MANILA - President Rodrigo Duterte's threat to shut down and take over two major telecommunications company in the Philippines will spook investors who plan to do business in the country, Sen. Francis Pangilinan said Tuesday.
Duterte's statement that PLDT and Globe should improve their services or face "closure" or "expropriation" was made during the President's 5th State of the Nation Address (SONA).
"Threatening telcos with expropriation after shutting down the largest media network while displaying sheer government incompetence and failure in managing the COVID response will only scare foreign and local investors from doing business in the Philippines," Pangilinan said in a text message to reporters.
"It further hampers our economic recovery," the opposition senator said, referring to the country's economic woes during the COVID-19 crisis.
Senators Panfilo Lacson and Imee Marcos said the President's threats against big businesses usually result in improvements tax collection and quality of service.
Philippine Airlines settled its P6 billion obligation to the government while cigarette manufacturer Mighty Corp paid P40 billion in taxes after Duterte publicly threatened to shut down the said companies in previous years, Lacson said.
"I would say, has therefore served its purpose, rightly or wrongly," Lacson said in a statement.
"Whether government takeover of telcos is justified and compliant with the provisions of the Constitution given the circumstances is another matter altogether," he said.
Marcos, meanwhile, claimed that Duterte, being a lawyer, and will ensure that his actions against large corporations will have sufficient legal basis.
"Hindi naman 'yun kikilos ng walang basehan," she said.
The President's "warlord-like" rhetoric and political will may even entice some investors to come to the Philippines, she said.
"Mas lalo matutuwa yung mga investor na it's transparent... Matutuwa sila na yung government will intervene, will take charge," said Marcos, who chairs the Senate Committee on Economic Affairs.
Senate President Pro Tempore Ralph Recto said that government expropriation of telcos "is not the solution" to improve the Philippines' connectivity issues.
"Government has a terrible record in operating telecoms," Recto said in a text message, referring to the state-run telephone service in the 1960s.
"Promoting competition is the way forward," he said.
PLDT shares sank by about 3.6 percent, while Globe shares dropped by 2.99 percent in the morning trade a day after Duterte's SONA.
The shares of third telco player DITO - owned by Duterte ally Dennis Uy - grew by around 8.27 percent in the same trading window.