Removing foreign ownership restrictions in the Philippines' constitution would strengthen national security in three key ways: 1) It would increase foreign direct investment, which would increase other countries' willingness to help the Philippines defend its territory against China. 2) It would allow modernization of strategic infrastructure like telecoms and ports through well-capitalized foreign investment, improving response capabilities. 3) It would enable the Philippines to join the Trans-Pacific Partnership and strengthen its relationship with the US, an important ally against Chinese territorial threats.

1. ChaCha and National Security
Foundation for Economic Freedom

2. Current Scenario
The greatest challenge that the
Philippines faces is the threat to its
territorial integrity and national
sovereignty from China

3. The Need for
Constitutional Reform
Removing the economic restrictions
answers the President's concern about
national security
WHY?

4. FDIs and Foreign Support for the
Philippines
• The Philippines has the lowest FDI in ASEAN.
• Low FDIs mean that the economic interest of
foreign countries in helping the Philippines
maintain its territorial integrity and maritime
security is low.
• We need to abolish the foreign ownership
restrictions in the Constitution and increase FDIs
to increase the willingness of foreign countries to
help us defend our territorial integrity and
maritime security against China.

5. Modernization of strategic
infrastructure
• Strengthening and operation of vital
infrastructure is a national security concern
• Removing restrictions will allow well-
capitalized investors to invest and help
modernize strategic infrastructures e.g.,
telecoms, airports, seaports, shipping, etc.
• The speed of our response during and after
Super Typhoon Yolanda shows the inferiority
of our communications and logistics

6. Transpacific Partnership
• We need to join the TPP lest we get left behind.
Vietnam and Malaysia have already joined.
• TPP is a US-led trade initiative and is the linchpin
of the US re-pivot toward Asia. Not joining TPP is
saying we don’t need the US in defending threats
to our territorial integrity against China.
• To become a full member of the TPP we have to
ensure equality of treatment for both foreign and
local investors, which means we need to remove
the Constitutional restrictions on foreign
ownership.

7. Adverse Selection
• Restrictions encourage foreign investors to use
dummies or creative legal maneuvers to
circumvent the Constitution
• We are at risk of having triads, mafias and agents
of unfriendly countries into our country especially
when institutions remain corruptible
• We can’t attract world-class foreign companies
from countries with rules against bribery and
unethical practices to set up shop in the
Philippines if restrictions remain in place.

8. Bangsamoro Peace Agreement
• Removing foreign ownership restrictions will
help foreign capital flow into the Bangsamoro
region to help achieve economic prosperity
under autonomy.
• Achieving internal peace and security will help
unify the country against external threats to
its national security.

9. Conclusion
Strengthen national security by passing the
Belmonte resolution to amend the Constitution
by inserting the phrase “unless provided by law”
into the foreign ownership restrictions in the
economic provisions in the Constitution and
subsequently liberalize the provisions by
legislation.