Business groups urge passage of amendments to Public Service Act

MANILA, Philippines — Local and foreign business groups are calling for the passage of a proposed measure seeking to amend the Public Service Act to allow the country to recover declining foreign direct investments (FDI).

In a statement yesterday, the Bankers Association of the Philippines, Foundation for Economic Freedom, Makati Business Club, Management Association of the Philippines, Semiconductor and Electronics Industries in the Philippines Foundation Inc., and the Joint Foreign Chambers of the Philippines which groups the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers, as well as the Philippine Association of Multinational Companies Regional Headquarters Inc. said the House of Representatives’ move to approve House Bill 78 which seeks to amend the Public Services Act, on second reading last Feb.18, is a positive development.

The groups said they look forward to its eventual passage on third reading, as well as for Senate’s approval of the measure.

HB 78 which seeks to amend the Public Service Act to make it more relevant to contemporary concerns, will allow full foreign ownership in the public service sector such as transportation and communications by limiting the definition of public utility to distribution and transmission of electricity, as well as water pipeline distribution and sewerage system.

Apart from providing a concise definition of public utilities which in the past has resulted in confusion, enactment of the measure into law would institute a rate-setting methodology which is fair to both investors and consumers.

The measure would also help the country attract investments.

“This legislation is long overdue and especially timely as it should help the Philippines recover from declining FDI,” the groups said.

FDI net inflows declined 29.9 percent to $6.4 billion in the January to November period from $9.2 billion in the same period in 2018, according to the Bangko Sentral ng Pilipinas.

“New FDI, attracted by the new law, will flow into domestic infrastructure in public services, improving technology, quality, and competition, bringing better pricing, and enhancing access to services for unserved and underserved areas,” the groups said.

With more FDIs, there would be more business opportunities and jobs to be created for Filipinos.

The groups said the bill strongly considers the protection of national security by adopting the same framework and measures for scrutinizing FDI for security risks used by countries such the US, Australia as well as the European Union.

In addition, the groups said the entry of more operators to be made possible by enactment of the measure into law, would improve the quality of public services such as transportation and communications.

“These services are crucial inputs in domestic micro, small, and medium enterprises and the daily life of Filipinos,” the groups said.