Duterte signs law on 100% foreign ownership of telcos, railways
President Rodrigo Duterte on Monday signed a law amending the Public Service Act and effectively allowing 100% foreign ownership of public services such as telecommunications and railways, among others.
The new law reclassifies telecommunications, railways, airlines, and logistical facilities as public services from their previous classification as public utilities.
Under the 1987 Constitution, foreigners may only own up to 40% of public utilities.
"I believe that through this law, the easing out of foreign equity restrictions will attract more global investors, modernize several sectors of public service and improve the delivery of essential services," Duterte said in a speech in the Palace.
"Indeed, the enactment of this amended law, as well as the amended Foreign Investments Act, will help stimulate the economy, especially for local businesses," he added.
"It is also expected to generate more jobs for Filipinos, improve basic services for Filipino consumers and allow for the exchange of skills and technology with the country’s foreign partners," Duterte said.
The new law still prohibits majority foreign ownership on the distribution and transmission of electricity; petroleum and petroleum products, pipeline transmission systems; water pipeline distribution systems and wastewater pipeline systems, including sewerage pipeline systems; seaports; and public utility vehicles which are still classified as public utilities.
House Ways and Means panel chairperson and the law's principal author Joey Salceda said the new law was the closest that the country had been to overcoming the “growth overhang caused by the 1987 Constitution’s foreign equity restrictions.”
"It cures our self-inflicted FDI (Foreign Direct Investment) limits. No one told us public services are necessarily public utilities. We just assumed that they meant the same thing, so we imposed foreign equity restrictions on a broad swathe of services in need of capital," Salceda said in a statement.
"We did not have to do that. This law settles that question. It’s a massive reform because it opens us to foreign capital. We need a lot of foreign capital. We have plenty of domestic talent, but they leave for abroad because the capital required to hire them is invested abroad," he added. —NB/KG, GMA News