Action for Economic Reforms (AER) condemns Senator Ralph Recto’s shameful obstruction of the proposed amendments to the Public Service Act. By delaying the passage of Senate Bill No. 2094, Senator Recto is hindering a long-overdue reform that is badly needed for the country’s economic recovery and long-term progress. The Senator is again acting like the Donald Trump of the Philippines.
The Public Service Law was first enacted as Commonwealth Act No. 146 in 1936. The failure to amend this law for the past eight decades has entrenched several monopolies and turned the country’s public services into family businesses. While some public utilities are often considered natural monopolies due to the high initial fixed costs, the outdated law all but institutionalizes the lack of competition and innovation in these markets.
Amending the Public Service Act through SB 2094 will dismantle existing barriers to entry and encourage new entrants and investments in transportation and telecommunications. A wide majority of business groups, economists, and policy makers all support this measure. The expected impact of the reform includes more stable supply chains, improved logistics, expanded and more accessible internet or digital services, rapid innovation, job creation, and a clearer path to development in the country.
Senator Recto argues that allowing total foreign ownership of telecommunications companies through SB 2094 will pose serious risks to our national security. However, the Senate version of the bill already includes safeguard provisions to address these risks. SB 2094 provides that foreign investments in “critical industries” (such as telecommunications) must undergo periodic review by both the National Security Council and Congress, which may result in permit or franchise cancellation if security threats are found.
As SB 2094 is currently on the Senate floor for amendments, Senator Recto is making out-of- order interpellations to delay its progress. Furthermore, he continues to rehash the same arguments of invoking national security. Unfortunately, his protectionist views and obstructionist tactics only serve the interests of entrenched oligarchs at the expense of the Filipino consumers.
Senator Recto has a long track record of putting vested interests above the greater good, as seen in his numerous attempts to dilute and block prior tax reforms. In 2012, he attempted to weaken the health gains from the Sin Tax law by proposing lower rates that would have favored the tobacco industry. Today, he is pushing aggressively for a bill that will dilute the regulation of
harmful vaping and electronic cigarette products. In 2018, he inserted amendments to the automobile tax in TRAIN, rendering the tax structure less efficient and less progressive, but more favorable to a segment of car manufacturers. He wanted the progressive fuel tax scrapped. He weakened the rationalization of the value-added tax by retaining unwarranted exemption. He objected to the rationalization of fiscal incentives.
Again, by derailing and paralyzing this much-needed reform to promote productive investments, Senator Recto is revealing whose interests he really serves. These are the businesses trying to maintain their monopoly position, which is threatened by the amendment of the Public Service Act.
Before, we called out Senator Recto for being the Donald Trump of the Philippines. Like the US former President Trump, Recto has obstructed reforms and has sided with vested interests. Fortunately, Trump has been rejected by the American electorate, and history will be unkind to him.
We call on Senator Recto to stop his delaying tactics. He has, for example, absented himself from the deliberations for two consecutive days. We call on other senators to trash Recto’s counterproductive behavior, and push for the immediate passage of Senate Bill 2094 to attract sound foreign investments and spur our economic recovery.