Charter Change – Where are

we now? Where are we going?

Christian S. Monsod
Tagaytay, CBCP-NASSA, November 9, 2006
 Where are we now?

A. Supreme Court has struck down People’s Initiative

(close but firm decision – gives hope that democratic
institutions still work)
B. Constituent Assembly option
C. Constitutional Convention option
D. Why charter change? - Revisiting issues
 A. SC decision on People’s Initiative

• Against: 8 justices: Panganiban, Carpio*, Ynares-

Santiago, Sandoval-Gutierrez, Austria-Martinez*, Carpio-
Morales*, Callejo*, Azcuna*
• For: 7 justices: Puno, Quisumbing, Nazario*, Corona*,
Cancio-Garcia*, Tinga*, Velasco*

* appointed by PGMA
 Decision: Dismiss PI
(Justice Antonio Carpio, ponente)
1. PI “miserably failed” to comply with basic requirement of
Constitution (Sec. 2, Art. XVII)
• Initiative must be “directly proposed by the
people…. upon a petition…….”
• Lambino initiative is a revision, not an amendment
2. No need to revisit Santiago vs COMELEC
3. COMELEC did not commit grave abuse of discretion in
dismissing Lambino initiative
4. Dissenting Opinion
5. Conclusions of SC
6. Postscript to SC decision
 1. PI not direct proposal of people
themselves
• Precondition of petition – (a) people as authors, must
see proposed amendments before signing; (b) proposal
must be embodied in petition or incorporated as
attachment
• Signature sheet is not a “petition” – mentions only shift
to parliamentary-unicameral + transitory provisions
• Not all signatories could have seen/known – Lambino
admitted printing only 100,000 copies of draft petition
• HENCE, signatories uninformed of exact amendments
and other changes, i.e. no term limits, interim parliament
determines expiration of own term of office (except
senators), further amendments within 45 days
(“logrolling” – invalidates entire proposition)
• GRAND DECEPTION, GIGANTIC FRAUD
 1.1 Absurdity of Lambino PI

• Rule of statutory construction: if later law is

irreconciliable with earlier law, later law prevails
• Lambino petition turns rule on its head - “in case of
irreconciliable inconsistency, the earlier provision
shall be amended to conform to a unicameral
parliamentary form of government…”, SC: effect is to
freeze two irreconciliable provisions until the earlier one
“shall be amended” which requires a future separate
constitutional amendment.
• What “unicameral parliamentary” form will be followed?
Do people know that they are adopting Bangladesh,
Singapore, Israel, New Zealand (all unicameral) and not
British, French, Spanish, German, Italian, Canadian,
Australian or Malaysian (bicameral)
 1.2 Lambino initiative is revision, not
amendment
• Art. XVII, sec. 1 provides for amendment or revision – by
con-ass, and con-con
• Art. XVII, sec. 2 provides for amendment (only) by
people’s initiative
• “revision” – alters basic principle of constitution, i.e.
separation of powers, system of checks and balances; or
alters substantial entirety (numerous provisions);
requires deliberative body with recorded proceedings
• “amendment” – adds, reduces, deletes without altering
the basic principle or basic structure or framework of
government, i.e. reducing voting age to 15, reducing
Filipino ownership of mass media from 100% to 60%
• Lambino argument not valid that difference is merely of
procedure, i.e. whether those who change are full or
part-time
 2. Revisiting Santiago vs Comelec case
not necessary
• Settled doctrine – the courts will not pass on
constitutionality of a statute if the case can be resolved
on other grounds
• Even assuming that RA 6735 is valid (as 10 sitting
justices now say), decision will still be same because, to
be valid, PI must first comply with Sec. 2, Art. XVII
before complying with RA 6735
• PI violates Sec. 5 (b) of RA 6735 – proponents must sign
“petition x x x as signatories”
• Sec. 4 (4) of PI violates Sec. 10 (a) of RA 6735 against
logrolling (more than one subject matter)
3. Comelec did not commit grave abuse
of discretion in dismissing PI

Comelec merely followed SC ruling in Pirma case (2nd

case filed with SC in 1997) –

“The Court ruled, first, by a unanimous vote, that no

grave abuse of discretion could be attributed to the
public respondent COMELEC in dismissing the
petition filed by PIRMA therein, it appearing that it
only complied with the dispositions in the Decisions
of this Court in GR no. 127325 on March 19, 1997
(Santiago ruling) and its Resolution of June 10, 1997
(upholding Santiago ruling in the MR)
4. Dissenting Opinions (Puno et al): give
due course to PI and remand to Comelec
for further proceedings.

