NextGen Day

MANILA, Philippines — The Department of Justice (DOJ) said on Wednesday that the new law revising the Public Service Act (PSA) recently approved by President Rodrigo Duterte now clearly outlines which enterprises are considered public utilities and would remain subject to the Constitution’s prohibitions on foreign investments.

“The new law now explicitly defines what public utilities are: electricity transmission and distribution, petroleum pipeline transmission, water and sewerage pipeline distribution, seaports, and personal water vehicles (PUVs)” (public utility vehicles). The Constitution will continue to limit their foreign ownership (maximum of 40 percent of capital). In a statement to media, DOJ Secretary Menardo Guevarra said, “All other public service businesses will be liberalized, enabling foreign capital to the level of 100 percent.”

Telecommunications, railways, expressways, airports, and shipping will all be designated public services under the modified PSA, allowing for up to 100 percent foreign participation in these areas.

Senator Franklin Drilon, the bill’s major supporter in the Senate, said the new law changes the more than 80-year-old Commonwealth Act No. 146 and will help the economy recover.

Drilon claimed that the amendment clarifies the definition of public utilities, noting that the interchangeable use of the terms “public utility” and “public service” has effectively banned foreign capital from entering the Philippine market.

While foreign ownership of these public utilities will be limited to a maximum of 40%, foreign ownership limits on all other “public services” will be lifted.

Drilon, on the other hand, underlined that Republic Act 11659 does not result in the deregulation of public services, stating that all public services, including public utilities, are still governed by existing regulations.

“This legislation will boost the economy, increase business competition, make it easier to do business, and create more jobs,” Drilon added.

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