Lagman slams as ‘unconstitutional’ bill extending foreign ownership of telcos, transport services

Published February 20, 2020, 12:00 AM

by manilabulletin_admin

By Ben Rosario

Even if finally enacted into law, the bill that seeks to allow greater participation or even full ownership of transportation and telecommunications firms by aliens will have to pass the Supreme Court’s scrutiny for allegedly being “fatally violative” of the Constitution.

Albay 1st district Rep. Edcel Lagman (FEDERICO CRUZ / MANILA BULLETIN)
Albay 1st district Rep. Edcel Lagman

Albay Rep. Edcel Lagman assailed the second reading approval of the measure, saying the bill is patently unconstitutional for allowing traditional public utilities to be owned by aliens or corporations which are wholly owned by foreigners.

Hinting that the issue would be brought for a ruling before the High Court, Lagman cited numerous court rulings declaring no distinction between the definition of “public service” and “public utility” which House Bill (HB) No. 78 differentiated.

Passed on second reading on Tuesday, HB 78 or the New Public Service Act is set for third reading approval soon. Since it has the full backing of the government, passage may be guaranteed in the Lower Chamber, which is dominated by administration allies.

The bill seeks to define “public utility” as a person that operates, manages, controls for public use the distribution and transmission of electricity, or the operation of water pipeline distribution system and sewerage system pipeline.

It drops all other services such as telecommunications and public transportation operation from being considered public utility, opening these two sectors to full or partial foreign ownership.

Authored by Albay Rep. Joey Sarte Salceda, HB 78 takes out telecommunications and transportation services from the definition of public utility, whose ownership is limited by the 1987 Constitution to less than 40 percent.

“This legislative reform will significantly contribute to increasing competition, as well as protecting the public interest,” Salceda said as he strongly pushed to amend the 80-year-old Public Service Act.

Salceda, chairman of the House committee on ways and means, noted that the current law has now failed to sufficiently address “changes in the economic framework brought about by globalization and rapid technological innovation.”

However, Lagman slammed the bill as a glaring attempt to allow a statute to amend the Constitution.

“The New Public Service Act, if enacted into law, is a mere statute which cannot amend the fundamental law,” Lagman warned.

“This is contrary to Section 11 of Article XII of the Constitution which reserves the ownership, operation, control, and management of public utilities to Filipino citizens or to corporations or associations at least 60 per centum of whose capital is owned by Filipinos,” stressed Lagman.

He added: “The subterfuge offensive to the Constitution is foisted by making a distinction between “public utility” and “public service” where enterprises categorized under the latter are unconstitutionally exempt from the nationality or citizenship requirement of the Constitution.”

The independent lawmaker recalled that a similar bill was passed on third and final reading in the Lower House during the previous Congress. However, the proposal failed to get the Senate’s nod.