bringing the public service act into the 21st century · 2/6/2017 · hence public utilities and...
TRANSCRIPT
BRINGING
THE PUBLIC SERVICE ACT INTO
THE 21ST CENTURY
PRESENTATION OUTLINE
1. CURRENT SITUATION
2. ISSUE
3. MAIN REFORM
4. EXPECTED OUTCOMES
5. OTHER REFORMS
6. CALL TO ACTION
1. CURRENT SITUATION
Every Philippine resident uses basic services to live and earn a living.
BASIC SERVICES
These basic services include:
ELECTRICITY
WATER
TRANSPORTATION
TELECOMMUNICATIONS
DISSATISFACTION
There is dissatisfaction with these services which are characterized by:
ELECTRICITY
WATER
TRANSPORTATION
TELECOMMUNICATIONS
POOR
QUALITY
HIGH
PRICES
LACK OF COMPETITION
The main reason behind the dissatisfaction with these services is:
Currently, there are only a few local players
leading to a lack of competition in the market.
LACK OF COMPETITION = LACK OF CHOICE OF CONSUMERS= MARKET POWER BY PROVIDERS = MARKET FAILURE
2. ISSUE
The lack of competition is caused by:
Ambiguity in the definition of public utility that is used
interchangeably with public service under the Public Service Act.
This serves as a major barrier to foreign entry and investment.
AMBIGUITY IN THE DEFINITION
This ambiguity is caused by the following:
1987 Constitution restricts the operation of a public utility to Filipinos only (Sec. 11, Art. XII).
HOWEVER
There is NO STATUTORY DEFINITION of a public utility.
There is the Public Service Act, but it only defines a public service (Section 13 (b),
Commonwealth Act No. 146), and NOT a public utility.
HENCE
Public utilities and public services have often been used interchangeably. This means
that all basic services with the semblance of public utilities or public services are
instinctively subjected to the same restriction in the Constitution.
COMMONWEALTH ACT NO. 146
To this day, public services are still governed by an outdated law.
Many of its sections have been expressly or
impliedly repealed, including the Public Service Commission under Presidential
Decree No. 1 in 1972.
The Public Service Act is a 1936 law
enacted during the Commonwealth
period.
This 80-year old law, Commonwealth Act No. 146, has been amended
several times already.
PROPOSED AMENDMENTS
It is NECESSARY to amend the Public Service Act in order to enable
the law to reflect the current realities in the 21st century by:
1. Recognizing the transfer of functions of the Public Service
Commission to various administrative agencies;
2. Clarifying the definition of public services and public utilities;
3. Instituting an appropriate mechanism for fixing rates; and
4. Increasing the penalties for violations.
3. MAIN REFORM
To develop a clear statutory definition
of a public utility by amending
the Public Service Act to make it
current, responsive, and relevant to
the 21st century
PUBLIC SERVICE DEFINITION
Section 13 (b) of The Public Service Act defines public service as follows:
Every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether permanent,
occasional or accidental, and done for general business purposes, any common carrier,
railroad, street railway, traction railway, sub-way motor vehicle, either for freight or
passenger, or both with or without fixed route and whether may be its classification, freight
or carrier service of any class, express service, steamboat or steamship line, pontines,
ferries, and water craft, engaged in the transportation of passengers or freight or both,
shipyard, marine railway, marine repair shop, wharf or dock, ice plant, ice-refrigeration
plant, canal, irrigation system, gas, electric light, heat and power, water supply and
power, petroleum, sewerage system, wire or wireless communications system, wire or
wireless broadcasting stations and other similar public services.
““
PUBLIC UTILITY DEFINITION
Due to the absence of a statutory definition for public utilities, the Supreme Court
put forward its own definition in JG Summit Holdings vs. Court of Appeals,
G.R. No. 124293, September 24, 2003, as follows: ““a business or service engaged in
regularly supplying the public with some
commodity or service of public
consequence such as electricity, gas,
water, transportation, telephone or
telegraph service
PROPOSED STATUTORY DEFINITION
““(D) I. PUBLIC UTILITY DEFINITION. – A PUBLIC UTILITY SHALL
EXCLUSIVELY MEAN (1) TRANSMISSION OF ELECTRICITY AS
DEFINED BY SECTION 4 (CCC) OF REPUBLIC ACT NO. 9136, (2)
DISTRIBUTION OF ELECTRICITY AS DEFINED BY SECTION 4 (N) OF
REPUBLIC ACT NO. 9136, AND (3) WATERWORKS AND
SEWERAGE SYSTEMS AS DEFINED BY REPUBLIC ACT NO. 6234,
AS AMENDED, AND PRESIDENTIAL DECREE NO. 198, AS
AMENDED.
