Press Release
March 22, 2022

Economic recovery to get a big boost from Drilon's twin economic laws
Drilon says these laws will help the next administration in leading the recovery of the Philippine economy

The country's much-needed economic recovery will get a significant boost from the signing into law of Republic Act 11659, according to Senate Minority Leader Franklin M. Drilon, principal author of the newly-signed law that amends the 86-year-old Public Service Act.

"I laud the timely passage of the Amended Public Service Act. By opening up our public services to competition, this will compel the current players to shape up and boost our foreign direct investments, and provide our people with better choices," Drilon said.

"I am proud of shepherding its passage in the Senate both as a principal author and as a co-sponsor together with Senator Grace Poe. I am happy that after years of efforts, we now have an amended Public Service Act that is truly reflective of the present needs of our country and our people," he added.

Drilon first filed the measure in the 17th Congress.

Together with the Amended Retail Trade Law and the Revised Corporation Code that he authored, Drilon believes that the country is in a better position to tackle the economic slump due to the COVID-19 pandemic.

Drilon said "these laws will help the next administration in leading the recovery of the Philippine economy."

Drilon explained that the Amended Public Service Act, which was enacted in 1936, provides a clearer definition of public utilities, as he pointed out how the interchangeable use of "public utility" and "public service" has effectively barred foreign entry into the market.

The law limits the term "public utility" to just six services: distribution of electricity, transmission of electricity, petroleum and petroleum products pipeline transmission systems, and water pipeline distribution systems and waste water pipeline systems, including sewerage pipeline systems, seaports and public utility vehicles. Foreign ownership to these public utilities will remain restricted to a maximum of forty percent, pursuant to Section 11, Article 12 of the Constitution. By virtue of the passage of this law, all other "public services" will no longer have foreign ownership restrictions.

Drilon, however, clarified that RA 11659 does not translate to the deregulation of public services, as he underscored that all public services, including public utilities, are still subject to existing regulatory rules.

"These laws will stimulate the economy, promote competition in business, enhance the ease of doing business, and generate more jobs," Drilon said.

While foreign direct investments (FDIs) to the country have seen an improvement in recent months, Drilon said that the country remains among the least attractive to foreign investors.

In October 2021, think tank Oxford Economics placed the Philippines second to the last among 14 Asia-Pacific economies in terms of attractiveness to foreign direct investment.

"Through RA 11659, together with the Amended Retail Trade Liberalization Act, we can address these so-called economic roadblocks that have prevented us from reaching our economic potential. We will see further rise of FDIs in the coming months and an improvement in our economy," Drilon said.

Even if he is part of the opposition, Drilon led the chamber in pushing for the two economic measures that are part of the Duterte administration's legislative agenda, namely the amended Public Service Act and the amended Retail Trade Liberalization Law.

Before the Senate adjourned session in February, Senate leaders led by Senate President Vicente Sotto and Majority Leader Miguel Zubiri cited the excellent performance of Drilon as minority leader and his contributions in the passage of several landmark measures.

Drilon is ending his fourth term as senator on June 30 leaving as legacy a number of economic reform laws which helped lay the foundations for a healthy economy. These include the Philippine Competition Act, which outlaws and penalizes anti-competitive agreements; the Cabotage Law to lower the cost of domestic shipping; amendments to the Foreign Investment Negative List, which liberalizes the ownership of lending, adjustment and financing companies; Tax Incentives Monitoring and Transparency Act (TIMTA); the Go Negosyo Law; the Customs Modernization and Tariff Act; and amendments to the Philippine Deposit Insurance Corporation. He is also the author of the GOCC Governance Act.

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