Ramer Labajo JD-1

A Socialist Charter?: An Examination and Critique of the Economic Philosophy Enshrined in the 1987 Constitution Introduction Socialism is social and economic doctrine that calls for public rather than private ownership or control of property and natural resources. According to the socialist view, individuals do not live or work in isolation but live in cooperation with one another. Furthermore, everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it. Society as a whole, therefore, should own or at least control property for the benefit of all its members. 1 The economic system of this ideology opposes or so they say softens the negative effects of a capitalist economy. Capitalism commonly defined as an economic system that is based on private ownership of the means of production and the creation of goods or services for profit.2 In the Philippines where the spirit of nationalism is high and at the instance of national patrimony the question of who really owns what and how much brings forth a review on certain provisions of our Constitution. Do we adhere to private ownership (capitalism) or to social or collective ownership (socialism)? Capitalism Article XII of the 1987 Philippine Constitution:
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant. Sec. 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. Sec. 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.

The above provisions which were partly borrowed and improved from the 1935 and 1973 Constitution promises Filipino citizens ownership and government overseer when it comes to conservation and utilization of natural resources of the Philippines. 3 The 60-40 ownership while largely been branded to exhibit State Capitalism are clear representation of the intention of the framers of the 1987 Constitution to adopt capitalism as a major driving force of the Philippine economy, and at the same time particularly having in mind that the purpose of the constitutional provision is the conservation of the national patrimony4. An Airgram to the State Department in
1

http://www.britannica.com/EBchecked/topic/551569/socialism Tormey, Simon. Anti-Capitalism. One World Publications, 2004. p. 10

Sec. 11. Art. XII, 1987 Constitution cf. Sec. 8. Art. XIV 1935 Constitution and Sec. 8. Art. XIV 1973 Constitution cf. Sec. 2. Art. XII 1987 Constitution and Sec. 10. Art. XII, 1987 Constitution cf. Sec. 3. Art. XIV, 1973 Constitution

Manila dated April 6, 1983 dichotomized creeping state capitalism and refers to it as crony capitalism under the Marcos government. State Capitalism as defined by Peter Binns, has various meanings, but is usually described as commercial (profit-seeking) economic activity undertaken by the state with management of the productive forces in a capitalist manner, even if the state is nominally socialist. 5 Our country as is/was previously dominated with quite a number of Government Owned and Controlled Corporations (GOCCs) as of August 2010, there are 604 GOCCs in the Philippines, 446 of which are operational water districts.6 In 1995, Philippines in signing the World Trade Organization (WTO) agreement have entered into globalization which paved the way to Neoliberalism. Neoliberalism has distinct features, These include policies that promote: economic liberalization, deregulation, privatization, finance capital investment, labor, flexibilization and labor export.7 Neoliberalism is a perspective that champions the market as the prime regulator of economic activity and seeks to limit the intervention of the state in economic life to a minimum.8 Neoliberalism is a label for economic liberalizations, free trade and open markets. Neoliberalism supports the privatization of nationalized industries, deregulation, and enhancing the role of the private sector in modern society. It is commonly informed by neoclassical or Austrian economics. The term neoliberal today is often used as a general condemnation of economic liberalization policies and advocates9 10 Neoliberalism seeks to transfer control of the economy from public to the private sector,11 under the belief that it will produce a more efficient government and improve the economic health of the nation.12 The above mentioned facts paint a picture of what is going on regarding the Philippine Economy and what the government is doing and has done. Lately we hear news about members of the Congress wanting to amend some part of the Constitution as to the amount of foreign ownership. Socialism Angelo S. Rappoport in his Dictionary of Socialism (1924), which analyzed several definitions of socialism and concluded that the common elements of socialism include: a. General criticisms of the social effects of private ownership and control of capital as being the cause of poverty, low wages, unemployment, economic and social inequality, and a lack of economic security;

b. A general view that the solution to these problems is a form of collective control over the means of production, distribution and exchange (the degree and means of control vary amongst socialist movements; c. Agreement that the outcome of this collective control should be a society based upon social justice, including social equality, economic protection of people, and should provide a more satisfying life for most people. The 1987 Constitution is beset with provisions sometimes even making up a majority of the Article which tends to support the third definition a society based upon social justice, including
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Krivenko v. Register of Deeds, G.R. No. L-630, Nov. 15, 1947 Binns, Peter (1986), State Capitalism Policy Brief (Senate Economic Planning Office), August 2010, p. 2

