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JFC calls for telco industry liberalization in PSA bill

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THE Joint Foreign Chambers (JFC) joined the call of the local business groups to not identify telecommunications as a public utility, easing the foreign ownership restrictions.

In a statement, the foreign business organizations urged the Senate to liberalize the telco sector “to foster competition and provide better quality services at lower cost.”

The pending Senate Bill (SB) 2094, which amends the Public Services Act (PSA), proposes the retention of 40-percent foreign ownership limit for telecommunications.

“SB 2094 limits the definition of public utilities to natural monopolies such as distribution and transmission of electricity, water and sewerage. Should the proposed amendments to the PSA be approved, they would add telecommunications to the list,” the JFC noted.

However, further liberalization of the telco is needed, as the Philippines has the lowest mobile broadband subscription rate and lowest service population penetration rate in the Association of Southeast Asian (Asean) region, the foreign chambers explained.

JFC said the Asean neighbors are outperforming the local telco sector because they allow 100-percent foreign ownership, citing Cambodia, Indonesia, Malaysia, Myanmar and Singapore.

“As subscribers ourselves of the major Philippine telcos, while we appreciate the services they provide, we believe they will improve in quality and price when more competitors are allowed to operate in the country,” the statement read.

“Liberalizing telecommunications sends a strong signal to foreign investors that the Philippines is more open and welcoming to foreign investors. This reform will also improve the international ranking of the Philippines by the Organization of Economic Co-operation and Development from its current unattractive placement as one of the most restrictive economies in the world for foreign investment in public services,” they added.

Meanwhile, the foreign business groups said the PSA amendments will match policies in Singapore, Thailand, Vietnam and Indonesia.

In addition, they said the proposal is in line with the Philippines’s commitments under the Asean Comprehensive Investment Agreement, which opens investment in services to other Asean members.

Apart from aiding the telco sector, the JFC’s proposal is also seen to have “positive spillover effects” for other areas of investments. The foreign business groups said more foreign direct investments will support economic recovery as these generate job opportunities.

Signatories to the letter include American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Korean Chamber of Commerce of the Philippines and Philippine Association of Multinational Companies Regional Headquarters Inc.

Read full article on BusinessMirror

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