GATS and the National Patrimony


Wigberto E. Tañada, Lead Convenor

Isang maalab na pagbati sa ating mga kapatid sa paggawa sa pribado at publikong sektor. Gayundin, isang maalab na pagbati sa mga kinatawan ng civil society at ng iba’t ibang sektor ng ating lipunan.

In June 2003, or one and a half years ago, we met and discussed GATS for the first time, in this same hall, together with VP Tito Guingona.

My initial reaction to the GATS liberalization agenda was that it was bad for our health. Masama sa kalusugan.

I still maintain the same view. Una, inaalis ng GATS ang konsepto ng public service. Pinapanigan ang liberalisasyon, komersiyalisasyon at pribatisasyon ng mga essential public services katulad ng health service, grains stabilization service, education service at water distribution service. Papayag ba kayo na mailagay sa kamay ng pribadong sektor ang PGH, ang NFA, ang UP at PUP, at ang mga local water districts? Ganito ang tinutungo ng GATS.

Ikalawa, tinutunaw ng GATS ang konsepto ng universal service, isang prinsipyo ng pamamahala, which is probably best summed up by the late President Ramon Magsaysay – those who have less in life should have more in law. Ang mahihirap at ang di maunlad na mga lugar ay dapat magkaroon ng access to basic services katulad ng banking service, power service at postal service. Subalit dahil sa liberalisasyon at GATS, may mga maliliit na farmer settlers ba na nakahihiram sa bangko? Kahit ang maliliit na mga small and medium enterprises are complaining that they have little or no access to formal credit because the concentration among the unibanks is lending mainly for the rich and this situation has gotten worse with the disappearance of small banks. Sa power service, unti-unti nang inaalis ang cross-subsidy, which means poor and underdeveloped areas will not be able to afford the rising cost of electricity. Sa postal service, ang patuloy na pagliit at pagsasapribado ng Philippine Postal Corporation means wala nang magdadala ng koreo sa mga ilang na lugar, mga lugar na hindi naaabot ng internet at maging wireless telephone. Goodbye sa universal service.

Ikatlo, mababawasan, hindi madadagdagan ang trabaho sa ilalim ng GATS. Bakit? Ang pagpasok ng malalaking dayuhang korporasyon sa service industries ay magbubunga ng mergers, buyouts ng maliliit at consolidation ng puhunan. Di ba ganito ang nangyayari sa banking industry? Habang lumalaki ang papel ng mga foreign banks at ng mga unibanks, umuunti ang bilang ng mga bangko. Habang lumalaki naman ang mga bangko, umuunti ang bilang ng mga manggagawa. Ganyan din ang nangyari at nangyayari sa retailing at wholesaling business. Sa pagpasok ng Makro at ng mga malalaking malls, maraming neighborhood stores ang nagbagsakan. May bagong trabaho para sa ilang manggagawa, pero mas marami ang nawawalan ng trabaho sang-ayon sa pag-aaral ng mga kapatid nating unyonista. Kasi sa GATS, hindi lumilikha ng mga bagong industriya. Ang binabago ay ang pagmamay-ari ng mga umiiral na industriya, sa pamamagitan ng pribatisasyon at liberalisasyon, partikular ang pagpasok ng mga dayuhan sa pamamagitan ng Mode 3 o commercial presence.

GATS is bad politics

But GATS is not only bad for our health; it is bad politics.

Yes, politics. For GATS entails changes in our laws and in our Constitution.

In Congress today, there is now feverish talks of charter change, primarily through the conversion of Congress into a Constituent Assembly for the specific purpose of amending specific provisions of the Constitution. The President cautioned the legislators that they have to cool the cha-cha dance for a while, that is, not until or after Congress has passed the expanded VAT and other fiscal measures needed to close the fiscal gap of the government. Is charter change being dangled as the reward for those who will march to the fiscal tune of Malacanang? And what is the reward? I wonder.

We, at the Fair Trade Alliance (FTA), are firmly opposed to the cha-cha initiative because the primary intent of those behind the initiative is to dilute economic nationalism in the Constitution. Malabnaw na nga ang interpretasyon at implementasyon ng economic nationalism, gusto pang pormal na alisin ito sa Saligang Batas.

So what has GATS to do with cha-cha? A lot.

The EU requests

In our June 2003 conference, I already mentioned the cha-cha threat under GATS. This was based on the preliminary report then that the purported request of the European Union was for the Philippines to make its Constitution GATS-compatible.

Now we have the full text of the EU GATS request. The picture emerging from a reading of the long EU request list is literally mind-boggling. In the name of GATS, what the EU is seeking is for the Philippines to change various existing laws, rules and Constitutional provisions deemed in conflict with the global liberalization of professional services, business services, postal and courier services, telecommunication services, construction and related engineering services, distribution services, environmental services, financial services, tourism and travel-related services, news agency services, transport services and energy services. It is a very long request list, 32 pages in all, single-spaced. What the EU is asking is virtually the overhaul of the entire government economic policy framework to make it GATS-compatible. Kuno.

I said kuno, because I do not think that the developed countries themselves are prepared to change their Constitution just to accommodate member countries’ request for liberalization, especially if the requests are coming from developing countries. In some developed countries like Canada, I understand that they have already announced that they will not allow any GATS-related liberalization in essential or vital services such as health and social security.

