‘Third player’ may prefer to await bill liberalizing public services

SENATOR Sherwin T. Gatchalian wants the telecommunications industry’s new entrant, the socalled “third player,” to enter the market after the passage of a bill which would liberalize industries providing public services.

“On the third player, I’m sure he’s conducting due diligence. If he hears this, he might as well wait for the amendment of the public services act so he could enter the market quickly and he can majority- own the company,” he told BusinessWorld on Thursday.

“It is to the advantage of the new player to wait for this act to be approved,” he added.

Mr. Gatchalian said he expects the proposed measure to become law before Congress goes on break by March, noting its inclusion in the Legislative-Executive Development Authority Council’s (LEDAC) priority bills.

The senator’s remarks were made on the same day the Department of Information and Communications Technology (DICT) moved the deadline for selecting the “third player” to May 18.

The Senate committee on public services and on economy last week tackled Senate bill Nos. 695, 1261, 1441 and 1594, which proposed amendments to the 81-year-old Public Services Act or Commonweath Act. No. 146.

Mr. Gatchalian, who chairs the committee on economy, said the proposed measure will clearly provide a definition of public utilities and public services, which have been used interchangeably over the years and have caused confusion on whether certain sectors are subjected to foreign equity restrictions.

The Constitution limits the operation of a public utility to companies whose ownership is at least 60% Filipino- owned. Meanwhile, the Public Service Act does not define a public service or public utility and included only a list.

If the law is passed, Mr. Gatchalian said public service providers, such as airlines and telecommunications, will be open to foreign investment. Only electric power distribution and transmission, water pipeline distribution and sewerage pipeline system will be restricted.

“With public services, it’s basically liberalizing the industries. To give you a specific example, telecoms will now be considered public services so it would not be subjected to the 60-40 limitation. It will be open to the 100% foreign ownership,” Mr. Gatchalian said.

He added that the application for franchises will be easier since companies will no longer require approval from Congress.

Mr. Gatchalian said the proposed measure would increase competition, lower prices, and improve services. It would also attract foreign investors since they would be given control over companies.

“That’s what we want for the ( third telco player): to be no longer hassled when it enters the country. This has always been the complaint of foreign investors that our system is too bureaucratic,” he said.