Business groups and government agencies were unanimous in their support for the enactment of Republic Act 11659 or the amendments to the Public Service Act (PSA), which Pres. Rodrigo Duterte signed into law on Monday, March 21.
The National Economic and Development Authority (Neda) and the Department of Trade and Industry (DTI) were among those which expressed their approval of the amendments to the PSA, saying it will liberalize key public services by allowing full foreign ownership in sectors including telecommunications, railways, airports, and shipping.
This development, they said, will encourage more foreign investments and innovation to lower prices, improve the quality of goods and services, and create more and better jobs.
The measure, however, still retains the 60-40 percent foreign equity limitation in some sectors considered as natural monopolies where a single firm can serve the market at lower costs than having two or more firms.
These include the distribution of electricity, transmission of electricity, petroleum and petroleum products pipeline transmission systems, water pipeline distribution systems, and wastewater pipeline systems, including sewerage pipeline systems, seaports, and public utility vehicles.
DTI secretary Ramon Lopez said he expects the country to get $60 billion to $100 billion worth of investments in the next two years with the signing into law of the amendments to the PSA.
He added the new PSA will also spur technology-based innovations in the country, better quality services at a lower cost, benefitting the consumers.
The American Chamber of Commerce of the Philippines (AmCham), meanwhile, lauded the enactment of the new law, saying it is expected to be a “game-changing” law for the country’s investment horizon.
AmCham said the amendments to the PSA will match the investment policies of Singapore, Thailand, and Vietnam amid the strong competition to attract foreign investments in the region.
The newly enacted law also aims to further increase foreign investments in the country. In 2021, despite limits in foreign ownership here, the Philippines registered its highest foreign direct investments (FDI) net inflows worth $10.5 billion.
Bulk of the capital placements were in the sectors of manufacturing; electricity, gas, steam and air-conditioning; financial and insurance; and real estate.
For its part, telco giant PLDT said the passage of RA 11659 would help position the Philippines as an “attractive investment destination” for foreign entities looking to invest in the Asian market.
“In the medium term, we expect that RA 11659 will encourage healthier competition in various industries in the country,” said PLDT president and chief executive officer Alfredo Panlilio in a statement.
In the meantime, Panlilio said there are no plans yet to increase the share of foreign equity at PLDT.
“We are also waiting for the release of the implementing rules and regulations (IRR) of the new law, and we welcome any opportunity to support the government in the development of the IRR,” Panlilio said. — with reports from PNA