Press Release
February 15, 2018


Sen. Grace Poe is poised to endorse remedial legislation amending the 81-year-old Public Service Act in a bid to remedy the country's restrictive economic environment, provide more jobs and ensure reasonable rates of services.

Poe, chairperson of the Senate committee on public services, said the proposed amendments seek to address the confusion in the definition of a public utility and public services, which, for several decades, hampered economic growth.

"Foreign entities would be allowed to come in and invest. The goal is to increase competition, provide better quality services and also to create jobs," Poe said during the hearing on Thursday, Feb. 15.

According to Poe, the 1987 Philippine Constitution restricts operation of a public utility to companies whose ownership is at least 60% Filipino-owned. Commonwealth Act No. 146 or the Public Service Act passed in 1936 only provides a list and not a definition of public services and no definition of a public utility. Thus, foreign equity restrictions also apply to public utilities like telecommunications, electricity, water and transportation, among others.

Poe said without a clear definition of public utilities, full realization of economic growth is crippled.

Currently, electricity (distribution and transmission), water, transportation, telecommunications and other essential services fall under the foreign equity rule mandated by the Constitution. After the reform, however, only the electric power distribution and transmission, water pipeline distribution and sewerage pipeline system are restricted.

A report on foreign direct investments (FDIs) to member-countries in the Association of Southeast Asian Nations (ASEAN) showed that between 1952 and 2012, Singapore accounts for more than half of total FDI to the whole region (52%), followed by Thailand (13%), Indonesia (11%), Malaysia (10%), Vietnam (8%) and the Philippines (3%).

In 2016, the Philippines emerged as the fourth largest recipient of FDIs in the region with $7.93 billion, but "still paled" in comparison to the top three ASEAN recipients, with Singapore remaining the region's most attractive investment destination with a total FDI inflows of $53.91 billion.

"Sa pag-amyenda ng PSA, magkakaroon ang taumbayan ng mas maraming mapagpipiliang public service providers. Magpaligsahan sila at makapagbigay ng de kalidad na serbisyo at produkto sa pinakamababang presyo at maraming trabaho para sa ating mamamayan," said Poe.

In other countries, foreign ownership between 50% and 100% of telecommunications are allowed, resulting in more mobile coverage and efficient service, the committee was told.

Poe also said the panel would "update" the system of penalties and violations against erring public utilities, which the existing law only imposes P200 per day, and this does not deter erring firms from committing disservice to the public.

The committee tackled Senate Bill Nos. 695, 1261, 1291, 1441 and 1594 authored separately by Senators Bam Aquino IV, Richard Gordon, Juan Miguel Zubiri, Sherwin Gatchalian and Poe.

Poe said she will schedule a technical working group to consolidate the measures and craft a final version of the bill.

The Philippine Business Groups-Joint Foreign Chambers of the Philippines had included amendments to the Public Service Act in the list of priority measures that they wanted Congress to approve to improve the business and economic climate in the country.

News Latest News Feed