PSA amendments put on back burner

psa amendments put on back burner - PSA amendments put on back burner

By Charmaine A. Tadalan, Reporter

A MEASURE amending the 83-year-old Public Service Act (PSA) to lift foreign ownership restrictions in certain sectors is taking a backseat to coronavirus pandemic response bills at the Senate.

Senate Public Services Committee Chairperson Grace S. Poe-Llamanzares on Wednesday said the committee will focus first on bills related to the coronavirus disease 2019 (COVID-19) crisis, and the 2021 national budget.

“(The PSA amendments will) be tackled, if we have time hopefully this year. Lined up are COVID-related legislation and budget,” she said in a phone message. 

The committee is tackling a bill requiring internet service providers to deliver a minimum standard internet speed, and another that would legalize motorcycle taxis.

“At this time, it appears that we will take up the other bills I mentioned first before (PSA amendments),” Ms. Poe-Llamanzares said at an online briefing.

The measure seeks to amend the PSA or Commonwealth Act No. 146, providing a clearer definition of “public services” which had been used interchangeably with “public utilities.” An amendment will effectively limit the definition of public utilities to power transmission and distribution, and waterworks and sewerage pipeline distribution system.

At present, public utilities are subject to foreign equity restrictions of up to 40% as provided under the 1987 Constitution.

If enacted, the measure will lift foreign equity restrictions particularly on telecommunication and transportation service providers. The 1987 Constitution allows operation of public utilities that are at least 60% Filipino-owned.

The bill amending the PSA was among those President Rodrigo R. Duterte mentioned in his fifth State of the Nation Address last July. Local and foreign business groups have also pushed for the bill’s passage, along with others that will open up the economy to foreign investments.

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua had said the PSA amendment will allow the Philippines to capture much-needed foreign investments amid the pandemic.

The measure nearly hurdled the 17th Congress, when it was approved by the House of Representatives but remained pending second reading in the Senate.

Ms. Poe-Llamanzares said senators have raised concerns on lifting the foreign ownership restriction, which may threaten national security and may favor a single country.

“It would have passed except that the pronouncements that are pro-one country is scaring other senators, na kapag binuksan natin ’yung economy, baka biglang ang bibili lahat ng ating kumpanya ay galing lang sa iisang bansa (that if you open up the economy, companies might be bought by just one country),” she said, noting these may be addressed through safeguards. 

There are now six bills amending the Public Service Act pending before the Senate panel, while its counterpart House Bill No. 78 has already been approved on final reading.

The European Chamber of Commerce of the Philippines (ECCP) said it will continue to push for the passage of the bill as well as the proposed amendments to the Foreign Investments Act (FIA) and the Retail Trade Liberalization Act (RTLA).

“The ECCP understands the government’s intentions to prioritize COVID-19 measures at this time. However, we wish to highlight that the passage of economic policy reforms is instrumental in accelerating economic recovery,” ECCP President Nabil Francis said over a phone message.

“Economic reforms such as the amendments to the Public Services Act, Foreign Investment Act and Retail Trade Liberalization Act will help spur inclusive growth through increased job generation, poverty reduction, and improved global competitiveness.”

The FIA amendment will remove restrictions on foreigners practicing their professions in the Philippines, while the changes to the RTLA will reduce the required minimum paid-up capital for foreign entrants to the country’s retail sector.

American Chamber of Commerce of the Philippines Senior Advisor John D. Forbes said they are hopeful the bill will be certified as urgent, seeing that it will stimulate the economy.

“We have been told the PSA is a high priority reform of the administration and hope it will be certified by the president. It can help stimulate foreign investment and competition and help economic recovery after 2020,” he said in a separate message.

“The law is 83 years old and is one reason OECD (Organization for Economic Cooperation and Development) rates the Philippines as comparatively closed to foreign investment.”

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