Above all, it’s a landmark decision for the Philippines. A new law allows 100% foreign ownership of telcos, airlines, and railways in the Philippines. In contrast, foreign companies could previously only own 40% of any Filipino company.
President Duterte signed into law a measure allowing up to 100% foreign ownership of public services in the Philippines. Above all, it’s a stunning decision that might draw the ire of Filipino oligarchs. Much of the power in the archipelago has been under the control of a handful of families for decades. Foreign ownership could be seen as a threat by these powerful clans.
“NEW LAW ALLOWS 100% FOREIGN OWNERSHIP TELCOS, AIRLINES, & RAILWAYS IN PHILIPPINES”
On the other hand, it’s a smart move. The Philippines is sure to gain more foreign investors. According to a report in BusinessWorld.com, Philippines trails other Asian countries in terms of potential in attracting foreign investors. A recent 2022 Milken Institute Global Opportunity Index revealed the Philippines ranked 83rd out of 126 countries. In addition, the PH slipped one spot from the 82nd spot in 2021.
Furthermore, the law was a measure which amended the Public Service Act (PSA) Republic Act (RA) No. 11659. It’s also known as “An Act Amending Commonwealth Act No. 146 otherwise known as the Public Service Act.”
Thus, under the amended PSA, the telecommunications, railways, expressways, airports, and shipping industries will be considered public services. Consequently, this will allow up to 100% foreign ownership in these businesses.
In addition, another new law, RA 11647, amends the Foreign Investments Act. The amended Foreign Investments Act relaxes restrictions on foreign investments by allowing foreign investors to invest in a local enterprise up to 100% of its capital.
Duterte thanked Congress for the timely ratification of the amended PSA. The President claims that it will aid the Philippines in leading the path towards economic recovery amid the Covid-19 pandemic.
Duterte Opines on the New Laws
“I believe that through this law, the easing out of foreign equity restrictions will attract more global investors, modernize several sectors of public service and improve the delivery of essential services,” Duterte said.
He said the amended PSA and amended Foreign Investments Act will both help stimulate the economy, especially for local businesses.
“It is also expected to generate more jobs for Filipinos, improve basic services for Filipino consumers, and allow for the exchange of skills and technology with the country’s foreign partners,” he added.
With reporting from the Philippine News Agency