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[ VOL. II, August 16, 1986 ]
JOURNAL NO. 57
Friday, August 15, 1986
CALL TO ORDER
At 9:51 a.m., the President of the Constitutional Commission, the Honorable Cecilia Muñoz Palma, called the session to order.
NATIONAL ANTHEM AND PRAYER
The National Anthem was sung followed by a prayer led by Mr. Teodoro C. Bacani, to wit:ROLL CALL
God our Father, as we begin our work once more today, we ask You to give us a deeper consciousness of the fact that we are Filipinos, whom You have called not only to our land and our natural resources, but to protect them not only for the present generation but for our posterity.
Grant O Lord that conscious of this, we may enact in this Constitution provisions that will truly be for the welfare of our people, and it will not be only class interest that we will promote but the interest of the entire nation and of our future generations. We ask You this in the name of Jesus, the Lord.
Amen.
Upon direction of the Chair, the Secretary-General of the Commission called the Roll and the following Members responded:
With 34 Members present, the Chair declared the presence of a quorum.
READING AND APPROVAL OF THE JOURNAL
Mr. Alonto was on official mission.
Messrs. Guingona and Regalado were sick.
Mrs. Nieva was absent.
On motion of Mr. Calderon, there being no objection, the reading of the Journal of the previous session was dispensed with and the said Journal was approved by the Body.REFERENCE OF BUSINESS
On motion of Mr. Calderon, there being no objection, the Body proceeded to the Reference of Business.REFERRAL TO COMMITTEES OF
COMMUNICATIONS
Upon direction of the Chair, the Secretary-General read the titles of the following Communications which were, in turn, referred by the Chair to the Committees hereunder indicated:Communication No. 552 — Constitutional Commission of 1986
Letter from Mr. Guillermo A. Castasus of 127 R. Berroya St., San Vicente, San Pedro, Laguna, suggesting that in the acquisition of lands, particularly agricultural lands, and on retaining ownership of landholdings, anyone who cannot guarantee the land's productivity has no reason for holding on to that land, much less to acquire moreCommunication No. 553 — Constitutional Commission of 1986
TO THE COMMITTEE ON THE NATIONAL ECONOMY AND PATRIMONY
Letter from Mr. Luis A. Quibranza of 1564 Labra Street, Caballes Compound, Guadalupe, Cebu City, transmitting his proposal on National Covenant for consideration by the Constitutional CommissionCommunication No. 554 — Constitutional Commission of 1986
TO THE STEERING COMMITTEE
Communication from Ms. Marisse C. Reyes, Correspondence Secretary, Office of the President of the Philippines, Malacañang, transmitting the following letters from Mr. Prudencio S. Serrano, 748 Don M. Marcos Ave., Mati, Davao Oriental, submitting suggestions for consideration in the Constitutional Commission; Mr. Eliezer J. Fortunato, 83 Chico St., Quirino District, Quezon City, proposing a federal form of government; Mr. Ramon Santillan, 303 Ziga Ave., Tabaco, Albay, suggesting inclusion of a provision in the Constitution regarding increased pension and government subsidized health care program for elders; and Mr. Troadio Fuentes, Immaculate Concepcion Parish, Ozamis City, suggesting the inclusion of religion in the school curriculumCommunication No. 555 — Constitutional Commission of 1986
TO THE STEERING COMMITTEE
Communication from Mr. Victor A. de la Cruz and three others, all of Filamer Christian College, Roxas City, urging the Constitutional Commission to incorporate in the Constitution the inviolability of the separation of the Church and StateCommunication No. 556 — Constitutional Commission of 1986
TO THE COMMITTEE ON GENERAL PROVISIONS
Letter from Minister Candu I. Muarip of the Office of Muslim Affairs and Cultural Communities, N. dela Merced Bldg. corner West and Quezon Avenue, Quezon City, submitting a compilation of proposals and resolutions adopted by Muslim professionals, academicians and scholars, and expressing the hope that these proposals which embody the general sentiments and common aspirations of the people be incorporated in the ConstitutionCommunication No. 557 — Constitutional Commission of 1986
TO THE COMMITTEE ON HUMAN RESOURCES
Communication from Mr. Isabelo F. Magalit of KONFES, 4 Malinis St., U.P. Village, Diliman, Quezon City, and thirty-nine (39) other signatories, submitting a position paper recommending that the text of the 1973 Constitution (Art. XV, Sec. 8) on the teaching of religion in public schools be retained and incorporated in the new ConstitutionCommunication No. 558 — Constitutional Commission of 1986
TO THE COMMITTEE ON HUMAN RESOURCES
Eighteen letters with eight thousand eight hundred sixteen (8,816) signatories with their respective addresses, all seeking to include in the Constitution a provision obliging the State to protect the life of the unborn from the moment of conceptionCommunication No. 559 — Constitutional Commission of 1986
TO THE COMMITTEE ON PREAMBLE, NATIONAL TERRITORY AND DECLARATION OF PRINCIPLES
Letter from Mr. Ishmael F. Mohammed of Suite 4 QB, ODC Bldg., Legaspi Village, Makati, Metro Manila, seeking the adoption of measures that will give the Filipino Muslims among the prisoners the privilege to observe fasting inside prison during the month of Rahmadan, exempting them from hard labor for thirty days, feeding them at dawn and at sunset and secluding them from other prisoners of another faithCommunication No. 560 — Constitutional Commission of 1986
TO THE COMMITTEE ON HUMAN RESOURCES
Letter from Bishop La Verne D. Mercado, General Secretary of the National Council of Churches in the Philippines, 879 EDSA, Quezon City, transmitting the NCCP's various proposals for the resolution of the problems and issues besetting our nation todayCommunication No. 561 — Constitutional Commission of 1986
TO THE STEERING COMMITTEE
Communication from the Misamis Oriental Public School Teachers and Employees Association, In
c., Cagayan de Oro City, requesting provision in the Constitution prohibiting incumbent elective officials from running for any elective position unless resigned and that political campaign be sponsored by the COMELEC and financed by the parties of the candidatesCommunication No. 562 — Constitutional Commission of 1986
TO THE COMMITTEE ON CONSTITUTIONAL COMMISSIONS AND AGENCIES
Communication with one hundred fifty (150) signatories with their respective addresses, all seeking to include a referendum/plebiscite on the issue of statehood U.S.A. in a proclamation calling for local electionsCommunication No. 563 — Constitutional Commission of 1986
TO THE COMMITTEE ON PREAMBLE, NATIONAL TERRITORY AND DECLARATION OF PRINCIPLES
Letter from Mr. Vicente A. Galang, Presidential Staff Director, Malacañang, transmitting Resolution No. 3 of the Antique Small Landowners Association, requesting the Constitutional Commission to incorporate in the Constitution the specific number of hectares of land a private person or corporation may possessUNFINISHED BUSINESS: COMMITTEE REPORT NO. 24 ON PROPOSED RESOLUTION NO. 496 AND COMMITTEE REPORT NO. 32 ON PROPOSED RESOLUTION NO. 533 ON THE ARTICLE ON NATIONAL ECONOMY AND PATRIMONY
TO THE COMMITTEE ON THE NATIONAL ECONOMY AND PATRIMONY
Thereupon, on motion of Mr. Rama, there being no objection, the Body resumed consideration, on Second Reading, of the following Committee Re- ports, as reported out by the Committee on the National Economy and Patrimony:
- Committee Report No. 24 on Proposed Resolution No. 496, entitled:
Resolution to incorporate in the new Constitution an Article on National Economy and Patrimony; and - Committee Report No. 32 on Proposed Resolution No. 533, entitled:
Resolution to incorporate in the Article on National Economy and Patrimony a provision on ancestral lands.
Mr. Rama manifested that the parliamentary status would be the period of amendments.
At this juncture, upon request of Mr. Rama, the Chair suspended the session to enable the Members to confer with the Committee on their proposed amendments.RESUMPTION OF SESSION
It was 10:02 a.m.
At 10:40 a.m., the session was resumed.AMENDMENTS OF MR. OPLE
Upon resumption of session, the Chair recognized Mr. Ople for his amendments.
