Fully foreign-owned telcos can soon operate in the Philippines once President Duterte signs the proposed shorter 11th Foreign Investment Negative List (FINL), the country’s chief economist said Thursday.
However, Socioeconomic Planning Secretary Ernesto M. Pernia told a press conference that foreign telcos can participate locally by “up to 100 percent” only upon the amendment of the antiquated Public Service Act or Commonwealth Act No. 146.
Pernia, who heads the state planning agency National Economic and Development Authority (NEDA), later explained to reporters that even if the President signs the proposed 11th FINL, the provision on telco cannot be implemented unless public service law is first amended.
House Bill No. 5828 passed by the Lower House in September last year would amend the Public Service Act, as it limited the coverage of “public utilities” to the distribution and transmission of electricity as well as water distribution and sewerage systems.
“Telcos will be out of this—it’s a public service and not a public utility,” Pernia said.
Its counterpart in the Senate is still pending, although Pernia noted the measure was a “priority bill” and would be “almost out” of Congress.
Pernia said the President’s signature in the 11th FINL could pressure Congress to amend the Public Service Act sooner.
The Neda chief said the 11th FINL, contained in a draft executive order (EO) submitted to the Office of the President two months ago, “will be signed pretty soon.”
Besides telcos, Pernia said sectors removed from the streamlined FINL included the following: private recruitment for local and overseas employment; practice of some professions; contracts for the construction and repair of locally funded public works projects; culture, production, milling, processing and trading (except retailing) of rice and corn and their by-products; teaching in the higher education levels; as well as retail trade.
Every two years, the government releases the FINL, which lists down sectors where foreign investors have only limited participation.
The 10th FINL was issued by former President Aquino in 2015 under EO No. 184, which had practically kept intact the list of activities and sectors restricted to foreign equity and participation as provided for in the ninth regular FINL.
As such, the 11th FINL should have been released last year, but has been delayed.
Early this year, Pernia said that mass media and almost every sector except land will be further opened up to foreign equity through the planned amendment of the 1987 Constitution.
Once the government’s plan to liberalize nearly all industries by 2019 happens, foreign direct investment (FDI) inflows could “easily double,” according to Pernia.
Job-creating FDI hit a record $10 billion in 2017. /kga