Salceda urges Senators to pass amended Public Service Act next May

Albay Rep. Joey Sarte Salceda has urged Senators to expedite the approval of their Senate version of the proposed amendments to the 80-year old Public Service Act (PSA) during the remaining two-week session of Congress next May to “break the barriers to investments and competition in certain industry sectors that hamper the country’s sustained, broader and higher trajectory of economic expansion.”

Salceda, a noted economist, is one of the principal authors of House Bill 5828 approved by the House in 2017 which now pends in the Senate. The Senate has already approved on second reading its version of the measure. Tackling it “would be the best use of the two weeks of sessions next May,” he said.

HB 5828 seeks to redefine the concepts of ‘Public Service’ and ‘Public Utilities’ in the old PSA law that are often interchangeably used by monopolies, duopolies and oligopolies to suit their purpose which discourage potential investors in some industry sectors, particularly transportation, power and telecommunications. The legal redefinition of the terms, Salceda said, is a first “vital step” to new economic reforms that will usher in healthy competitions in important industry sectors.

Quoting a recent World Bank study, Salceda said the Philippine economy has remained “highly concentrated” compared to other countries in the region, “which means less competition — and thus high prices, less jobs and value created.” The World Bank study said letting more players enter these vital industries could improve services, generate higher-paying jobs and, ultimately, hasten poverty reduction.

The Albay lawmaker noted that the vagueness of the two concepts “has led to business uncertainty, fewer investments and limited consumer choices.” HB 5828, he added, “aims to ensure the proper implementation of Section 11, Art. XII of the Philippine Constitution, which states that only companies which are 60% owned by Filipinos may operate public utilities.”

The measure’s ultimate objective, he explained, is “to promote consumer welfare and international competitiveness, since with more players in the industry, there will be greater competition, which will lead to better quality services, greater access to services for far-flung areas, and lower rates.”

Salceda said the bright projections on the country’s robust economic growth should be coupled with better quality services and lower rates in transportation, telecommunications, and power. The UK-based Oxford Economics recently projected Philippines’ GDP is expected to grow by an average of 5.3 percent between 2019 and 2028, second only to India’s 6.5 percent, among emerging markets (EMs) expected to post the fastest economic growth in the next 10 years.

“Apart from this, we need to protect consumers from companies that violate the law by making sure the penalties will deter or punish them for violating the rights of consumers,” Salceda stressed. The measure seeks to increases the penalties for violators of its provisions, from the current PhP200 a day to a maximum of PhP5 million a day to “give teeth to the law.”

HB 5828, Salceda said, would attract more foreign investments which the country badly needs, and address the “changes in the economic framework brought about by globalization and rapid advances in technology and the law to fulfil its purpose of truly serving the public.”

Economic analysts said the Philippines’ woes over its poor telecommunications, transport and power service quality have been debilitating and have stalled economic growth for so long. These woes, Salceda pointed out, stem from the “ambiguities” in the statutory definition of Public Service and Public Utility, “which have allowed oligarchs to monopolize the three vital industries for decades to the detriment of consumers and progress.”