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Senators move anew to lift restrictions on foreign participation in public utilities

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MEASURES amending the 82-year-old Commonwealth Act No. 146, or Public Service Act (PSA), to remove foreign ownership limits on sectors engaged in public services have been filed anew in the Senate.

Four bills have so far been filed in the chamber by Senate Majority Leader Juan Miguel F. Zubiri, Minority Leader Franklin M. Drilon, as well as Senators Grace S. Poe and Francis N. Pangilinan.

The proposed New Public Service Law of the Philippines almost made it out of the 17th Congress after hurdling the House of Representatives in September 2017, but failed to get third-reading approval in the Senate ahead of the June 3 adjournment.

Mr. Zubiri said the measure has a chance of making it out of the 18th Congress, provided the bill will put in place safeguards while opening up to foreign investments.

“We’re looking at amending the Public Service Act by removing these industries as a public utility; however, it still has to go to Congress for congressional approval of franchise,” Mr. Zubiri said in a July 31 interview.

“There’s a likelihood that we’ll pass it, but it needs all these safeguards.”




He explained that congressional approval will authorize the government to revoke the franchise in a national emergency.

’Yung Public Service Act, we want to remove telecommunications, transportation,” Mr. Zubiri said.

Pero ang safeguards na ilalagay natin, in times of emergency, national emergency, kung saan pwede bawiin sa kanila ang kapangyarihan na ’yan (But we will adopt safeguards that will enable the government to take over such public utilities in times of emergency).”

The bills seek to provide a clearer definition of “public utility,” which had been used interchangeably with “public services.”

Companies classified as “public utility” are subject to the 40% cap on foreign participation or ownership under the 1987 Constitution.

ALSO IN THE HOUSE
Three of the four bills proposed to narrow down the definition of “public utility” to the transmission and distribution of electricity, as well as waterworks and sewerage pipeline distribution system; while the bill which Mr. Zubiri filed specified besides that electric power generation and supply, crude oil and petroleum products, transportation, broadcasting and telecommunication are not considered “public utilities.”

Meanwhile, six bills have been filed and are now pending before the House committee on economic affairs, chaired by AAMBIS-OWA Rep. Sharon S. Garin.

Albay 2nd District Rep. Jose Ma. Clemente S. Salceda had said on Aug. 5 that the proposed PSA amendment is among the chamber’s priorities, as discussed during the Aug. 5 preparatory meeting for the Legislative-Executive Development Advisory Council. Another meeting has been set for Aug. 27 to finalize the 18th Congress’ legislative agenda.

Socioeconomic Planning Secretary Ernesto M. Pernia and Trade Secretary Ramon M. Lopez both pushed for the said measure during the pre-State of the Nation Address Economic and Infrastructure Forum on July 1.

The proposed PSA amendment also led the list of priority bills for the 18th Congress submitted on July 30 by 14 local and foreign business groups, along with other measures that will lift limits to foreign ownership such as amendments to Republic Act No. (RA) 7042, or the Foreign Investments Act of 1991; and to RA 8762, or the Retail Trade Liberalization Act of 2000.

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