NEDA: Public Service Act amendment to boost competitiveness

The proposed amendments to the Public Services Act are seen to foster a healthier competition in the Philippine market as it eases foreign ownership restrictions in several industries, the National Economic and Development Authority (NEDA) said Friday.

In a statement, the NEDA said the amendments to the Public Service Act of 1936, “will significantly reduce equity restrictions in several service industries and encourage participation of foreign investors, thereby fostering more competition in the Philippine market.”

The proposed House Bill 78 or New Public Service Act seeks to limit the definition of public utilities to electricity distribution and transmission, water and sewerage pipelines, air transportation, ports and airports.

The measure was approved by the lower chamber on second reading.

“We expect this bill to improve the country’s attractiveness as an investment destination and make the Philippines one of the top choices of both domestic and foreign investors once it gets passed into a law,” Socioeconomic Planning Secretary Ernesto Pernia said.

The proposed amendments to the law will remove ambiguity and uncertainty between what constitutes a ‘public service’ and provide clear economic bases for designating certain industries as “public utility,” according to the NEDA chief.

The measure also allows the NEDA secretariat in consultation with the Philippine Competition Commission to recommend to Congress the classification of a public service as a public utility if:

• The person regularly supplies and directly transmits and distributes to the public through a network a commodity or service of public consequence;
• The commodity or service is necessary to the public and a natural monopoly that needs to be regulated when the common good so requires;
• The commodity or service is necessary for the maintenance of life and occupation of residents; and
• The commodity or service is obligated to provide adequate service to the public on demand

Opposition lawmakers from the House of Representatives have since expressed their objection to the measure which supposedly allows full foreign ownership of public utilities in the country.

Albay Representative Edcel Lagman said there is no distinction between "public utility" and "public service" as the Supreme Court itself stated in a 2003 ruling that "public utility is engaged in public service" that provides "basic commodities and services indispensable to the interest of the general public."

Bayan Muna party-list Representative Carlos Zarate said he finds it "tragically ironic" that the Duterte administration is questioning the Philippine depository receipt of embattled broadcast giant ABS-CBN when its allies in Congress are pushing for House Bill 78.

The bill’s main proponent Albay Representative Joey Salceda, meanwhile, stood firm that the measure adheres to the 1987 Constitution and would break the monopoly in certain industries for the good of the public.

NEDA chief Pernia said the measure will enable the government to respond to the economic needs of the people as it boosts competition that gives Filipino consumers more choices and better access to services at more reasonable rates.

“NEDA supports the passage of this legislative measure primarily because it complements the Philippine Competition Act that puts the rights of the Filipino consumers on top by promoting a competitive market for them,” the Cabinet official said.

The Philippine Development Plan 2017-2022 cites the importance of amending the Public Service Act for its crucial role in expanding economic opportunities and increasing the competitiveness of the country, the NEDA chief said.

“Moreover, the proposed amendments to the law has been one of the priority legislative measures of the economic team and certified as urgent by President Rodrigo R. Duterte,” he said. —LDF, GMA News