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Congress closer to easing foreign ownership limits

The House of Representatives is poised to approve  on final reading anytime soon a bill amending the 84-year-old Public Service Act.

This came after the chamber, in plenary session, approved on second reading House Bill 78 that provides a clear definition of a public utility. The House approved the bill second reading via voice voting.  

Congress will adjourn on March 13 for a Holy Week break.

The bill defines public utility as a “person that operates, manages, and controls for public use” any of the following: electricity distribution, electricity transmission, and water pipeline distribution or sewerage pipeline system.

The bill also proposes that the National Economic and Development Authority Secretariat, in consultation with the Philippine Competition Commission, shall recommend to Congress the classification of public service as a public utility on the basis of several criteria, such as the person regularly supplies and directly transmits and distributes to the public through a network a commodity or service of public consequence;  the commodity or service is necessary to the public and a natural monopoly that needs to be regulated when the common good so requires;  the commodity or service is necessary for the maintenance of life and occupation of residents; and the commodity or service is obligated to provide adequate service to the public on demand.

Lawmakers welcomed the bill’s imminent enactment.

Albay Rep. Joey Salceda, the bill’s author, said, the bill will “significantly contribute” to increasing competition, as well as protecting the public interest.

“More competition among providers would result in lower prices and improved quality of basic services in the Philippines creating a more competitive economy towards a better quality of life for all,” Salceda, chairman of the House committee on ways and means, said.

AAMBIS-OWA Party-list Rep. Sharon Garin, the chairperson of the House Committee on Economic Affairs, lamented that the Constitution limits the operation of public utilities to Filipino-owned corporations, with the same limitations being applied to all public services and so “Philippine competitiveness, as well as its economic growth and development, is hampered.”

“By eliminating the ambiguity of the law, more economic opportunities will be provided to the Filipino people. The passage of House Bill 78 will allow new players to invest in the Philippines, therefore ushering competitive industries and reducing prices for Filipino consumers,” said Garin. 

As this developed, the Gabriela Women’s Party warned that the proposed amendments to Public Services Act will set the stage for the total foreign control of several vital sectors and services in the country, including the media industry. 

House Bill 78, which is one of the priority measures of the Duterte administration, allows full foreign ownership of media entities, railways, transport systems, telecommunication systems, among others. 

“Sinasagad ng rehimeng Duterte ang pagbebenta sa halos lahat ng serbisyo publiko sa malalaking dayuhang negosyante sa ilalim nitong amyenda sa Public Service Act. Kulang na lang ay tahasang ipamigay nya ang mga lupain at lahat ng serbisyong dapat ay nasa kontrol ng gobyerno,” said Gabriela Rep. Arlene Brosas, of Gabriela a Women’s Party.

“So much for Duterte’s talk of sovereignty and patrimony and against foreign ownership. This measure, if passed, would lead to foreign takeover of public transport systems, internet services, media and other sectors at the expense of ordinary consumers who will pay costlier services,” Brosas also said. 

The Gabriela lawmaker said such measure dovetails with Duterte regime’s major auctions to Chinese capital of key sectors such as telecoms (Dito Telecommunity), and airports (MacroAsia partnership with Chinese firm for Sangley airport). 

“The Public Services Act amendments bill is essentially Duterte’s economic Charter change, as it seeks open the gates for full foreign ownership to virtually all public services and utilities except power and water. Shortcut ito sa Cha-cha habang kasalukuyang tinatalakay sa komite ang mas komprehensibong pagbabago sa Konstitusyon,” said Brosas. 

Brosas, who was among the first to interpellate the sponsor of the measure, argued that the bill hinges on an outdated free market argument regarding competition and supposed improvement of services. 

“Habang ang maraming bansa sa mundo ay nagpapasa ng batas para i-nasyonalisa at proteksyunan ang kanilang pampublikong yutilidad,  she said. 

The Gabriela lawmaker said the fact that the period of interpellation stretched to six months with over a dozen interpellators means that the House leadership should think twice in approving HB 78. 

“The economic impact of this measure would be disastrous. Dapat na masusing makonsidera ng Kamara ang mga agam-agam at pagtutol sa panukalang batas na ito na pabor lamang sa dayuhan,” Brosas added.

Topics: Congress , foreign ownership , House of Representatives , Public Service Act , House Bill 78
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