Rodrigo Duterte signed last March 21 amendments to Public Service Act (PSA or Republic Act 11659) which further opens up the Philippine economy to foreign investments and capitalists. This is after the successive approval of amendments to the Foreign Investments Act (RA 11647) last February and the Retail Trade Liberalization Act (RA 11595) last December 2021.

The amendment to the PSA will allow foreign capitalists to fully own and operate telecommunication, domestic shipping, railways and subways, airlines, expressways and tollways and airports, paving the way for foreign capitalists to completely control the country’s critical infrastructure.

Foreign ownership of key industries does not only threaten the country’s sovereignty, but also its security. Based on the country’s experience under all-out privatization, this new law will lead to higher costs of transportation and communication.

The Foreign Investments Act reduced the amount of paid up capital to $100,000 or ₱5,000,000, and the required workforce to 15 (from 50) to fully own and operate a local enterprise. The related updated “foreign investment negative list” will now also open up more economic fields for foreign capitalists including tourism and agriculture which will pave the way for expansion of plantations and ecotourism projects which have displaced peasants from their land.

The Retail Trade Liberalization Act will now allow foreign capitalists to invest as low as ₱10 million (from ₱127 million under the original law in 2000) to set up a retail store in the Philippines, which will compete against mid-sized and small Filipino retailers, and further promote foreign goods instead of locally produced commodities.

Foreign capitalists, particularly American capitalists, together with their local bouregois-comprador agents are most gratified by these laws. They have long called for the removal of limitations for foreign businesses.

This triple measure brings the country back to the era of the Parity Rights Amendment under the Bell Trade Act of 1946 which allowed US citizens equal rights to exploit the country’s economic resources.

Drowned by foreign investments

A look back at Philippine history shows that there is no evidence that foreign investments have developed the country. In fact, it has been instrumental in keeping the country backwards and non-industrial.

In a study by Ibon Foundation, the share of foreign investments relative to the gross domestic product (GDP) increased since the 1970s. Inward FDI flows were at an annual average of some US$80 million in the 1970s (1970-1979) and reached an average US$6.2 billion over the last decade (2012-2021).

Its equivalent share in GDP quadrupled from a little less than 0.5% to 1.9% over that same period. The inward stock of FDI and its share to GDP also increased. Yet, despite increase in foreign investments, manufacturing and agriculture is down to its weakest in 70 years.

The bulk of FDI goes to manufacturing, according to Ibon. Most of these are in the export processing zones and not related to developing of local industries. Manufacturing shrank to 18.6% of GDP in 2020—its smallest share since 1950. Meanwhile, agriculture recorded its weakest share to GDP in history—9.2% last 2019.

Surely, these triple neoliberal measures will worsen the country’s reliance to foreign capital and debt. These laws will also reinforce the country’s orientation of exporting low-value added semi-manufactures connected to the global assembly line controlled by multinational corporations. These will worsen the country’s inability to stand on its own feet.