NEARLY a year after the law that allows up to 100 percent foreign ownership of public services in the country was passed, the National Economic and Development Authority (Neda) released the Implementing Rules and Regulations (IRR) on Monday, March 20, 2023.
Following the IRR’s release, Republic Act (RA) 11659 (An Act Amending Commonwealth Act 146, otherwise known as the Public Service Act, as amended) will take effect on April 4, 2023, Neda said.
“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,” Neda Secretary Arsenio M. Balisacan said in a statement.
Neda said the IRR of RA 11659 was crafted following an extensive review and consultations with the public, legislators, relevant administrative agencies and other key stakeholders.
The law was signed by then President Rodrigo Duterte on March 21, 2022.
Key public services
The amended Public Service Act will enable the liberalization of key public services by allowing full foreign ownership of businesses in select industries such as airports, railways, expressways and telecommunications, Neda said.
Prior to the approval of the amendments, foreign ownership in the aforementioned industries was limited to 40 percent.
However, public service utilities such as electricity transmission and distribution, water and wastewater pipeline distribution system including sewerage, petroleum and petroleum products pipeline transmission systems, seaports and public utility vehicles remain subject to the 60-40 percent foreign equity limitation.
Safeguard provisions
The amendments also provide safeguard provisions to protect the country against national security concerns that may arise through any proposed merger or acquisition, or any investment in a public service.
Balicasan said the amendments to the Public Service Act “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.”
Relevant administrative agencies may issue guidelines and circulars for the effective implementation of RA 11659 and its IRR, provided that these remain consistent with Commonwealth Act 146 as amended, as well as with RA 11659 and its IRR, according to Neda.
“We are confident that the Philippines will be able to attract much-needed capital and technology, sustain its high-growth trajectory, and generate high-quality jobs enabling rapid poverty reduction in the next six years,” Balisacan said.
The Neda chief’s optimism is boosted not just by RA 11659 but also by the policies and measures such as the amendments to the Foreign Investments Act, the Retail Trade Liberalization Act, the passage of the Corporate Recovery and Tax Incentives for Enterprises or Create Act, the Regional Comprehensive Economic Partnership ratification, amendments to the IRR of the Build-Operate-Transfer or BOT Law, approval of the Neda Joint Venture Guidelines, as well as the Marcos Administration’s continuous efforts to raise investor interest in the country.