Congress OKs bill allowing foreign ownership of public utilities

MANILA, Philippines — The House of Representatives on Tuesday approved on third and final reading the bill seeking to allow foreign ownership of public utilities in the country, a move seen as “fatal violation” of the Constitution.

With 136 affirmative votes, 43 negative votes, and one abstention, the House of Representatives approved House Bill No. 78, which seeks to amend the Commonwealth Act No. 146 also known as the Public Service Act.

Under the 1987 Constitution, ownership, operation, control, and management of public utilities should be given to Filipino citizens or to firms that are at least 60 percent owned by Filipinos.

The proposed law now limits the definition of a public utility to electricity distribution, electricity transmission, and water pipeline distribution or sewerage pipeline system.

It also distinguishes “public service,” whose definition under the law is retained, from “public utility.”

While the bill was approved, it also had its fair share of opposition in the lower chamber.

Albay Rep. Edcel Lagman earlier said the bill was is “fatally violative” of the 1987 Constitution, further arguing that there is no distinction between “public utility” and “public service.”

“It is well-settled that public service is an indispensable attribute or element of a public utility, and the two are synonymous and interchangeable, so much so that there is no sound reason for making a distinction to justify defiance of the Constitution by allowing the non-compliance of ‘public service’ enterprises with the requirement of Filipino citizenship,” Lagman said in a statement.

“The ‘New Public Service Act’ if enacted into law, is a mere statute which cannot amend the fundamental law,” the lawmaker added.

Lawmakers in the House’s Makabayan bloc are also against the proposed measure.

But Albay Rep. Joey Salceda, who authored the bill, explained that “competition and foreign investment are inhibited because limitations that should only apply to the operation of a public utility are applied to all public services.

“This situation is caused by the ambiguity in the definition of public utility that is often used interchangeably with public service under Commonwealth Act No. 146. The key to fixing this problem is to develop a clear statutory definition of public utility,” Salceda said in the bill’s explanatory note.

The lawmaker added that the enactment of the bill once signed into law will be beneficial to consumers.

“This legislative reform will significantly contribute to increasing competition, as well as protecting the public interest. More competition among providers would result in lower prices and improved quality of basic services, creating a more competitive economy towards a better quality of life for all,” Salceda said.

EDV