The Board of Investments (BOI) has echoed the sentiment of many advocates that the proposed amendments to the Public Service Act (PSA) are a “game changer” for the Philippines to make investments opportunities happen in the country.  

Trade Undersecretary and BOI Managing Head Ceferino Rodolfo emphasized the importance of the amendments to the said measure during the “Breaking Economic Barriers” digital event organized recently (December 10, 2021) by the British Chamber of Commerce of the Philippines.

Undersecretary Rodolfo stressed that the PSA will open up greater competition in various industries, as he pointed out that a blanket prohibition was not the best way to prevent the entry of malicious foreign investors into the country, as a dominant number of investors have an aim to only boost their business interests. 

The Undersecretary hopes for the positive conclusion of the process to pass the amendments to the said measure for many investors are monitoring the developments. “Investors are waiting for the passage of the PSA,” he bared, as the success of the amendments is now in the hands of the lawmakers. 

Still being discussed on the 2nd reading by the Senate, the Public Service Act (PSA) seeks to modify an 85-year-old act to change the legal definition of “public services” and those that are blanketed by the category of the “public utilities” industry.  

Once passed, the amended law will allow droves of foreign ownership on some crucial public services such as telecommunications and transportation. 

In the event, Trade Secretary Ramon Lopez shared that strong fundamentals of the economy would be an impetus for the Philippine economy’s eventual recovery, as the world is still reeling in the pandemic, especially now with the emergence of the Omicron variant of COVID-19. The PSA, said the Secretary, can foster greater competition in various industries such as the telecommunications industry.  

Meanwhile, Representative Sharon Garin, Chairperson of the House Committee on Economic Affairs, backed the idea that the PSA will truly be a game changer for the Philippine economy. “It should open up for more foreign investors,” she said, emphasizing that the passage of the amendments to the said bill is a declaration that “we are open for foreign investors.”  

Susan Bulan, of the Foundation for Economic Freedom, pointed out that PSA’s impact affects everyone, as it is opening up more investments for the transportation and logistics sector, and will benefit small farmers and even consumers with the decreased prices of basic goods.  

Bulan, who is also the team leader of the Advocacy for the Enactment of Law Amending the Public Service Act, pointed out that the amendment to the PSA would improve the country’s telecommunications field, as it will reduce costs and promote further innovation.  

Based on the Organization for Economic Cooperation and Development (OECD) ranking last year, the Philippines is at the third spot for most restrictive out of 83 economies on the Foreign Direct Investments (FDI) Regulatory Restrictiveness Index, following Palestine and Libya.  

Aside from the PSA, amendments to two other pertinent measures were also discussed during the online event. With the theme “Philippines’ Road to Further Liberalizing Its Economy,” the speakers chewed over the amendment to the measures that will usher in the opening up of the Philippine economy further to the foreign investors.  

Awaiting the signing of President Rodrigo Duterte, the amendments for the Retail Trade Liberalization Act is eyeing that the minimum paid-up capital requirement for foreign retailers will dip to P25 million (USD500,000), with a per store requirement of P10 million, which is lower than the current’s P125 million ($2.5 million) for foreign retailers.  

Senator Aquilino Pimentel III, the main sponsor of the said amendment, meanwhile, pointed out that the updated law can infuse additional capital to the Philippine economy and generate additional jobs for the Filipinos.  

Still at the Bicameral Conference Committee is the proposed amendments to the Foreign Investment Act of 1991, which will open up more industries to foreign direct investment. Once passed, foreigners will be allowed to own 100% of more domestic market enterprises except for industries on the “foreign investment negative list.” 

Included also in the proposal is the reduction of the required number of local direct hires for foreign companies from now’s 50 to 15.  

According to Atty. Anthony Amunategui Abad, CEO of TradeAdvisors, poverty alleviation is dependent on the ability of the country’s economy to raise capital, as aids and grants can’t simply solve the persistent problem of impoverishment.  

Abad said that the Foreign Direct Investments (FDI) brings capital accumulation, science and technology, and competition, dispelling the negative perception on the foreign companies, as according to him, capital knows no nationality.  

On the other hand, British Ambassador Laure Beaufils accentuated that the Philippines has the potential to do so much more when it comes to investments, hoping that the PSA will soon be passed into law. In searching for a country to invest in, British businesses always look at rule of law, predictability, and “future-proofing” of investments, she shared.  

While Emmanuel Bonoan, the Vice Chairman and Chief Operating Officer of KPMG, encouraged a more liberal environment for investors for more actions ought to be done in structures of the economy with the Public-Private Partnerships (PPP) as an important component for a competitive economy.  

British Chamber in partnership with the Department for International Trade at the British Embassy Manila, is committed to assist promoting trade and investments between the UK and the Philippines. Despite the lingering pandemic, the Chamber relentlessly highlights the Philippines as an attractive destination for foreign direct investments, deemed as crucial to its post-pandemic recovery. END