Ligaya Lindio-McGovern, Neo-Liberal Globalization in the Philippines: Its Impact on Filipino Women and Their Forms of Resistance, Indiana University
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Bello Walden, http://www.tni.org/article/neoliberalism-hegemonic-ideology-philippines).

Taylor C. Boas and Jordan Gans-Morse, Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan, Studies in Comparative International Development (SCID), Volume 44, Number 2, 137-161
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Stanley Fish, Neoliberalism and Higher Education, New York Times, March 8, 2009, retrieved March 1, 2012

11

Cohen, Joseph Nathan (2007) "The Impact of Neoliberalism, Political Institutions and Financial Autonomy on Economic Development, 19802003" Dissertation, Department of Sociology, Princeton University. 2007
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Prasad, (2006)

social equality, economic protection of people, and should provide a more satisfying life for most people. The following are some of those provisions:
Article II, Declaration of Principles and State Policies Sec. 10. The State shall promote social justice in all phases of national development. Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Article XII, National Economy and Patrimony Sec. 15. The Congress shall create an agency to promote the viability and growth of cooperatives as instruments for social justice and economic development.

Social justice once appeared as a single provision in the 1935 Constitution is now a heading of a whole article, Social Justice and Human Rights, which again tend to support the above quoted common element on socialism.
Article XIII, Social Justice and Human Rights of the 1987 Constitution Sec 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

The deliberate intent of adding these provisions in the 1987 Constitution is an obvious promotion of social justice, social equity and social security and giving more emphasis on these terms which happens to be the third and final common element of Socialism. It is also interesting to note that the word social is mentioned twenty times in the 1987 constitution, ranging from: social order, social services, social justice, social institution, social well-being, social progress, social economic force, social growth, social structures, economic, social, and tourism development, economic, social, and cultural well-being, reduce social, economic, and political inequalities, participation at all levels of social, political, and economic decision making and social security. As opposed to the 1935 Constitution mentioned only once, and in the 1973 mentioned only six times. Could this also mean a manifestation of the framers of the constitutions true intention? Which is to promote socialism? Conclusion As what Don Claro M. Recto envisioned and warned us that The greatest tragedy that can befall a Filipino is to be an alien in his own land. It is said that the whole 1987 Constitution is a written, conventional and rigid kind of Constitution which favors very much about the general welfare of its people. It was written with the intention of protecting the people from another dictator. The engraving of such doctrines in the Constitution is a spoonful of soup of liberty which was previously been deprived of by the former dictator. In the matter of Capitalism, needless to say that it is clearly manifested of what is going on in the Philippines, our liberation from the grips of the Spanish opened our eyes to capitalism. We transitioned from State Capitalism to Elite Crony Capitalism to Neoliberalism. Neoliberalism a step forward to joining the giants in the global economy, that step has already been taken by our leaders. Also with Socialism, the only provision that limits outside investors from taking over the Philippines and its vast natural resources is the 60-40 ownership. It should be noted that the framers of the 1987 constitution had only the Filipino interest in their minds, and out of that came the Filipino First Policy which is plainly enshrined in our constitution. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.13 From this standpoint, it can be argued that the 1987 Constitution is a hybrid constitution. It is partly a socialist charter in which it protects the general social welfare of the people and a capitalist one, in which it is very much open to the idea of capitalism as a major driving force of economic growth and development.
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Sec. 10 (2), Art. XII, 1987 Constitution