity restriction is not the main reason why the Philippines is lagging in foreign direct investments (FDI). Scrapping the limit will not guarantee that the economy will take off.
3. It is not a good idea to open all industries to complete foreign ownership.
4. Economic problems can be solved by ordinary legislations.

Pass pending legislations

If the intention of Nograles is to improve the economy, Makati Business Club (MBC) executive director Alberto Lim said the House Speaker should lead Congress in enacting the necessary laws that will improve the investment climate.

"A lot of economic problems can be solved by ordinary legislations," Lim said.

"Why is the House of Representatives pushing Charter change via Constituent Assembly when so many important bills remain unaddressed?" MAP also said in its web site.

In June 2007, domestic and foreign business groups in the Philippines wrote to President Arroyo to push for 12 recommended legislative reforms, which they believe would help improve competitive investment climate in the country.  These were:

1. Built Operate Transfer (BOT) Law Amendments
2. Credit Information System Act
3. Custom Brokers Act Amendment
4. Financial Sector Taxes Rationalization Act
5. Fiscal incentives rationalization act (implemented for minimum wage earners)
6. Foreign investment restriction rationalization act
7. Freedom of access to information act
8. Land administration reform act
9. Local government code amendments
10. Magna Carta for small and medium enterprises (enacted into law)
11. Renewable energy act (pending President Arroyo’s signature)
12. Simplified net income taxation act

Focus on building infrastructure

While the Charter change proposals may have their merits, PCCI President Edgardo Lacson and Business Processing Association of the Philippines (BPAP) executive officer Oscar Sañez said they can wait until after the world economy recovers from the global financial crisis.

"In the past, businessmen backed the amendments to the economic provisions of the economy. There was no financial turmoil then. But now, the time is different. Why are we opening another battle line? Charter change is very divisive. The global financial crisis should be the main battle line. All energy should be focused on that," said Lacson.

"This is not the time to spend money in an exercise like Cha-cha," Sañez said in a text message to abs-cbnNEWS.com/Newsbreak.

"Government should take the lead in focusing limited resources to infrastructure-building and promoting investments in the industries that are seeing prospects for revenue and employment growth," Sañez added.

Lacson agreed. "We have to pump up the economy. Let’s concentrate on projects that will provide immediate employment," he said.

The PCCI had proposed to the government a P100 billion private-public investment fund to stimulate the economy.

Sañez cited the following industries—tourism, information technology, and business process outsourcing.

"What they need to do is to realign the budget to make it more responsive to job generation. Employment is what we need. A lot of people are losing their jobs," Lim said.

Equity restriction not the big problem

Lacson, MBC's Lim, and Ortigas and Company chief operating officer Rex Drilon also said that equity restriction is not the reason why the Philippines is lagging in foreign direct investments. Drilon is a member of the MAP.

"If you change the constitution, you think foreign direct investments will go up? That’s not going to be true," said Drilon.  

Drilon cited as examples the Communist countries, China and Vietnam, which get US$70 billion and $9 billion in foreign direct investments (FDI), respectively. In comparison, the Philippines is estimated to only get about $1 billion this year. It could even be negative if Philam Life, which is worth $2 billion, is sold to a Filipino corporation.

Nograles’s argument does not hold water because China and Vietnam have very restrictive economic policies, Drilon explained. Unlike the Philippines, Drilon said people in Vietnam don’t even speak English and there’s no freedom of the press. 

"With all our freedoms, we only get $1 billion," Drilon said. "It’s not the economic provisions scaring investors away. It’s bad governance. It’s corruption, corruption, and corruption," Drilon said.  

"The first thing they look for is good governance. Our reputation for corruption is really bad. We have very bad red tape problem," said Lim.

"There are many factors in making a country attractive to foreign investors," Lacson said. Stability of policies is one big problem in the Philippine, they said.

One instance that Drilon cited is the botched National Broadband Network (NBN) deal, which shifted from a Build-Operate-Transfer scheme to a loan.

In China and Vietnam, Lim said, "When they say they will do something, they do it."

"We keep changing rules in the middle of the game," Drilon said.

Don’t open all industries yet

Lacson also does not favor lifting foreign ownership restrictions across all industries.  

"We should do it industry-to-industry. We cannot do it across the board. It has to be studied on an industry-to-industry basis. We need to study the impact on the industry. We don’t want to wipe out the advantage of our local industries that are already competitive," Lacson said.

He noted that the future of the Association of Southeast Asian Nations (ASEAN) region will eventually be a common market, similar to the European Union, and the Philippines will be forced to open the industries to foreign ownership.

"We just have to be very selective for now," he said. "Let’s protect the industries that we need to protect," Lacson added.

For now, the mining industry is open to foreign ownership after the Supreme Court ruled as constitutional the Mining Act of 2005, which allows foreign corporations to fully own mining companies in the country.   

Economic agenda just a ‘smokescreen’

"Using the economy as rational for Constitutional change, parang mababaw, if that’s the only purpose. The reason must be something else. It’s a smokescreen," Drilon said.  

Lim agreed. "That’s only a smokescreen. Charter change can wait. At the right time and in the right manner, not by them. They have self interests," he said.

In spite of repeated denials from Malacañang and the administration congressmen pushing for Charter change, it is feared that the moves to amend the Constitution are aimed at extending the term of President Arroyo in office.  

With the general opposition of senators to push for Charter change through Constituent Assembly (Con-Ass), administration allies in the House of Representatives are pushing for the joint voting as the proper charter change procedure. Joint voting will make the 23-member Senate irrelevant because the 238-member House of Representatives could possibly gather the necessary three-fourth vote of Congress—196 votes—to convene into a Con-Ass. The issue is expected to be brought to the Supreme Court.

Business groups like the Makati Business Club and the Management Association of the Philippines, will join Church groups, civil society organizations, militants, and political leaders in an anti-Chacha rally in Makati City on December 12. According to its officers, the PCCI does not join street rallies.