The Senate Just Approved a Bill Allowing Foreign Ownership of Telcos and Airlines

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The Senate on Wednesday approved on third and final reading a measure that seeks to open up the economy to foreign investors by allowing them to own public services such as telecommunications and airlines.

With 19 affirmative and three negative votes, the chamber passed Senate Bill 2094, amending the 85-year-old Commonwealth Act 146 or the Public Service Act. The House of Representatives approved its version of the measure in March 2020.

The measure seeks to clarify the definitions between the terms "public utility" and "public service". Under the 1987 Constitution, only corporations that are at least 60% owned by Filipinos will be given the franchise, certificate, and authorization to operate as a public utility.

Under the bill, public utilities are limited to distribution or transmission of electricity, petroleum and petroleum products pipeline distribution systems, water pipelines distribution systems and wastewater pipeline systems, as well as airports, seaports, public utility vehicles and tollways or expressways.

This paves the way for telecommunications, air carriers, domestic shipping, railways and subways to be considered as a public service and are no longer bound by restrictions on foreign ownership.

Sen. Grace Poe, who sponsored the measure, said the bill would allow Filipino consumers to have "more and better choices" on public services they want to avail.

"We are declaring as public policy that the expansion of the investment base will benefit the public by allowing meaningful competition with more players, domestic and foreign, to slug it out to win the satisfaction of the consuming Filipino people," she said.

Sen. Risa Hontiveros, who voted against the measure, warned about the possible consequences of opening up critical infrastructure like telecommunications to foreign ownership.


"By allowing 100% foreign ownership, we are opening our phones, and all our internet-connected devices, appliances and critical public facilities to foreign state and non-state interests that may have malevolent designs on our national security," she said.

Poe said safeguards have been placed in the bill to protect national security, including prohibiting foreign state-owned enterprises from owning capital in any public service classified as critical infrastructure.

Foreign nationals will also not be allowed to own more than 40% of capital in public services engaged in the operation and management of critical infrastructure, unless their country gives the same opportunity to Filipinos.

President Rodrigo Duterte had certified the measure as urgent, with economic managers saying it would help the country recover from the negative impacts of the COVID-19 pandemic.

This story originally appeared on Reportr.World. Minor edits have been made by the editors.

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