Senate approves bill allowing foreign ownership of utilities

MANILA, Philippines — The Senate on Wednesday approved in its third and final reading a bill that would allow foreign ownership of public utilities.

On 19-3-0, Senators approved Senate Bill 2094, which seeks to amend Commonwealth Act 46 or the Public Service Act (PSA).

The bill aims to overhaul the PSA by establishing a clearer differentiation between “utilities” and “utilities” that will free utilities that are not considered natural monopolies from restrictions on foreign capital.

Senator Grace Poe, sponsor of the bill, explained earlier that utilities should be treated as natural monopolies, which are constitutionally required to be 60% Filipino-owned.

The proposal in the Senate version of the bill limits utilities to electric power distribution, electric power transmission, water and sewage distribution services, airports, seaports and vehicles of public service.

Tolls and highways were also included in those considered a public utility during Tuesday’s amendment period, meaning that under the Senate measure, areas not considered public utilities – such as telecommunications, airlines and the domestic shipping industry – would no longer be covered. by the condition of citizenship.

Sectors that are not considered public services, such as telecommunications, airlines and the national maritime industry, would no longer be covered by the citizenship requirement./ Marchant via AFP Relaxnews

Railways and subways are also considered public utilities under the bill.

Poe explained earlier that while utilities that are not natural monopolies will be freed from this foreign capital restriction, they will not be exempt from any of their other responsibilities as utility providers.

“I would like to emphasize that in this attempt to liberalize our economy, we have taken into account national security concerns. We recognize that some industries are critical infrastructure,” Poe also said during Wednesday’s session.

“Thus, transactions resulting in control of these industries are subject to multiple layers of safeguards. The country is now open for business, but it has to be on our specific terms and needs,” she added.

These safeguards include prohibiting foreign state-owned companies from holding equity in any public service classified as critical infrastructure and review of foreign investment by the National Security Council.

The bill also contains a reciprocity clause stipulating that foreign nationals are not allowed to hold more than 40% of the capital of public services engaged in the operation and management of essential infrastructure unless their country grants the reciprocity to Filipino nationals.

In addition, the measure proposes to increase penalties for those who commit prohibited acts or negligence, with fines no less than the current value of the original fine based on the Consumer Price Index, or a penalty imprisonment for at least six years up to a maximum of 12 years. , or both.


Senate Pro Tempore President Ralph Recto and Senators Risa Hontiveros and Francis Pangilinan voted against passing the bill.

Hontiveros raised national security concerns with the bill opening up “critical services” to foreign ownership.

“I support the objective of inviting more foreign investors who will inject capital and know-how for the improvement of our public services. I accept the principle that Congress has the power to define which services are a public service and which are not,” she said.

“I commend the sponsor and my colleagues for continuing to book our common carriers (our buses, jeepneys, taxis) and our seaports and airports primarily to Filipinos and companies with a maximum foreign ownership limit of 40%,” he said. -she adds.

However, she said she was “saddened” that the bill would allow full foreign ownership of “many other essential services”.

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

“The face of conflict and war has been irreversibly changed and I fear we have just let our guard down,” she added.


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