Local and foreign investors hailed the signing into law of the Public Service Act (PSA) by President Duterte, while Trade and Industry Secretary Ramon M. Lopez revealed at least investment leads of $100 billion over a two-year period as the law opens up to 100 percent foreign ownership of public services in the country and creating more jobs for Filipinos.
Initially, Lopez said the amended PSA is projected to haul in more than $60 billion investments in the telecommunications, transportation, logistics and railways sectors. “This is still understated as other leaders have not indicated investment amount. Can be over $100 billion over two years,“ Lopez added without identifying the investment leads.
From the private sector, the American Chamber of Commerce of the Philippines (AmCham) applauded the signing of the bill amending the 1936 PSA pointing out that the amendments will match that of Singapore, Thailand and Vietnam’s level of liberalization in these sectors.
“AmCham is confident that its signing, along with other recent investment liberalization bills –the Retail Trade Liberalization Act and the Foreign Investments Act –will significantly help the Philippines compete with its regional neighbors in bringing in investments to the Philippines. It will also be extremely helpful to the long-run recovery of the economy after the pandemic,” American investors said in a statement.
The American business chamber, which was incorporated in 1920, vowed to continue to endeavor to contribute to the Philippine economic growth and serves the interests of Philippine and American businesses through the participation of members in promoting its long-term objectives. AmCham represents over 700 member organization’s voice and interests.
Officials of the German-Philippine Chamber of Commerce and Industry (GPCCI – AHK Philippinen), who were invited to witness the signing of the law in Malacanang as well the presentation of the recently enacted Amendments to Foreign Investments Act (Republic Act No. 11647), also lauded the enactment of the amended PSA.
GPCCI President Stefan Schmitz said “The passage of the Amendments of the Public Service Act harmonizes with the recently passed amendments to Retail Trade Liberalization Act and Foreign Investment Act” said “with these laws enacted, we are confident that the country can attract many investors in various sectors and will benefit Filipinos by improving basic services and creating more jobs.”
GPCCI Executive Director Christopher Zimmer said the “game-changing law shall break major economic barriers in the country and will be beneficial for the economic recovery.”
Zimmer said the enactment of RA 11659 seeks to ease or lift restrictions on foreign investments in public services by amending the 85-years-old public service law, distinguish definitions between “public utilities” and “public services”, and repeal provisions that limit foreign participation in certain economic activities.
The amendments will attract global players to help modernize Philippine public services telecommunications, shipping, air carriers, railways, and subways. Increased competition is seen to generate higher quality of service and competitive pricing for consumers.
The Management Association of the Philippines (MAP) noted of how they and other private sector groups collaborated to support the passage of the PSA amendments.
MAP President Alfredo “Fred” E. Pascual said that along with the recently amended Retail Trade Liberalization Act (RTLA) and the Foreign Investment Act (FIA), the amended PSA provides a legal framework to encourage the inflow of more foreign investments into the country. “The entry of foreign investors will foster strong competition that will benefit the consumers, create more jobs, expand our economy, and boost our recovery from the disruptions caused by COVID-19.A more open Philippine economy will enable us to catch up with our more progressive neighbors in ASEAN,” said Pascual.
In a statement, the Foundation for Economic Freedom (FEF) said the enactment of the Amendments to the Public Service Act is the most game-changing economic legislative reform in 86 years that is pro-consumer, pro-security and pro-growth.
As the Philippine economy emerges from the effects of the COVID-19 pandemic, FEF said, the enactment of this law will facilitate new opportunities and sustainable growth by fostering competition in the public service sector, attracting much-needed foreign direct investments, and paving the way for better access, quality, and rates of public services.
FEF commended legislators and the government’s economic managers for crafting a law that not only opened the country to FDI and creates a more competitive public sector, but also safeguards the nation from potential national security threats, protects the welfare of small local businesses, and ensures benefits for Filipino businessmen.
“This new law will bring huge benefits for business and individual consumers alike, with the entry of more investors in the telecommunications and transport industries offering a wider choice at different price points. We foresee increased investments in the sectors opened up to a maximum of 100% foreign ownership such as telecommunications, shipping, trains and railways, airports and airlines, toll roads, and transport network vehicles (TNVs),” FEF said.
As new foreign investments enter the country, the amended Public Service Act establishes rules to protect the country from malign intentions that endangers our national security. The provisions on vetting of potential investments in critical infrastructure, and the requirement for an ISO certification for Information Security for telecommunications investors ensures that the Philippines will be less vulnerable to cyber threats and domination of foreign interests.
The amended law likewise protects consumer welfare by increasing the penalties for erring companies engaged in public services. It also provides protection for small operators in the transportation industry by retaining the 60/40 restriction for public utility vehicles such as tricycles and jeepneys. Filipino businessmen likewise benefit, as the law includes a reciprocity provision that may open up business opportunities for them in other countries. Another benefit of the law is the creation of more jobs for Filipinos with the entry of more investments.
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