NEWS

By Kyle Aristophere T. Atienza | Business World | March 22, 2022 12:34AM

(Photo: Reuters)

PRESIDENT Rodrigo R. Duterte on Monday signed a law that allows full foreign ownership in more public services such as telecommunications and domestic shipping, a move that would further liberalize the Philippine economy.

Republic Act No. 11647, which amends the 85-year-old Public Service Act, excludes telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports from the definition of a public utility. This means they will no longer be subject to the 40% foreign ownership cap for public utilities under the Constitution.

The law also bars foreign nationals from owning more than 50% of capital in public services engaged in the operation and management of critical infrastructure, unless their country accords reciprocity to Filipino nationals.

Foreign state-owned enterprises are also prohibited from owning capital in any public service classified as a public utility or critical infrastructure.

The President is also given the authority to suspend or prohibit any proposed merger or acquisition, or investment in a public service that results in giving control to a foreigner or foreign corporation.

The government is hoping the measure will help the Philippine economy recover from the pandemic by creating much-needed jobs.

“I believe that the easing of foreign equity restrictions would attract more investors, modernize several sectors of public service, and improve the delivery of essential services,” Mr. Duterte said in a speech at the signing ceremony.

He also said that the law would generate more jobs for Filipinos and improve services for Filipino consumers.

“By easing foreign equity restrictions in key industries, the law will spur critical investments to fast-track inclusive recovery and development that will leave no Filipino behind,” Senate Committee on Public Services Chair Mary Grace S. Poe-Llamanzares said in a statement.

Critics, however, have raised concerns over national security risks.

Last year, Senator Ralph G. Recto said allowing total foreign ownership of telecommunications companies would pose risks to national security.

Increasing foreign ownership in key industries will make it even more difficult for Filipino enterprises to develop, according to think tank Ibon Foundation.

Source: Business World