VARIOUS business groups and foreign chambers are pressing the Bicameral Conference Committee to adopt the “most liberal provisions” of a measure amending the Public Service Act (PSA), which they said would help the Philippines attract much-needed foreign investments as it recovers from the pandemic.

At the same time, foreign chambers and other local groups ramped up the pressure on the Senate to immediately give its concurrence to the ratification of the Regional Comprehensive Economic Partnership (RCEP).

This as Congress only has two weeks to go before it goes on a break on Feb. 4 for the election campaign.

In a statement, 22 business groups and foreign chambers said the amendment to the PSA is one of the “most important” reforms for the Philippine economy and is “essential to restoring and eventually exceeding pre-pandemic rates of economic growth.”

“This will improve the reputation of the Philippines as an economy that welcomes foreign investment, and annual FDI (foreign direct investment) inflow levels should increase to levels well above Malaysia and Thailand and may even begin to approach Vietnam,” they said.

Business groups that signed the statement include the American Chamber of Commerce of the Philippines, British Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, Management Association of the Philippines, and the Makati Business Club.

The Bicameral Conference Committee is currently consolidating the House and Senate versions of the bill amending the PSA. The measure seeks to allow 100% foreign ownership in telecommunications, air carriers, domestic shipping, railways and subways, and canals and irrigation. The Constitution currently limits foreign ownership in sectors defined as public utilities to 40%.

The business groups said the bicameral committee members should adopt the most liberal provisions, such as allowing fully foreign-owned companies to hold operations and maintenance concessions of airports and seaports. Tollways and expressways should also be liberalized for foreign investments, they added.

Foreign ownership restrictions on air carriers should also be lifted to give them the option to access foreign capital, they said.

Telecommunications should also be excluded from the definition of public utility.

“Likewise, the exclusion of passive infrastructure and value-added services from the definition of ‘telecommunications’ to avoid erecting a new and substantial barrier to the entry of competition in the market for internet services which would stifle the growth of community internet,” they said.

Public utility vehicles should be excluded from the meaning of public utilities. “This reform will be advantageous to the Philippine economy as it will increase competition in vital domestic land transportation services and result in increased foreign investment helping to modernize the industry,” they said.

Senator Mary Grace Natividad S. Poe-Llamanzares, chair of the Senate Public Services Committee, said in a Viber message there will be no hurdles to the ratification of the measure before the break.

“The bill strikes a fair balance between today’s economic imperatives and national security with adequate safeguards but not constraining growth and development. At the end of the day, what we aim is to give our people better services at lower costs that will improve their quality of life,” Ms. Poe-Llamanzares said.

Meanwhile, the Joint Foreign Chambers (JFC), Confederation of Wearable Exports of the Philippines (CONWEP) and its affiliate, the Coalition of Philippine Manufacturers of Personal Protective Equipment (CPMP), called on the Senate to immediately give its concurrence to the RCEP.

“As business associations representing major industrialized economies, we are concerned the Philippines export industry that has been severely hit by the pandemic, will miss out unless this free trade agreement is approved by the Senate,” Julian Payne, Canadian Chamber of Commerce of the Philippines president, said in a statement.

Lars Wittig, European Chamber of Commerce of the Philippines president, said the ratification of RCEP will be a complement to other economic reforms to show the Philippines is an “increasingly attractive location for new and expanding foreign investment.”

The RCEP is a free trade agreement among the 10 members of the Association of Southeast Asian Nations and five of its largest trading partners China, Japan, South Korea, Australia and New Zealand. It took effect on Jan. 1, with 11 economies having ratified it.

In a letter sent to the Trade department, CONWEP Executive Director Marites Jocson-Agoncillo and CPMP Executive Director Rosette Carrillo said global brands have changed their orders to the Philippines from Vietnam as a result of the hesitation of the latter’s workforce to return to factories due to the COVID-19 pandemic.

“We need RCEP to sustain such opportunities. Otherwise, we again lose these orders, as well as significant planned investments on apparel and textile from countries such as China, Taiwan, and others, to Vietnam which is expected to resume its operations in the next couple of months,” they said.

Meanwhile, representatives from the agriculture sector and civil society organizations urged the Senate to reject or defer any decision on the RCEP.

In a separate statement, the groups said many of the claimed gains from RCEP are “insignificant.”

“RCEP proponents have conveniently downplayed, if not deliberately concealed, one crucial caveat about the agreement — that any tariff concession from our trading partners under RCEP will not be exclusive to the Philippines, and will actually be available to all other member countries,” they said.

“Moreover, while RCEP may provide more incentives for foreign investors to come to the Philippines, they can just as easily decide to place their money in other countries where the environment for doing business is more attractive,” they added.

The statement was signed by representatives of Agricultural Sector Alliance of the Philippines, Inc.; Samahang Industriya ng Agrikultura; Pork Producers Federation of the Philippines, Inc.; Federation of Free Farmers; and United Broiler Raisers Association, among others. — Revin Mikhael D. Ochave