Foreign chambers back changes to Public Service Act

by Louella Desiderio (The Philippine Star), 25 May 2021

MANILA, Philippines — Foreign business groups want Congress to immediately approve the bill seeking to update the 85-year-old Public Service Act to encourage more investments from overseas.

“We, the undersigned foreign chambers of commerce in the Philippines commend the Philippine Senate for beginning the plenary debate on Senate Bill 2094 and encourage the Congress to complete passage of this important legislation at the earliest possible time,” the groups said in a joint statement yesterday.

The groups include the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce Philippines, British Chamber of Commerce Philippines, Canadian Chamber of Commerce of the Philippines, Dutch Chamber of Commerce in the Philippines, European Chamber of Commerce of the Philippines, French Chamber of Commerce and Industry in the Philippines, German-Philippine Chamber of Commerce and Industry, Japanese Chamber of Commerce and Industry of the Philippines Inc., Korean Chamber of Commerce Philippines, Nordic Chamber of Commerce of the Philippines, Philippine Association of Multinational Companies Regional Headquarters Inc., Philippine-Swiss Business Council and Spanish Chamber of Commerce in the Philippines.

The bill seeks to define and distinguish public utilities from public services, as well as limit public utilities to natural monopolies involving distribution and transmission of electricity, water and sewerage.

In March last year, the House of Representatives approved its version of the bill.

The groups said Commonwealth Act 146 has regulated public services and includes a list of 25 services which are not natural monopolies and not usually considered as public utilities under best international practice.

“These restrictions have been the basis of the reputation of the country as more closed to foreign investment than most Asian economies. It also created a business environment for the services sector that nurtured oligopolies and weakened competition to the detriment of consumers. Tens of billions of dollars in foreign investment did not come to the Philippines but instead went to our neighbors,” the groups said.

When the proposed measure is approved into law, the groups said the country would be able to attract new investments from foreign firms in the telecommunications, transportation and other services.

“This is expected to increase competition, improve technology, modernize and lower the prices of services to the benefit of Filipino consumers,” the groups said.

As Philippine infrastructure has consistently lagged behind in Southeast Asia by ranking sixth after Indonesia, Malaysia, Singapore, Thailand, and Vietnam in international indexes, the groups said the Public Service Act amendments would lead to improvements in infrastructure services through more investments in the country at no cost to the government and taxpayers.

The reform is also expected to improve the country’s ranking by the Organization for Economic Cooperation and Development from its current unattractive placement as one of the most restrictive economies for foreign investment in public services.

Apart from the amendments allowing the country to match policies in Singapore, Thailand, Vietnam and Indonesia, it is also in line with the commitments in the Association of Southeast Asian Nations (ASEAN) Comprehensive Investment Agreement to open investment in services to its neighbors as part of the ASEAN Economic Community.