Thereupon, Mr. Ople proposed to amend Section 1, to read as follows:
SECTION 1. The State shall develop a self-reliant, DYNAMIC and independent national economy. The goals of the national economy are a more equitable distribution of income and wealth, [full employment of human, physical and technological resources, and] a sustained increase in the amount of goods and services produced by the nation for the benefit of the Filipino people [with priority to the welfare of the poor. In the attainment of these goals, all economic sectors shall be given optimum opportunity to develop and a broader-based ownership of private enterprises shall be encouraged] AND ANExplaining his amendments, Mr. Ople indicated that the Committee was consulted on his proposal. He explained that the term "dynamic" is essential to ensure that self-reliance and independence will generate more economic dynamism in its interaction with the economic environments of the rest of the world. He also stated that the phrases/clauses sought to be deleted are embraced in the proposed second paragraph.
EXPANDING PRODUCTIVITY AS THE KEY TO RAISING THE STANDARDS OF LIVING FOR ALL ESPECIALLY the poor.
THE STATE SHALL ESTABLISH POLICIES THAT PROMOTE NATIONAL INDUSTRIALIZATION AND FULL EMPLOYMENT BASED ON SOUND AGRICULTURAL DEVELOPMENT AND AGRARIAN REFORM THROUGH INDUSTRIES THAT MAKE FULL USE OF THE NATIONAL ENDOWMENT IN BOTH HUMAN AND NATURAL RESOURCES AND WHICH ARE FULLY COMPETITIVE IN BOTH THE DOMESTIC AND EXTERNAL ENVIRONMENTS. HOWEVER, THE STATE SHALL PROTECT FILIPINO ENTERPRISES AGAINST UNFAIR COMPETITION.
IN THE PURSUIT OF THESE GOALS, ALL ECONOMIC SECTORS AND REGIONS SHALL BE GIVEN OPTIMUM OPPORTUNITY TO DEVELOP AND A BROADER-BASED OWNERSHIP OF PRIVATE ENTERPRISES INCLUDING BOTH THE CORPORATE AND THE COOPERATIVE OR SOCIAL SECTORS SHALL BE ENCOURAGED.
Reacting thereto, Mr. Monsod stated that the Committee is prepared to accept the proposed amendment conditioned on the deletion of the word/ phrase 1) "national" in the first sentence because the phrase "The State shall protect Filipino enterprises against unfair foreign competition" already covers the idea that it is "national"; and 2) "or social sectors" in the last sentence because the people may not understand it. He suggested that the word "cooperative" or the phrase "similar enterprise" would be more appropriate and acceptable to the Committee.
Mr. Ople stated that he was willing to accept the Committee's amendment provided that despite the deletion of "national", the understanding is that Filipino business and industrial leaders and no other group would lead in the industrialization of the country, to which Mr. Monsod clarified that the phrase "Filipino enterprises" in the penultimate paragraph was precisely used to convey the same idea.
Mr. Bacani observed that "dynamic" would be a surplusage since the clause "expanding productivity as the key to raising the standards of living for all especially the poor" in the second sentence of the first paragraph as well as the succeeding paragraph amplify the dynamism that is required of the national economy.
Mr. Ople did not insist on his amendment with the understanding that the concept of a self-reliant and independent national economy would refer to a state of economy that is dynamic and not static.
Upon inquiry of Mr. Suarez whether the phrase "expanding productivity" would refer to all sectors, Mr. Ople replied that many economic theories converge on the perception that productivity spells the difference between mediocre and successful economies. He noted that productivity, which is reflected in the level of wages and income, is 20 times higher in Japan and the United States. He underscored the importance of establishing productivity as a national goal and as the key to raising the standards of living.
Mr. Ople affirmed that the use of the phrase "industrialization in relation to agrarian reform" would anchor industrialization on agrarian economy and agrarian reform. Moreover, he noted that the expectation is that agrarian reform would release new forces and energies as well as idle capital needed to promote industrialization and achieve equity through social justice. He likewise explained, upon inquiry of Mr. Suarez, that the phrase is substantially a proposal he made under Section 9 in the Article on Social Justice which had been transposed to the Article on National Economy and Patrimony. He added that the gist of the first two sections which he presented to the Committee as new amendments had been merged in Section 1.
On the phrase "national endowment in both human and natural resources", Mr. Ople stated that this supports the self-reliant and independent national economy outlined in Section 1, "national endowment" being that what God has given, which includes the human resource potential. He stated that this also speaks of a commitment to put the process of industrialization and modernization in the hands of Filipinos.
MR. SARMIENTO'S AMENDMENT TO THE AMENDMENT
Mr. Sarmiento proposed the deletion of the words "the national endowment in" to simplify the phrase to "industries that make full use of both human and natural resources". In reply thereto, Mr. Ople stated that if this is a Committee amendment, he would have no objection to it.
Mr. Suarez observed that inasmuch as the Committee is prepared to use Mr. Ople's proposal as the basis for drafting Section 1, certain terms used therein would have to be explained. With reference to the phrase "and which are fully competitive in both the domestic and external environments", Mr. Suarez queried whether the words "external environment" refer to the industries of other countries.
Mr. Ople clarified that the phrase would emphasize self-reliance and independence as the attributes of industries which should be supported for this purpose. He added that it would refer to: 1) protection of the consuming public in relation to producers; and 2) ability of the industries to earn foreign exchange by providing high quality, high performance and low cost products to the world markets.
Responding to Mr. Suarez' request for examples of acts that would constitute unfair foreign competition, Mr. Ople cited the dumping of excess goods in the Philippine market, overcharging by multinationals of Filipino partners in terms of royalties and technologies, and denial to Filipino partners of access to technology.
MS. AQUINO'S AMENDMENT TO THE AMENDMENT
Ms. Aquino proposed to delete the word "unfair" and substitute it with the words CONTROL AND IMPORT COMPETITION. She stated that any foreign competition is by itself unfair and unequal. She opined that considering the small size of Philippine economy and the relative level of underemployment, the entry of a foreign company would pose a great danger to the possibilities of full development of the local industries affected.
Amended, the provision would read: "The State shall protect the local industries from foreign CONTROL AND IMPORT COMPETITION".
Mr. Villegas, in rejecting the amendment, explained that it would constitutionalize a specific situation which may not last forever and observed, moreover, that it would be unjust to think that Filipino enterprises, assuming they are infants and would need protection, would remain so and require protection forever. He underscored that the Body should not include a statement that all imports from foreign countries would constitute unfair competition to local industries.
Reacting thereto, Ms. Aquino stressed that there are certain givens which have to be assumed, one being that the Philippines has an agricultural economy and unless there is complete and committed cuddling from the State and the government, the difficulties besetting this economy could not be transcended. She manifested her concern that the country could not even attempt to gear up the development cycle unless the local industry is protected from foreign intrusion, more specifically import competition. Allowing untrammelled competition, she contended, would institutionalize the decided advantage of foreign competitors already in the market.
In answer, Mr. Villegas underscored that there is a provision that in legitimate and meritorious cases, the State shall protect Filipino enterprises. He maintained that to make a sweeping statement that all Filipino enterprises shall forever be protected from imports would be unwarranted.
Mr. Ople noted that the amendment HOWEVER, THE STATE SHALL PROTECT FILIPINO ENTERPRISES AGAINST UNFAIR FOREIGN COMPETITION introduced by the Committee appears to be an umbrella statement for protecting Filipino enterprises against all manner of unfair competition and that Ms. Aquino's concerns may already be subsumed therein.
Mr. Bacani clarified that the Committee is committed to the protection of Filipino enterprises and is against unfair competition to Filipino enterprises although it wants to assert that not all importations constitute unfair competition.
Ms. Aquino, in answer, stated that she had assumed certain givens, firstly, that the Philippines has a weak local industry which needs more than adequate protection from the State and the government and, secondly, that the basic structure and framework of the local industry are wanting in terms of built-in and inherent machineries which would allow it to fully develop. She stated that she was concerned and disturbed by the seeming reluctance of the Committee to address the issue and decisively settle it in the provision.
