The proposed “New Public Service Act” that the House of Representatives passed on second reading on Tuesday is unconstitutional, as it allows foreign-owned companies to fully own transportation and telecommunications facilities in the country, Albay Rep. Edcel Lagman said on Thursday.

House Bill No. 78 would be even disadvantageous to workers and consumers, and would put the country’s national security at risk, according to labor groups.

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Trade Union Congress of the Philippines (TUCP) said HB 78 would do away with the 12-percent cap on return on capital on public services that would put consumers at the losing end since foreign companies could dictate prices.

“For profit-seeking foreigners or local oligarchs, the sky’s the limit. Consumers will bear the brunt. This is contrary to the position of the President that big businesses should behave,” TUCP spokesperson Alan Tanjusay said in an interview.

But proponents of the bill said it was aimed at “effect[ing] necessary changes in the antiquated provisions” of Commonwealth Act 146, or the Public Service Act of 1936.

The author of the bill, Joey Salceda, another Albay lawmaker, said the measure sought “to increase its relevance to contemporary concerns, in the interest of providing the general public with more choices, better services and lower prices.”

Under the bill, electricity distribution and transmission, and water pipeline distribution or sewerage system remain to be public utilities and subject to the 1987 Constitution’s 60-40 limitation on foreign ownership. The rest, like transportation and communications, may be fully owned by foreigners.

Public utility, public service

Lagman said HB 78 would violate the Constitution, which reserves ownership, control, operation and management of public utilities to citizens or corporations at least 60 percent owned by Filipinos.

The measure, according to Lagman, attempts to skirt the constitutional prohibition by making a distinction between “public utility” and “public service.” Firms classified as public service are exempt from the nationality or citizenship requirement of the Constitution.

There is no distinction bet­ween public utility and public service, as declared by the Supreme Court in a number of cases, Lagman said.

“[T]he two are synonymous and interchangeable, so much so that there is no sound reason for making a distinction to justify defiance of the Constitution by allowing the noncompliance of ‘public service’ enterprises with the requirement of Filipino citizenship,” he said.

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Lagman noted that a similar measure was passed by the House in the 17th Congress but this was “ignored” by the Senate.

Ironical

Bayan Muna Rep. Carlos Isagani Zarate found it ironical that the Duterte administration was questioning the alleged foreign ownership of TV network ABS-CBN, while its allies in the House were pushing to allow 100-percent foreign-owned companies to operate key public utilities in the country.

Zarate, a deputy minority leader, was referring to the network’s issuance of Philippine depositary receipts to foreigners, one of the grounds for the quo warranto petition filed by the Office of the Solicitor General in seeking a revocation of the ABS-CBN legislative franchise.

“We’ve already seen the detrimental effects of opening up public service to business interest and now they want to do it on a grander scale, involving foreign businesses,” Zarate said in a press briefing at the House of Representatives.

In a statement, TUCP vice president Louie Corral said that since public services like power, communication and transportation were part of the nation’s lifeline, allowing foreigners to own and run them raised serious national security concerns.

“What happens in [these sectors] determine who will control what, how the supply chain will be formed and what the final prices of goods and services will be,” Corral said.

Sentro secretary general Josua Mata warned that allowing the full privatization and full foreign ownership of public services may “instantly turn [these services] into a commodity that’s accessible only to those with money.”

“The move to bring in foreign ownership of public services is patently wrong. Our very own experience in privatizing energy under Epira (Electric Power Industry Reform Act), which led to us being burdened with one of Asia’s highest electricity rates, proves that private sector ownership could be worse,” Mata said.

The Federation of Free Workers said foreign ownership would not assure Filipinos of a better working environment.

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