Foreign investments

PSA amendments not enough to attract foreign investment if corruption persists – Infrawatch PH

(AFP)

MANILA, Philippines — Infrawatch PH, a non-governmental policy think tank, said amendments to the Public Service Act (PSA) would not be enough to attract foreign investment as governance problems persist.

“Foreign investment in the country will only come if the governance issues in the country are resolved, as this remains the main binding constraint for growth,” Infrawatch PH said in a statement on Thursday.

“As long as corruption, cronyism and red tape continue to delay permits, disqualify competition and increase the investment costs of doing business in the country, no opening will entice foreign investors to choose the Philippines,” he added.

These governance issues, according to the think tank, have been evident in several instances, including: the assignment of ABS-CBN frequencies to figures associated with the current administration, the assignment of a new major telecommunications and the Pharmaly controversy – which involved almost 12 billion pesos of public funds.

“It is foolish of the government to think that the PSA will be the magic bullet to make the country the destination of choice for foreign investment as long as these governance issues persist,” Infrawatch PH said.

DDespite uncertainties about how the PSA will help the country in terms of investment, Infrawatch noted that the amendments effectively prohibit foreign state-owned companies from expanding ownership of utilities and critical infrastructure.

“In real terms, this means that foreign ownership in the Dito Telecommunity and the National Network of the Philippines will not extend even to fifty percent under the amended law, if such foreign entities are controlled or mandated by foreign governments or public companies,” explained Infrawatch PH.

The think tank also added that these changes also mean that Filipino partners in these companies cannot sell their stakes to foreign partners, both of which are tied to foreign governments or state-owned companies.

On Wednesday, the Senate and House of Representatives ratified the report of the bicameral conference committee, which reconciles conflicting provisions between Senate Bill 2094 and the House bill. No. 78 – bills proposing changes to the PSA over 85 years.

The changes now await the approval and signature of President Rodrigo Duterte.

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