PROPOSED STATUTORY DEFINITION
““ II. AMENDMENT OF PUBLIC UTILITY DEFINITION. – NO OTHER
BUSINESS OR SERVICE SHALL BE DEEMED A PUBLIC UTILITY
UNDER SECTION 13 (D) (I) UNLESS OTHERWISE SUBSEQUENTLY
PROVIDED BY LAW UPON RECOMMENDATION BY THE
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
(NEDA).
PROPOSED STATUTORY DEFINITION
““ THE NEDA SHALL ONLY RECOMMEND INCLUSION OF THE
BUSINESS OR SERVICE IF: (1) IT IS A PUBLIC SERVICE; (2) THAT
REGULARLY SUPPLIES AND DIRECTLY TRANSMITS AND
DISTRIBUTES TO THE PUBLIC THROUGH A NETWORK; (3) A
COMMODITY OR SERVICE OF PUBLIC CONSEQUENCE; AND (4)
IS A NATURAL MONOPOLY THAT MUST BE RESTRICTED IN ITS
OPERATION WHEN THE PUBLIC INTEREST SO REQUIRES.
4. EXPECTED OUTCOMES
The proposed statutory definition
LIMITS THE SERVICES
that are subjected to
RESTRICTIONS THAT INHIBIT COMPETITION.
RESTRICTED AS PUBLIC UTILITIES
BEFORE THE REFORM
RESTRICTED AS PUBLIC UTILITIES
AFTER THE REFORM
ELECTRICITY
(electric light, heat, and power)
TRANSPORTATION
(any common carrier, etc.)
WATER
(water supply, and power)
TELECOMMUNICATIONS
TRANSMISSION OF ELECTRICITY
DISTRIBUTION OF ELECTRICITY
WATERWORKS AND SEWERAGE
SYSTEMS
5. OTHER REFORMS
• Recognizing the transfer the functions of the Public Service
Commission to various administrative agencies
Recognition of Administrative Agencies. – All references to the Public
Service Commission in Commonwealth Act No. 146, as amended, shall
mean any administrative agencies to which the powers and duties of
the Public Service Commission were transferred in accordance with
their respective charters and related statutes.
“ “
RATE OF RETURN
• Instituting an appropriate mechanism for fixing rates
(c) To fix and determine, OR TO FIX MAXIMUM CEILINGS OF, individual or
joint rates, tolls, charges, classifications, or schedules thereof, as well as
commutation, mileage, kilometrage, and other special rates which shall
be imposed, observed, and followed thereafter by any public service
WHEN THE PUBLIC INTEREST SO REQUIRES …
“ “
INCREASING PENALTIES
• Increasing the applicable penalties for violations
From a fine not exceeding P200 per day to
disgorgement of profits,
treble damages,
a fine of up to P5M subject to indexation,
or all or any combination thereof
“ “
6. CALL TO ACTION
The Public Service Act must be amended
to define public utilities
effectively allowing for greater competition
in more areas of basic services
for IMPROVED QUALITY OF SERVICES and LOWER PRICES
to 1) make the Philippine economy competitive; and
2) improve the quality of life in the Philippines.
LEGISLATIVE AGENDA
Philippine Development Plan
Legislative Agenda: Public Service Act Amendments Bill
Chapter 9: Industry
Chapter 15: Sound Macroeconomic Policy
Chapter 19: Infrastructure Development
LEGISLATIVE AGENDA
STATUS IN THE 17TH CONGRESS
Status in the 17th Congress of the Republic of the Philippines
House of Representatives
1. House Bill No. 4389 by Rep. Gloria Macapagal-Arroyo
2. House Bill No. 4468 by Rep. Joey Salceda
3. House Bill No. 4501 by Rep. Arthur Yap
4. House Bill No. 4787 by Rep. Feliciano Belmonte and
Rep. Jose Christopher Belmonte
Senate
1. Senate Bill No. 1261 by Sen. Richard Gordon
2. Senate Bill No. 1291 by Sen. Miguel Zubiri
THANK YOU.