The Joint Foreign Chambers on Tuesday expressed concern over the proposal to retain the 60/40 ownership rule for telecommunication companies, which is being considered in the deliberations on Senate Bill 2094 to amend the Public Services Act.
JFC joined the other business groups in calling on the Senate to liberalize the telecommunications sector to foster competition and provide better quality services at a lower cost.
SB 2094 aims to limit the definition of public utilities to natural monopolies, such as distribution and transmission of electricity, water and sewerage.
Philippine business groups recently issued a statement on the inclusion of telecommunication as public utility. In support of the PBGs, the JFC said most Southeast Asian countries have better telecommunication services than the Philippines. The Philippines has the lowest mobile broadband subscription rate of 68 per 100 and lowest service population penetration rate of 80 percent, it said.
The group said Cambodia, Myanmar, Vietnam, Indonesia, Malaysia and Singapore allow 100-percent foreign ownership of telecom companies.
“As subscribers ourselves of the major Philippine telcos, while we appreciate the services they provide, we believe they will improve in quality and price when more competitors are allowed to operate in the country. The PSA amendments will match policies that Singapore, Thailand and Vietnam already allow and that Indonesia last year opened to foreign investment,” the group said. Othel V. Campos
Allowing foreign ownership also complies with commitments the Philippines made in the ASEAN Comprehensive Investment Agreement to open investment in services to other ASEAN members, effective 2012, as part of the ASEAN Economic Community, JFC said.
It said foreign ownership would allow the Philippines to better qualify as a member of advanced plurilateral trade and investment agreements such as the Comprehensive and Progressive Transpacific Partnership.
The bill contains provisions to protect against foreign government-owned and influenced firms controlling Philippine public services by adopting national security review practices followed by major governments including Australia, Japan, and the United States.
“Liberalizing telecommunications sends a strong signal to foreign investors that the Philippines is more open and welcoming to foreign investors. This reform will also improve the international ranking of the Philippines by the Organization of Economic Cooperation and Development from its current unattractive placement as one of the most restrictive economies in the world for foreign investment in public services,” JFC said.
The OECD ranks the Philippines as one of the least open, discouraging potential investors.