• Let the people decide – “Legal sovereignty…is not

subject to law for it is the author and source of law…and
is thus the equivalent of legal omnipotence.”
• Proposed changes “substantial but mere amendments”
• “On the factor of changes in law and in facts, certain
realities on ground cannot be blinked away. The urgent
need to adjust certain provisions of the 1987 Constitution
to enable the country to compete in the new millenium is
given. The only point of contention is the mode to effect
the change…”
 5. Conclusions of SC

• Present constitution is sovereign will of the people –

16,622,111 voted for it in 1987
• Sovereign approval included prescribed modes for
amending or revising Constitution
• “To allow today its cavalier change is to set adrift the
Constitution in uncharted waters, to be tossed and
turned by every dominant political group of the day.”
• Lambino’s initiative is not “people’s choice” but “agenda
of incumbent President”. Court must be wary of
incantations of “people’s voice” or “sovereign will”
• Primordial duty of Court is to defend and protect
Constitution, its bible, the Court’s raison d’etre
 6. Postscript to SC Decision
(comments of OneVoice)
• SC decision consistent with intent and deliberations of
Constitutional Commission
• SC decision criticized as “trying facts”.
– Former Justice Vicente Mendoza – No. SC was not
trying facts when it examined PI to determine if
compliant with constitutional requirement (Sec. 2, Art.
XVII)
• On the other hand, Puno’s statement that need for
charter change to compete in new millenium is a “given”
and that only issue is mode for doing it, is the
propaganda line of Arroyo administration. It is an
economic and not a legal issue that is still unresolved in
the charter change debate. Puno Opinion provides no
supporting evidence for statement. Yet it is a premise for
justifying PI.
B. Constituent Assembly Option (Plan B)

• Issues on Con-ass
– within gov’t coalition – who will be chief beneficiary of
chacha?
– constitutional issue – joint or separate vote?
– still time for plebiscite before 2007elections?

• Likely that Supreme Court will rule for separate vote as

more consistent with the nature of a bicameral
legislature.

• Intent of Constitutional Commission – separate vote but

draft provision was not adjusted when Concon voted 23-
22 for bicameral legislature
 What Changes if con-ass? Based on
Jaraula (J) and Pichay (P) versions…

Commonalities:
• both would weaken the powers of the Supreme Court
• both give more powers to the PM than the Pres has
under the 1987 Constitution (i.e. expanded power of
appointment, commission on appointments
abolished; PM can contract and guarantee foreign
and domestic loan without Monetary Board)
• interim parliament can constitute itself into con-ass
and do anything, subject only to another plebiscite
 What Changes? – cont’d
Differences:
• J: Pres is head of state, PM head of gov’t; P: No
Pres, PM is head of state and of govt.
• J: Federal system of govt is proposed to be
established within 10 years from the ratification of
the proposals: P: present unitary system of local
govt and autonomous regions is maintained.
• J: opens up the economy to foreigners, i.e., they
may develop our natural resources, engage in
insurance and advertising , own lands, public
utilities, mass media and schools; P: maintains the
Filipino-first provisions and Filipino ownership
requirements of the 1987 Constitution
• party-list system – P: same; J: subject to new law
(party-list reps appointed rather than directly voted)
 What Changes?....cont’d

Differences:
• P: changes the definition of our national territory by
apparently excluding our claim over Sabah; does
away with constitutional prohibitions on abortion,
political dynasties, and the presence of nuclear
weapons in the country; J: status quo
• J: interim parliament to be set up immediately after
the ratification of the proposals, but only until June
30, 2007 (but power to extend to later date);
P: interim parliament to be convened in January 2008
after elections in Nov. 2007, and to last until June 30,
2010.
 C. Constitutional convention option

• Not likely favored by administration –

- Con-con can have life and purpose of its own

- Timing could be problematical for purposes of

vested interests for parliamentary system. No 2007
elections key feature of plan

- Long process could distract PGMA from

addressing objective of economic legacy
 D. Why charter change now?
Revisiting Issues
We are told by chacha advocates –
• Philippines has not progressed in last 60 years and
repeatedly undergo political instability. We have had
presidential-bicameral system for same period.
Therefore, presidential-bicameral system is main cause
for our predicament. (“Let’s try something else even if we
are not sure it will work.”)
• Change in form of govt will change behavior of politicians
• With shift to parliamentary-unicameral system:
- “modernization”
- political stability and efficient governance
- economic progress with more FDI
 Yet…
• Current achievements (fiscal improvement, economic
growth, improved credit rating, etc.) did not require
charter change
• New super-regions infrastructure program does not
require charter change to implement. Neither do
other programs under the Arroyo Medium-Term Phil.
Development Program
• Urgent concerns can all be addressed under present
Constitution, i.e. health care, housing, education,
peace and order, criminality, etc.
• Preconditions for successful parliament, i.e. strong
political parties, strong bureaucracy and credible
electoral process, are not in place today.
 Let us examine the arguments..

