Neda issues rules on public utilities liberalization
MANILA, Philippines – Better prospects for foreign investment inflows are seen as the National Economic and Development Authority (Neda) issued on March 20 the implementing rules of the amended Public Service Act (PSA), which allows full foreign ownership of businesses in certain industries.
Upon their effectivity on April 4, changes to the PSA framework enable the liberalization of key public services such as airports, railways, expressways and telecommunications.
Before the amendments, foreign ownership in these industries was limited to 40 percent.
This ownership cap will remain in force for businesses engaged in the transmission and distribution of electricity; water and wastewater pipeline distribution systems, including sewerage; petroleum and petroleum products pipeline transmission systems; seaports, and public utility vehicles.
Also, the amendments provide safeguard provisions to address national security concerns that may arise through any proposed merger or acquisition, or any investment in a public service.
According to the Neda, the implementing rules and regulations (IRR) for Republic Act (RA) No. 11659 were released following extensive review and consultations with the public, legislators, relevant administrative agencies and other key stakeholders.
“The implementation of policies on competition and regulatory efficiency necessitates comprehensive and transparent consultations with key stakeholders and legislators to ensure that these remain faithful to public interest,” Neda Secretary Arsenio Balisacan said in a statement.
Landmark reform
Balisacan said 21 agencies, including Neda, had been involved in the crafting of the rules, which they unanimously approved.
“With the IRR already in place, we see this as a landmark reform that will further improve the country’s position as an ideal investment hub, which will help enhance employment opportunities and allow more Filipinos to benefit from more improved goods and services,” the chief economic planner said.
“The PSA amendments form a critical part of our endeavor to attract foreign investments to the country to boost market competitiveness, foster innovation and create high-quality jobs,” he added.
In addition, relevant administrative agencies may issue guidelines and circulars for the effective implementation of RA No. 11659 and its implementing rules.
Balisacan said the amended law would complement other policies and measures like the amended Foreign Investments Act, Retail Trade Liberalization Act, Corporate Recovery and Tax Incentives for Enterprises Act, Regional Comprehensive Economic Partnership ratification, amendments to the IRR of the Build-Operate-Transfer Law and the Neda Joint Venture guidelines. INQ
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