NextGen Day

The bicameral conference committee report on the proposal proposing revisions to the Public Service Act (PSA) in order to attract more foreign investments was ratified by the House of Representatives on Wednesday night.

During the plenary session, the chamber approved the final text of proposed PSA modifications aimed at loosening restrictions on foreign investment in public services.

Except for electricity transmission and distribution, water pipeline and sewerage, seaports, petroleum pipeline, and public utility vehicles, the bill basically opens up all economic sectors in the country to 100 percent foreign equity.

Rep. Joey Salceda, the chair of the House Ways and Means Committee, called the idea “the most essential economic change.” “since the CREATE Act (Corporate Recovery and Tax Incentives for Enterprises).

The move, according to Salceda, is the country’s closest approach to overcoming the “growth overhang caused by the 1987 Constitution’s foreign equity limits.”

“This is a major reform because it allows us to access foreign capital.” We require a large amount of foreign finance. We have a lot of homegrown talent, but they go abroad since the money needed to hire them is invested elsewhere “he stated

He pointed out that the Philippine economy is the most repressive of the ASEAN (Association of Southeast Asian Nations) countries.

According to him, the final version eliminates the need for time-consuming reviews by the whole National Security Council for so-called essential infrastructure.

He said that the initiative would have “huge” effects on job creation and investment.

“From the final version of the sectors that will be opened up as a result of the PSA revisions, we predict an increase in FDIs (foreign direct investments) of roughly PHP299 billion over the next five years.” “We also estimate GVA growth in these regions to result in a 0.47 percentage point higher GDP (gross domestic product) growth rate than the baseline,” Salceda said.

According to him, the PSA amendments’ principal economic benefit is that it gives local and oligopolistic companies in important sectors a genuine threat of external competition.

“”A credible threat of competition is viewed as a pro-competitive tool that diminishes monopoly or oligopoly power (to set prices or deliver low-quality services) and motivates local players to enhance efficiency,” he explained.

The ratified version, according to Salceda, will be “a godsend to consumers.”

He explained that, in addition to the fact that more competition means lower pricing in general, the proposal also includes a provision that requires public utilities and public services to return excess public receipts and pay fines if they exceed the rates set by regulators.

“The PSA modifications will instantly help consumers. Of course, in the long run, we will inevitably create more jobs and may even be able to send many OFWs home, as we expect additional FDI to emerging from capital-starved public services as a result of the reform “he stated

Other laws ratified by the Lower House during the same plenary session include:

1) House Bill 78 and Senate Bill 2094, which define what constitutes a public utility;

2) HB 5793 and SB 2395, which require subscriber identity module (SIM) cards to be registered;

3) House Bill 3255 and Senate Bill 1241, which would construct Timbangan ng Bayan Centers in all markets around the country;

4) House Bill 10610 and Senate Bill 1155, which fix the validity duration of the license to own and possess firearms, registration, and permit to carry firearms outside of one’s home or place of business;

5) HB 9458 and SB 643, allowing government employees night shift differential compensation;

6) House Bill 10698 and Senate Bill 2124, which reinforce the Sangguniang Kabataan;

7) HB 10658 and SB 2449, which tighten anti-human trafficking regulations;

8) HB 8818 and SB 2365, which tighten the Philippine Deposit Insurance Corporation’s (PDIC) regulatory structure; and

9) HB 10701 and SB 2421, which would provide health personnel with required continuous benefits during the Covid-19 pandemic and other future public health emergencies.

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