Senate warned against keeping telecoms as public utility

PHILIPPINE STAR/ MICHAEL VARCAS

LOCAL BUSINESS GROUPS are asking the Senate to refrain from retaining the foreign equity restriction in the transportation and telecommunications sectors, joining foreign chambers in opposing such proposals.

Senate Bill 2094 seeks to amend the Public Service Act (PSA), changing the definition of public utilities to allow more foreign investment in telecoms and transport. The Constitution limits foreign ownership in public utilities to 40%.

The business groups, led by the Philippine Chamber of Commerce and Industry (PCCI), expressed concern over the potential retention of the status of telecoms, transport, and power generation as public utilities.

“We strongly oppose moves to return transportation and telecommunication, as well as power generation back to the definition of Public Utilities, wherein these sectors will continue or revert to the 60-40 Filipino-Foreign Ownership requirements under the 1987 Constitution,” the groups said in a statement on Wednesday.

Aside from the PCCI, the statement was attributed to the Philippine Exporters Confederation, Inc., Employers Confederation of the Philippines, Supply Chain Management Association of the Philippines, and the Export Development Council. They said the position is supported by consultations among exporters, manufacturers, and small businesses.

Amendments to the PSA could help support the manufacturing sector, they said.

“There are four factors to production that are preventing the Philippines from developing the much-needed supply chains and from maximizing the potentials of our industries: high interisland shipping rates, expensive and unreliable internet connection, unreliable power supply, and inadequacy of infrastructure.”

They pointed to a need for a telecommunications upgrade amid constant internet service interruptions that have been disrupting business and government services. They also noted this will help attract more foreign direct investments to support economic recovery.

Foreign business groups had previously noted the same concerns surrounding telecommunications, saying that allowing foreign competition would improve the quality and pricing of internet connectivity.

The local business groups in their statement said that they had also welcomed an Electric Power Industry Reform Act’s (EPIRA) provision to open up the power generation sector to local and 100% foreign private investors.

“(The provision helps) meet the critical power need of our growing economy and support our growing economy, especially the fuel-intensive manufacturing industries,” they said.

Some senators have raised concerns on lifting the foreign ownership restriction, warning that it could threaten national security.

“We know the security and foreign influence concerns of Congress in crafting the law,” the business groups said.

“This is not irremediable. Congress may undertake safeguard measures and strengthen governmental institutions to ensure that our sovereign interests shall be upheld.” — Jenina P. Ibanez

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