Thanks to Congress adopting a bill allowing complete foreign ownership in the telecommunications industry, European telcos may soon be able to enter the Philippine market.
Several European corporations have turned their attention to the Philippines as a result of the proposed measure. The passage of the law modifying the 85-year-old Public Service Act (PSA) is a “absolute enormous game-changer,” according to Lars Wittig, President of the European Chamber of Commerce of the Philippines (ECCP). “It will create double-digits, billion-dollar investments,” he says.
The bill defines “public utility” as the distribution and transmission of electricity, as well as petroleum and petroleum products pipeline transmission systems, water pipeline distribution systems, and wastewater pipeline systems, including sewerage pipeline systems, seaports, and public utility vehicles. All other industries that aren’t included will remain public services and will either be liberalized or open to 100% foreign ownership.
With this, Wittig said European telcos interested in bidding for the country’s third largest telecommunications company in 2018 might “go back and go for the 51 percent, 99 percent, or 100 percent ownership.”
Telenor, situated in Norway, Mobiltel, based in Austria, and Vodafone, based in the United Kingdom, have all expressed an interest in participating in the alleged third telco search. However, the winner was the China Telecom-backed and Udenna-led DITO Telecommunity, formerly known as Mislatel consortium.
Maurizio Cellini, first counselor and head of the European Union’s Delegation to the Philippines’ Trade and Economic Affairs, also underlined the need for the Philippines to attract international investments, citing the country’s potential as a fast-growing economy.
“From an investment standpoint, the European Union continues to regard the Philippines as a major, rapidly expanding market. “However, despite its size and promise, the Philippines fails to attract European traders and investors,” Cellini added.