Business Groups Support Amendments in the Public Service Act
Thirteen business groups support the changes to be made in the Public Service Act that could increase more foreign direct investments (FDIs) in the Philippines.
In a statement, the groups strongly support the passage of Senate Bill (SB) No. 2094, which seeks to update the Public Service Act. However, they expressed their concerns over several provisions in the bill in fear that such may hinder FDIs in the country.
Among the provisions, the groups placed concern on the bill’s reciprocity act, which requires a similar treatment by the home country of the foreign investor before being allowed to own more than 40% of the capital of public services engaged in critical infrastructure.
The groups noted that the provision providing investments by foreign-state-owned enterprises, which can be interpreted as prohibiting sovereign wealth funds from investing in public service classified as critical infrastructure, should also be given a second look.
They stated, “We strongly urge that these provisions be revisited or be refined as they pose obstacles to the achievement of the bill’s avowed objective to attract more foreign investments.”
They added that SB No. 2094 should be prioritized over the Charter Change (Cha-Cha) since the bill encourages FDIs more directly in comparison to the controversial Cha-Cha.
Under the Constitution, public utilities in the Philippines should be at least 60% Filipino-owned.
Proposed amendments to the Public Service Act would define public utilities and provide a distinction from public services, as well as limit public utilities to natural monopolies involving distribution and transmission of electricity, water, and sewerage.
According to the groups, the coexistence of the two concepts has negatively affected the Philippines’ ability in attracting foreign investments. Once the bill is enacted into law, the FDIs in the country is expected to increase, especially in sectors such as telecommunications and transportation.
The thirteen groups in support of the bill are the Cebu Business Club, Cebu Leads Foundation, Financial Executives Institute of the Philippines, Fintech Alliance Philippines, Guild of Real Estate Entrepreneurs and Professionals, Institute for Solidarity in Asia, Investment House Association of the Philippines, Management Association of the Philippines, Makati Business Club, National Real Estate Association, Philippine Council of Associations and Association Executives, Philippine Chamber of Commerce and Industry, and Philippines Institute of Certified Public Accountants.
On May 27, the Senate began the plenary debate on the bill, while the House of Representatives approved its version on third and final reading in March last year.