Bill that will amend PSA unconstitutional – Carpio

A bill that seeks to amend the Public Service Act (PSA) is an attempt to allow foreign ownership of telecommunications (telco) firms in the country, former Supreme Court justice Antonio Carpio said on Thursday.

House Bill (HB) 78 aims to amend the 84-year-old Commonwealth Act 146, or the PSA, to limit the definition of public utility to only power distribution and transmission, and water pipeline distribution or sewerage pipeline system. It also distinguishes the term “public service” from “public utility,” making other entities such as telcos and transportation businesses open for foreign ownership.

The bill was passed at the House of Representatives on March 10. The Senate’s version remains pending.

“That House bill, if approved by the Senate, will amend the Public Service Act to exclude telcos as public utilities which, under the Constitution, must at least be 60 percent Filipino-owned,” Carpio said in a statement.

He affirmed that this amendment would allow foreign investors to own 100 percent of telco companies, implying that China Telecom could be 100 percent owner of the third telco that the government had pushed since 2017.

The ticket for the country’s third telco had been awarded to Dito Telecommunity, a partnership of Davao-based Udenna consortium and China’s State-owned telecom.

“Apparently, China Telecom wants to come in as a majority, or even 100 percent owner, of the third telco,” Carpio said.

He added that the measure was unconstitutional as “the framers of our Constitution, in discussing Section 11, Article 12 of the Constitution requiring public utilities to be at least 60 percent Filipino-owned, expressly referred to telco companies.”

Carpio said another provision of the Constitution, not covered in HB 78, also required telcos to be 60 percent Filipino-owned.

He explained that telcos, which cannot operate without utilizing radio frequencies, must also comply with the Constitutional provision that states: “All natural resources are owned by the State. The State may directly [exploit such natural resources], or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations at least 60 percent of whose capital is owned by such persons.”