Measure amending Public Service Act now up for Duterte’s signature

The Senate and the House of Representatives on Wednesday ratified the bicameral conference committee report on the proposed measure modernizing the Public Service Act.

During their respective plenary sessions, the chambers each adopted the bicameral report for Senate Bill 2094 and House Bill 78, which aims to amend the 85-year-old Public Service Act.

The measure seeks to clear ambiguity surrounding the terms “public utility” and “public service,” identifying public utilities as the following: the distribution and transmission of electricity; petroleum and petroleum products pipeline transmission systems; water pipeline distribution systems and wastewater pipeline systems, including sewerage pipeline systems; seaports; and public utility vehicles.

According to the proposed law, any industry not included among these will remain public services and will be liberalized.

Senator Grace Poe, chairperson of the Senate committee on public services, said that the country's "top economic and legal experts" are backing the bill.

"The data will bear us out. 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 direct investments which we sorely lack and need,” Poe said.

Poe said that easing foreign equity restrictions in such industries will grow the economy and generate jobs for Filipinos.

She also denied that liberalizing some industries is an invitation for foreign countries to take advantage of the country's resources.

Poe said foreign nationals are not allowed to own more than 50% of the capital of entities engaged in the operation and management of critical infrastructure, unless his or her country accords reciprocity to Philippine nationals.

“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.

'Uncontrolled rate hikes'

However, Gabriela party-list Representative Arlene Brosas sees a "red flag" in this “piecemeal Charter Change measure” which, she said, “will enable the foreign takeover of key economic sectors such as telecommunications and transport.”

"Ironically, this discreet Cha-cha disguised as PSA amendments was ratified exactly 35 years since the 1987 Constitution was ratified. The intent to uphold national patrimony, as stated in Article XII of the Charter is subverted by a mere definition of public utility,” Brosas said.

“Pahihintulutan ng panukalang ito ang 100% foreign ownership ng mass media, power generation, telekomunikasyon, railways, airlines, at logistical facilities na magbubuyangyang sa mga konsyumer sa mas mataas na singil sa serbisyo,” she added.

(This measure will allow 100% foreign ownership of mass media, telecommunications, railways, airlines, and logistical facilities, which will expose consumers to higher rates.)

Bayan Muna party-list Representative Carlos Isagani Zarate also expressed strong opposition to modernizing the PSA.

"Ang pag-amyenda sa Public Service Act upang alisin ang mga negosyo o serbisyo bilang mga public utility ay ang pag-alis sa mga proteksyon ng publiko sa makatwirang singil para sa mga rito, at ang tuluyang pag-alis ng kontrol at otoridad ng gobyerno sa mga ito," Zarate said.

(Amending the Public Service Act to remove services from the list of public utilities is to remove the protections to ensure the appropriate rates for these, and to completely remove the government's control or authority over them.)

"Samakatuwid, mahaharap ang mga konsumer sa walang-kontrol na pagtaas na presyo at bayarin kung buong-buo na itong na itong kontrolado ng mga negosyo," he added.

(Therefore, the consumer will be facing uncontrolled price hikes if these services are completely controlled by corporations.)

'One step forward, two step backwards’

Think tank IBON Foundation said passing the PSA "will be one step forward, two steps backwards for the country."

"It could be one step forward if it spurs foreign investment and expands telecom, shipping, airports and airlines, and railways. Foreign business groups and their prospective local partners certainly seem extremely keen to have more opportunities for their profit-making," IBON Foundation executive director Sonny Africa said in a statement on Thursday.

"It's however two steps backward because, first, increasing foreign capital's share entrenches them and will make it even more difficult for Filipino enterprises to ever develop in these industries and, second, this threatens the long-term ability of the country to have communications and transport utilities secure from malign foreign activity," it added.

Africa also warned of "unquantifiable" national security costs.

"Telecoms and transport are critical infrastructure that are prime targets for espionage, sabotage, and other self-serving interventions. We shouldn't completely open up areas of the economy to foreign capital that we ourselves do not yet more fully grasp, control and provide," he said.

Africa added that restrictions set by the Constitution should be seen as an opportunity to develop robust Filipino capacity in telecoms, shipping, airports, airlines, and railways.

"Relaxing them in favor of foreign investors is a decision to forego developing this entirely with adverse long-term economic and national security implications," he said.  

The ratified measure will go to Malacañang for President Rodrigo Duterte's signature. — with a report from Richa Noriega/BM/VBL, GMA News