The American Chamber of Commerce (AmCham) here is urging the government to look at the possibility of allowing full foreign ownership in public utilities without necessarily amending the Constitution.
John Forbes, AmCham senior adviser, said the positive effects will come in ripples as aside from opening the country’s doors to more foreign direct investments (FDI), the stronger competition in public utilities will also give Filipino consumers access to better services at lower prices.
The Foreign Investment Negative List (FINL) only allows up to 40 percent foreign equity in public utilities. The list, however, is being revised every two years as mandated by the Foreign Investments Act of 1991, as amended by Republic Act 8179.
Forbes said as part of the ongoing review of the FINL, the government should consider public utilities as one of the investment areas where 100-percent foreign equity should be allowed.
“If your objective is to improve competition and increase investments in public utilities without changing the Constitution, this is one way to do it,” Forbes told the BusinessMirror.
He said the Constitution, anyway, does not clearly define what a public utility is.
The 1936 Public Service Act, he said, is probably the only law that details what public utilities are.
This outdated law, Forbes said, should be included in the FINL review and determine if there is a way to fully liberalize the public utilities sector without tinkering with the Constitution.
“That is the objective of the FINL, to see if there is anything there in the list that can be removed,” Forbes said.
He noted that although revising a law could be troublesome, it is a lot easier than amending the Constitution.
The public utilities sector, because of the nature of its business, is one of the areas that can easily attract foreign investments, Forbes said.
Like in the United States, he said, there are many European players in the telecommunications sector, and there are also several American telecommunication firms in Europe.
The public utilities sector, he said, is one major reason why the US and Europe have the biggest exchange of FDI. –Max V. de Leon | Reporter, Businessmirror
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