‘PSA should benefit small businesses’

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With the amended Public Service Act (PSA) a signature away towards becoming a law, the Philippine Competition Commission (PCC) has committed to ensure the expected benefits of liberalization will trickle down to the intended beneficiaries, the consumers.

This as the Joint Foreign Chambers (JFC) yesterday welcomed the ratification on Wednesday night by Congress of the bicameral conference committee report reconciling provisions of Senate Bill 2094 and House Bill 78 on the amendments to the 1936 PSA.

The PCC also said the Philippine Competition Act (PCA) has built-in safeguards that would ensure the liberalization of public services will not lead to anti-competition practices.

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“The liberalization will certainly overwhelm the economy. What we would like to see is (for) the benefits (to be) not confined to the upper echelons of businesses. What we’d like to see is for that liberalization to spur competition up to the level of the MSMEs (micro, small and medium enterprises). The PCC will have to make sure that that happens, and that this does not lead to certain sectors of the economy, or even the society to feel (or bear) the brunt of the negative effects of liberalization,” said Emerson Aquende, PCC commissioner.

Johannes Bernabe, PCC commissioner, said safeguards are in place under the PCA in case there are acquisitions that would tend to increase market concentration.

These would be subjected to review, he said.

However, Bernabe noted it is unlikely that foreign service suppliers which have been erstwhile barred from entry will cause increasing concentration precisely “because they are first time entrants into the market. “

He noted the role of PCC and the National Economic Development Authority in vetting what would be further listed as public utilities as a safeguard against further restrictions on foreign investments in the future.

The ratified version of the PSA bills contains a short list of public utilities which are considered “natural monopolies” and subject to the 60-40 percent ownership restriction in the Constitution since 1935. It also limits foreign ownership to 40 percent of seaports and most but not all types of public utility vehicles.

JFC in a statement said the PSA amendments will match policies that Singapore, Thailand, and Vietnam allow and those which Indonesia opened to foreign investments last year.

It added the PSA also complies with commitments the Philippines made in the Asean Comprehensive Investment Agreement to open investment in services to other Asean members, effective in 2012, as part of the Asean Economic Community.

“This will allow the Philippines to better participate as a member of advanced plurilateral trade and investment agreements such as the Comprehensive and Progressive Transpacific Partnership and the Regional Comprehensive Economic Partnership,” JFC said in a statement. IRMA ISIP

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