Liberalization of public service: An amendment to the 85-year-old Public Service Act

On December 15, 2021, senators approved on third reading the Senate Bill No. 2094; garnering votes of 18-3-0 in favor of amending the Commonwealth Act No. 146 or the Public Service Act of 1936. The country was long held back by its underinvested public service infrastructure which in turn prohibited healthy market competition and resulted in high service costs that burden both direct consumers and exporters in general.

The Export Development Council-Networking Committee on Legislative Advocacy and Monitoring (EDC-NCLAM) advocated for the liberalization of telecommunications and common carriers in the previous version of the bill. Hence, this development in liberalizing our economy is greatly supported by the EDC. These amendments will reduce the cost of inter-island shipping by paving the way for competition in the shipping industry.

The current version of the bill limits public utilities to services on the distribution or transmission of electricity, water pipeline distribution, wastewater pipeline systems, airports, seaports, and public utility vehicles (PUVs). Under the amended bill, telecommunications, air carriers, domestic shipping companies, railways and subways are no longer classified as public utilities. Thus, 100% foreign ownership to these industries is now allowed. However, mentioned industries are also considered as critical infrastructure, therefore, foreign state-owned enterprises are prohibited in owning capital in any of these services.

Senator Grace Poe, the Chair of Senate Committee on Public Services, reiterated that there are adequate safeguards stipulated in the Senate measure to address concerns on national security. This includes the prohibition of foreign state-owned enterprises from owning capital in any public service classified as critical infrastructure, the reciprocity clause, and strict review of foreign investments by the National Security Council (NSC).ADSC

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