Mr. Villegas responded that as worded, the amendment would prejudice millions of consumers who may deserve lower prices and better quality in the event that the infant industries do not fully develop. He stated that the legitimacy of the infant industry argument could not be questioned and that the phrase "unfair foreign competition" would also apply to the situation of industries still in a fledgling stage and it would be unfair to subject them to competition from the Goliaths of international trade. He noted that there are situations when local industries in the infancy stage would need protection even if the foreigners do not practice predatory pricing or dumping. He stressed that the Committee would like to prevent a situation where, even after 30 years, the enterprise would still claim to be an infant industry, in which case there should be prima facie evidence of retardation.
Upon inquiry of Ms. Aquino, Mr. Villegas explained that "unfair foreign competition" would refer to the following situations: 1) where industries are still fledgling at which time they should be protected against imports from foreign countries; and 2) dumping as well as other unfair competition practices which Congress would enumerate.
On the matter of protective measures, Mr. Villegas referred to tariffs, quantitative restrictions, prohibition on the importation of certain items and import control.
Mr. Monsod informed that the intent of the Article is to protect the efficient infant Filipino producers and not the market and that protecting the market would necessitate import control, licensing and even price control. In protecting Filipino enterprises, however, he stated that there is no guarantee that they would be insulated from any kind of competition in the market since this would be bad for the country. He adverted to import control which resulted in graft and corruption in enterprises which survived because of subsidy from consumers, and in companies which are not economic in scale. He noted that protection of the markets also resulted in monopolies. Should the Body want to protect the market, Mr. Monsod stated that there would be a need for price controls and empowering the State to nationalize industries if they are inefficient.
Ms. Aquino stated that she supports healthy competition between and among Filipino entrepreneurs for as long as this is not cut-throat or monopolistic. She stressed that her main concern is the decided advantage given to foreign corporations if they are allowed to enter the local industry. She noted that in view of the clarification given by Mr. Monsod, she would be willing to delete the word "import" although she would insist on substituting "unfair" with CONTROL.
Mr. Monsod .opined that the phrase "foreign control and competition" would protect the market, to which Ms. Aquino responded that her amendment has clear reference to Filipino enterprises or local industries.
Upon inquiry of the Chair, Mr. Villegas informed that the Committee did not accept Ms. Aquino's proposed amendment to the amendment.
Thereupon, the Chair adverted to an open letter addressed to the Commission and asked if Section 1 of the Article proposed by Mr. Ople would answer to some degree the questions contained therein with specific reference to industrialization, protectionism and economic nationalism.
Mr. Villegas informed the Chair that during the Committee deliberations the proposal was considered and the Committee felt it had included all the suggestions. He noted that the last phrase which provides that the State shall protect Filipino enterprises against unfair foreign competition would address one of the issues raised and that the reference to industrialization balancing agricultural development and agrarian reform would address the issue of industrializing the Philippines.
SUSPENSION OF SESSION
The Chair suspended the session.RESUMPTION OF SESSION
It was 11:17 a.m.
At 11:31 a.m., the session was resumed.AMENDMENTS OF MR. DAVIDE
Upon resumption of session, the Chair stated that Section 1, as amended by Mr. Ople, had been accepted with corresponding amendments offered by the Committee.
At this juncture, Mr. Sarmiento suggested that the Body first hear all the amendments to Section 1.
Mr. Davide proposed the following amendments to Mr. Ople's amendment:
1) On line 9, before "income", insert the word OPPORTUNITIES and a comma (,).Mr. Suarez pointed out, however, that there is a big difference between rising standard of living and raising the standard of living. He opined that "raising" is advisable than "rising", to which Mr. Davide replied that "rising" is better because the improvement of the standard of living is a continuing economic target.
The Committee accepted the amendment.
2) On the second to the last line of the first paragraph, delete the words "raising the" and in lieu thereof, substitute the words MAXIMUM ECONOMIC GROWTH AND RISING; and substitute the word "poor" with UNDERPRIVILEGED.
Mr. Ople stated that the amendments were acceptable.
Mr. Suarez maintained that "raising" signifies elevation of the underprivileged by improving their standard of living.
Mr. Ople supported Mr. Suarez' views.
Thereupon, Mr. Davide desisted from pursuing his amendment.
At this juncture, Mr. Bacani suggested substituting the phrase "standards of living" with LEVELS OF LIVING on the ground that even the poorest have very high standards of living which may not be attainable.
Mr. Ople interposed no objection.
At this juncture, Mr. Villegas stated that he could not accept the proposed substitution of the words MAXIMUM ECONOMIC GROWTH on the ground that maximizing economic growth is not the objective of the Committee on the National Economy and Patrimony. He maintained that the reference to "a sustained increase in the amount of goods and services produced by the nation for the benefit of the Filipino people" would capture better the real objective of the economy.
Thereupon, Mr. Davide reiterated his desistance from pursuing his amendment.
However, on the amendment to substitute "poor" with UNDERPRIVILEGED, Mr. Villegas manifested the Committee's acceptance.
3) On the second paragraph, delete the words "establish policies that".
Mr. Ople accepted the amendment, which Mr. Villegas likewise did.
4) On line 4, after the word "full", insert AND EFFICIENT.
Mr. Ople accepted the amendment, and Mr. Villegas did the same.
AMENDMENT OF MR. RODRIGO
On the second to the last line of paragraph 2, Mr. Rodrigo proposed to delete the word "fully".
Mr. Ople accepted the amendment and Mr. Villegas did the same.
AMENDMENT OF MR. PADILLA
On the last line, Mr. Padilla proposed to substitute the words "external environments" with FOREIGN MARKETS.PROPOSED AMENDMENT OF MR. GARCIA JOINTLY
Mr. Ople accepted the amendment which Mr. Villegas likewise accepted.
WITH MR. GASCON
On line 8, after "economy", Mr. Garcia proposed to add the following: FOUNDED ON THE EFFECTIVE CONTROL BY FILIPINOS, OF THE ECONOMY AND OF INDUSTRIES VITAL TO THEIR NATIONAL INTERESTS.
In reply to Mr. Sarmiento's query on the meaning of the phrase "vital to their national interests", Mr. Garcia explained that basically, he would want an economy where Filipinos would be in full command. He stated, however, that the definition of the phrase would depend on the enabling legislation to be enacted by Congress.
On the meaning of the words "effective control", Mr. Garcia stated that decisions would be in the hands of Filipinos who would be operating with national interest in mind.
Mr. Suarez suggested putting a period (.) after "Filipinos" and deleting the rest of the sentence so that it would read.
The State shall develop a self-reliant and independent national economy FOUNDED ON THE EFFECTIVE CONTROL BY FILIPINOS.
Mr. Garcia maintained that it would be more emphatic if the vehicles by which this control is to be exercised are underscored. He stated, however, that he would be willing to accept Mr. Suarez' proposal on the understanding that this would include both the economy itself and the decisions and policies attendant to it.
Mr. Villegas assured that the concept of effective control would be developed in the subsequent sections of the Article on National Economy and Patrimony. He accepted Mr. Garcia's proposed amendment, as amended by Mr. Suarez.
FURTHER PROPOSED AMENDMENTS OF MR. GARCIA
On Mr. Garcia's inquiry, Mr. Ople affirmed that the proposed third paragraph of Section 1 on broader-based ownership had been accepted by the Committee with the modification to delete the words "or social", so that it would read "including both corporate ENTERPRISES AND COOPERATIVES OR SIMILAR ORGANIZATIONS.
Mr. Garcia manifested that on the basis of the original draft, he would propose to add after the words "in the attainment of these goals" the clause THE STATE SHALL PROMOTE THE INDUSTRIALIZATION OF THE NATION, FOSTER ECONOMIC NATIONALISM, AND ENCOURAGE BROADER-BASED OWNERSHIP AND MANAGEMENT OF ECONOMIC ENTERPRISES.
In reply, Mr. Villegas stated that the objectives contained therein were already incorporated in the second paragraph. Thereupon, Mr. Garcia requested the inclusion of the words BROADER-BASED OWNERSHIP AND MANAGEMENT OF ECONOMIC ENTERPRISES in the third paragraph.
Mr. Ople accepted Mr. Garcia's proposal.
