Search for:
Asia-Pacific

Philippines: Amendment allowing full foreign ownership of telcos signed by President Rodrigo Duterte

By , and 3 Mins Read

Republic Act No. 11659 amends the Public Service Act to allow 100% foreign ownership of certain public services, including telecommunications.

In brief

President Rodrigo Duterte signed into law Republic Act No. 11659 or “An Act Amending Commonwealth Act No. 146,” otherwise known as the Public Service Act, as amended on 21 March 2022. The amendment aims to liberalize previously restricted service industries to encourage private enterprise and foreign investment. While the law provides an exclusive list of sectors that are to be classified as ‘public utilities’ that remain subject to foreign ownership restrictions, the amendment also removes the 40% foreign ownership investment cap on certain public service sectors, including telecommunications.

Key takeaways

Key takeaways from R.A. No. 11659 are as follows: 

  • The amendments exclusively enumerate services to be classified as ‘public utilities,’ or services that will remain subject to the 40% ownership cap under the Constitution, which are:
    1. Distribution of electricity
    2. Transmission of electricity
    3. Petroleum and petroleum products pipeline transmission systems
    4. Water pipeline distribution systems and wastewater pipeline systems, including sewerage pipeline systems
    5. Seaports
    6. Public utility vehicles
  • On the other hand, the telecommunications economic sector is reclassified as ‘critical infrastructure,’ which are systems and assets — whether physical or virtual — so vital to the Republic of the Philippines that the incapacity or destruction of such systems or assets would have a detrimental impact on national security.
  • ‘Telecommunications’ is defined by the Act as “any process which enables a telecommunications entity to relay and receive voice, data, electronic messages, written or printer matter, fixed or moving pictures, words, music or visible or audible signals or any control signals of any design and for any purpose by wire, radio or other electromagnetic, spectral, optical or technological means.” Expressly excluded are passive telecommunications tower infrastructure and components, such as, but not limited to, poles, fiber ducts, dark fiber cables, and passive telecommunications tower infrastructure, as defined by the Department of Information and Communications Technology (DICT), and value-added services, as defined in the Public Telecommunications Policy Act of the Philippines.
  • The amendment removes nationality restrictions for telecommunication services in the Philippines, which now allows foreign nationals to own up to 100% of capital in a company providing telecommunications services directly to the Philippine public, but only if the country of such foreign national accords reciprocity to Philippine nationals under a foreign law or a treaty. 

All administrative agencies1 concerned shall, in coordination with the National Economic Development Authority (NEDA) promulgate rules and regulations to implement the provisions of the Act, within six months from its effectivity.

1 Civil Aeronautics Board (CAB), Civil Aviation Authority of the Philippines (CAAP), Department of Energy (DOE), Department of Environment and Natural Resources (DENR), DICT, Department of Transportation (DOTr), Energy Regulatory Commission (ERC), Land Transportation Franchising and Regulatory Board (LTFRB), Land Transportation Office (LTO), Local Water Utilities Administration (LWUA), Maritime Industry Authority (MARINA), Metropolitan Waterworks and Sewerage System (MWSS), National Telecommunications Commission (NTC), National Water Resources Board (NWRB), Philippine National Railways (PNR), Philippine Ports Authority (PPA), Toll Regulatory Board (TRB)

LOGO Philippines_QuisumbingTorres_Manila

Please contact QTInfoDesk@quisumbingtorres.com for inquiries.

VISIT QUISUMBING TORRES SITE

Categories:
Author

Bienvenido Marquez III is a partner in Quisumbing Torres' Intellectual Property, Data and Technology Practice Group. He also co-heads the Consumer Goods & Retail Industry Group and is a member of the Technology, Media & Telecommunications Group. He participates in initiatives of Baker & McKenzie International of which Quisumbing Torres is a member firm. He is a member of Baker McKenzie's Asia Pacific Intellectual Property Business Unit for Brand Enforcement. He is immediate Past President of the Philippine Chapter of the Licensing Executives Society International (2019-2021), and is currently co-chair of the LESI Asia Pacific. He is also a member of the Anti-Counterfeiting Committee of the International Trademarks Association (INTA). He has been appointed as member of the INTA Asia Global Advisory Council (GAC) for 2022 to 2023, making him the only Philippine representative on the council.

Bien has vast experience in handling IP enforcement litigation, trademark and patent prosecution and maintenance, copyright, data privacy, information security, IT, telecommunications, e-commerce, electronic transactions, cyber security and cybercrime. He has been consistently ranked as a leading individual for Intellectual Property and TMT in Legal 500 Asia Pacific, Chambers Asia Pacific, asialaw Leading Lawyers, Managing IP Stars, Asia IP, and World Trademark Review. He was also recognized as a Volunteer Service Awardee by INTA in 2018.

Author

Frederick August Jose is a partner in Quisumbing Torres’ Intellectual Property, Data and Technology Practice Group and Technology, Media & Telecommunications. He has 12 years of experience in a wide range of IP and IT corporate and litigation matters.
Frederick is a Certified Information Privacy Professional for Europe by the International Association of Privacy Professionals (IAPP). He has been appointed as a member of the Co-Existence Agreement Sub-Committee of the International Trademark Association (INTA) for the term 2022 to 2023. He actively participates as a speaker in various regional and local seminars and trainings on IP, IT and data privacy in the Philippines. He also teaches summer law courses, and Intellectual Property Law.

Author

Ray Paolo B. Santos is an associate at Quisumbing Torres. He works with the Intellectual Property, Data and Technology Practice Group. Prior to joining QT, he was with another local law firm as an associate at the firm's Corporate Department. Ray graduated with honors from the Ateneo Law School in 2019, and was admitted to the Philippine Bar in 2020. He finished his degree in Bachelor of Science in Management from the Ateneo de Manila University in 2015.

Related Posts