By Camille A. Aguinaldo
SENATOR Grace S. Poe-Llamanzares presented to the plenary on Tuesday the consolidated bill amending the 82-year-old Commonwealth Act No. 146 or the Public Services Act.
In her sponsorship speech, the senator said the passage of the bill into law would allow the telecommunications industry’s new entrant, the so-called “third player,” to fully operate in the country.
“To all the statements of the President on the third telco player, fourth, fifth or if there is any, this is the law that would give the authority for this to become a reality,” said Ms. Llamanzares, chair of the committee on public services.
Senate Bill No. 1754 was the substitute bill for proposals filed by Senators Llamanzares, Paolo Benigno A. Aquino IV, Emmanuel Joel J. Villanueva, Richard J. Gordon, Juan Miguel F. Zubiri, Sherwin T. Gatchalian and has taken into consideration House Bill No. 5828. The proposed measure was co-sponsored by Mr. Gatchalian, chair of the Senate committee on economic affairs.
Ms. Llamanzares said the proposed measure has provided a statutory definition of public utility, which have been used interchangeably as public services over the years and have caused confusion on whether certain sectors are subjected to foreign equity restrictions.
“The proposed bill recognizes that public service is the much broader term, the umbrella term so to speak, while the term public utility is just a subset and is much smaller in scope under public service,” she said.
According to the bill, public utilities would be treated as “natural monopolies,” which would be subjected to foreign equity restrictions of the 1987 Constitution.
Section five of the bill defined public utilities as “a subset of public services, it refers to the direct transmission or distribution, and delivery through a network, of a commodity or service of public consequence.”
It listed three public utilities exclusively as the transmission of electricity, distribution of electricity as well as water works and sewerage systems.
Ms. Llamanzares said the clear definition meant the liberalization of other public services from constitutional restrictions on foreign equity, ownership and operations.
“The natural effect of the proposed definition of public utility is the freedom of all public services not listed in the three public utilities,” she said.
With the passage of the bill, the senator said she expects a “meaningful competition” in the business sector as more domestic and foreign players would come into the market “to win the satisfaction of the consuming Filipino people.”
“In this way, they would be competing to give quality services and goods at the lowest price for Filipinos. We are expecting to erase of “take it or leave it” attitude of the monopolies who took advantage in the past decades and century,” she said.
The senator assured that the bill would not affect existing regulations on public services and would not diminish constitutional restrictions on foreign equity, allaying fears of some critics claiming that regulations and restrictions would be relaxed.
The bill also suggested a formula on the reasonable rate of return, which would consider real-time fluctuations, inflations and other factors rather than the fixed rate of return set by the Supreme Court at 12%.
It has also provided stiffer penalties for violators with a fine of P5 million per day of violation as well as “disgorgement of profits” and additional “treble damages,” a far cry from the original penalty of P200 per day of violation.
It also sought to update and upgrade the deregulation powers of the Public Service Commission.
“SBN 1754 is a wonderful example of the exercise of legislative power in relation to the ever-changing needs of the Filipino people and the country as well as changes brought about by investments and economic trends worldwide,” she said.