NEDA, businesses cheer passage of law allowing 100% foreign ownership of telcos, railways

The Philippines’ top socioeconomic planning body and local businesses on Tuesday cheered the passage of a law that would allow foreigners to fully own public services, noting that this would encourage more overseas businesses to set up shop in the country.

According to Socioeconomic Planning Secretary Karl Kendrick Chua, allowing foreign players to own 100% of public services will boost competition and eventually lower prices of goods and services.

“This reform will help bring in more foreign investments and improve services, especially in transport and telecommunications where we are lagging behind,” he said in an emailed statement.

“This will benefit all Filipinos through better quality goods and services at lower prices and more meaningful job prospects,” he added.

President Rodrigo Duterte on Monday signed the amendments to the Public Service Act, which reclassifies telecommunications, railways, airlines, and logistical facilities as public services versus their previous classification as public utilities.

This will allow 100% foreign ownership of these services.

The law also limits the coverage of public utilities to key sectors that will be subject to the 60%-40% foreign equity limitation.

These include the distribution of electricity, 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.

The NEDA had been pushing for the liberalization of foreign ownership to help the Philippines become more competitive with its peers in Southeast Asia.

Other key measures, the Retail Trade Liberalization Act and the Foreign Investments Act, were signed on December 10, 2021 and March 2, 2022, respectively. 

“The completion of the economic liberalization bills will revitalize our economy and encourage more investments and innovation as we continue to recover from the COVID-19 pandemic,” Chua said.

“The measures will also strengthen our domestic economy against external shocks, such as the Russia-Ukraine crisis,” he continued.

For its part, PLDT Inc. also welcomed the development, saying the measure would encourage healthier competition in the medium term and position the Philippines as an attractive destination in the long term.

PLDT president and chief executive officer Alfredo Panlilio, however, said that the company currently has no plans to boost its foreign ownership.

“We are also waiting for the release of the implementing rules and regulations of the new law, and we welcome any opportunity to support the government in the development of the IRR,” he said.

PLDT is headed by business tycoon Manuel Pangilinan, who also has interests in infrastructure and railways through Metro Pacific Investments Corp. (MPIC).

PLDT shares jumped P2.00, or 0.12%, to P1,723.00 apiece on Monday, while MPIC's stock price rose 4 centavos, or 1.08%, to P3.75 apiece. — VBL, GMA News