Senate OKs on third reading bill amending Public Service Act

The Senate on Wednesday approved on third and final reading the bill amending the 85-year-old Public Service Act (PSA) in a bid to open up the Philippines to more foreign investors.

With urgent certification from Malacañang, the senators passed the measure, which allows foreign ownership over public services, a day after it was approved on second reading.

Senate Bill 2094 got 19 affirmative votes, three negative votes and zero abstention with Senate President Pro Tempore Ralph Recto, Senators Risa Hontiveros and Francis Pangilinan casting “no” votes on the measure. 

SB 2094 seeks to provide clearer definitions of the terms "public services" and “public utilities.”

Under the bill, public utility refers to a “public service that operates, manages or controls for public use” which covers: distribution or transmission of electricity; petroleum and petroleum products pipeline distribution systems, water pipelines distribution systems and wastewater pipeline systems; as well as airports, seaports, public utility vehicles and tollways or expressways.

According to Senator Grace Poe, sponsor of the bill, those not classified as a public utility shall otherwise be considered as a public service, which will not be bound by the restriction on foreign ownership.

Public services include telecommunications, air carriers, domestic shipping, railways and subways.

Poe earlier explained that such public services are identified in the bill as “critical infrastructure” and will continue to be subject to regulation by relevant agencies under existing laws.

She made an assurance that SB 2094 contains “safeguards” to protect national security and there will be a review of the foreign investments by the National Security Council.

Among the safeguards contained in the bill is the provision prohibiting foreign state-owned enterprises from owning capital in any public service classified as critical infrastructure.

Moreover, the bill has a “reciprocity clause” which states that foreign nationals shall not be allowed to own more than 40 percent of capital in public services engaged in the operation and management of critical infrastructure, unless their country accords reciprocity to Philippine nationals.

The proposed law also raises the penalties for persons who commit prohibited acts or neglect, with fines not less than the current value of the original fine based on the consumer price index, or imprisonment of not lower than six years up to a maximum of 12 years, or both.

On the other hand, Hontiveros, who voted against SB 2094’s passage, said she supports the objective of inviting more foreign investors for the improvement of the country’s public utilities.

However, she lamented that the bill have opened up many other critical services up to 100 percent foreign ownership when the Senate could have limited foreign participation to 70%.

Hontiveros explained that limiting it to 70% would allow Filipinos and even the state “to have direct knowledge of what goes on inside these critical facilities.”

“I also vote no, because the telecoms industry is being opened up by our Senate Bill to 100 percent foreign ownership, and we are doing this at a time when we have tech savvy neighbors as well as rogue non-state elements that are directly targeting facilities in the region, including government and military installations and other very critical infrastructure,” the lawmaker said.

Citing the admission of National Security Advisor Esperon a year ago, Hontiveros noted that the Philippines has no rudiments of a cyber-defense doctrine nor a cyber-defense operations center that would allow the country to engage in the “new theater of international conflict,”

“By allowing 100 percent foreign ownership we are opening our phones, and all our internet-connected devices, appliances and critical public facilities to foreign state and non-state interests that may have malevolent designs on our national security. This is a fact and the government is aware of the existence of these clear and present threats,” she said.

“The face of conflict and warfare has been irreversibly altered, Mr. President and I fear that we have just brought our guards down. This is why I vote no,” she ended.” — RSJ, GMA News