On Mr. Villegas' query on the definition of "broader management", Mr. Garcia stated that it would mean the participation of the different sectors which are involved in production. He stressed that his proposal, which is more of participatory management, would provide flexibility in the sense that the concept would develop as the economic development progresses.
Mr. Romulo stated that the concept of participation was rejected in the provisions on labor in the Article on Social Justice because the Body decided that such concept should be left to the discretion of Congress. He opined that ownership implies management and that there is no need to expand such notion.
Mr. Ople stated that personally he would favor workers' participation at the level of the enterprise, to which Mr. Romulo responded that such concept was provided for in the provisions on labor in the Article on Social Justice.
Mr. Villegas added that the inclusion of the word "cooperatives" supports the concept of participation.
Mr. Garcia underscored the importance of broader-based ownership and management in the sense that the different social sectors, as owners, would not only be consulted but would also participate in chartering the direction of this endeavor. He denied thinking in terms of the European concept of codetermination because of the different stages and levels obtaining according to the state of economic level of the country.
On the example of a broader-based management, Mr. Garcia cited the people's economic councils which is the thrust of the Ministry of Trade and Industry, to which Mr. Ople replied that it is different from management of an economic enterprise.
Mr. Garcia likewise cited the example of a newspaper publication which could be in the hands of the people who produce the newspaper and who could therefore participate in its management.
On Ms. Aquino's inquiry as to whether the proposal treats of the nature of codetermination in corporate management, planning and acquisition of property, Mr. Garcia clarified that his proposal would provide room for development whenever the organized associations of the different sectors would be willing participants in this effort.
Ms. Aquino observed that the proposal could best be resolved by taking into consideration the records of the deliberations on the Article on Social Justice. She opined that by not giving it compulsory constitutional mandate, the process would be open to the dynamics of evolution and in the absence of an explicit prohibition, it becomes part and parcel of the dynamic growth and processes.
Mr. Romulo stated that the matter had already been fully discussed in the provisions on labor in the Article on Social Justice and it was for this reason that the Body approved a provision which reads "They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law" such that the ideas which Mr. Garcia would want to be incorporated had already been taken care of.
On Mr. Garcia's suggestion to retain the word "social", Mr. Villegas stated that the term "social" is so innovative and it could lend itself to all sorts of interpretation. He opined that it would be more appropriate to mention one of the examples, like cooperatives, so that the people would immediately have a basis for understanding what social sectors mean.
Mr. Garcia maintained that if the existence of the social sector is recognized, with more reason, it should be incorporated in the proposal to clarify the experience of the people in the evolution of more communal forms of ownership and participation, to which Mr. Villegas replied that the inclusion of cooperatives would open the way for other types of social aggroupments. Mr. Villegas further stated that with respect to the newspaper Malaya, there is cooperative ownership
Mr. Garcia stated that there would be broader acceptability if the social sector is recognized.
On Mr. Ople's suggestion to insert SOCIAL between the words "similar" and "organizations", Mr. Villegas opined that it would be redundant.
On whether his proposal would refer to nonprofit organizations, Mr. Garcia stressed that the term "social" would provide a broader understanding and recognize the existence of this sector.
Upon Mr. Ople's inquiry on the reaction of the Committee, Mr. Villegas stated that the word "social" would be too ambiguous.
At this juncture, Mr. Rodrigo reminded the Body that the draft Constitution to be submitted to the people should not use words that could not be understood by the common man.
Mr. Garcia explained that the term "social" would refer to collective organizations that include the broader base of society.
Mr. Villegas stated that the Committee believes the word "collective" is more appropriate in economic enterprises, to which Mr. Garcia manifested agreement.
AMENDMENT OF MR. PADILLA
In reply to Mr. Padilla's query regarding Mr. Garcia's proposal to change the word "private" to ECONOMIC, Mr. Villegas stated that the Committee decided to retain the word "private".SUSPENSION OF SESSION
Thereafter, the Committee accepted Mr. Padilla's amendment to delete the words "both the" and "and the" so that the line would read "private enterprises, including corporate enterprises, cooperatives and other . . ."
On motion of Mr. Sarmiento, there being no objection, the Chair suspended the session until two-thirty in the afternoon.RESUMPTION OF SESSION
It was 12:07 p.m.
At 3:00 p.m., the session was resumed.INCORPORATION OF THE RECORD OF THE CAUCUS INTO THE RECORD OF THE COMMISSION
On motion of Mr. Villacorta, there being no objection, the Body approved the incorporation of the record of the caucus held during the lunchbreak into the Record of the Constitutional Commission.
APPROVAL OF SECTION 1, AS AMENDED
Mr. Rama moved that the Body vote on Section 1, as amended.
Mr. Ople read Section 1 as proposed by Messrs. Natividad, de los Reyes, Maambong and himself, and as amended by Messrs. Bacani, Bennagen, Garcia, Gascon, Azcuna, Davide and Padilla, to wit:
SECTION 1. THE STATE SHALL DEVELOP A SELF-RELIANT AND INDEPENDENT NATIONAL ECONOMY EFFECTIVELY CONTROLLED BY FILIPINOS. THE GOALS OF THE NATIONAL ECONOMY ARE A MORE EQUITABLE DISTRIBUTION OF OPPORTUNITIES, INCOME AND WEALTH, A SUSTAINED INCREASE IN THE AMOUNT OF GOODS AND SERVICES PRODUCED BY THE NATION FOR THE BENEFIT OF THE PEOPLE, AND AN EXPANDING PRODUCTIVITY AS THE KEY TO RAISING THE QUALITY OF LIFE FOR ALL, ESPECIALLY THE UNDERPRIVILEGED.The Sponsor accepted the proposed Section 1, as amended.
THE STATE SHALL PROMOTE INDUSTRIALIZATION AND FULL EMPLOYMENT BASED ON SOUND AGRICULTURAL DEVELOPMENT AND AGRARIAN REFORM, THROUGH INDUSTRIES THAT MAKE FULL AND EFFICIENT USE OF HUMAN AND NATURAL RESOURCES, AND WHICH ARE COMPETITIVE IN BOTH DOMESTIC AND FOREIGN MARKETS. HOWEVER, THE STATE SHALL PROTECT FILIPINO ENTERPRISES AGAINST UNFAIR FOREIGN COMPETITION AND TRADE PRACTICES.
IN THE PURSUIT OF THESE GOALS, ALL ECONOMIC SECTORS AND REGIONS SHALL BE GIVEN OPTIMUM OPPORTUNITY TO DEVELOP, AND A BROADER-BASED OWNERSHIP OF PRIVATE ENTERPRISES, INCLUDING CORPORATIONS, COOPERATIVES, AND SIMILAR COLLECTIVE ORGANIZATIONS SHALL BE ENCOURAGED.
Submitted to a vote and with 33 Members voting in favor, none against, and no abstention, the proposed Section 1, as amended, was approved by the Body.
AMENDMENT OF MR. DAVIDE
Mr. Davide moved to amend Section 2 as proposed by Mr. Ople, to read as follows:
SECTION 2. THE USE OF PROPERTY BEARS A SOCIAL FUNCTION, AND ALL ECONOMIC AGENTS SHALL CONTRIBUTE TO THE COMMON GOOD. INDIVIDUALS AND PRIVATE GROUPS, INCLUDING CORPORATIONS, COOPERATIVES, AND SIMILAR COLLECTIVE ORGANIZATIONS SHALL HAVE THE RIGHT TO OWN, ESTABLISH AND OPERATE ECONOMIC ENTERPRISES, SUBJECT TO THE DUTY OF THE STATE TO PROMOTE DISTRIBUTIVE JUSTICE AND TO INTERVENE WHEN THE COMMON GOOD SO DEMANDS.Mr. Ople accepted the amendment of Mr. Davide.
The Sponsor, likewise, accepted the proposed Section 2, as amended, and there being no objection, the same was approved by the Body.
AMENDMENT OF MR. DE LOS REYES
As proposed by Mr. de los Reyes, and accepted by the Sponsor, the Body approved, on Section 3, page 2, line 24, between the words "farming" and "in", to insert the phrase WITH PRIORITY TO SUBSISTENCE FISHERMEN AND FISHWORKERS.
