DTI expecting investment boost from bill amending PSA
THE proposed amendments to the Public Service Act (PSA) will help drive the economic recovery by attracting more investment, according to the Department of Trade and Industry (DTI).
Trade Secretary Ramon M. Lopez said in a statement on Tuesday that the bill amending the PSA will help improve the investment climate.
“Once President Rodrigo R. Duterte signs the bill into law, foreign equity restrictions will be eased which shall attract more global players (to) modernize several sectors such as telecommunications, shipping, air carriers, railways, and subways,” Mr. Lopez said.
“Similarly, there will be increased competition in terms of services and products which will generate better-quality services and competitive pricing to the benefit of the consumers. Higher investments will also generate more jobs and income for the people,” he added.
On Feb. 2, Congress ratified the bicameral conference committee report of the bill amending the PSA, which would permit 100% foreign ownership in telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports.
These will not be covered by the 40% foreign ownership limit provided under the 1987 Constitution. Currently, the bill is awaiting Mr. Duterte’s signature.
The bill retained the “public utility” classification only for the distribution and transmission of electricity, petroleum and petroleum products pipeline transmission systems, water pipeline distribution systems and wastewater pipeline systems; sewerage pipeline systems; seaports; and public utility vehicles.
Any industry not included in the list of “public utilities” will be considered a “public service” and can be liberalized and fully owned by foreigners.
“I am confident that we can make an economic recovery happen in the Philippines this year. With the amended PSA, we expect the entry of new foreign investors and the introduction of modern and new technologies in the aforementioned sectors,” Mr. Lopez said.
Trade Undersecretary Rafaelita M. Aldaba said the proposed amendments to the PSA will boost the competitiveness of the services sector.
“A more competitive services sector will have indirect consequences toward economic growth. High-quality transport or telecommunication infrastructure, for example, could influence the production costs and competitiveness of all firms across all sectors of the economy,” Ms. Aldaba said.
The DTI said the bill still bars foreign nationals from owning more than 50% of companies involved in the operation and management of critical infrastructure if their home country does not provide reciprocal rights to Philippine nationals.
“The President is granted the authority to suspend or forbid any proposed merger or acquisition, or investment in a public service that effectively results in the grant of control to a foreigner or a foreign corporation,” the DTI said.
“With the economic headwinds brought by the prevailing pandemic, the amended PSA, the Retail Trade Liberalization Act, as well as the Foreign Investment Act are expected to hasten the country’s recovery from the present global health crisis,” it added. — Revin Mikhael D. Ochave
