Duterte Signs Law Allowing Full Foreign Ownership in Key Sectors

PRESIDENT Rodrigo R. Duterte signed a bill Monday allowing full foreign ownership in more public services such as telecommunications and domestic shipping, a move that would further liberalize the Philippine economy.

Republic Act no. 11647, which amends the 85-year-old Public Service Act, excludes telecommunications, domestic shipping, railways and subways, airlines, highways and toll roads, and airports from the definition of a public utility. This means they will no longer be subject to the 40% foreign ownership cap for public utilities under the Constitution.

The law also prohibits foreigners from owning more than 50% of the capital in public services engaged in the operation and management of critical infrastructure unless their country reciprocates Philippine nationals.

Foreign state enterprises are also not allowed to own capital in any form of public serviceto beused as public utility or critical infrastructure.

The president will also be given the power to suspend or prohibit any proposed merger or acquisition, or investment in a public service that results in the transfer of control to a foreigner or foreign company.

The government hopes the measure will help the Philippine economy recover from the pandemic by creating much-needed jobs.

“I believe that easing restrictions on foreign stocks would attract more investors, modernize several sectors of public service and improve the delivery of essential services,” Mr Duterte said in a speech at the signing ceremony.

He also said the law would create more jobs for Filipinos and improve services for Philippine consumers.

“By easing restrictions on foreign stocks in key industries, the law will encourage critical investments to accelerate inclusive recovery and development that no Filipinos will leave behind,” said Mary Grace S. Poe-Llamanzares, chair of the Senate Public Services Committee. in a statement.

However, critics have expressed concerns about national security risks.

Last year, Senator Ralph G. Recto said allowing total foreign ownership of telecommunications companies poses risks to national security.

According to think tank Ibon Foundation, increasing foreign ownership in key industries will make it even more difficult for Philippine companies to develop. † Kyle Aristophere T. Atienza