Bill allowing foreign ownership of utilities gets final green light from Senate

December 15, 2021 | 5:52 p.m.

MANILA, Philippines — The Senate on Wednesday approved a final reading of a bill to amend the Public Utilities Act to allow full foreign ownership of companies in key sectors such as telecommunications and transportation.

Voting 19-3-0, the chamber voted to pass Senate Bill 2094 which was co-sponsored by Senate Minority Leader Franklin Drilon and Sens. Grace Poe. Drilon is also the main author of the bill.

Under the 1987 Constitution, public services must be 60% Filipino-owned. The bill seeks to change the law to make a distinction between utilities and utilities, freeing the latter for full foreign ownership.

If the bill is signed into law, foreigners will be allowed to own 100% of airlines, railways and subways, shipping companies and telecommunications operators.

“The main objective of this measure is to provide choices to consumers and I believe that by opening our economy to a diverse set of investors, we could provide our fellow Filipinos with more and better choices,” said Poe in the Senate.

“We have changed a law that dates back to the Commonwealth era,” she added. “Future generations of Filipinos will really benefit from what we started in our bedroom today.”

Pro Tempore Senate President Ralph Recto and minority senses Risa Hontiveros and Francis Pangilinan voted against the measure.

Senator Imee Marcos voted in favor but said she had “serious reservations” which she would take to the chamber secretariat.

Hontiveros opposes opening up the telecommunications industry to full foreign ownership

“I am saddened that many other essential services have been opened 100% to foreign ownership by our bill,” Senator Risa Hontiveros said in a speech explaining her “no” to the bill.

“[A]As Senator Recto has repeatedly suggested, we could have limited foreign ownership to, say, 70%, allowing Filipinos and even the state to have first-hand knowledge of what is going on inside these critical facilities.

She notably opposed opening up the telecommunications industry to 100% foreign ownership “at a time when we have tech-savvy neighbors as well as rogue non-state elements directly targeting facilities in the region.” .

Hontiveros said these supposedly targeted facilities include “government and military facilities and other very critical infrastructure.”

Ms. Poe, in her own speech, pointed out earlier that national security had been taken into consideration in the development of our bill, with certain industries, including telecommunications, being recognized as “critical infrastructure” subject to “several layers of guarantees”.

But Hontiveros argued that the Philippines lacked a cyber defense capability.

READ: 35% of Philippine companies’ cybersecurity technologies are obsolete – study

“National Security Advisor [Hermogenes] Esperon admitted him to the Senate in a hearing exactly a year ago,” she said, likely referring to Esperon telling senators in a hearing that there was no cybersecurity operations center in the Philippines.

“By allowing 100% foreign ownership, we are opening up our phones and all of our Internet-connected devices, appliances, and critical public facilities to state and non-state foreign interests who may have malicious designs on our national security,” Hontiveros said.

“The face of conflict and war has been irreversibly altered…and I fear we’ve just let our guard down.” —Bella Perez-Rubio