Carpio says Cha-cha needed to allow foreign ownership of public utilities

Former Supreme Court Associate Justice Antonio Carpio on Friday said the 1987 Constitution should be amended to allow foreigners to own public utilities because the amended Public Services Act allowing increased foreign ownership is illegal.

Carpio was referring to the amended Public Services Act which allows 100% foreign ownership of public services such as telecommunications and railways, among others.

The law reclassifies telecommunications, railways, airlines, and logistical facilities as public services from their previous classification as public utilities.

Under the 1987 Constitution, foreigners may only own up to 40% of public utilities.

“They redefined the term public utility. Public utility is limited to this, but all the rest will now be considered public services. Now, we all know that Supreme Court is the final interpreter of the Constitution. We interpret words, phrases, and sentences. That is the primordial power of the Supreme Court. Without that, the Supreme Court is nothing,” Carpio said in a forum on Charter Change initiatives,

“Can Congress, by law, interpret a term in the Constitution with finality? If the Supreme Court will say Congress can interpret a term, phrase, sentence in the Constitution and that is binding on us, then the Supreme Court will become an appendage, a sidekick of the Congress. It will erase the power of the Supreme Court. If I were in the Supreme Court now, I would declare it unconstitutional because that is the very essence of judicial power, to interpret the Constitution. So my fear is that the Supreme Court will strike down the amended Public Service Act,” he added.

Carpio said a lot of foreigners actually came to invest in the country with the passage of the amended Public Services Act law, and these investments could disappear instantly once the Supreme Court strikes the said law as unconstitutional.

“A lot of foreigners have come in and they believed in the law. If the Supreme Court will say it is unconstitutional, what happens to the investments here? I think it will take us decades to recover from this blunder. Foreign investors will not come in because they fear that there is no rule of law here,” he said.

“So, what is the solution? How do we save the country from this impending disaster? We have to cure that defect, and to cure that defect we have to amend that provision [of the Constitution] in public utility, at least. [We can put] unless otherwise provided by law, but subject to reciprocity [of other countries allowed to come in here to invest],” Carpio added.

He cited Vietnam which limits foreign ownership in the telecommunications industry to 49%.

“If we open up 100% of the telecom industry [to foreign companies], the Vietnamese can own our telecom companies. We cannot allow the Vietnamese to buy out our telecoms here while we cannot do the same in their own country. It has to be reciprocal. In fact, the EU (European Union) realized this. The Chinese have been buying their companies, but they cannot do the same in China. And so they [in the EU] are [now] requiring reciprocity in all their investment agreements,” Carpio added.

He further said the amended Public Services Act was passed out of a whim of then President Duterte instead of giving it a lot of thought and study.

“Duterte guaranteed that China can own and control 100% of third telecom in the Philippines. He made that promise. How did he do it? It was Congress who did it,” he said.

“It was an election year, and he said, for later release. Your pork barrel will be released to you if you approve two things: cancel the ABS-CBN franchise and approve the amended Public Service Act. Of course, it was done by Congress because it is an election year,” Carpio added.

In July 2021, the Department of Budget and Management already denied that it is withholding the release of “for later release” funds worth P160 billion. 

“It is noted that of the P158.36 billion FLR appropriations intended for the infrastructure programs of the Department of Public Works and Highways, P144.81 Billion has already been recommended by the DBM to the President for approval,” the DBM said then.

The House of Representatives and the Senate approved the amended Public Services Act in March 2020 and December 2021, respectively.

Duterte signed the amended Public Services Act back in March 2022.

GMA News Online has reached out to lawmakers regarding Carpio’s comments and will publish their reply as soon as it becomes available.—AOL, GMA Integrated News