House Approves Full Foreign Ownership in Communications, Power, and Transport

Communications, transportation, and power should not be listed as public utilities, say lawmakers.

The House of Representatives approved on February 18 a measure amending the Public Service Act, an 84-year-old law that bars full foreign ownership in the public service sector, including the transportation, communication, and power industries, according to a report by the Philippine Star.

Section 11, Article XII of the 1987 Constitution states that Filipinos shall own at least 60 percent of capital in public utilities. The Constitution also states that all the executive and managing officers of organizations operating public utilities must be Filipinos.

The House plenary passed on second reading House Bill 78, which seeks to define transportation, communications, and power as public services, not public utilities. The bill limits “public utilities” to distribution and transmission of electricity, water pipeline distribution, and sewerage pipeline systems.

Under House Bill 78, public services are defined as “common carrier, railroad, street railway, subway motor vehicle, ice refrigeration plant, irrigation system, marine railways, wire or wireless communications systems; wire or wireless broadcasting stations; freight or carrier services, steam boats ferries and war craft engaged in the transportation of passengers or freight, gas, electric light, heat and power water supply and power, petroleum and sewerage system, among others.”

Deputy speaker Sharon Garin explains that, if passed into law, the bill will open the Philippine market to competition and benefit Filipino consumers.

“Competition and foreign investment are inhibited because limitations that should only apply to the operation of a public utility are applied to all public services,” said Garin.

According to Garin, opening up the public services industry to foreign competition redound to a healthier economy in the form of lower prices and improved quality of services.

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