The Senate Public Services Committee endorsed on Wednesday, March 10, the approval of the amendments to the Public Service Act, which are expected to open up competition and improve the provision of basic services in the country.
Senator Grace Poe, the panel's chairperson, sponsored during their plenary session the Committee Report No. 191, which consolidates six bills proposing the revision of the 85-year-old Commonwealth Act No. 146.
"It is my honor to present to the body a measure that has been a long time coming," Poe said in her sponsorship speech.
She said Senate Bill No. 2094 proposes to clear the ambiguity surrounding the interchangeably used terms "public utility" and "public service".
The latter would be the umbrella term, while the former will be its "subset", Poe said.
Under the bill, public utility will just be limited to three services, namely: the distribution of electricity; transmission of electricity; and water pipeline distribution and sewerage services.
Public utilities, she said, "are to be treated as natural monopolies" and will still be be restricted pursuant to Article 12, Section 11 of the Constitution, which states that franchises, certificates and other forms of authoritization for public utilities shall be given only to 60-percent, Filipino-owned corporations and associations.
Meanwhile, "all other public services that are not natural monopolies will be freed from such foreign equity restriction but not from any of their other responsibilities as public service providers," she said.
Poe stressed: “We are not redefining things. We are declaring as public policy that the expansion of the investment base will benefit the public by allowing meaningful competition with more players, domestic and foreign, to slug it out to win the satisfaction of the consuming Filipino people."
"Sa ganitong paraan, magiging paligsahan ang pagbibigay ng dekalidad na serbisyo at produkto sa pinakamababang presyo para sa mga Pilipino. Inaasahan nating ito na ang magwawakas sa ‘take it or leave it’ attitude ng mga nagpakasasang monopolya nitong nakaraang siglo (This way, the provision of quality service and products at the lowest price to the Filipinos will now be a competition. We expect that this measure will end the 'take or leave it' attitude of companies that have enjoyed their monopoly in the past century)," she explained.
As for public services, the National Economic and Development Authority (NEDA), Philippine Competition Commission (PCC), and all concerned agencies will be granted the power to recommend to Congress to reclassify public services as public utilities based on a set of criteria enumerated in the bill. Public service providers will also be allowed to set rates "that will allow the recovery of prudent and efficient cost and reasonable rate of return".
On the other hand, Poe said the measure proposes to increase the measly penalty for erring public service providers from the P200-per-day of violation under the existing law, to up to P2 million, plus the "disgorgement of profits" and "additional treble damages."
"Marahil ay mas nakakatipid pa sila kung magbayad ng multa kaysa pagandahin ang kanilang serbisyo publiko (Maybe they were able to save more if they will just pay the penalty instead of improving their services)...If public interest is not enough incentive, we certainly hope that these updated fines will," she said.
Addressing concerns about the Philippines' security and sovereignty, Poe said the bill contains several safeguards that would "protect the interest of our country and people, and would make sure that no single country will dominate investments in the public sector".
Among others, the National Security Council shall be tasked to "initiate a review of foreign investments that would result in the control of critical infrastructure in the country", such as the transmission and distribution of electricity, water and sewerage pipeline systems, telcos, and common carriers.
The bill also included a "reciprocity clause", which provides that foreign nationals may only own more than 40 percent of the public services identified as critical infrastructure "if their country accords a reciprocal right to Filipinos by law, treaty or international agreement."
"Moreover, foreign employees are only allowed after a determination of non-availability of a competent, able and willing Filipino. Foreign employment shall not be more than 25 percent of the total employees of any given corporation," Poe added.
Poe said the bill would also help in the country’s economic recovery from the COVID-19 pandemic and will attract foreign direct investments.
Senate President Vicente Sotto III and Senate Minority Leader Franklin Drilon lauded the endorsement of the bill in plenary. Drilon, its principal author, committed to help in defending the measure for its approval in the chamber.