President Rodrigo Duterte signed into law the Republic Act 11659, amending 85-year-old Public Service Act, now allowing foreigners full ownership of businesses in the country.
The law relaxes restrictions on foreign ownership specifically in telecommunications, airlines, and railways sectors. Others such as public utility vehicles, water, electricity, petroleum pipelines, and seaports will retain current restrictions on foreign ownership.
So what does this mean to the local telecommunications industry? For starters, it could invite more telecoms companies with presumably more capital to enter the country and challenge local counterparts.
This is good as healthy competition spurs innovation and improves basic services. Not only that, but more companies entering the country also means more jobs.
But it also has its downsides. Foreign companies could push out smaller Filipino-owned companies. Also, there’s no assurance that their service will be better.
In the end, the main goal of the new law is to attract foreign investment into the country to help stimulate the economy.
PLDT and Smart President and CEO Al Panlilio, recently commented on the passage of RA11659.
“In the medium term, we expect that RA 11659 will encourage healthier competition in various industries in the country. In the long term, it will help position the Philippines as an attractive investment destination for foreign enterprises seeking to expand their business in the Asian market,” said Panlilio.
“In the case of PLDT, while we support investment-friendly regulations, we have no plans to increase the share of foreign equity at present. We are also waiting for the release of the implementing rules and regulations of the new law, and we welcome any opportunity to support the government in the development of the IRR,” he added.