OFFICIAL limits on foreign ownership of the Philippine telecom industry should be lifted to attract investment and improve its service, a Cabinet official said Thursday.
Currently foreign firms can own a maximum 40 percent of Philippine utilities, including telecom companies, which should be raised, said Socioeconomic 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 percent 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.
PLDT and Globe, however, are already controlled by Hong Kong’s First Pacific Co. Ltd. and Singapore’s Singtel, respectively, the latter in joint venture with the Ayala conglomerate.
First Pacific directly holds about 25 percent of PLDT, while Singtel owns about 20 percent outright of Globe.
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 1987 Constitution sets the 40 percent ceiling and some analysts have warned scrapping the limit would require amending the Constitution itself.
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.
Last year, talks between San Miguel Corp. and Australia’s Telstra to launch a third player fell through. San Miguel ended up selling its telco assets to PLDT and Globe in a 50-50 split.