Business groups on Tuesday expressed strong support for the liberalization of the Philippine economy through the passage of the amendments to the Public Service Act.
“We believe that this is the most consequential piece of legislation towards maximizing opportunities to attract foreign investments to create jobs and build the infrastructure for economic recovery and growth, as the country struggles against the effects of the pandemic,” the Foundation for Economic Freedom, Makati Business Club and UP School of Economics Alumni Association said in a joint statement.
The proposed amendments to the Public Service Act aims to open up key sectors of the economy, specifically the transportation and telecommunications sectors, to facilitate the infusion of much-needed foreign investment.
“Any moves to retain the 60-40 foreign equity restrictions, and add legislative franchise requirements where none existed prior to the act, will thwart the intention of the bill and the positive impact that it can bring to the business community and consumers,” the groups said.
They said a main objective of the amendments is to define public utilities. A key criteria in the proposed definition is that public utilities should be natural monopolies.
“Both transportation and telecommunications are not natural monopolies. There are numerous transportation companies and three telecommunications companies that operate viably in the country. We caution the Senate against including favored subsectors under the public utility definition in order to protect them from competition. It is crucial to apply the proposed definition consistently in identifying the sectors that should be considered public utilities to maintain the internal integrity of the bill,” the groups said.
They noted the strong interest among foreign investors from various countries to invest in the Philippines. “We must maximize this opportunity by sending a strong signal to the global community that the Philippines is open for business, to facilitate the entry of a wider range of investors and new technologies to help the country transition to a digital economy,” they said.
The groups said that instead of keeping the services sector closed to foreign investment in the guise of national security, it is important for the country to carefully balance its needs to attract foreign investments while protecting national security.
“The proposed Senate bill incorporates safeguards that address the nature of the risk, instead of using an ownership ban as a blanket solution. The status quo has proven insufficient to address the needs of the country. Retaining the 60-40 foreign equity restriction will prevent the accomplishment of the intentions of the proposed reform to liberalize the Philippine economy to attract greater foreign investment, facilitate competition, fund infrastructure, create jobs and improve the quality of public services in the country,” they said.
“We strongly urge the leaders and members of the Senate to stay true to the intentions of the proposed reform by opening the transportation and telecommunications sectors to greater foreign investment, for the benefit of the Philippine economy, the business community and the Filipino consumer,” they said.