Foreign business groups are opposing moves to retain the 60-40 foreign equity restrictions on transportation and telecommunications, saying doing so runs counter to the intention to relax ownership rules on public services in the Philippines.
In a statement, the Joint Foreign Chambers (JFC) cautioned the Senate, which is deliberating the amendments to the Public Services Act, against including numerous favored sub- sectors under the public utility definition to protect them from competition.
The groups said adding legislative franchise requirements where none existed “will thwart the intention of the bill and the positive impact it can bring to the business community and consumers.”
“We urge the Senate to stay true to the intentions of the proposed reform by opening the transportation and telecommunications sectors to greater foreign investment, for the benefit of the Philippine economy, the business community, and the Filipino consumer,” JFC said.
In stressing that both transportation and telecommunications are not natural monopolies, JFC said there are numerous transportation companies and three telecommunications companies that operate viably in the country.
“It is crucial to apply the proposed definition consistently in identifying the sectors that should be considered public utilities to maintain the internal integrity of the bill,” the group said.
It added that instead of keeping service sectors closed to foreign investment in the guise of national security, it is important to carefully balance the need to attract foreign investments while protecting national security.
The proposed Senate bill incorporates safeguards that address the nature of the risk, instead of using an ownership ban as a blanket solution.
“To catch up, the economy must open up. The status quo has proven insufficient to address the needs of the country. Retaining the 60-40 foreign equity restriction will prevent accomplishment of the intentions of the proposed reform to liberalize the Philippine economy to attract greater foreign investment, facilitate competition, fund infrastructure, create jobs and improve the quality of public services in the country,” the JFC said. – Irma Isip
