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Miscellaneous

Senate’s anti-China amendment to Public Service Act unconstitutional — Roque

The discriminatory provision against foreign and domestic state-owned enterprises as prescribed under the Philippine Senate’s amendment to the 1936 Public Service Act (PSA) is patently unconstitutional according to international law expert and former member of the 17th Congress Harry Roque, Jr.

“Prohibiting state-owned enterprises to engage in the public service sector is discriminatory to the People’s Republic China and even inimical to the economic interests of the Philippines because both countries own businesses that are key players in the power generation and distribution industry,” Roque warned.

“We are supposed to liberalize the provisions of this antiquated law to allow and not discriminate players in the sector. Ultimately, it is the consumers that would benefit from better public services that will be generated by these competitors,” Roque said in critiquing Senate Bill 2094, which passed the third and final reading last December.

Roque, who was elected party-list representative in 2016, specifically argued that “restricting the entry of foreign state-owned corporations into public services is violative of the equal protection clause under the 1987 Constitution. Our Constitution states that everyone in the Philippines, which includes foreigners, is entitled to equal protection of the law.”

“One way to determine whether there the equal protection clause has been violated is through the reasonable basis test, which we adopted from American jurisprudence. An element of the test is that the distinction to be valid must be based on genuine distinction. It must be germane to the purpose of the law and applicable at all times,” the former Presidential spokesman explained.

Roque said, “We do not know why there is a need to discriminate against state-owned enterprises from China when this is not germane to the law and there is no basis for distinction. In the first place, we have already allowed Chinese enterprises to enter the sector through the National Grid Corporation of the Philippines (NGCP) for years.”

“We can reasonably infer that the basis for distinction here is because of nationality. Chinese enterprises that are active in public services are state-owned,” Roque pointed out. “In American jurisprudence, this becomes subject to intense scrutiny because all distinctions based on nationality are presumed unconstitutional. Therefore, this proposed law is prone to a constitutional challenge.”

Roque clarified that “even without the mention of China, the prohibition against foreign state-owned enterprises is clearly a distinction based on nationality,” Roque clarified. “One problematic issue arising from this matter is that we have a state-owned enterprise like the Philippine National Oil Corporation (PNOC) in the public service sector.”

“To sustain the validity of distinction based on nationality, we must show an overriding state interest. Even if we invoke national threat as overriding state interest, where is the threat?” Roque asked. “The Chinese have been allowed to enter NGCP years ago and have not posed a threat to our national security.”

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