"National security is non-negotiable."
"National security is non-negotiable."
Power and telecommunications are public utilities covered by Section 11, Article 7 of the Constitution. These two industries are natural monopolies requiring high start-up costs which necessarily limit possible investors. There have been discussions on easing the restrictions in the telecommunications industry to allow for better and more competitive services. While there may be practical wisdom to this, still the constitutional limitations prevail, and should be followed.
The provision allows operation of a public utility to “citizens of the Philippines, or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizen.” Foreign ownership, if at all, is capped at 40 percent maximum. Section 11 further states: “The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.”
Apart from obvious national security reasons, power and telecommunication entail interconnectivity and exchange of information. I believe the rationale behind Section 11 is now challenged by investments of China both in our power and telecommunications industries.
Dito Telecommunity Corporation, previously known as the Mislatel consortium, has been granted by the government a Certificate of Public Convenience and Necessity as the third telecommunications provider in the country last July. The Mislatel consortium is composed of the Mindanao Islamic Telephone Company, Inc., Udenna Corporation with 35 percent share, Chelsea Logistics Corporation with 25 percent share, and State-owned China Telecommunications Corporation which owns 40 percent.
The National Grid Corporation operates the state-owned power grid which transmits electricity in most parts of the country. At present, the NGCP is owned by the consortium of State Grid Corporation of China, One Taipan Holdings Corp., and Calaca High Power Corporation. The State Grid Corporation of China holds 40 percent stake, while One Taipan Holdings and Calaca High Power Corp. each have 30 percent. Last Congress, I filed House Bill No. 5209 which proposes to limit the ownership of the National Grid Corporation of the Philippines (NGCP) exclusively to Filipinos.
At present, China holds a 40-percent stake in two of our nationalized, most sensitive industries. China Telecommunications Corporation owns 40 percent of Dito Telecommunity Corporation and the State Grid of China owns 40 percent of NGCP.
To be clear, I agree that our country will benefit from the infusion of capital, knowledge and new technology from foreign investors. However, we must strike a delicate balance between modernizing our industries while maintaining the integrity and sovereignty of our public utility companies, from a big picture perspective. We must be cautious of the extent and breadth of authority and involvement granted to them, particularly in this case where the same country is sole foreign investor. The involvement of just one country in two vital public utilities casts a shadow of vulnerability to our country’s security. As I’ve always said, national security is non-negotiable.
