Enactment of the proposed Public Service Act is not a guarantee that foreign investments will start pouring into the country’s economy but eliminating corruption, cronyism and red tape will.

InfraWatch convenor and former Kabataan Partylist Rep. Terry Ridon aired this view following the ratification by the Lower House and the Senate of the bicameral conference committee report on the proposed Public Service Act.

Now awaiting the signature of President Rodrigo Duterte, the legislative proposal will amend the Public Service Act to narrowing down industries considered as public utilities to include only electricity distribution and transmission system and water pipeline and sewerage pipeline system; petroleum products, and petroleum, seaports and public utility vehicles.

The objective is to exclude from the definition several industries such as telecommunications, railways, airports expressways and shipping industries, thus, allowing the entry of foreign investors.

“Foreign investments to the country will come only if the governance issues in the country are resolved, as this remains the main binding constraint for growth,” Ridon insisted.

“For as long as corruption, cronyism and redtape continue to delay permits, disqualify competition, and raise capital costs to do business in the country, no amount of opening up will lure foreign investors to choose the Philippines,” he warned.

Ridon explained that the governance issues he raised have been evident in the “parceling out of the ABS-CBN frequencies to personalities allied with the current administration, the award of the new major telecommunications player and the Pharmally controversy involving almost P12 billion in public funds.” “With this kind of governance climate, foreign investments to specific sectors will remain uncertain,” he said However, there are positive features of the bill that Ridon lauds.

“On the other hand, the PSA amendments effectively prohibit foreign-state owned firms from expanding ownership over public utilities and critical infrastructure,” he said.

“In real terms, this means that the foreign equity in both Dito Telecommunity and the National Grid of the Philippines will not expand even to fifty-percent under the amended law, if these foreign entities are controlled or proxies of foreign governments or state-owned enterprises,” the former lawmaker noted.

He added: “This means that Filipino equity partners in these firms cannot sell their interests to their current foreign equity partners, both of which are identified with foreign governments or foreign state-owned enterprises.”