The Department of Trade and Industry (DTI) said it has thrown its support behind moves at the House of Representatives to open up more sectors, such as broadcasting, telecommunication and public utilities, to foreign-equity participation.
Trade Secretary Ramon M. Lopez expressed his support for bills seeking to amend the public-service law during the Inclusive Innovation Conference 2017 organized by the DTI.
The Department of Finance (DOF) has been pushing for a “more liberal” foreign investment negative list (FINL) so the country could attract more investors.
“The amendments won’t be part of the current FINL yet, but a big chunk of the change in the list can be through the [amendment] of the public-service law,” Lopez said.
He said he supports four bills filed at the House of Representatives, which seek to change the definition of “public utilities”.
Under House Bills (HB) 4389, 4468, 4501 and 4787, filed by Reps. Gloria Macapagal-Arroyo, Joey S. Salceda, Arthur C. Yap and Feliciano R. Belmonte Jr., respectively, public utilities will be limited to electric-power transmission and distribution, water distribution and sewerage systems. All other “public services”, including electric-power generation and supply, crude oil and petroleum, transportation, broadcasting, telecommunications and value-added services, will no longer be under the public utilities category.
The definition of public utility in the public-service law, or the Commonwealth Act 146, was “too ambiguous”, as it allowed public utilities to be interchanged with public services.
In this way, the 60-40 foreign-equity limitation that only applies to public utilities also applies to public services.
Lopez added the changes can help streamline the government’s FINL. Finance Secretary Carlos G. Dominguez III earlier pledged a “very liberal” FINL in their ongoing review of the restrictions, which started this month.
The FINL enumerated the investment areas and activities reserved exclusively for Filipinos, as well as industries where foreign equity of up to a maximum of 40 percent is allowed, as provided for by the 1987 Constitution.
The last regular FINL was issued in May 2015 by former President Benigno S. Aquino III.
Under the 2015 Negative List, 100-percent foreign participation is allowed only for retail trade enterprises and still subject to certain conditions in the Retail Trade Liberalization Act and also in the rice and corn industry under certain conditions.
The 2015 list also allows full foreign participation in the exploration, development and utilization of natural resources through financial or technical assistance agreements with the President.