Years of reading business books — cash flow statements, expense sheets, client financials — changes how you see money move. Not in theory, but in the very literal, line-by-line way it enters and exits a business. And once you've stared at enough books, you start noticing the same pattern show up everywhere: capital goes where it's allowed to grow, and it avoids anywhere that structurally limits its own upside.
That's the lens I want to bring to a conversation most people find dry or too political to touch: the 1987 Philippine Constitution, and whether it's actually still serving ordinary Filipino workers the way it was meant to.
The 60/40 Rule, in Plain Terms
Article XII of the 1987 Constitution restricts foreign ownership to a maximum of 40% in specific industries — public utilities, land ownership, natural resources among them — requiring at least 60% Filipino ownership. The intention behind it makes sense on the surface: protect Filipino control over key industries, prevent foreign entities from owning the country's most important assets outright.
But from where I sit, looking at how money actually flows into and through a business, this rule has an unintended side effect. If you're a foreign investor with capital and genuine business expertise, but you're capped at a minority stake with limited control over your own investment, the incentive to bring that capital here in the first place shrinks. Not because the opportunity isn't real, but because the risk-to-reward ratio doesn't favor putting serious money into a structure where you don't have full ownership over the outcome.
Why This Matters More Than It Sounds
This isn't an abstract policy detail — it directly connects to why economic activity concentrates so heavily in a handful of areas like BGC, Manila, Cebu, and Davao, instead of spreading more evenly across the country. Even with the ownership restrictions in place, those hubs still manage to attract enough investment to feel alive, dense, and full of purchasing power. Imagine what that could look like with full, unrestricted foreign investment in more industries, reaching more provinces.
I'm not saying this in isolation. Other economies in the region didn't see the kind of growth people associate with them until they eased similarly restrictive foreign ownership rules. That's not a coincidence worth ignoring.
The Second Structural Issue: A Highly Centralized System
Alongside ownership restrictions, there's the matter of how centralized the Philippine government structure is. A shift toward federalism and a parliamentary system gets floated regularly in political conversations, and I think the reasoning behind it is simpler than people make it sound: if you're from the province and you have to relocate to a metro city just to access real opportunity, you are already experiencing the cost of an overly centralized, unitary system firsthand.
Decentralizing economic and political decision-making could, in theory, let opportunity — and the purchasing power that comes with it — grow in more places at once, instead of funneling almost everyone toward the same few cities.
I Know This Is a Contested Topic
To be fair, these aren't universally agreed-upon fixes. Constitutional reform — whether around foreign ownership limits or the shift toward federalism — is genuinely debated among economists, lawmakers, and everyday Filipinos, with real concerns on multiple sides about sovereignty, implementation risk, and whether structural change alone would actually translate into better outcomes for ordinary workers. I'm not presenting this as settled fact — I'm presenting it as the pattern I keep running into from a bookkeeping vantage point: money goes where the structure lets it grow, and right now, a lot of our current structure doesn't.
Where I Land On This
I'm not writing this as a policy expert. I'm writing it as someone who reads the actual movement of money for a living, and who's lived the consequences of a system that keeps concentrating opportunity in the same places while leaving the rest of the country to migrate toward it. Whether or not constitutional reform is the full answer, I don't think we can keep treating the current structure as untouchable if we're serious about closing the purchasing power gap.
These conversations need more ordinary people — workers, bookkeepers, small business owners — willing to engage with them honestly, instead of leaving them entirely to politicians and economists.
To know more about my services, writings — connect with me here — here's my website: https://www.kylenelsonomac.com/
Mahal na mahal kita. Mahal na mahal ka ng Diyos. Faith without action is nothing.