Bill lifting foreign ownership limits in public utilities passes 2nd reading

MANILA, Philippines — The House of Representatives on Tuesday approved on second reading a bill which seeks to lift the foreign ownership restrictions on corporations involved in public utilities.

House Bill no. 78 seeks to amend the Commonwealth Act no. 146, known as the Public Service Act. The bill limits the definition of a public utility to electricity distribution, electricity transmission, and water pipeline distribution or sewerage pipeline system.

Further, the bill distinguishes “public service,” whose definition under the law is retained, from “public utility.”

The bill runs counter provisions under the 1987 Constitution, which state that public utilities must be solely operated by firms which are 60-percent owned by Filipinos.

Albay Rep. Joey Salceda, who authored the bill, explained that “competition and foreign investment are inhibited because limitations that should only apply to the operation of a public utility are applied to all public services.

“This situation is caused by the ambiguity in the definition of public utility that is often used interchangeably with public service under Commonwealth Act No. 146. The key to fixing this problem is to develop a clear statutory definition of public utility,” Salceda said in the bill’s explanatory note.

The lawmaker added that the enactment of the bill once signed into law will be beneficial to consumers.

“This legislative reform will significantly contribute to increasing competition, as well as protecting the public interest. More competition among providers would result in lower prices and improved quality of basic services, creating a more competitive economy towards a better quality of life for all,” Salceda said.

Edited by EDV