Shameless bill defies Constitution: Exempts telecoms, power, broadcast media from foreign ownership limits

THE plot in the past regime by the once powerful Liberal Party—whose biggest supporters were in the telecoms and power industry—to remove the 40 percent limit on foreign ownership of public utilities as prescribed by the Constitution fell through, as the ending bell rang on the Aquino regime and ended that conspiracy.

But a more disgusting attempt, a “Plan B” so to speak, which will do exactly the same thing, which is to defy the Constitution was quietly passed in September by the House of Representatives: House Bill 5828, the consolidated version of four bills.

The bill excludes the telecommunications industry as well as power, and broadcast media from the constitutional provision that limits foreign capital in public utilities to 40 percent.

How the heck could it do this?

It exploits the preposterous technicality that the Constitution doesn’t list what public utilities are. Believe it or not, HB 5828 lists as a “public utility” only those engaged in power distribution, water pipeline distribution and sewerage.

So by changing the English language, telecoms, power generation, transport and even broadcast media—industries considered anywhere in the world as ‘public utilities’—are no longer public utilities in this sad country. So they’re not covered anymore by that constitutional provision. The authors of this bill, clever as they are to have concocted this scheme to skirt the Constitution, are taking us for fools.

If they can revise the meaning of “public utility,” they can more easily change the definition of the more technical term, “martial law”. This is defined for instance by Wikipedia as “the imposition of direct military control of normal civilian functions of government.” So, if a law is passed that adopts such a definition, and it is a civilian president who directs the military, it isn’t martial law, which therefore is not restricted by the Constitution’s provisions on “martial law,” whose features after all aren’t listed there? What else could be redefined? Human rights? Freedom of the Press?

So obvious
One of the versions of the bill, filed by filed by Rep. Arthur Yap, even reads: “Any existing law to the contrary notwithstanding, the following shall not be considered a public utility operation: 1) electric power generation and supply; 2) trade in crude oil and petroleum products; 3) transportation; 4) broadcasting and telecommunications.”

Obviously, the mastermind of this plot, after consulting his lawyers, thought that Yap had gone overboard—masyadong garapal, as the Filipino term would put it— and the conspiracy would be so obvious with his version of the bill. So The consolidated bill no longer lists those not deemed as “public utilities”, but just the same are so exempted from the Constitution.

Congress: In the service of whom?

It is so much designed for the interests of the Indonesian magnate Anthoni Salim and Singapore Telecoms, who are the controlling yet foreign stockholders of PLDT and Singtel, respectively, as well as of the Filipino oligarchs who are their minority partners.

The last 2016 Supreme Court decision merely said that the Securities and Exchange Commission “did not act with grave abuse” when it issued its ruling in memorandum in 2012 that allowed these foreign firms to skirt the Constitutional ban. But the SEC under new administrations can issue a new ruling.

Even PLDT in its report to the US SEC acknowledged this as a major risk to the company: “We believe that as of the date of this report, PLDT is in compliance with the requirements of the Constitution, and this position was recently supported by the Supreme Court; however, we cannot assure you that subsequent changes in law or additional litigation would not result in a different conclusion. “ Thus its need to have a law that specifically exempts telecoms from the Constitutional provisions.

So, as if by magic, and upturning the wisdom of the framers of the Constitution, when this bill becomes law, telecoms—now dominated foreigners—will no longer be considered a public utility. It is therefore exempt from the Constitution’s 40 percent limit on foreign capital in public utility firms.

I challenge the authors to show me any study, or definition by any dictionary, legal or business, that says telecoms and power generation aren’t public utilities.

The absurdity of HB 5828 is demonstrated by the fact that it lists power distribution as a public utility. But power generation is not. An analogy would be that milk sold in the supermarket is classified as a non-essential product. But the milk that are placed in cans by companies aren’t. Cellphone service is not only essential to ordinary people’s lives but to nearly all economic activity in this era . But it isn’t a public utility. The authors of this bill are taking us for fools.

Hilarious attempt
This would be simply a hilarious attempt at excluding telecoms and power from the Constitution’s provision if not for the fact that Congress has proven time and again to be so malleable to the wishes of the Philippine oligarchy. One doesn’t really know the meaning of “oligarchy” if he thinks its rule doesn’t span all administrations.

The bill’s authors didn’t even bother to explain why they think telecoms, power, and broadcast media aren’t public utilities.

Perhaps they cannot say that the bill changes the meaning of public utilities to accommodate the passive-income oligarchs who are the partners of the controlling foreign companies in these telcos?

Would you blame me if the thought comes to mind that the Indonesian tycoon Salim controls not only the biggest telco in the country PLDT, but is also engaged in “electric power generation and supply,” industries that the bill would exempt from the constitutional provision?

The bill’s authors are former president, now Pampangga Rep. Gloria Arroyo, Arthur Yap, Joey Sarte-Salceda, former speaker Feliciano Belmonte with his nephew Jose Christopher Belmonte, and Makati Rep. Manuel Monsour Del Rosario. They each filed their own bill that proposed the same redefinition of a “public utility,” which were consolidated into one bill.

Whoever planned this plot to skirt the Constitution was certainly a clever operator. Yap was an official of the Arroyo administration, while Salceda was a big noisy supporter of hers, with all of them belonging to the then ruling Lakas-CMD party. Belmonte was the chief political lieutenant of then President Aquino 3rd who threw Arroyo to prison on flimsy grounds. Former martial-arts instructor and actor del Rosario run under losing presidential candidate Jejomar Binay’s party, UNA. (I wonder how in the world did the actor del Rosario become interested in public utility regulation?)

Salim’s partner
Belmonte is a business partner of the Indonesian tycoon Salim who controls PLDT. His family in 2015 sold its controlling shares in the Philippine Star group of publications for a reported P4 billion—an unexpectedly extremely high price, industry sources claimed—to a PLDT unit that is ultimately controlled by Salim. The family still retains some shares, with his sons in top management positions in the Philippine Star newspaper.

Is it just mere coincidence that congressmen from opposing parties suddenly have the brilliant idea of changing the definition of “public utilities” so as to exempt telecoms, the most profitable business to be in in this country, from the constitutional ownership limits?

Is this strategy what is called “covering all parties,” also intended to portray that there is consensus for this bill that betrays our national interest. Was it a message to Speaker Pantaleon Alvarez that he would lose the support of four parties, even if small, if he doesn’t support the bill?

I had become convinced that the Senate is useless body, which slows and even impedes reforms, that we need desperately a unicameral parliament. This time though, with HB 5828 already passed by the House of Representatives, only the Senate—and the President of course—remain as the last guardian of our Constitution and of our nation’s control of public utilities, I have become a believer of our bicameral system.

But given the Senate’s track record, our only hope perhaps is that this scandalous bill that shames the nation and mocks the Constitution, will be vetoed by President Duterte.

Filed under: Manila Times Columns

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