MVP welcomes Public Service Act amendments

MANILA, Philippines — PLDT chairman Manuel V. Pangilinan welcomed Congress’ ratification of amendments to the Public Service Act (PSA) last week, which will allow foreign investors to own up to 100 percent of companies in the telecommunication, transportation and other public services.

“I would say it’s a big step forward. In a way, it’s a courageous step allowing foreign ownership of certain key businesses like telcos and expressways,” Pangilinan said in an interview with “The Chiefs” on One News/TV 5 on Friday.

Pangilinan said foreign investments are a big help to local telcos given the capital-intensive nature of the business.

“The telco business is huge. It is a huge consumer of capital, especially if you are new. Technology changes, and it affect the spending of telcos. I think the ratification of amendments is a big step forward and I do hope that we can continue to relax the constraints of this economy to bring the funds in,” he said.

At present, industries like telecommunications are only limited to 40 percent foreign ownership.

On PLDT’s end, however, Pangilinan said the amendments to the PSA would not have much impact because the company already has foreign investors in Japan’s NTT DoCoMo and NTT Communications.

“And the bulk of our common shares are held by foreigners already,” he said.

Pangilinan said PLDT is not keen on selling more shares to investors at the moment.

“We had record high EBITDA so the cash flows of PLDT are actually very, very strong...I think we’ll be crucified if we’re to issue new shares in the wake of very strong cashflows. You know how shareholders are. They’re very jealous about the danger of getting diluted,” he said.

Meanwhile, Pangilinan is not in favor of completely removing the need to secure legislative franchises for telcos prior to operations.

“I don’t think we should do away with it completely, whether by a way of franchising or some form of a regulatory regime, because you know, these are still very important businesses for the country so some form of regulation must still be maintained to ensure that there is some order to the business,” he said.

“I don’t see it being totally unfettered because public interest is very much in the business. It is imbued with public interest. There must be some form of regulation. I think some form of approval process is still needed,” Pangilinan said.