Beginning April 4 this year, when the implementing rules and regulations of the Public Service Act become effective, full foreign ownership would be allowed in businesses except those involved in electricity transmission and distribution, water and wastewater pipeline distribution systems, including sewerage, petroleum and petroleum products pipeline transmission systems, seaports and public utility vehicles which shall remain subject to the 60 -40 foreign equity limitation.
After extensive review and consultations with the public, legislators, relevant administrative agencies, and other key stakeholders, the National Economic and Development Authority (NEDA) released the Implementing Rules and Regulations (IRR) of Republic Act No. 11659 or the Amendments to the Public Service Act (PSA) on March 20, 2023.
“The implementation of policies on competition and regulatory efficiency necessitates comprehensive and transparent consultations with key stakeholders and legislators to ensure that these remain faithful to public interest,” said NEDA Secretary Arsenio M. Balisacan.
“All 21 agencies, including NEDA, approved the Implementing Rules and Regulations of the amended Public Services Act. With the IRR already in place, we see this as a landmark reform that will further improve the country’s position as an ideal investment hub, which will help enhance employment opportunities and allow more Filipinos to benefit from more improved goods and services,” he added.
Upon its effectivity on April 4, 2023, the amendments to the PSA shall enable the liberalization of key public services by allowing full foreign ownership of businesses in select industries such as airports, railways, expressways, and telecommunications. Prior to the approval of the amendments, foreign ownership in the aforementioned industries was limited to 40 percent.
Meanwhile, public service utilities such as electricity transmission and distribution, water and wastewater pipeline distribution system including sewerage, petroleum and petroleum products pipeline transmission systems, seaports, and public utility vehicles remain subject to the 60-40 percent foreign equity limitation.
Accordingly, the amendments also provide safeguard provisions to protect the country against national security concerns that may arise through any proposed merger or acquisition, or any investment in a public service.
“The PSA amendments form a critical part of our endeavor to attract foreign investments to the country to boost market competitiveness, foster innovation, and create high-quality jobs,” Balisacan said.
Further, relevant administrative agencies may issue guidelines and circulars for the effective implementation of RA No. 11659 and its IRR, provided that these remain consistent with Commonwealth Act No. 146 as amended, as well as with RA No. 11659 and its IRR.
“Together with complementary policies and measures such as the amendments to the Foreign Investments Act (FIA), the Retail Trade Liberalization Act (RTLA), the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, the Regional Comprehensive Economic Partnership (RCEP) ratification, amendments to the IRR of the Build-Operate-Transfer (BOT) Law, approval of the NEDA Joint Venture (JV) Guidelines, as well as the Marcos Administration’s continuous efforts to raise investor interest in the country, we are confident that the Philippines will be able to attract much-needed capital and technology, sustain its high-growth trajectory, and generate high-quality jobs enabling rapid poverty reduction in the next six years,” he added.
Tags: #PSA, #NEDA, #IRR, #foreignownership