Friday, April 18, 2025

‘PSA bill even more restrictive’

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Philippine business groups and foreign chambers have opposed proposals at the Senate to make the Public Service Act (PSA) more restrictive than when it was legislated during the Commonwealth rather than relax it.

In a joint statement, the business groups said some senators are proposing amendments to broaden the 60-40 rule and apply it to most forms of common carriers, airports, dams, roads and railroads, seaports, and telecommunications.

Article 12 Section 11 of the Constitution contains the restriction that public utilities must be 60 percent Filipino-owned. For the first time in 86 years the PSA amendment bill provides a legal definition of a public utility to differentiate such from the numerous public services listed in the 1936 PSA.

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These four natural monopolies are electricity distribution and transmission, water distribution, and sewerage pipeline systems. All other public services would be open to foreign ownership up to 100 percent.

The business groups said in broadening the 60-40 rule, the senators” selectively cite Supreme Court rulings and argue that national security will be in danger if foreigners own public services.”

The business groups argued foreign firms have been allowed to own ice plants, power plants, and shipyards for some time now and they invested heavily in all three major telecommunication firms and the national transmission grid concession.

“The bill before the Senate contains adequate provisions to protect national security concerns, similar to Australia, Japan, the United States, and many others who welcome foreign investment in public services but also apply national security reviews.

“Thus, we call on the Senate to decline all amendments to the PSA that will apply the 60-40 rule to any public service not classified as public utility defined in the bill,” the business groups said.

They added: “PSA amendments for 60-40 that will include industries that do not fall within the definition of a public utility as provided in Senate Bill 2094 will worsen the rank of the Philippines for restrictiveness,” they said.

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