PROPOSED AMENDMENT OF MRS. ROSARIO BRAID
Mrs. Rosario Braid proposed on Section 3, page 2, line 5, after the word "energy", to insert the phrase AIRWAVES AND RADIO FREQUENCIES.
She explained that airwaves and radio frequencies should be considered as natural resources, and that broadcasting is a very important social force which influences the values, lifestyles and attitudes of people.
She also opined that there could be economic nationalism if media and advertising would change the colonial values of Filipinos so that they would choose what is Filipino.
The Sponsor did not accept the proposed amendment because, as pointed out during the public hearings, airwaves would already be covered by airspace which is included in the Article on National Territory. He added that it involves a complex and technical question and it would be difficult to control airwaves.
Mrs. Rosario Braid contended that Parliamentary Bill No. 5078, which was filed in the Batasang Pambansa, stated that since radio frequencies are public property, the enjoyment thereof should be administered in the public interest and in accordance with international agreements and conventions.
She pointed out that in the past, frequencies were easily transferred to another owner without regulation by the State. She opined that the State should be given power to own and manage them for the public interest, to which Mr. Villegas replied that it would be difficult to define and measure airwaves, and the Committee would leave it to the scope of "airspace" as contained in the Article on National Territory.
However, he underscored that national patrimony would include airwaves without specifying it in the Article.
In view thereof, Mrs. Rosario Braid withdrew her proposal.
MANIFESTATION OF MR. RAMA
At this juncture, Mr. Rama reminded the Body of the agreement in the caucus that a proposal accepted by the Committee need not be explained by the proponent unless the Committee requests for an explanation.
AMENDMENT OF MR. JAMIR
Mr. Jamir proposed a substitute amendment to the second paragraph of Section 3, to read:
THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGN-OWNED CORPORATIONS INVOLVING EITHER TECHNICAL OR FINANCIAL ASSISTANCE FOR LARGE-SCALE EXPLORATION, DEVELOPMENT AND UTILIZATION OF NATURAL RESOURCES ACCORDING TO THE TERMS AND CONDITIONS PROVIDED BY LAW.
In reply to Mr. Suarez' query, Mr. Jamir affirmed that his proposal refers to service contracts, among others.
Mr. Sarmiento proposed to add BASED ON REAL CONTRIBUTIONS TO THE LONG-TERM GROWTH OF THE ECONOMY after the phrase "terms and conditions provided by law".
Mr. Romulo accepted the amendment.
Thereafter, Mr. Foz proposed to insert GENERAL before "terms".
Mr. Romulo, likewise, accepted the amendment.
AMENDMENT OF MR. CONCEPCION
Mr. Concepcion proposed, on Section 3, line 5, to add OR TIMBERLANDS after "forest".
Mr. Romulo accepted the amendment.
Thereafter, on the same Section, line 16, Mr. Concepcion proposed to insert NOT MORE THAN before "twenty-five years".
Mr. Concepcion explained that he would like to limit the term of the contract to twenty-five years, renewable for another twenty-five years.
Mr. Suarez proposed to merely change "shall" on the same line and section, to MAY.
Mr. Concepcion accepted the amendment.
INQUIRY OF MR. GASCON
At this juncture, Mr. Gascon adverted to Mr. Jamir's amendment, observing that as proposed, the service contracts would be entered into by the President in accordance with the guidelines of a general law on service contracts to be enacted by Congress and, therefore, the President would no longer need the concurrence of Congress every time he enters into a service contract.
Mr. Gascon objected to Mr. Jamir's amendment and sought permission to present his own proposal.
However, Mr. Bengzon requested that Mr. Jamir's amendment be voted first before the Body proceeds to the consideration of Mr. Gascon's proposal.
The Chair, however, allowed Mr. Gascon to proceed.
Mr. Gascon pointed out that the Congress might enact a too general law under which the contracts that would be entered into by the President could be detrimental to the interest of the Filipino people. In view thereof, he proposed an alternative amendment to read: THE PRESIDENT SHALL ENTER INTO SUCH AGREEMENTS ONLY WITH THE CONCURRENCE OF TWO-THIRDS VOTE OF ALL THE MEMBERS OF CONGRESS SITTING SEPARATELY.
Mr. Bengzon did not accept the proposed amendment on the ground that: 1) concurrence on every single contract would require two-thirds vote of the Members of Congress voting separately with the possibility that each contract would be different from the other, and 2) there would be great temptation for corruption because of the lobbying that would ensue. He added that since the general law would contain all the restrictions, there would be uniformity in the service contracts to be entered into by the President.
Mr. Gascon, however, maintained that since the Body would not know the contents of the general law and considering that the membership of Congress would change regularly, it is best to assure the people that their representatives would be attuned to their interest all the time
Reacting thereto, Mr. Bengzon stressed that there should be a presumption that the Members of Congress could be trusted and there should be flexibility to allow the people's representatives to change the general law in case it would no longer serve the best interest of the country.
On Mr. Gascon's query whether Congress could change the general law, Mr. Bengzon answered in the affirmative.
At this juncture, Mr. Gascon requested for a suspension of session to give him time to formulate his proposed amendment.
Mr. Ople, however, proposed to add the sentence THE PRESIDENT SHALL SUBSEQUENTLY NOTIFY CONGRESS OF EVERY SERVICE CONTRACT ENTERED INTO IN ACCORDANCE WITH THE GENERAL LAW.
Mr. Jamir accepted the amendment to his amendment.
Mr. Villegas, likewise, accepted the amendment.
Mr. Villegas agreed with Ms. Tan's observation that the general law and the notification to Congress of every service contract entered into would be sufficient safeguards with respect to the President's authority to enter into such service contracts.
SUSPENSION OF SESSION
Upon request of Mr., Sarmiento, the Chair suspended the session.RESUMPTION OF SESSION
It was 3:41 p.m.
At 4:00 p.m., the session was resumed.AMENDMENT OF MR. SARMIENTO TO
Upon resumption of session, Mr. Sarmiento was recognized for his amendment to the Jamir amendment.
MR. JAMIR'S AMENDMENT
Mr. Sarmiento manifested that after conferring with the other Members, they had mutually agreed to add after "conditions provided by law" the phrase ON REAL CONTRIBUTIONS TO THE ECONOMIC GROWTH AND GENERAL WELFARE OF THE COUNTRY, which the Committee accepted.
Mr. Sarmiento likewise manifested the Committee's acceptance of his amendment adding the sentence IT SHALL BE THE POLICY OF THE STATE TO PROMOTE, DEVELOP AND EMPLOY LOCAL SCIENTIFIC AND TECHNOLOGICAL RESOURCES CONSISTENT WITH THE PURPOSE OF CONSERVING THE GENERATED WEALTH FOR UTILIZATION BY THE PEOPLE after the word "country".
In reply to Mr. Villegas' query on the meaning of "generated wealth", Mr. Sarmiento stated that it connotes conservation of the natural resources.
In reply to the Chair's query whether the sentence would follow Mr. Ople's amendment, Mr. Villegas clarified that it would follow Mr. Jamir's amendment.
The Chair, however, pointed out that a new sentence was introduced by Mr. Ople and accepted by the Committee.
Mr. Ople explained that the sentence he introduced had something to do with the notification to Congress of all service contracts entered into under the said provision. He suggested that Mr. Sarmiento integrate his amendment to the provision on scientific manpower, to which Mr. Bennagen remarked that it could be a separate section since it has a broad coverage.
Mr. Ople agreed, stating that the Section deals with service contracts and exploitation of natural resources.
Thereupon, Mr. Sarmiento simplified his proposed amendment to read: IT SHALL BE THE POLICY OF THE STATE TO PROMOTE, DEVELOP AND EMPLOY LOCAL SCIENTIFIC AND TECHNOLOGICAL RESOURCES.
In reply to Mr. Davide's query whether the proposed amendment could be accommodated in the Article on Declaration of Principles and State Policies or in the Article on Human Resources, Mr. Villegas observed that the amendments intends to ensure that the deliberate attempt to develop local talents would not make them dependent on foreigners, which Mr. Sarmiento confirmed.
