The country’s largest business groups have called for a review on two provisions – reciprocity clause and investments by foreign- state owned enterprises -- under the proposed Senate Bill 2094, which seeks to open the public services sector of the domestic economy to majority foreign equity ownership.
A joint statement was signed by 13 major domestic business groups led by the Philippine Chamber of Commerce and Industry, Makati Business Club, Management Association of the Philippines, Cebu Business Club, Cebu Leads Foundation, Financial Executives Institute of the Philippine, Fintech Alliance PH, Guild of Real Estate Entrepreneurs and Professionals, Inc., Institute for Solidarity in Asia, Inc., Investment House Association of the Philippines, National Real State Association, Inc., Philippine Council of Association and Association Executives, and Philippine Institute of Certified Public Accountants.
While the Philippine businesses support the passage of Senate Bill No. 2094, which seeks to amend the 85-year old Commonwealth Act No. 146, otherwise known as the “Public Service Act”(“PSA”, they also expressed concerns over the two provisions.
First, the reciprocity clause requires a similar treatment by the home country of the foreign investor before it can be allowed to own more than 40 percent of the capital of public services engaged in critical infrastructure.
The other provision governs investments by foreign-state owned enterprises, which the business groups said can be interpreted as prohibiting sovereign wealth funds from investing in public service classified as critical infrastructure.
“We strongly urge that these provisions be revisited and/or refined as they pose obstacles to the achievement of the bill’s avowed objective to attract more foreign investments,” the groups said.
Overall, the groups described SB 2094 bill “a low-hanging fruit” in the legislative tree to attract foreign investments instead of amending the Constitution which is highly controversial and ill-timed under present circumstances.
The amendatory bill, they said, will put in place a legal framework that will encourage more foreign investments in the Philippines and will foster strong competition that will benefit the consumers, boost job creation, and expand our economy while at the same safeguarding our national interests against foreign domination of critical infrastructure.
The bill also seeks to differentiate some public utilities from other forms of public services. The commingling of the two concepts under the PSA has become archaic and obsolete with the passage of time. “It has adversely impacted on our country’s ability to attract foreign investments to our economy.
As a result, the Philippines has paled in comparison with our neighboring countries in attracting foreign investments to the detriment of our economic development and our people,” the statement said.