PHL opening telecom industry to foreign players by 2017

Foreign investors may be able to penetrate the country’s telecommunications industry by next year, as the government is currently looking at ways to encourage more overseas businessmen to invest in the Philippines.

“Without a doubt I’m in favor of removing the telecom industry from the limitations imposed on public services. New technology comes from abroad. If foreign companies come here to bring in new technology, then all of us will benefit," Senator Sherwin T. Gatchalian, chairman of the Senate committee on economic affairs, told reporters on the sidelines of a hearing in Pasay City

"It will improve competition, improve innovation,” the senator noted.

Gatchalian is intends to review of the Philippine Services Act and how to exclude the telecommunications industry under the definition of public services.

“Tignan natin how we can invite more foreign operators, because the foreign operators will bring in new technology, and new technology will bring down prices. So, we’re also looking at that and to see how we can invite more foreign companies to come in,” he said.

Gatchalian expects to have a draft proposal to review the telecom sector by January, saying stakeholders have been sharing information on how to go about it. "So, we'll just have to put all of than together, according to the senator.

Separately, the antitrust watchdog noted there is no need for a constitutional amendment at this point.

“There’s a lot of talk kasi about the need to amend the Constitution to allow investors to come in, particularly in the operation of public utilities," Commissioner Johannes Bernabe of the Philippine Competition Commission (PCC) told reporters on the sidelines of the same hearing.

"What we’re saying is, from a legal perspective, you don’t need to do that because public utilities are not defined in the Constitution ... It’s defined by the Commonwealth Act, the Public Services Act,” the commissioner said.

According to the Public Service Act, the term public service covers every individual, partnership and companies that own, manage, operate and control businesses in common transportation, as well as power and water supply, communications system, broadcasting stations and other similar activities that serves the wider public.

Only four industries, so far, considered public utilities, Bernabe noted, citing studies by a team of “highly regarded” economists and lawyers from the University of the Philippines.

“What we’re saying is as of now, the only activities which we see as deserving of the status of public utilities and therefore limited to 40 percent of foreign equity are four activities,” he said.

These are:

• Water pipeline distribution

• Gas and technology pipeline distribution

• Sewerage pipeline systems

• Electricity distribution and transmission systems

“Maybe we can also push for this amendment of an 80-year old law that will become a priority measure that the administration will push for. Right now the bill has been filed by Senator Bam Aquino. I hope that it gets the kind of support and prioritization it deserves,” Bernabe said.

President Rodrigo R. Duterte said in November he wants to open the communications, media, and energy sectors to foreign players should local firms fail to step up their game.

Earlier this year, Australia's Telstra Corp. Ltd. was supposed to enter the Philippine market via a joint venture with San Miguel Corp. (SMC), but the negotiations fell through after the companies failed to agree on an equity investment structure.

GMA News Online has tried to reach both PLDT Inc. and Globe Telecom Inc. for comment. PLDT declined to issue a statement for the meantime, while Globe has not responded as of this posting. — VS, GMA News