Business groups press bicam committee to adopt ‘most liberal provisions’ of PSA bill

VARIOUS business groups and foreign chambers are pressing the Bicameral Conference Committee to adopt the “most liberal provisions” of a measure amending the Public Service Act (PSA), which they said would help the Philippines attract much-needed foreign investments as it recovers from the pandemic.

At the same time, foreign chambers and other local groups ramped up the pressure on the Senate to immediately give its concurrence to the ratification of the Regional Comprehensive Economic Partnership (RCEP).

This as Congress only has two weeks to go before it goes on a break on Feb. 4 for the election campaign.

In a statement, 22 business groups and foreign chambers said the amendment to the PSA is one of the “most important” reforms for the Philippine economy and is “essential to restoring and eventually exceeding pre-pandemic rates of economic growth.”

“This will improve the reputation of the Philippines as an economy that welcomes foreign investment, and annual FDI (foreign direct investment) inflow levels should increase to levels well above Malaysia and Thailand and may even begin to approach Vietnam,” they said.

Business groups that signed the statement include the American Chamber of Commerce of the Philippines, British Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, Management Association of the Philippines, and the Makati Business Club.

The Bicameral Conference Committee is currently consolidating the House and Senate versions of the bill amending the PSA. The measure seeks to allow 100% foreign ownership in telecommunications, air carriers, domestic shipping, railways and subways, and canals and irrigation. The Constitution currently limits foreign ownership in sectors defined as public utilities to 40%.

The business groups said the bicameral committee members should adopt the most liberal provisions, such as allowing fully foreign-owned companies to hold operations and maintenance concessions of airports and seaports. Tollways and expressways should also be liberalized for foreign investments, they added.

Foreign ownership restrictions on air carriers should also be lifted to give them the option to access foreign capital, they said.

Telecommunications should also be excluded from the definition of public utility.

“Likewise, the exclusion of passive infrastructure and value-added services from the definition of ‘telecommunications’ to avoid erecting a new and substantial barrier to the entry of competition in the market for internet services which would stifle the growth of community internet,” they said.

Public utility vehicles should be excluded from the meaning of public utilities. “This reform will be advantageous to the Philippine economy as it will increase competition in vital domestic land transportation services and result in increased foreign investment helping to modernize the industry,” they said.

Senator Mary Grace Natividad S. Poe-Llamanzares, chair of the Senate Public Services Committee, said in a Viber message there will be no hurdles to the ratification of the measure before the break.

“The bill strikes a fair balance between today’s economic imperatives and national security with adequate safeguards but not constraining growth and development. At the end of the day, what we aim is to give our people better services at lower costs that will improve their quality of life,” Ms. Poe-Llamanzares said.

SENATE PRESSED ON RCEP

Meanwhile, the Joint Foreign Chambers (JFC), Confederation of Wearable Exports of the Philippines (CONWEP) and its affiliate, the Coalition of Philippine Manufacturers of Personal Protective Equipment (CPMP), called on the Senate to immediately give its concurrence to the RCEP.

“As business associations representing major industrialized economies, we are concerned the Philippines export industry that has been severely hit by the pandemic, will miss out unless this free trade agreement is approved by the Senate,” Julian Payne, Canadian Chamber of Commerce of the Philippines president, said in a statement.

Lars Wittig, European Chamber of Commerce of the Philippines president, said the ratification of RCEP will be a complement to other economic reforms to show the Philippines is an “increasingly attractive location for new and expanding foreign investment.”