Retention of telcos as public utility opposed

Foreign business groups say ‘liberalizing sends strong signal to investors’

FOREIGN business groups are joining local industries in opposing proposals to retain the status of the telecommunications sector as a public utility, which would limit foreign ownership in the sector.

Senate Bill 2094 could amend the Public Service Act (PSA), changing the definition of public utilities to allow more foreign investment in telecoms. The Constitution limits foreign ownership in public utilities to 40%.

The business groups expressed concerns over proposals to retain the status of telecoms they said are being considered in Senate deliberations.

The groups said that allowing foreign competition into the country would improve the quality and pricing of internet connectivity, which lags behind most Southeast Asian countries.

“The Philippines has the lowest mobile broadband subscription rate of 68 per 100 and lowest service population penetration rate of 80%. Even Cambodia and Myanmar are more advanced,” the groups said in a statement on Monday.

Business groups behind the statement include the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers of commerce in the Philippines, along with the Philippine Association of Multinational Companies Regional Headquarters, Inc.

The groups added that the PSA amendments would help the country comply with commitments to the Association of Southeast Asian Nations to open investment in services to other members of the region.

“Liberalizing telecommunications sends a strong signal to foreign investors that the Philippines is more open and welcoming to foreign investors.”

Some senators have raised concerns on lifting the foreign ownership restriction, warning that it could threaten national security or favor a single country.

But the groups maintain that SB 2094 could protect against foreign government control of Philippine public services.

“The bill contains provisions to protect against foreign government-owned and influenced firms controlling Philippine public services by adopting national security review practices followed by major governments, including Australia, Japan, and the United States, in reviewing and approving major new foreign investments,” the groups said.

The foreign chambers join other Philippine business groups — which include the Management Association of the Philippines and the Foundation for Economic Freedom — that had written to the Senate opposing any move to retain telecoms as public utility. — Jenina P. Ibañez

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