70% foreign equity in telcos pushed

The Duterte administration is pushing the removal of public utilities, including telecommunications, from the biennial “negative” list of sectors where foreign investors have only limited participation, the country’s chief economist said.

In particular, Socioeconomic Planning Secretary Ernesto M. Pernia told reporters that they were looking at raising to 70 percent the maximum share that could be held by foreign firms in local telco companies from 40 percent at present.

For Pernia, full foreign ownership of telco firms was also “possible.”

“The focus is on telcos because that’s where we are really inefficient,” explained Pernia, who also heads the state planning agency National Economic and Development Authority (Neda).

In general, Pernia said President Duterte preferred up to 70-percent foreign ownership of utilities.

Also, the President wanted foreigners’ maximum lease term of private land extended to 100 years from 50 years at present, Pernia added.

Pernia said they would amend the antiquated Public Service Act in order to redefine what constituted public utilities so that these could be removed from the foreign investment negative list (FINL) that the government releases every two years.

The 10th list FINL was issued in 2015.

The Neda chief said these moves formed part of the plan to trim the FINL as well as ease constitutional restrictions on foreign investment in a bid to attract more investors from overseas.

Finance Secretary Carlos G. Dominguez III told reporters Tuesday night that they were targeting to release the 11th FINL by the middle of next month.

Dominguez said economic managers would relax foreign investment restrictions as allowed by the Constitution and under existing laws.

The government last March signaled that a serious challenger with a large foreign partner was welcome in the Philippines. This was an increasingly popular stand among customers who feel the incumbent telcos have done too little to address network issues, especially on internet quality. —BEN O. DE VERA