On the suggestion that the provision state that the general law providing for service contracts shall give priority to the objective of Mr. Sarmiento's proposed amendment, Mr. Villegas adverted to the phrase "It shall be the policy of the State".
Mr. Gascon sought clarification of Mr. Jamir's amendment which Mr. Villegas read as follows:
THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGN-OWNED CORPORATIONS INVOLVING EITHER TECHNICAL OR FINANCIAL ASSISTANCE FOR LARGE-SCALE EXPLORATION DEVELOPMENT AND UTILIZATION OF NATURAL RESOURCES ACCORDING TO THE GENERAL TERMS AND CONDITIONS PROVIDED BY LAW BASED ON REAL CONTRIBUTIONS TO THE ECONOMIC GROWTH AND GENERAL WELFARE OF THE COUNTRY. IT SHALL BE THE POLICY OF THE STATE TO PROMOTE, DEVELOP AND EMPLOY LOCAL SCIENTIFIC AND TECHNICAL RESOURCES. THE PRESIDENT SHALL SUBSEQUENTLY NOTIFY CONGRESS OF EVERY CONTRACT ENTERED INTO IN ACCORDANCE WITH THIS PROVISION.
Mr. Gascon insisted on his objection and maintained that every service contract to be entered into by the President should be with the phrase WITH THE
CONCURRENCE OF CONGRESS.
In support of Mr. Gascon's stand, Mr. Nolledo stated that the provision authorizing service contracts is an exception which aliens could use to circumvent Filipino control of the economy. He stated that personally he would favor even the deletion of the provision although he could settle with a compromise safeguard requiring two-thirds vote of all the Members of Congress. He stressed that service contracts, being an exception to the rule on protection of natural resources for the nation's interest, should be subject to all possible stringent rules instead of liberalizing the rules in favor of aliens.
Mr. Colayco, likewise, supported the stand of Messrs. Gascon and Nolledo and pointed out that the Committee originally intended to place the concurrence requirement before it opted to delete this possible safeguard.
He pointed out that these special contracts would mostly be on oil and mineral land exploration which would involve millions of pesos, adding that in such cases Congress would not be able to anticipate what guidelines should govern the thinking or decision of the President. He stressed that there should be some safeguards to reduce the possibility of negligence on the part of the government in accepting the terms of the contractor. He maintained, however, that the concurrence should only be by a majority vote of either the Lower or Upper House.
On Mr. Suarez' query as to how the President would get the concurrence of Congress, Mr. Maambong opined that it should be by special law and not just by a resolution inasmuch as the concurrence would be a mandate of the Constitution.
At this juncture, Mr. Gascon asked for a vote on Mr. Jamir's amendment and, if disapproved, for the Body to proceed to consider his proposal.
Mr. Romulo, adverting to the query of Mr. Suarez, commented that award of a service contract is analogous to a grant of franchise by Congress. He opined that there would be enough safeguards if the sharing and other terms and conditions thereof are specified in a general law.
PROPOSED AMENDMENT OF MR. DAVIDE TO THE PROPOSED AMENDMENT OF MESSRS. JAMIR AND OPLE
Mr. Davide proposed to substitute "natural resources" with MINERALS, PETROLEUM AND OTHER MINERAL OILS.
On the Ople amendment, he proposed to add the sentence: THE NOTIFICATION TO CONGRESS SHALL BE WITHIN THIRTY DAYS FROM THE EXECUTION OF THE SERVICE CONTRACT.
Mr. Davide stated that service contracts should be limited to areas where Filipino capital may not be sufficient as in the exploitation, development and exploration of minerals, petroleum and other mineral oils, excluding all other natural resources.
On the inquiry of Mr. Suarez whether the enumeration and specification would not include "agricultural land", Mr. Davide stated that the reason for the enumeration is to indicate which resources would be open to service contracts. He added that lands of the public domain, timber, forests, marine resources, flora and fauna, wildlife and national parks would be beyond the reach of any service contract. He also affirmed that it would limit the extension of technical or financial assistance to the resources specified or enumerated.
INQUIRY OF MR. CALDERON
Upon inquiry of Mr. Calderon, Mr. Davide affirmed that "search for mineral oil" would refer to offshore and onshore mineral oil. To Mr. Calderon's observation that under the regalian doctrine concessions could be granted to all agricultural lands or any property of the public domain, Mr. Davide pointed out that the Committee report would limit possible alienation to agricultural lands which could be done by lease or homestead.
Mr. Calderon maintained that under the same doctrine, inasmuch as the State is supposed to own everything under the soil, the government could grant leases to all lands whether private or public. Mr. Davide corrected that it would not refer to private land. He drew attention to the opening paragraph of the Section which provides that except for lands of the public domain, natural resources cannot be alienated. Lands of the public domain, he stated, can be alienated by lease or homestead not to exceed 24 hectares.
To Mr. Calderon's contention that under Philippine laws, private lands are not exempted from the regalian doctrine and that the State can enter into contracts involving private lands, Mr. Davide argued that under the principle of ownership of the individual, he can enter into contracts subject to control by the State for reasons of social justice.
Mr. Calderon observed that an oil concessionaire would have to enter into a contract with the private landowner which may involve delays in the development of Philippine oil resources. Mr. Davide replied that all minerals and all natural resources including oil would belong to the State and not to any particular individual and if there is a service contract for oil exploration, it must be with the State which is allowable under the proposal of Mr. Jamir.
Mr. Villegas accepted the amendment on behalf of the Committee on the premise that service contracts are primarily for minerals, petroleum and other mineral oils and that all other types of public lands, agricultural or marine resources, are subject to other provisions in the Article.
Thereafter, he restated Mr. Jamir's amendment incorporating the amendment of Mr. Davide, to wit:
THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGN-OWNED CORPORATIONS INVOLVING EITHER TECHNICAL OR FINANCIAL ASSISTANCE FOR LARGE-SCALE EXPLORATION, DEVELOPMENT, AND UTILIZATION OF MINERALS, PETROLEUM AND OTHER MINERAL OILS ACCORDING TO THE GENERAL TERMS AND CONDITIONS PROVIDED BY LAW BASED ON REAL CONTRIBUTIONS TO THE ECONOMIC GROWTH AND GENERAL WELFARE OF THE COUNTRY.Mr. Ople accepted Mr. Davide's second amendment to substitute "subsequently" with the phrase WITHIN THIRTY DAYS FROM ITS EXECUTION SO that the sentence would read: THE PRESIDENT SHALL SUBSEQUENTLY NOTIFY CONGRESS OF EVERY CONTRACT ENTERED INTO IN ACCORDANCE WITH THIS PROVISION WITHIN THIRTY DAYS FROM ITS EXECUTION.
The third amendment of Mr. Davide was to substitute the word "foreign owned" with the words WITH FOREIGN CORPORATIONS so that the sentence would read: THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGN CORPORATIONS.
Upon inquiry of the Chair, Mr. Villegas informed that the additional sentence proposed by Mr. Sarmiento had been included.
VOTING ON THE PROPOSED AMENDMENT OF MESSRS. JAMIR, SARMIENTO, OPLE AND DAVIDE
Submitted to a vote, and with 21 Members voting in favor, 10 against and 2 abstentions, the proposed amendment was approved by the Body.
PROPOSED AMENDMENT OF MR. TREÑAS
Mr. Treñas, on Section 3, page 2, line 14, proposed to delete the phrase "whose voting stock and controlling interest" so that the line would read ASSOCIATION AT LEAST SIXTY PERCENT OF WHOSE CAPITAL IS OWNED BY SUCH CITIZENS. The Committee accepted the amendment and there being no objection, the same was approved by the Body.
Mr. Villegas informed the Chair that the amendment of Mr. Sarmiento which has undergone a change in style would now read: IN SUCH AGREEMENTS THE STATE SHALL PROMOTE THE DEVELOPMENT AND USE OF LOCAL SCIENTIFIC AND TECHNICAL RESOURCES.
PROPOSED AMENDMENTS OF MR. DAVIDE
On Section 3, page 2, line 5 after the word "timberland", Mr. Davide proposed to insert a comma (,) and the word WILDLIFE followed by a comma (,).
