The House of Representatives on Tuesday approved on 2nd reading House Bill 5828 amending the Public Service Act redefining the public utilities that are covered by the constitutional ban on foreign investments in the country.

The bill provides a clear definition of public utility to cover 3 sectors: distribution of electricity; transmission of electricity and water pipeline distribution system or sewerage pipeline.

The committee report said the bill seeks to clarify the definition of public utilities in order to open up certain industries to more competition and provide a mechanism for rate fixing that allows a reasonable rate of return to attract investments into public utilities.

Opposition lawmaker Edcel Lagman earlier slammed HB 5828, which he said seeks to amend the 1987 Constitution.

“Itong bill na ito inaamyendahan ang Constitution. Hindi pwede. Ang pwede lang is you amend the constitution either by con-ass, by con-con or by people's initiative," he said.

"The bill is not unconstitutional, the law that will be passed based on the bill will be unconstitutional. Yes it's prioritized by the House leadership and they have the supermajority to back up an infirm measure," he added.

Lagman said the bill “ is actually a subterfuge to allow foreigners to own public utility enterprises without complying with the citizenship requirement imposed by the Constitution.”

Lagman said the Constitution requires that public utilities must be owned by Filipino citizens or by corporations, partnerships or associations where not less than 60% of the capital stock is owned by Filipino citizens.

“No less than Rep. Arthur Yap, the Chairman of the House Committee on Economic Affairs, has admitted during the deliberations that once House Bill No. 5828 is enacted into law foreigners will be allowed to own public utilities," he said.

Lagman said HB 5828 deleted the requisite Filipino ownership requirement of public utilities under the Public Service Act, which is identical with Section 11 of Article XII of the Constitution.

“Moreover, in its definition of a public utility, House Bill No. 5828 has deliberately deleted the concept of ownership and limited the definition to the operation, management and control of public utilities even as there can be no operation, management or control without an owner," he said.

Lagman added that the bill also deletes common carriers and telecommunications companies, which are presently operating with controlling Filipino ownership, from the enumeration of public utilities.

“I don't know whether it would pass the Senate but once it becomes law it is ripe to be challenged before the High Court. Bakit 'di na lang hintayin na mag-charter change?" he said.