OBG talks to Rafael Morales, Managing Partner, SyCip Salazar Hernandez & Gatmaitan

Interview: Rafael Morales

What is your outlook on the ongoing move for constitutional change, and how will this affect the investment atmosphere of the country?

RAFAEL MORALES: There is a good chance that constitutional change may be effected during the current administration. In this respect, foreign investors would probably be indifferent to the proposal to change our system of government from presidential to parliamentary. I presume that they would be more interested in amendments affecting the economic provisions of the constitution, such as the one relaxing or removing the restriction on foreign ownership of land. This type of amendment would likely be acceptable to foreign investors, being beneficial to them.

How will the push towards improved corporate governance and eliminating corruption have an influence on the business sector?

MORALES: President Benigno Aquino’s push in this direction is commendable and should be welcomed and supported by the business sector. Corruption and poor governance are perennial problems that weaken investor confidence in the country. Therefore addressing these issues in a meaningful way would be a positive development for the business sector.

However, the president’s drive to make erring persons accountable should be conducted with scrupulous observance of due process, so as not to result in political instability that could eventually be counter-productive to his programme of good governance in the public – as well as the corporate – sector.

What can the Philippines do to further support political stability in the country?

MORALES: The days of coup attempts appear to be over, but the country continues to witness political events that might lead to constitutional crisis. The impeachment proceedings against the chief justice and another member of the Supreme Court should be conducted in ways that do not emasculate the third branch of the government. An independent judiciary is indispensable to political stability in the country. Preserving the independence of the judiciary would foster political stability in the Philippines.

How should the country’s leadership address corruption disputes from past administrations?

MORALES: Some sectors see the moves of government as less than acceptable from the vantage point of due process. The government can avoid this perception by putting together a team of litigators steeped in constitutional and commercial law to manage the process. All is not fair in litigation. There are rules that must be observed. Moreover, it is essential that the judiciary must not be weakened in the process.

How can the Philippines work to ease the legal disputes between the national government and the local government units (LGUs)?

MORALES: Federalism is often proposed as the solution to these disputes. I am not certain, however, if abandoning our unitary system of government is the correct answer. Indeed, federalism might be a recipe for the break-up of our republic.

To be sure, however, the perceived rift between the two might go away, if the internal revenue allotments of LGUs are released expeditiously by the national government, thereby enhancing local financial autonomy.

What steps can the Philippines take to attract foreign investment in the country?

MORALES: Foreign investors are looking for a good investment climate and, therefore, the Philippines should provide that environment to attract investments, particularly foreign direct investments.

This can be achieved by improving our infrastructure (especially in areas such as transport, telecommunications and power) and streamlining business regulations by cutting red tape to the bone. Needless to say, corruption should be controlled, if not eliminated.