1. Presidential vs. parliamentary – international context

2. Bicameral vs unicameral legislature
3. Lifting of economic “restrictions”
4. Conclusions
 1. Presidential to Parliamentary:
International context

Reforms experienced by democratic countries between

1962 and 1998:
• Most had to do with the change of electoral rules
(from majoritarian to proportional and vice-versa).
• Only two countries changed their form of
government: Cyprus (1970) and Sri Lanka (1978).
Both of them shifted from parliamentary to
presidential. (Persson, 2005)
Empirical findings on form of government
– (i) On Corruption
Results are ambiguous/conflicting
• Persson/Tabellinini (2004): Evidence supports
theoretical finding that accountability is stronger
(i.e.corruption is less) in presidential than in
parliamentary. But: only to a degree (relationship
not “robust”) and depending on the quality of the
democracy (result does not hold for “bad”
democracies).
• Lederman, et. al. (2005): Parliamentary systems
associated with lower corruption. Shift from
parliamentary to presidential leads to greater
probability of more corruption: presidential system,
as opposed to parliamentary - increased corruption
by 0.8 points (robust).
 On corruption … cont’d.

• This supports theory that parliamentary systems

allow for stronger and more immediate monitoring of
executive by legislature because parliaments have
the power of removal – although oversight capacity
may be weakened when a single party dominates the
legislature.
(ii) On democratic survival (vulnerability to
military takeover)
Stepan and Skach (1993)-
• parliamentary democracies had a rate of survival
more than three times higher than that of presidential
democracies;
• presidential democracies were more than twice as
likely as pure parliamentary democracies to
experience a military coup;
• not one presidential regime managed to survive as a
democracy for ten consecutive years from 1980 to
1989, while 15 of the 41 parliamentary systems did.
 However the SS 1993 study had serious
methodological flaws:
Mainwaring and Shugart, Haggard, Power and
Gasiorowski (1997):
• selection bias & spurious correlation (ignored other
factors)
• no evidence that constitutional type has any
significant bearing on the success of Third World
experiments in democracy between 1930 and 1995
• no statistically significant difference between
breakdown rates of presidential and parliamentary
• if longer period than 10 yrs is examined, opposite
conclusion – presidential better survival rate
 (iii) On Government Spending
• Parliamentary (and proportional) democracies have
larger government spending. Shift from parliamentary
to presidential reduce the total size of government
spending by about 5% of GDP in the long run;
• Spending also grows faster in parliamentary forms, a
feature present not only in national governments but
in local governments as well. (PT2003, 2004, P
2005)
• New majoritarian and presidential democracy cuts
government consumption by almost 2% , while a new
parliamentary democracy raises it considerably. The
difference between the 2 forms of government is a
highly significant 5% of GDP. (PT 2006)
 (iv) On Structural Reforms
(defined as openness, protection of
property rights)
• There is a large and significant correlation between
parliamentary proportional democracy and structural
reforms (PT 2004,P2005)
• Significant correlation between parliamentary
systems and openness (Lederman, 2005)
 (v) On Economic Performance

• There is no significant effect of parliamentary system

on economic performance, as measured by per
capita GDP, Total Factor Productivity, and labor
productivity. (P 2005)
• A new parliamentary democracy grows 1.5% less
than a new presidential democracy (PT 2006)
 IN SUM, evidence on the shift from Pres
to Parliamentary -

i. On Corruption: There is conflicting empirical

evidence as to which form of government will lead to
lower corruption
ii. On Democratic Survival: There is conflicting
evidence as to whether constitutional type has any
significant bearing on the survival of democracies.
iii. On Government Spending: The evidence is pretty
strong that presidential regimes have smaller
government (government spending as a percentage
of GDP) than parliamentary regimes.
 IN SUM, on the shift from Pres to
Parliamentary - (cont’d)
iv. On structural reforms (openness, protection of
property rights): A parliamentary system is
systematically correlated with structural policies.
HOWEVER – a parliamentary system has no
significant effect on economic performance
v. On economic performance: A new presidential
system grows faster than a new parliamentary
system
Therefore, no conclusive evidence for claimed
advantages of parliamentary system. Moreover,
would worsen concentration of power today. Will
behavior of politicians improve by giving them
more power?
 2. Bicameral to unicameral

