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Tuesday, March 19, 2024

DICT: No security risk in full foreign capital in telcos, still subject to checks

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The government does not see any national security threat arising from the passage of the law granting 100 percent foreign ownership of public services such as telecommunications, despite them being reclassified.

With the recently signed Republic Act 11659 amending the decades-old Public Service Act, foreign investments in mass media are also expected to come in, economic managers and a senator running for President expressed Wednesday.

Acting Secretary Emmanuel “Manny” Caintic of the Department of Information and Communications Technology said local telecom firms are still subject to existing laws and will undergo cybersecurity checks through DICT’s Cybersecurity Bureau and third-party audits.

“We don’t see any problem because they will still be under the existing laws. We will make sure that there are regular cyber security checks and that they still follow the guidelines for telco companies,” he said in a Super Radyo dzBB interview.

“It also doesn’t mean that they would no longer follow our rules and regulations despite them having 100% ownership,” Caintic added.

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Telecommunications and other public services such as railways, airlines, mass media and logistical facilities were previously classified as public utilities. Under the 1987 Constitution, foreigners may only own up to 40% of public utilities.

Meanwhile, Finance Secretary Carlos Dominguez said the amendments pushed by the economic team in the antiquated public service, foreign investments, and retail trade laws were “forward-looking measures [that] widen the horizon for investments” in the Philippines.

“They create numerous opportunities for synergy between local and international firms. There is now enough space for international firms to form joint ventures with Filipino companies, especially those at the cutting edge of information technologies,” said Dominguez, the country’s chief economic manager.

Senator Panfilo Lacson, who is running to succeed President Rodrigo Duterte in the May 9 elections, told a television program that passing the amendments to the Public Service Act opened up more sectors of the economy to foreign investment, and set threshold amounts for non-Filipinos to infuse capital into local businesses.

Lacson stressed in the “Kandidatalks” program hosted by Go Negosyo on TV5 that micro, small and medium enterprises (MSMEs) remained largely Filipino-owned, but noted the government could do a better job enticing investors to come to the Philippines.

“The only restrictions are on the public utilities bordering on national security, of course. But we actually opened airports, railways, telecom, the media even, so it’s good because… the world is getting smaller and smaller. We cannot compete if we don’t open up,” the Partido Reporma standard-bearer said.

On Congress’ amendment to the Commonwealth-era Public Service Act, Dominguez said it “provided a clearer definition of the terms public services and public utilities in the existing law.”

These will “open up public services to 100-percent foreign ownership, and retain public utilities as majority Filipino-owned, subject to the 60-40 ownership rule” in the Constitution, he added.

Dominguez called on “experienced and strategic investors in the United States to bring their capital into our country, especially in the fields of telecommunications; media; and private transportation vehicles.”

At present, foreigners are barred from investing in or funding mass media in the Philippines.

“Since telco is a relatively high capital investment industry, we need good foreign direct investments for it so we could improve our services through better internet and establishment of more fiber-optic cables and towers to improve the signal of our mobile services,” Caintic said.

Several foreign companies have already shown interest in owning 100 percent of telcos in the Philippines, as the country has good market and mobile penetration but still has some 25 million households with no internet connection, he added.

With better internet connection, employees could now opt to continue working from home and students from all parts of the country can have access to the same educational materials, the DICT chief said.

Asked how the department could ensure the safety and security of the Filipinos with this new law, Caintic said he sees the passing of the SIM Card Registration bill as among the solutions.

“One of the things we are rushing before the end of President Duterte’s term is the SIM Registration Bill. Just like about 150 other countries that have the same bill, we can reduce these hacking and phishing by properly and safely registering SIM cards so that we can know and determine immediately who are the people or groups who commit criminal activities,” he added.

In February, Congress ratified the bicameral conference committee report on the measure requiring the registration of mobile phone subscriber identity module cards or SIMs.

The measure mandates all public telecommunications entities (PTEs) to require the registration of SIM cards as a prerequisite to their sale and activation.

It also provides that all social media networks should require the real name and phone number of users upon the creation of their accounts.

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