Mr. Azcuna pointed out that fauna includes wildlife and the term "flora and fauna" was intended to replace the term "wildlife" in the 1973 Constitution. He noted that mentioning the two would be redundant and only one should be used.
Mr. Bennagen observed that "flora and fauna" are broader terms and "wildlife" would be included to emphasize some endangered species which could be considered national treasures.
The Committee accepted the amendment which, there being no objection, was approved by the Body.
On the same Section, same page, line 9, before the word "and" Mr. Davide proposed to insert the word EXPLOITATION. Mr. Villegas explained that the word "exploitation" was subsumed under development, besides, it has a derogatory connotation. Thereupon, Mr. Davide desisted from pursuing his amendment.
On the same Section, same page, lines 14 and 15, Mr. Davide proposed to delete the clause "at least 60% of whose voting stock or controlling interest is" and substitute the same with the clause WHOSE CAPITAL STOCK IS WHOLLY such that the line would read: "associations WHOSE CAPITAL STOCK IS WHOLLY owned by such citizens."
Mr. Villegas stated that the Committee could not accept the amendment of Mr. Davide inasmuch as it had voted in favor of sixty percent.
REMARKS OF MR. DAVIDE
Mr. Davide observed that the Commission had approved a Preamble in which the sovereign Filipino people stated that one of the objectives of the creation or establishment of a government is to conserve and develop the national patrimony which implies that such national patrimony or natural resources are exclusively reserved for the Filipino people. He noted that the principle proceeds from the fact that natural resources are gifts from God to the Filipino people and it would. abridge that special blessing if aliens are allowed to exploit these resources.
Mr. Davide stated that he voted for Mr. Jamir's proposal because it would not grant alien corporations the right to exploit the natural resources but only for them to render financial or technical assistance. He stressed that the natural resources are being depleted and population has been increasing by leaps and bounds such that 50 years hence, if aliens are allowed to exploit the natural resources of the country, there would not be any left for future generations. He noted that since 1935, when aliens were given the right to exploit the natural resources, the Filipinos have become victims of foreign dominance and control. He appealed to the Body, for the sake of future generations, to decide once and for all that the natural resources must be reserved only for Filipino citizens.
Mr. Villegas, in reply thereto, noted that the matter had been fully discussed in the Committee and the conclusion reached was sixty percent Filipino ownership would be a sufficient guarantee that the national welfare would be served.
On the matter of shortage of domestic capital, Mr. Villegas observed that this is most acute in the exploration and development of natural resources because of the very high risk involved in these activities. He added that lack of capital would not only prejudice prospective employees in these types of corporations but would also prevent the utilization of resources for the present generation.
Mr. Suarez, reacting to the amendment of Mr. Davide, noted that there are two points raised, namely, 1) the percentage of holdings, and 2) the basis for such percentage. He proposed splitting the amendments into two parts as there may be Members who would accept the capital stock proposal, as against voting stock, for controlling interest.
In reply to Mr. Villegas' proposal to use "capital" instead of "capital stock", Mr. Davide stressed that this is unacceptable inasmuch as "capital," which may be voting or nonvoting, would not be the guiding principle but rather the ownership of the corporation. He insisted on a wholly owned capital stock.
SUSPENSION OF SESSION
The Chair suspended the session.
It was 4:41 p.m.
RESUMPTION OF SESSION
At 4:42 p.m., the session was resumed.
Thereupon, Mr. Villegas informed that Mr. Davide had accepted the word CAPITAL in place of "voting stock or controlling interest".
REMARKS OF MR. AZCUNA
Mr. Azcuna observed that even if 60% of the capital is owned by citizens, the control can be with foreigners because even a minority of 40% of the capital, if this is voting capital, would allow them control. He noted that this could lead to ownership of the corporation by foreigners inasmuch as they would have control of the voting capital.
Mr. Bengzon replied that the reason why the Committee eliminated "stock" was because Mr. Rodrigo pointed out that there are associations which do not have stocks.
Mr. Azcuna maintained that the 60% ownership of the capital would not assure Filipino control if such 60% would be nonvoting.
REMARKS OF MR. PADILLA
Mr. Padilla stated that he is against the amendment of Mr. Davide because it would be ideal only if domestic capital is available for use in exploration, development and utilization of natural resources. Adopting a 100% capital to be owned by the citizens, he maintained, would prevent the exploration, development and utilization of the natural resources inasmuch as the country does not have the capital for such activities.
Mr. Davide noted that the Commission has just approved the possible entry of foreign interest into the development and utilization of these natural resources by virtue of Mr. Jamir's amendment. He stated that he voted in favor of this amendment as it would eventually vest exclusive ownership in Filipino citizens and corporations. He noted that as a matter of policy, utilization and exploitation of these natural resources should be reserved to Filipinos and Filipino-owned corporations. He pointed out that because of Mr. Jamir's amendment, the President would be able to enter into service contracts with foreign corporations for the development and utilization of these resources.
Mr. Davide allayed the apprehension that the country would stagnate on the matter of developing minerals, petroleum and oil products because service contracts would be allowed, and there would be more reason to provide for a 100 per cent Filipinization of all natural resources.
RESTATEMENT OF MR. DAVIDE'S
PROPOSED AMENDMENT
Mr. Davide restated his amendment on page 2, lines 14 and 15, to wit: ASSOCIATIONS WHOSE CAPITAL STOCK IS WHOLLY OWNED BY SUCH CITIZENS.
Submitted to a vote, and with 16 Members voting in favor and 22 against, the amendment was lost.
PROPOSED AMENDMENT OF MR. DAVIDE
On the same page, between lines 24 and 25, Mr. Davide proposed to insert a new paragraph, to read:
THE GOVERNING AND MANAGING BOARDS OF SUCH CORPORATIONS SHALL BE VESTED EXCLUSIVELY IN CITIZENS OF THE PHILIPPINES.
At this juncture, Mr. Rigos suggested that Mr. Davide's amendment be inserted after "citizens" on line 15.
In reply to Mr. Romulo's queries, Mr. Davide stated that under his proposal, the 40% capital stock would not be entitled to a proportionate seat in the Board because of the same is owned by aliens, while they could not sit in the Board, they could still exercise their right as ordinary stockholders and submit proposals for a policy to be decided upon by the Board.
Mr. Romulo pointed out, however, that to deprive these stockholders, composing 40% of the representation in the Board, is unfair because they are not allowed to have a say in the management of the company and, if the 60% controls the Board, then the Filipino part has control of the company. He observed that the proposal would discourage investments and that the Constitution should either allow a 60%-40% with full rights to the 40%, limited as it is as to a minority, or not allow foreign investments at all.
Responding thereto, Mr. Davide maintained that the aliens could not have everything. He stated that while they may be given entry to subscription of the capital stock of the corporation, it does not follow that they could not be deprived of the right of membership in the managing or governing board of the particular corporation, although it would not totally deprive them of a say because they could still exercise the ordinary rights of stockholders
Mr. Romulo argued, however, that while they could be heard, they could not vote which, he opined, is unfair. Mr. Davide, however, replied that they could have proxies vote for them and retain their prerogative to participate, to which Mr. Romulo pointed out that proxies would encourage dummies, and 40% is a substantial and fair share for bona fide foreign investors.
Mr. Villegas, on behalf of the Committee, did not accept the amendment.
RESTATEMENT OF MR. DAVIDE'S AMENDMENT
Mr. Davide restated his amendment on page 2, between lines 24 and 25, to insert a new paragraph, to wit:THE GOVERNING AND MANAGING BODIES OF SUCH CORPORATIONS SHALL BE VESTED EXCLUSIVELY IN CITIZENS OF THE PHILIPPINES.
At this juncture, Mr. Padilla stated that Section 3 speaks of coproduction, joint venture, and production sharing agreements with Filipino citizens, such that if the foreign share of 40% would not be represented in the Board, no foreign investment would agree to invest capital without any voice in management.AMENDMENT OF MR. MAAMBONG
The Chair stated that the same points were expressed by the Committee.
Thereafter, submitted to a vote, and with 14 Members voting in favor, 20 against and 1 abstention, the amendment was lost.
