House approves bill allowing foreign ownership of public services

The House of Representatives on Tuesday approved on third and final reading House Bill 78 which amended the Public Service Act and allowed foreign investments on certain public utilities by reclassifying them as public services.

The measure, which was passed with 136 yes votes, 43 no votes, and one abstention, declared that the following public services would no longer be covered by the 40 percent foreign ownership limit set by the 1987 Constitution:

• sewerage systems;
• telecommunications systems;
• wire/wireless communications systems;
• petroleum;
• gas, electric light, heat, and power;
• irrigation systems;
• water supply;
• marine repair shops;
• wharf or dock;
• canal; and
• public markets.

The same measure gave the President the power to suspend or prohibit any proposed merger or acquisition transaction, or any investment in a public service that effectively resulted in the grant of control, whether direct or indirect, to a foreigner or a foreign corporation “in the interest of national security, the president, after review, evaluation and recommendation of the relevant government department or administrative agency.”

Likewise, the measure mandated that the Philippine Competition Commission would be consulted on all matters relating to mergers and acquisitions.

Favored foreigners

A number of lawmakers, however, opposed the measure as it contravened the parameters set by the Constitution and favored foreigners rather than Filipinos.

“Maganda na po ang ating ekonomiya kahit wala po ang batas na ito na salungat po sa Konstitusyon,” Deputy Speaker Jesus Crispin Remulla said.

“Nagpasa rin po ang Kongreso ng Anti-Dummy law kasi may mga nakalusot na violation [on foreign ownership]. Bakit natin bibigyan [ngayon] ng premyo ang mga taong dinaya ang mga Pilipino [sa batas na ito]? Maling mali po,” Remulla added.

Gabriela party-list Representative Arlene Brosas shared the same view.

“Bakit natin sasaklolohan ang dayuhan kesa ang ordinaryong Pilipino?” Brosas asked.

Article 12, Section 11 of the Constitution provides that no franchise, certificate, or any other form of authorization for the operation of a public utility would be granted except to Filipino citizens or to corporations or associations organized under the laws of the Philippines at least 60 percent of whose capital was owned by Filipino citizens.

The Constitution, however, did not define a public utility. — DVM, GMA News