Question & AnswerQ&A (Republic Act No. 11659)
The State recognizes the role of the private sector as a main engine for national growth and development. It encourages private enterprise and expands investment to provide efficient, reliable, and affordable basic services to all, ensuring effective regulation, reasonable returns, rationalized foreign equity restrictions, and national security protection.
Public Utility refers to a public service that operates, manages, or controls for public use specific services such as distribution and transmission of electricity, petroleum pipelines, water and wastewater pipeline systems, seaports, and public utility vehicles. All concessionaires managing these are also considered public utilities.
Jurisdiction is transferred to agencies such as the Civil Aeronautics Board, Civil Aviation Authority of the Philippines, Department of Energy, DICT, Department of Transportation, Energy Regulatory Commission, LTFRB, LTO, NTC, Philippine Ports Authority, and others listed in Section 3.
Violations can result in fines ranging from Php 5,000 to Php 2,000,000 per day, and/or imprisonment from six years and one day to twelve years, depending on the nature of the violation, after notice and hearing.
The certificate can be cancelled after hearing for violation of its conditions, failure to secure the necessary certificate, refusal or neglect to comply with orders, or failure to pass performance audits for three consecutive years.
Foreign state-owned enterprises are prohibited from owning capital in public utilities or critical infrastructure for investments made after the law's effectivity. Sovereign wealth funds and independent pension funds may collectively own up to 30% of such public services. Foreign nationals cannot own more than 50% of capital in critical infrastructure unless there is reciprocity.
They have jurisdiction and supervision over all public services, including issuing certificates to operate, regulating rates and charges, conducting investigations, requiring reports and audits, enforcing compliance, suspending or revoking certificates, and imposing fines.
NEDA may recommend classification of public services as public utilities to the President and Congress and must provide periodic advice on local and foreign ownership restrictions. It also conducts regular sectoral studies and baseline surveys, and promulgates implementing rules with administrative agencies.
Performance audits are to be conducted annually by independent teams to monitor costs, service quality, emergency response, risk assessment, cybersecurity, and other metrics, ensuring reliability, security, and safety of services, with penalties for non-compliance.
Telecommunications entities must obtain and maintain certifications from accredited bodies attesting to compliance with relevant ISO information security standards as prescribed by DICT, and maintaining certification is a continuing qualification for franchise retention, except for MSMEs.