MANILA - The Board of Investments said Tuesday the amended Public Service Act (PSA) will boost foreign direct investments and fuel economic growth once it is enacted into law.
The Senate and the House of Representatives on Feb. 2 passed the joint bill which amends the Public Service Act and eases foreign ownership restrictions on select sectors. The measure is now up for signature by President Rodrigo Duterte.
Trade Secretary and BOI Chairman Ramon Lopez said the measure redefines what sectors are considered "public utility" and "public services".
Under the current law, foreigners are restricted from full ownership of companies considered to be public utilities, which include telecommunications firms.
Analysts say this has stunted investment in telcos and resulted in a duopoly that is disadvantageous to consumers.
Business leaders said allowing foreigners to own telcos will bring much-needed investment into the sector, which will mean better services and faster internet speeds.
But the PSA amendments also carry a reciprocity clause that bars foreign nationals from owning over 50 percent of public service companies in critical infrastructure unless their country also allows Filipinos majority ownership in these sectors, DTI Usec. Rafaelita Aldaba said.
Under the measure, the President can also suspend or forbid a proposed merger or acquisition on investments in public service “that effectively results in the grant of control to a foreigner or a foreign corporation.”
According to the BOI, the proposed measure classifies the distribution and transmission of electricity, petroleum and petroleum products pipeline transmission systems, water pipeline distribution systems and wastewater pipeline systems, sewerage pipeline systems, seaports, and public utility vehicles as "public utility."
Therefore, "any industry not included in the list will remain as 'public services' and be liberalized taking into account national security," the BOI said.
Lopez said the PSA amendments will benefit consumers and generate more jobs.
"There will be increased competition in terms of services and products which will generate better quality of services and competitive pricing to the benefit of the consumers. Higher investments will also generate more jobs and income for the people.” Secretary Lopez said.
The Philippines is currently ranked as the third most restrictive economy by the 2020 Organization for Economic Cooperation and Development (OECD) report.