Major provisions of the Constitution
being targeted for revision or elimination

At any rate, let me outline here the key charter amendments which the EU is proposing. And let me remind you, we have not yet seen the requests from the United States, Canada, Japan and Australia.

Briefly, what the EU is seeking are as follows:

One, eliminate any citizenship requirement before a corporation can engage in any economic activity.

Second, eliminate any citizenship requirement in the composition of a company’s board and officers.

Third, eliminate the 60 per cent Filipino capital requirement for ownership of land.

Fourth, eliminate any debt-to-equity requirement before foreign investors can access domestic credit.

Note that in the above requests, the whole thrust is to treat foreign capital or foreign corporation like Filipino capital or Filipino corporation. This is nothing but a revival of the old Parity law, under the post-war amendment of the Constitution as a result of the Bell Trade Act. As recorded in our history, the Philippines extended economic parity to the Americans because we were told that we would not be given any war damage reparations. We allowed the Americans to own land and mines, and operate public utilities, all of which were reserved to Filipinos under the l935 Constitution.

Today, economic parity, through GATS, is being revived and extended not only to the Americans. It is being extended virtually to all foreigners. It is open sesame.

And if you will have the opportunity to read the lengthy EU request, there is no phrase saying ‘please remove’ this or that. The word consistently used is ‘eliminate’.

The whole idea is to open up to full foreign participation the remaining sectors of the economy where the present Constitution has imposed restrictions. These include the land market, the telecoms sector, banking sector, media sector, transport sector, energy sector, including mining, exploration and retailing of minerals and gas, and the environmental sector, which also covers water distribution.

Sa kabuuan, ang nais mangyari sa ilalim ng GATS ay full liberalization of the economy. Tapos na po ang liberalization ng industrial sector. Nasimulan na ang agricultural sector. So ang service sector naman.

And yet, the liberalization of industry and agriculture has not resulted in any major economic advances for the nation. What we have seen in the last three decades, especially in the l990s, was the unbridled and one-sided liberalization of the economy, justified by the economic technocrats as a means of modernizing industry and agriculture. With a terribly high cost of doing business, with the safety nets not in place and the political will to enforce the safeguard measures against the predatory trading practices of other nations missing, many of our industries such as poultry, livestock, vegetable, shoe, tire, rubber and so on have literally collapsed, bringing down with them the jobs and incomes of tens of thousands of workers and farmers.

It is not difficult to imagine that the outcomes under GATS liberalization will be similar – more joblessness, more inequality and more foreign control over the economy.

What is the government’s response
to the EU request?

In the meantime, what is the response of the government to the EU request, to the requests of other countries?

Surprisingly, our government has not issued any statement or pronouncement on what it is offering in response to the various GATS requests. WTO bulletins state that the Philippines is one of the countries which have not submitted any offers.

Lumalaban ba ang Pilipinas? Sinasagkaan ba natin ang liberalisasyon?

I am afraid the answer is No.

Recently, we are witness to the government’s orchestration of the liberalization program for the mining industry. The Supreme Court reversed itself on the Constitutionality of the limitations on foreign ownership and participation in mining exploration and development. Right after the Supreme Court’s decision, the government convened a mining summit, where Australian, American, European and Chinese mining companies promised to generate as much as a trillion dollars for the economy and so much jobs for the nation’s work force.

This is sheer exaggeration. Have we forgotten the fact that mining was a major activity in the l930s and from the l950s to the l970s? In the l960s and l970s, we even became Asia’s biggest producer of copper. Umunlad ba ang Pilipinas dahil sa mining noong mga dekadang ito? Hindi. Sa halip, ang naiwang mining sites tulad ng Marinduque ay nagmistulang ghost towns, na pati ang mga ilog at baybay dagat ay namatay sa lason.

But I am afraid the mining liberalization is only a prelude to the bigger thing, the wholesale liberalization of the economy via the cha-cha waltz.

The last chapter of the new Medium-Term Philippine Development Plan (MTPDP) is devoted to ‘Constitutional Reform’, to the removal of the Constitutional restrictions on foreign ownership and participation in the land market, mining and the operation of public utilities, media and advertising business, telecommunications and so on. In short, Chapter 25 of the MTPDP is the implementation of the GATS request from the developed countries.

The MTPDP does not even flinch in saying that economic nationalism is the supposed obstacle to growth and development. NEDA wrote:

“The Constitutional provision providing for a self-reliant and independent economy effectively controlled by Filipinos…stifled economic innovations and reforms”.

I am afraid this is a distorted view of history and economic reality. For the truth is that our economic planners and policy makers, with their dependence on foreign advisers and lenders, never bothered to implement the Constitutional mandate to develop a progressive and balanced economy effectively controlled by Filipinos. We never tried to develop a self-reliant and independent economy. We never observed economic nationalism, and yet it is economic nationalism which is being blamed as the root cause of our backwardness. This is a typical example of neo-liberal doublespeak.

And now that there is GATS, they want to formally remove what they have not been implementing – economic nationalism as enshrined in the Constitution.

Clearly, the challenge for all of us is to expose the Machiavellian plots to change the Constitution in the name of GATS liberalization and to educate the larger public on how a handful of technocrats are selling the nation to foreigners based on specious logic and false assumptions. This is an outright attack on our national patrimony.

Let us all resist. Thank you and mabuhay!


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