Dindo Manhit, President, Stratbase ADR Institute
Amending the Public Service Act (PSA) is an appropriate and timely move by our legislators. The manifest intention is very clear — open up the public service/utility industry to more competition, especially during this time of pandemic. Through this, we would be able to encourage the entry of more foreign direct investments (FDIs), which, if managed correctly, will improve the delivery of public services and lead to the creation of more jobs.
To date, there are two existing bills, namely, House Bill No. 78 (HB 78, which the Lower House has passed) and Senate Bill No. 2094 (SB 2094, which is still under interpellation in the Upper House), that aim to amend an 85-year-old piece of legislation — the Commonwealth Act No. 146, otherwise known as the Public Service Act. However, these bills, while talking about the same intention, are using “different” languages.
The Senate version recognizes that the telecommunication and common carrier industries are part and parcel of our critical infrastructure. By and of itself, it is essential and should be safeguarded against monopolistic interest by a foreign entity. Another significant difference refers to the absence of regulatory safeguards vis-à-vis FDIs. For instance, SB 2094 highlights the role of the National Security Council in reviewing foreign investments in terms of controlling any critical infrastructure in the country.
More so, the absence of a reciprocity clause in HB 78 that defines or delineates the obligations, benefits, and penalties of involved parties is another gap. Furthermore, SB 2094 provides for the compliance with international organization standards such as International Organization for Standardization or ISO. In this regard, SB 2094 provides for the aspects of Information Security and Performance Audit.
In essence, the Senate version is perceived to project a higher degree of independence and directly represents the national concerns about security and the economy.
The whole idea about the safeguard provisions behind the Senate version is captured by a calibrated or more nuanced approach toward amending the PSA. This version represents a definitive middle ground between reckless optimism and a cynical perspective in the act of opening up public services to more competition.
In this context, the 85-year-old PSA has been superseded by the rate of economic changes and developments in the country. From the post-war period through the age of nationalism and to the era of globalization, a lot of “things” have moved and changed. Much more so, economic developments and trends in the global landscape have been more extensive and intensive. By this account, the law has been rendered obsolete.
In her words, Senator Grace Poe, Chairperson of the Senate committee on Public Services, expressed that “Our economic landscape has significantly changed since the PSA was enacted 85 years ago, to the point that it is already incompatible with our progress. If we fail to adapt today, we will be left further behind.”
On this note, the relationship between sovereignty and national economic advancement has also evolved into a mutually reinforcing dynamic. It should not be presented or perceived as a binary option where a hard choice should be made. Sovereignty should not serve as a hindrance to progress but instead be a driver toward advancement. In the same way, national advancement should strengthen our sovereignty as the country effectively adapts to the global environment.
As explained by Senator Poe in a related blog post, “As we are trying to do this simultaneously — strengthen our national security and also our economy — it is incumbent upon Congress and the concerned administrative agencies to make sure that those investing in our country are above board and are not controlled by a foreign state.”
To erase or neutralize the “fears” of foreign control over our public services, SB 2094 further provides for concrete security measures to arrest any monopolistic interests threatening healthy competition. These are very particular to critical infrastructure that refers to the industries of telecommunications and common carriers.
To curb any animosity to the PSA amendment, Congress should come up with a unified version of HB 78 and SB 2094 manifesting a balanced position to consider sovereignty and economic advancement equally. As admirable as the Senate version is, the security measures or regulatory safeguards should be present in the unified version.
It is also befitting for the Members of the House of Representatives to rethink our national economic and political interests during joint Congressional sessions or debates about the PSA amendment.
Looking beyond the politics within and between the House of Representatives and the Senate, and the power separation dynamics between the legislative and judicial branches of government could offer us an alternative perspective and narrative — that the PSA amendment should be perceived as treating sovereignty and economic advancement as two mutually reinforcing components of national development, rather than being understood as two mutually exclusive factors.
This article was originally published in BusinessWorld.