Businesses continue to trust govt despite Sereno ouster

The investing public, both onshore and offshore, was seen to brush aside the ouster of the Chief Justice as just one more irritant in the investment space, according to the Department of Trade and Industry (DTI).

In a text message to the BusinessMirror, Trade Undersecretary Nora K. Terrado said the observable dissonance at the Supreme Court (SC) should not disrupt the country’s
investment momentum.

“The investors we talked to have not raised any issue on the political side. They do not mind the political noise,” Terrado said.

This developed even as the Judicial Reform Initiative (JRI), a five-year-old organization that counts as members some of the largest and most influential business entities in the country, issued a statement telling the court magistrates they “welcome any and all efforts to safeguard the integrity and sanctity of our constitutional process.”

“The JRI reiterates its stand for the rule of law, the balance of power in government
and constitutional processes.

“We respect the power and prerogative of the Supreme Court to hear and decide on petitions brought before its chambers.

“However, we are concerned that the quo warranto petition against Chief Justice Maria Lourdes A. Sereno was given precedence over the constitutionally mandated impeachment proceedings that had already progressed to a substantial extent in Congress at the time the petition was filed.

“We take particular note of the Court’s statement in the decision that the Chief Justice ‘chronically failed to file her SALNs [Statements of Assets Liabilities and Net Worth] and thus violated the Constitution, the law and the Code of Judicial Conduct.’

“Without passing judgment on the conclusion, this can qualify as grounds for impeachment for being ‘culpable violation of the Constitution’ or ‘betrayal of public trust,‘ the determination of which is left by the Constitution exclusively to Congress through the impeachment process.

“We are nonetheless encouraged that the Supreme Court was closely divided in deciding the case and that it has not declared its decision to be ‘final.’

‘We are hopeful, therefore, that due process will be preserved and any motion for reconsideration given utmost respect and attention. And we welcome any and all efforts to safeguard the integrity and sanctity of our constitutional processes. In the meantime, we appeal for calmness and sobriety and urge the public to keep the faith in the Supreme Court as the last bastion of democracy.”

Businessmen said investors would rather that the government keep its hands off the selection of a new Chief Justice to help restore the now-impaired independence of the Judiciary.

This was backed by George T. Barcelon, chairman of the Philippine Chamber of Commerce and Industry, who said the government can depend on the business sector for support.

“I don’t see much impact in the immediate term. The business community’s trust in the government is still strong. I take the SC decision on quo warranto [as] sound and no further debate [is needed] on the matter,” he told the BusinessMirror.

The Terrado and Barcelon viewpoint is backed by investment pledges approved by the Board of Investments the past year amounting to P616.7 billion, the agency’s best performance in 50 years. The record-high figure comes at a time when the government is forced to account for its human-rights record against the backdrop of the war on drugs.

The all-time high investment figure was 39.5 percent higher than the P442 billion worth of fresh projects in 2016. Investments also surged 13 percent in terms of approved ventures to 426 projects, from 378 projects, and generated employment opportunities numbering 76,065, or 12.5 percent more than previous.

Determined to beat its own record, the DTI projects some P680 billion worth of investments pouring into the country this year. It looks to the manufacturing and infrastructure sectors to lead the surge and help boost the economic impact of the government’s “Build, Build, Build” program.

“Political noise is not exclusive to our administration but is also true for other countries around the world. Despite this, we see generally a positive outlook in favor of the Philippines,” Terrado said.

The trade official, who is in charge of the government’s investment missions abroad, said investors are attracted to the Philippines “mainly because of the strong macroeconomic fundamentals.”  Its economy, for one, expanded by 6.8 percent in the first quarter—two ticks below the target 7 percent, but faster than the 6.5 percent recorded during the same quarter last year.

Terrado also cited the Build, Build, Build program as one factor why the political fracas does not impact as much on the economic sphere. She said opportunities to participate in the infrastructure program and countryside development encourage investors to invest in the Philippines.

But while political noise may be a nonfactor in the investment climate, Barcelon warned this might not be true for long if administration officials are perceived to have interfered in the selection of a new Chief Justice. He said it will be better if the SC is allowed to restore its questioned independence by choosing a new head magistrate in a transparent and autonomous manner.

“The selection of [a] new Chief Justice must be independent and transparent. Otherwise, there may be a credibility issue that prolongs uncertainty,” Barcelon said.

But Ateneo School of Government Dean Ronald U. Mendoza said it is important for a country seeking more investors to keep a respectable record on human rights and the rule of law. He said institutions, such as the High Court are crucial in upholding contracts and property rights and in resolving disputes.

“Strong institutions are critically important in order for the country to promote good governance, establish the rule of law and strengthen the credibility of contracts and property rights. Institutions help settle conflicts that arise in any of these areas,” Mendoza told the BusinessMirror.

“This is why all our institutions are important in enticing investors and spurring business and job creation in the country. Few institutions are more important than the Constitution—the bedrock of all laws in the country,” he added.

In a survey by the Japan External Trade Organization (Jetro) released in March, the Philippines ranked dead last in a group of six Southeast Asian countries as prospective investment destination for Japanese firms. Of 938 respondents, Japanese investors were more motivated to do business in Vietnam (37.5 percent), Thailand (36.7 percent) and Indonesia (24.8 percent) than in Singapore (17.1 percent), Malaysia (14 percent) and the Philippines (13.1 percent).

Japanese firms said the political, social, as well as security, issues in the Philippines are the main restraints to expansion programs in the Philippines, the Jetro survey said. The survey also listed infrastructure, collection of bills, legal system and its enforcement and administrative procedures as issues affecting the country’s business environment.

This was why Mendoza believes Sereno’s removal as head magistrate will extract a toll on the flow of investments to the country. “The recent Sereno ouster does not just represent political noise [because] the way it was done signals a fundamental weakening in the independence of the highest court in the land, and it seems to have bent the Constitution in ways that could trigger more uncertainty rather than mitigate this,” he said.

Mendoza added some investors might now think twice on the ostensibly reformist of government given what happened to Sereno. Several reforms, he added, might be delayed, if not stalled, if the government loses the trust and confidence of the business community.

“Even the Duterte administration’s efforts to promote deep institutional reforms, such as the move to federalism, will now ring hollow, particularly since allies of the administration played a key role in the Sereno ouster. They will struggle now to regain the credibility necessary as reformists and institutions builders,” the Ateneo dean warned.

Justices last Friday voted 8-6 in favor of the quo warranto petition against Sereno filed by Solicitor General Jose C. Calida. The decision of the justices to nullify Sereno’s appointment as Chief Justice was seen to bring about a Constitutional crisis, as the highest law of the land prescribes the head magistrate can only be removed through an impeachment trial. (By Elijah Felice Rosales, Business Mirror)



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