MANILA, PHILIPPINES — President Rodrigo Duterte signed bill on Monday amending the 85-year-old Commonwealth Act No. 146, or the Public Service Act, to allow foreigners to fully own businesses in the Philippines.
The law would specifically allow full foreign ownership of businesses in certain industries such as telecommunications, airlines, and railways.
However, some sectors, such as public utility vehicles, water, electricity, petroleum pipelines, and seaports, will continue to be restricted to full foreign equity.
The amendments, according to Duterte, will help the country “leading the path towards economic recovery amidst the COVID-19 pandemic.”
“I believe that with this law, the easing of foreign equity restrictions will attract more global investors, modernise several sectors of public service and improve the delivery of essential services,” outgoing President Rodrigo Duterte said as he signed off on the changes.
Foreign equity restrictions will be “eased out” in several sectors, including telecommunications, shipping, airlines, railways, and subways, according to Trade Secretary Ramon Lopez.
The changes do not apply to sectors classified as public utilities, such as water and electricity distribution, where foreign equity is still limited to 40%.
The president, however, retains the authority to veto a proposed foreign takeover of a public service.
Experts welcomed the easing, but cautioned that more needed to be done to boost investor confidence in the country’s investment environment.
“Opening the door does not necessarily mean they will all enter, because it will depend on their review on the feasibility of coming in,” said Alvin Ang, an economics professor at Ateneo de Manila University.
“They might ask for something else, so that may require fixing or renovating … that could be ease of doing business, that could be governance, that could be regulatory capacity, that could be quality of support.”
Moreover, Duterte stated that the amendments will create more jobs for Filipinos, improve basic services, and allow for the exchange of skills and technology with the country’s foreign partners.
During the ceremonial signing, other laws were also presented. Republic Act 11647, also known as the “Foreign Investments Act,” Republic Act 11650, also known as the “Instituting a Policy of Inclusion and Services for Learners with Disabilities in Support of Inclusive Education Act,” and Republic Act 11648, which raised the statutory rape age from 12 to 16 years old.