We are told by cha cha advocates that:

• Senate is cause of gridlock

• Faster legislation will benefit people
• Senate is unnecessary expense
• Shift to unicameral is really abolition of BOTH senate
and house and creation of new parliament
 However, ….

True that shift gets rid of an institution (Senate) that many

people dislike, but:
• House, which people equally dislike, will still around with
same people dominating interim parliament with more
power than before
• Senate as part of constitutional check and balance
system will disappear
• Speedy legislation and decisions can also mean speedy
mistakes
• Gridlock can also happen in unicameral parliament
among different power blocks
 3. Lifting of Economic Restrictions

We are told by cha cha advocates that:

Restrictions on foreign ownership have closed the

door (“binding constraint”) on Foreign Direct
Investment (FDI); investment climate is stifled.
Therefore:
– There is lost employment and growth opportunities
– These provisions are anti-poor
 However, some empirical findings:

• Macro-level data shows association between foreign

direct investment (FDI) and higher levels of income,
but do not establish causality. Also, no generalization
can be made about link between the activities of
foreign firms and income distribution.
• Historically, FDI played only a minor role in the growth
of most high-performing Asian economies
– 1967-1986 Countries where FDI >5% of GDI were
HK, Malaysia, and Singapore. Countries where FDI
<2% of GDI wereTaiwan, Korea, China and Japan.
– More recently: Except for China and Singapore,
FDI in East and SE Asia comprise<10% of GDI.
 Some Empirical Findings…

Factors Affecting Investment (per World Investment

Report and surveys of investors themselves)
• Adequate infrastructure
• Skill levels (human capital)
• Quality of the general regulatory framework
• Clear Rules of the Game no uncertainty
• Fiscal determination
 In our experience…

• Ownership of Land: Leases up to 75 years (like

China) on land; condominium laws on housing
• Foreign investors appear happy with:
– “control” with less than 40% of common stock not
unusual; “super-majority” requirements on key
provisions sufficiently protects foreign minority
– Liberal interpretation of “total capital”
– Redefinition of boundaries of an industry
– Innovative financial instruments (gdr)
 IN SUM, on the lifting of restrictions -

1. The claim that economic provisions of constitution

have closed the door to FDI are not borne out by
facts – addressed by liberal interpretation, or by
redefinition through legislation, or the use of creative
financial and other instruments.
2. Amending the constitution is not likely to open any
new doors to FDI because for all intents and
purposes, they are already open.
3. Amending the constitution will not bring in FDI
unless more important factors, (see previous slide)
affecting FDI are addressed
 IN OTHER WORDS: Wrong Diagnosis

• The diagnosis of chacha advocates that present

Constitution is obstacle to modernization, political
stability and economic growth - leads to wrong
solutions, i.e. if Constitution (presidential-bicameral and
economic provisions) is not the problem, why the rush to
change it?
• Rather, urgent needs of people can all be addressed
under present Constitution. Implement provisions
FULLY, especially social justice provisions and electoral
reform
• Political instability and divisiveness is exacerbated by
push for charter change; relative calm with decision of
SC
 Where are we going?

• Motion for Reconsideration to SC likely to fail

• Con-ass running out of time and will probably be struck
down by SC.
• Concon not favored for now by administration
• Scheduled elections in 2007 will probably take place
• Administration “hubris” could change political situation
 What we want to happen..
• Administration abandons chacha; focuses on social
reform and economy. Collective effort to restore
trustworthiness of democratic institutions
• Electoral reform, i.e. automation program, revamp of
Comelec, appointment of one more good commissioner,
reversal of Ombudsman decision on Mega-Pacific case
• Massive voter education program and advocacy better
candidates in 2007 both administration and opposition
• Results and consequences of 2007 elections accepted
as indirect referendum - final resolution of political
issue on presidency
• After 2007 elections – education campaign and national
debate on need for any charter change and, if
necessary, a constitutional convention.
If we speak with one voice, continue
to persevere through the challenges
and act together…

We can be part of the solution….

Thank you.