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PSA amendment crucial in obtaining investments

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PSA amendment crucial in obtaining investments

Failing to pass the amendments to the Public Service Act (PSA) will deprive the Philippines of the needed investments especially in the telecommunications sector, a top official of the Philippine Competition Commission (PCC) said.

“If the PSA is not adopted, then that would mean that investments in the key sector of telecoms will continue to be limited to 40-percent foreign capital, and that will deprive the Philippines of much needed investments, much needed capital needed to upgrade the kind of technological requirements needed for us to be on a level on a field level with our Asean competitors,” said PCC Commissioner Johannes Bernabe in a briefing on Monday, referring to the Association of Southeast Asian Nations.

“So even domestically, the kind of goals we have set for ourselves in so far as digitizing the economy, in so far as ramping up e-commerce may be stalled by the kind of limitations that would continue if the PSA were not amended. So, the stakes are really high in terms of ensuring the passage of these amendments to the PSA,” he added.

The country’s economic managers have been pushing for the passage of the amendments to the PSA in a bid to improve investment flows into the country.

The amendment seeks to lift limitations on foreign equity ownership on some sectors currently classified as public utility.

PCC Chairman Arsenio Balisacan said the amending the PSA would also benefit the logistics sector.

“Now, obviously, that investment, particularly foreign investment in particular will induce more competition in the marketplace and that should result in not only a higher stock of this logistics infrastructure, but more importantly, better quality services, lower prices and more innovation in the sector. And this has been the lack of investment in the sectors and the competition space in the sector has been recognized for several decades as a key binding constraint to improving the services in the trade sector and the retail and other sectors of the economy that the investment in the sector will affect,” said Balisacan.

“So, it will not be in the interest of the country not to pass that law, because as I said, it has been identified as a key component of the reforms that needs to be done in the country to raise productivity to get the growth moving not only at a higher level, but at a sustained level. So, again, the amendment of the PSA will be crucial to the competition environment in the country,” he added.

Balisacan, meanwhile, cited the importance of adopting a competition lens in policy responses towards economic recovery in the new normal.

“Enabling more resilient supply chains through competition policy brings us closer to ensuring not just robust economic growth but also the protection of vulnerable groups.

Supply chain resiliency safeguards the poor from sharp price increases or sudden shortages, and affords workers greater productivity and flexibility despite disruptions,” he said during the “Enabling Resilient Supply Chains and Innovation Spaces in Southeast Asia’s New Normal: The Role of Competition Policy,” held on Monday.

“Now more than ever, the PCC urges policymakers to use competition policy as a complementary and strategic lever to build back our supply chains, innovation spaces, and economy—this time more resilient, more sustainable, and more inclusive,” he added.