More groups back easing restrictions on public utilities

by Louella Desiderio – The Philippine Star, 23 Sep 2021

MANILA, Philippines — More business groups have expressed opposition to keeping transportation, telecommunication and power generation as public utilities as the country needs to attract more foreign investments at this time.

“As the Senate deliberates one of such measures in the form of the Public Service Act (PSA) amendment, we strongly oppose moves to return transportation and telecommunication, as well as power generation back to the definition of public utilities, wherein these sectors will continue or revert to the 60-40 Filipino-foreign ownership requirements under the 1987 Constitution,” the Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation Inc., Employers Confederation of the Philippines, Supply Chain Management Association of the Philippines, and public-private sector group Export Development Council said in a joint statement yesterday.

Proposed amendments to the PSA seek to limit the definition of public utilities to natural monopolies such as distribution and transmission of electricity, water and sewerage.

There have been some proposals however, to retain other sectors such as telecommunications as a public utility.

The groups said their position on the transportation and telecommunication sectors is based on the consultations among exporters, manufacturers, small and medium enterprises and other business stakeholders.

With the pandemic forcing businesses and individuals to shift online, the groups emphasized the urgent need for a massive upgrade to speed up and improve the telecommunications system.

“We get daily experiences on service interruptions, technical glitches, and lack of internet that in this period and age can make or break a business, disrupt the online delivery of government services (electronic business one-stop shop, digital payments), and e-learning. Every second the Philippines is offline because of the inability of our current providers to keep us connected is a second that the Philippines is closed for business,” the groups said.

As concerns on security and foreign influence have been cited as among the reasons for the proposal to retain the telecommunication sector as a public utility, the groups said such can be addressed in crafting the law.

“This is not irremediable. Congress may undertake safeguard measures and strengthen governmental institutions to ensure that our sovereign interests shall be upheld.”

As for power generation, the groups said they welcome the Electric Power Industry Reform Act’s provision to open the sector to local and 100 percent foreign private investors to address the requirements of the growing economy, particularly the manufacturing industry.

Citing National Economic and Development Authority director general Karl Chua, who has emphasized the need to focus on the manufacturing sector for the Philippines to become a high income country, the groups said the PSA amendments would help in this area.

The groups cited four factors that prevent the country from developing its supply chains and maximizing the potential of its industries such as the high inter-island shipping rates, expensive and unreliable internet connection, unreliable power supply, and lack of infrastructure.

“We urge the Senate to be bold in this particular policy decision. We have seen how timely and appropriate policy decisions elsewhere have led to significant positive results and these are inspirations that we can learn from and adopt,” the groups said.

Other business groups that have issued calls against keeping key sectors of the economy such as transportation and telecommunication closed to greater foreign investments are Foundation for Economic Freedom, Makati Business Club, University of the Philippines School of Economics Alumni Association, as well as the Joint Foreign Chambers composed of the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers, and the Philippine Association of Multinational Companies Regional Headquarters Inc.