AFTER the House of Representatives approved on second reading a bill that will possibly give 100 percent foreign ownership to telcos, transportation and power firms, it will become a new battleground for local players, a business leader said.
Mandaue Chamber of Commerce and Industry president Steven Yu said the measure will force local businesses to innovate amid a cutthroat competition with foreign players.
“For local business owners, it will mean more intense competition especially that foreign investors have lower costs of capital and better access to big capital,” Yu told SunStar Cebu.
House Bill 78 reclassified services like telecommunications, transportation and power from “public utilities,” which should be 60 percent Filipino-owned, to “public services” that could be fully owned by foreign players.
The bill stated that public utility refers to a “person that operates, manages and controls for public use” electricity distribution, electricity transmission, and water pipeline.
The author of the bill, Albay Rep. Joey Salceda, said it would amend the “antiquated provisions” of the 84-year-old Public Service Act and would usher more competition in the market for the Filipino people to have better choices.
“This legislative reform will significantly contribute to increasing competition, as well as protecting the public interest. More competition among providers would result in lower prices and improved quality of basic services in the Philippines creating a more competitive economy towards a better quality of life for all,” Salceda said in his explanatory note.
Yu said judging from the success of other countries that have similar policies, this move should spur economic growth and will be good for the economy in general.
But for local players, it would test their capabilities to sustain operations in the ever-changing playing field.
“For the local players to succeed, we have to further develop our capital markets and attain higher investment ratings. Another way is to collaborate, and do joint ventures with foreign companies that have both the expertise and financial muscle to achieve scale and therefore, attain sustainability and long term growth,” he said. (JOB)