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Costly but poor quality basic services

By: Johnny Dayang

Economic analysts agree that poor quality but costly telecommunications and power service which torture us daily have also unduly stalled our country’s economic growth for so long. How has this burdensome imposition come about?

Noted economist and Albay Rep. Joey Salceda said the problem “stems from ‘ambiguities’ in the statutory definitions of Public Service and Public Utility in existing laws which have enabled oligarchs to monopolize the country’s vital telecommunications and power industries for decades to the detriment of consumers and progress.”

Happily, the House of Representatives has recently approved House Bill 5828 which legally redefines Public Utilities in clear terms, and amends the 80-year old Public Service Act. The measure consolidated six bills filed by Reps. Salceda, Gloria Macapagal-Arroyo, Arthur Yap, Feliciano Belmonte, Jr., Jose Christopher Belmonte and Monsour del Rosario.

Cheaper power costs and quality telecommunications services attract investments and are vital requirements for robust economic development. Deficiencies of these two factors explain why many foreign investors continue to resettle their production operations elsewhere.

HB 5828 aims to ensure the proper implementation of Section 11, Art. XII of the Philippine Constitution, which states that only companies which are 60% owned by Filipinos may operate public utilities “to promote consumer welfare and international competitiveness, since more players will mean greater competition, which will lead to better quality services, greater access to services, and lower rates.”

To clarify the noted ambiguities, HB 5828 redefines Public Utility to refer to a person, business or service that operates, manages and controls the distribution and transmission of electricity for public use under the 2001 Electric Power Industry Reform Act, and water pipeline and distribution system as defined under RA 6234, and the 1973 Provincial Water Utilities Act. It limits the meaning of public service facilities to refer to “canal, public market, irrigation system” and the like.

Salceda said consumers suffer from high prices and poor quality of basic services because only a few oligarchs effectively control the market and foreign investments are inhibited, because “limitations that should only apply to the operation of a public utilities are also applied to all public services.”

The new measure, he added, will “enhance the old Public Service Act’s relevance to contemporary concerns, in the interest of providing the general public with more choices, better services and lower prices.”

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