As proposed by Mr. Maambong and accepted by the Sponsor, the Body approved an amendment on page 2, line 16, between the words "period" and "twenty-five", to change the word "of" to NOT EXCEEDING.PROPOSED AMENDMENT OF MR. GARCIA
On the same page, line 14, Mr. Garcia proposed to change "sixty" to SEVENTY-FIVE.
Mr. Villegas, however, did not accept the amendment and insisted on the 60-40 ratio.
SUSPENSION OF SESSION
On motion of Mr. Villegas, the Chair suspended the session.RESUMPTION OF SESSION
It was 5:07 p.m.
At 5:31 p.m., the session was resumed.RESTATEMENT AND VOTING ON MR. GARCIA'S
PROPOSED AMENDMENT
Mr. Garcia restated his proposed amendment on Section 3, to change the word "sixty" on page 2, line 14 to SEVENTY-FIVE.PROPOSED AMENDMENT OF MR. FOZ
Submitted to a vote, with 16 Members voting in favor, 18 against and one abstention, the Chair declared the proposed amendment lost.
Mr. Foz proposed to change the words "sixty percent" to TWO THIRDS in order to be consistent with the ratio provided for in the case of public utilities.
Mr. Romulo stated that there is a proposal on Section 15 to reduce the ratio to 60-40.
Mr. Padilla observed that 60% had been repeatedly upheld in various votings, in view of which, he inquired whether the decision of the Body to uphold the percentage in the Committee Report would already be a decision on the issue.
Mr. Villegas explained that the Committee would not accept the proposed amendment because one-third of the vote is like having nothing in decision making since it could be easily vetoed.
Mr. Rodrigo suggested that the Body decide once and for all between the proposal of two-thirds and the 60% recommendation of the Committee, otherwise, there would be other proposals of the same nature.
The Chair, however, stated that Mr. Foz' proposal on the matter would be the last one the Body would entertain.
Submitted to a vote and with 17 Members voting in favor and 20 Members against, the Chair declared Mr. Foz' proposed amendment lost.
RESERVATION OF MR. OPLE
Mr. Ople made a reservation for the coming Monday session to propose a new section after Section 3.ANNOUNCEMENT OF MR. BENGZON
Mr. Bengzon announced that the Body would resume consideration of the proposed Article on Local Government in the next session and the Article on National Economy and Patrimony on Monday, August 18, 1986.RESTATEMENT AND APPROVAL OF
SECTION 3, AS AMENDED
Mr. Villegas restated Section 3, as amended, to wit:Submitted to a vote, and with 24 Members voting in favor, 13 against and one abstention, the Body approved Section 3, as amended.
ALL LANDS OF THE PUBLIC DOMAIN, WATERS, MINERALS, COAL, PETROLEUM AND OTHER MINERAL OILS, ALL FORCES OF POTENTIAL ENERGY, FISHERIES, FORESTS OR TIMBER, WILDLIFE, FLORA AND FAUNA, AND OTHER NATURAL RESOURCES ARE OWNED BY THE STATE. WITH THE EXCEPTION OF AGRICULTURAL LANDS, ALL OTHER NATURAL RESOURCES SHALL NOT BE ALIENATED. THE EXPLORATION, DEVELOPMENT, AND UTILIZATION OF NATURAL RESOURCES SHALL BE UNDER THE FULL CONTROL AND SUPERVISION OF THE STATE. SUCH ACTIVITIES MAY BE DIRECTLY UNDERTAKEN BY THE STATE, OR IT MAY ENTER INTO COPRODUCTION. JOINT VENTURE, PRODUCTION-SHARING AGREEMENTS WITH FILIPINO CITIZENS OR CORPORATIONS OR ASSOCIATIONS AT LEAST SIXTY PERCENT OF WHOSE CAPITAL OR CONTROLLING INTEREST IS OWNED BY SUCH CITIZENS. SUCH AGREEMENTS MAY BE FOR A PERIOD NOT EXCEEDING TWENTY-FIVE YEARS, RENEWABLE FOR NOT MORE THAN TWENTY-FIVE YEARS, AND UNDER SUCH TERMS AND CONDITIONS AS MAY BE PROVIDED BY LAW. IN CASES OF WATER RIGHTS FOR IRRIGATION, WATER SUPPLY, FISHERIES OR INDUSTRIAL USES OTHER THAN THE DEVELOPMENT OF WATER POWER, BENEFICIAL USE MAY BE THE MEASURE AND LIMIT OF THE GRANT. THE CONGRESS MAY BY LAW ALLOW SMALL-SCALE UTILIZATION OF NATURAL RESOURCES BY FILIPINO CITIZENS, AS WELL AS COOPERATIVE FISH FARMING WITH PRIORITY TO SUBSISTENCE FISHERMEN AND FISHWORKERS IN RIVERS, LAKES, BAYS, AND LAGOONS.
THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGN-OWNED CORPORATIONS INVOLVING EITHER TECHNICAL OR FINANCIAL ASSISTANCE FOR LARGE-SCALE EXPLORATION, DEVELOPMENT AND UTILIZATION OF MINERALS, PETROLEUM AND OTHER MINERAL OILS ACCORDING TO THE GENERAL TERMS AND CONDITIONS PROVIDED BY LAW BASED ON REAL CONTRIBUTIONS TO THE ECONOMIC GROWTH AND GENERAL WELFARE OF THE COUNTRY.
THE PRESIDENT SHALL SUBSEQUENTLY NOTIFY CONGRESS OF EVERY CONTRACT ENTERED INTO IN ACCORDANCE WITH THIS PROVISION WITHIN THIRTY DAYS FROM ITS EXECUTION. IN SUCH AGREEMENTS, THE STATE SHALL PROMOTE THE DEVELOPMENT, AND USE OF LOCAL SCIENTIFIC AND TECHNICAL RESOURCES.
ADOPTION OF RESOLUTION NO. 538
On motion of Mr. Bengzon, there being no objection, the Body unanimously adopted Resolution No. 538 congratulating former Senator Lorenzo M. Tañada for the award to him of the Philippine Legion of Honor with the degree of Chief Commander.REMARKS OF MS. TAN
Ms. Tan stated that although she had no doubts on the Committee’s pro-Filipino attitude and its knowledge in economics, she could not understand why it would allow foreigners to explore the country's natural resources by granting them 40% share of the capital. This, she lamented, would only sink the Filipinos deeper in poverty.
MANIFESTATION OF MR. GASCON
Mr. Gascon made a reservation to present a motion to reconsider Section 1 in order to allow the Members an opportunity to reassess whether to widen the concept of industrialization.
Replying thereto, Mr. Monsod stressed that "industrialization" is not synonymous with industries, it being a generic term.
Mr. Gascon maintained that the provision, as worded, limits industrialization.
The Chair stated that the issue on industrialization had already been discussed during the caucus.
Mr. Villacorta supported Mr. Gascon's motion for reconsideration on the ground that during the caucus, the Members were given misleading information which he would reveal at the proper time, in reply to which Mr. Monsod insisted on immediate ventilation of the allegation that there had been misleading information or statement.
Thereupon, Mr. Villacorta advised that one misinformation given to the Members was that Minister Jose Concepcion is against constitutionalizing protectionism. He stated that he would like to get hold of the advertisement alluded to by a Member who said it, in reply to which Mr. Monsod stated that he was the one who issued the statement. Mr. Villacorta suggested that the matter be discussed in a caucus on Monday because there were other matters mentioned that were contrary to economic facts.
Mr. Monsod contended that the record of the caucus which was already incorporated in the Record of the Commission would bear out that all he said was that Minister Jose Concepcion was against constitutionalizing protectionism in Section 1 of the Article, which statement was based on his personal interview with the Minister. He also urged that a public apology be made by those who said they were misled by him, if it would be proven that he was correct.
ADJOURNMENT OF SESSION
Thereafter, on motion of Mr. Sarmiento, there being no objection, the Chair declared the session adjourned until nine o’clock in the morning of the following day.
It was 5:52 p.m.
I hereby certify to the correctness of the foregoing.
Secretary-General
ATTESTED:
President
Approved on August 16, 1986