Limits on foreign ownership of the Philippine telecom industry should be lifted to attract investment and improve its service, a senior minister said, on Thursday.
Currently foreign firms can own a maximum 40 per cent of Philippine utilities, including telecom companies, which should be raised, according to Economic Planning Secretary Ernesto Pernia.
“If we want to attract foreign direct investment, they have to have a larger stake in the investment,” he told reporters. “Forty per cent seems rather low. By raising that to 70 percent, it seems more attractive,” he added.
The Philippine telecom industry is dominated by just two companies – PLDT and Globe Telecom – and critics argue the duopoly has led to poor service and high charges.
One study said the country had the slowest internet speed in Asia-Pacific.
Pernia said such a change would require Congress passing a new law, which could prove contentious in a country where many lawmakers have interests in key industries.
However, the Philippine constitution sets the 40 per cent ceiling and some analysts have warned scrapping the limit would require amending the constitution itself.
PLDT is run by a unit of Hong Kong-based First Pacific, which holds about 25 per cent of the Philippine firm.
Rival Globe Telecom is a joint venture of Singtel and the Philippines’ Ayala group with the foreign investor owning about 20 per cent outright.
President Rodrigo Duterte, who took office last year, has repeatedly called on the telecom industry to improve its service, threatening to bring in “new players” to improve competitiveness and quality.
In November last year, Duterte said the country needed foreign investment to improve its telecom and power sectors. “I will open the Philippines so this (poor service) will all be gone,” he warned. (ChannelNewsAsia)