Business Cost NewsLegislation NewsLocal Government NewsPart 4 News: General Business Environment

Foreign chambers push early OK of Public Service Act


Business groups believe the passage of a law amending the Public Service Act (PSA) at this time would place the country in the league of its neighbors that are more open to foreign investments.

Foreign chambers said in a statement on Monday that this is one of the reasons they welcome the start of the plenary debate on Senate Bill 2094 or the amendment of the PSA at the Senate.

Later on Monday, Sen. Grace Poe, who chairs the Senate Public Services committee, started fielding questions from interpellators on the bill amending the over 80-year-old law, one of three certified as urgent by Malacañang.

The foreign chambers said once the law is passed, they would make sure that the reform will be brought to the attention of countries in Australia-New Zealand, East Asia, Europe, and North America to entice them to invest in the Philippines.

“We will encourage them to invest in the Philippines and support better public services for the Filipino people. With its large, growing economy, the Philippines will enjoy many benefits when local and foreign firms compete side-by-side and together to provide the Filipino with better services that this game-changing reform will bring,” they said.

They said the archaic PSA is to blame for the country’s inability to attract Foreign Direct Investments (FDI) for many years, as well as the creation of oligopolies in the Philippines.

The foreign chambers said the PSA, known as Commonwealth Act 146, has been in effect for the past 85 years. It has regulated public services and considers 25 services, which are not natural monopolies, as public utilities.

Public utilities, under the Philippine Constitution, should be 60 percent owned by Filipinos. This has prevented more foreign players from investing in these services.

“It [PSA] also created a business environment for the services sector that nurtured oligopolies and weakened competition to the detriment of consumers. Tens of billions of dollars in foreign investment did not come to the Philippines but instead went to our neighbors,” they explained.

The bill in the Senate proposes to define public utilities and differentiate them from public services. The chambers said “natural monopolies” involving distribution and transmission of electricity, water, and sewerage will be considered to be public utilities.

The amendments will allow and encourage foreign investments in telecommunications, transportation, and other services which will not only increase competition but also improve technology, modernize and lower the price of services.

The businessmen said the reform will also improve the country’s ranking by the Organization of Economic Cooperation and Development (OECD), which tagged the Philippines as one of the most restrictive economies in the world for foreign investment in public services.

Further, the foreign chambers said the bill contains provisions to protect against foreign government-owned and influenced firms controlling Philippine public services.

This will be done by adopting national security review practices followed by major governments, including Australia, Japan, and the United States, in reviewing and approving major new foreign investments.

The statement was signed by 14 foreign chambers such as the American Chamber of Commerce of the Philippines; Australian-New Zealand Commerce of the Philippines; British Chamber of Commerce of the Philippines; Canadian Chamber of Commerce of the Philippines; and the Dutch Chamber of Commerce in the Philippines.

The list of signatories include the European Chamber of Commerce of the Philippines; French Chamber of Commerce and Industry in the Philippines; German-Philippine Chamber of Commerce and Industry; Japanese Chamber of Commerce & Industry of the Philippines; and the Korean Chamber of Commerce of the Philippines.

Other signatories include the Nordic Chamber of Commerce of the Philippines; Philippine Association of Multinational Companies Regional Headquarters Inc.; Philippines-Swiss Business Council; and the Spanish Chamber of Commerce in the Philippines.