Local business groups join calls to open up key economic sectors

MANILA, Philippines — Three local business organizations have joined calls to open up key sectors of the economy, such as transportation and telecommunication, to more foreign investments.

In a statement, Foundation for Economic Freedom, Makati Business Club and the University of the Philippines School of Economics Alumni Association said they support amendments to the Public Service Act (PSA) to liberalize the economy and open it to more foreign investments.

As the intention of the amendments to the PSA is to open up key sectors of the economy, such as the transportation and telecommunications sectors, to needed foreign investment, the groups said keeping the foreign equity restrictions would negate the positive impact to the business community and consumers.

The groups also said the main objective of the amendments to the PSA is to define public utilities and the key criteria in the proposed definition is to cover natural monopolies.

“Both transportation and telecommunications are not natural monopolies. There are numerous transportation companies and three telecommunications companies that operate viably in the country,” the groups said.

With strong interest from foreign firms to invest in the Philippines, the groups said the country should maximize the opportunity and send a strong signal to the global community of its openness to new investments.

“At this juncture, instead of keeping our services sector closed to foreign investment in the guise of national security, it is important for the country to carefully balance our need to attract foreign investments while protecting our national security,” the groups said.

The groups also said the Senate bill has safeguards to address the risks.

By keeping the 60-40 foreign equity restriction, the groups said the country would be unable to attract greater foreign investment, promote competition, fund infrastructure, create jobs and have improved public services.

Earlier, the Joint Foreign Chambers composed of the American, Australian-New Zealand, Canadian, European, Japanese, and Korean chambers in the country, as well as the Philippine Association of Multinational Companies Regional Headquarters Inc., cautioned against maintaining foreign equity restrictions in the transport and telco sectors as it would negate efforts to attract more investments.