The Philippines government is considering lifting foreign ownership restrictions on local telecoms companies and other utilities to help stimulate the industry.
The government has proposed to raise the current cap limiting foreign direct ownership to 40% of a utility company up to 70%. While the economic planning ministry believes the change could be implemented with the passing of a new law, the 40% cap is enshrined in the constitution and some analysts believe lifting the cap would require a constitutional amendment, which would be very difficult to pass.
The Philippines’ duopoly of telecoms operators are both part owned by foreign investors. PLDT is around 25% owned by Hong Kong based First Pacific and Globe Telecom is 20% owned by Singtel and operated as a joint venture with Ayala Group.
Philippines president Rodrigo Duterte has been firmly calling or the telecoms industry to improve services for Filipinos, and has threatened to bring in new competition to improve competition and quality. He has also asserted that foreign investment is needed to improve the Philippines’ telecoms sector.
Duterte is scheduled to deliver his second State of the Nation Address today.