Biz groups push okay of Public Service Act

Categories: AnnouncementsJFC NewsPolicy News and Updates

Date: 22 May 2019

Business leaders have closed ranks behind a final push to prod the 17th Congress—which resumes sessions on Monday (May 20) for its final three weeks of work—to pass the amended Public Service Act (PSA) before leaving office in June.

The PSA has long been deemed a priority piece of legislation because it is seen as a roundabout way of removing foreign ownership restrictions on certain key industries, such as telecommunications, by clearly and finally defining what public utilities are. In the process, those key industries that will fall outside the new definition of utilities in the amended PSA can better expand their horizons without the constitutional restrictions, business leaders believe.

Under Article 12, Section 11 of the 1987 Constitution, public utilities must be solely operated by firms that are 60 percent owned by Filipinos. House Bill (HB) 5828 and Senate Bill (SB) 1754 seek to clearly define what public utilities are.

HB 5828 and SB 1754 limited the definition of public utilities to: the distribution of electricity; transmission of electricity; and water pipeline distribution system or sewerage pipeline system.

Business executives polled by the BusinessMirror said it will be a waste if members of the 17th Congress fail to pass amendments to the PSA, a piece of legislation that they said should not be left to the 18th Congress to pass.

Advanced stage

“Of the bills that are in advanced stage—second or third reading in both houses—we hope Congress prioritizes Public Service [Act] amendments before it adjourns,” said Coco Alcuaz, executive director of the Makati Business Club.

“We urge the legislators to pass the amendments to the Public Service Act, Foreign Investment Act and Retail Trade [Liberalization] Act before the 17th Congress ends. However, should these not be passed within the nine working sessions left, we hope that the said measures will be urgently prioritized,” said Florian Gottein, executive director of the European Chamber of Commerce of the Philippines.

American Chamber of Commerce of the Philippines Senior Advisor John D. Forbes and Philippine Chamber of Commerce and Industry leaders Maria Alegria Sibal-Limjoco and George T. Barcelon also called on senators to approve the amendments to the Public Service Act.

HB 5828 hurdled the House of Representatives last year, while its Senate version is awaiting second reading. The Senate leadership has listed it as one of three priority bills on its agenda when sessions resume, and Senate President Vicente Sotto III underscored its crucial role in boosting business.

The 17th Congress will resume session for the last time on Monday (May 20), and will enter sine die adjournment on June 8. Business measures that have yet to near plenary discussions in either the House or Senate will most likely be taken up by the 18th Congress.

These include the amended Foreign Investment Act, amended Retail Trade Liberalization Act and the Tax Reform for Attracting Better and High-Quality Opportunities (Trabaho) bill, which is the second package of the government’s tax reform program.

The Trabaho bill seeks to gradually bring down corporate income tax to 20 percent by 2029, from 30 percent, and rationalize tax incentives on the other.

Economic zone firms, mostly multinationals, oppose the component on incentives rationalization, as it will remove key tax perks, such as the 5-percent tax on gross income in lieu of all local and national taxes. They deem these incentives crucial for staying here. Senators find this alarming, as it could potentially lead to losses in investments and, in turn, employment, making a contradiction of the moniker “Trabaho [jobs]” bill.


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