Both chambers of Congress ratified and submitted to President Duterte for signature the revised Public Service Act, which removes foreign ownership limits of telecommunications, airlines and railways, which means they are now exempt from the 40 percent foreign ownership limit under the Constitution.
THE amended Public Service Act that Congress ratified Wednesday, now pending signature of President Duterte (who certified it as urgent) allows full foreign ownership of telecommunications, airlines and railways, which means they are now exempt from the 40 percent foreign ownership limit under the Constitution.
Under the reconciled version of House Bill No. 78 and Senate Bill 2094, telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports have been excluded from the definition of public utility.
As a result, the public can expect cheaper airfares, shipping costs and affordable internet fees.
Key sectors
Lawmakers said the amendment to the PSA bill would open key sectors to much-needed foreign investment and competition, which would translate to cheaper airfares, lower transportation and shipping costs, and affordable Internet services for consumers.
“Not only will the passage of this measure speed up the country’s economic recovery from the devastating effects of the pandemic, but it will also make our country competitive when it comes to attracting foreign investments which we sorely lack and need,” said Senator Mary Grace Natividad S. Poe-Llamanzares, who led the Senate contingent to the bicameral committee, during the plenary session late Wednesday.
Marikina City Rep. Stella Luz A. Quimbo said the bicameral committee was able to strike a balance between “opening up the economy to more foreign investors, protecting small businesses like jeepney operators, and ensuring that national security is safeguarded.”
Poe said the liberalization of these industries is not an invitation for foreign countries to take advantage of the Philippines’ resources, adding adequate safeguards were placed to protect national security and sovereignty.
Under the reconciled version, foreign state-owned enterprises are prohibited from owning capital in any public service classified as public utility or critical infrastructure.
Reciprocity
Also, the measure prohibits foreign nationals from owning more than 50 percent of the capital of entities engaged in the operation and management of critical infrastructure, unless his or her country accords reciprocity to Philippine nationals.
The President is also given the authority to suspend or prohibit any proposed merger or acquisition, or investment in a public service that results in giving control to a foreigner or foreign corporation.
The measure also states that “no person shall be deemed a public utility unless otherwise subsequently provided by law.”
Public utilities
Under the measure, the definition of public utilities still includes distribution and transmission of electricity; petroleum pipeline transmission systems; water distribution systems; seaports and public utility vehicles.
These will continue to be subjected to the 40% foreign ownership cap.
Senate President Pro Tempore Ralph G. Recto reiterated that he was against the passage of this proposed measure.
“I have no problem with foreign investments, especially when it comes to manufacturing, that’s where we need it the most,” he said.
“But I do think that there are certain industries that need to be reserved for Filipinos, and that is consistent also with our Constitution, particularly certain critical infrastructure or industries.”
At the House, Gabriela Party-list Rep. Arlene D. Brosas also objected to the ratification of the measure.
“By providing a limited definition of public utility, this measure exploits the loophole in the 1987 Constitution to allow the circumvention of foreign ownership limits for all other types of public services…Ironically, we are ratifying this measure on the anniversary of the 1987 Constitution,” she said.
SIM card registration
Congress also ratified the bicameral committee report on the proposed SIM Card Registration law, which aims to co curb fraud and other crimes aided by subscriber identity module (SIM) cards.
“We hope that by legislating this measure, we would be able to eradicate mobile phone, internet or electronic communication-aided criminal activities,” Business World reported.
The committee agreed to use the House version as the working draft, Poe said.
Under the approved version, all public telecommunications entities (PTEs) must require the registration of SIM cards as a prerequisite to their sale and activation.
An individual’s real name and phone number must also be provided upon the creation of an account in any social media network.
Data collected from registration will be kept by the respective PTE in a centralized database, strictly serving as a register for the processing, activation, or deactivation of subscription, and not for any other purpose.
PTEs and social media providers must keep relevant data and information for 10 years from the time the end-user deactivates their number or account.
All existing SIM card subscribers with active services are required to register within 180 days from the when the law takes effect. PTEs are mandated to deactivate SIM card numbers not registered within this period.
Poe said the sale of SIM cards to foreign nationals will be allowed, provided they comply with certain requirements.
Adequate safeguards
Poe stressed that liberalizing some industries is not an invitation for foreign countries to take advantage of the country’s resources.
“Adequate safeguards and security provisions are in place, including giving authority to the President to suspend or prohibit any proposed merger or acquisition transaction, or any investment in a public service that will grant control to a foreigner or a foreign corporation,” Poe said.
She emphasized the presence of a provision prohibiting foreign state-owned enterprises from owning capital in any public service classified as public utility or critical infrastructure.
Foreign nationals are also not allowed to own more than 50 percent of the capital of entities engaged in the operation and management of critical infrastructure, unless his or her country accords reciprocity to Philippine nationals.
“The ratified measure made its intentions clear and unequivocal by adding a provision that says that ‘nothing in the bill shall be interpreted as a requirement for legislative franchise where the law does not require any’,” Poe said.
The measure also said that “no person shall be deemed a public utility unless otherwise subsequently provided by law.”
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