Question & AnswerQ&A (IRR of Republic Act No. 11659)
Republic Act No. 11659 is an Act amending Commonwealth Act No. 146, otherwise known as the Public Service Act, as amended.
It refers to the relevant government agencies to which the specific powers and duties of the Public Service Commission were transferred pursuant to and as amended by existing laws.
Public Service refers to those persons defined under Section 13(b) of Commonwealth Act No. 146, as amended. Public Utility is a public service that operates, manages, or controls for public use specified sectors including distribution and transmission of electricity, petroleum pipeline systems, water and sewerage systems, seaports, and public utility vehicles.
Internal combustion engine vehicles that carry passengers and/or domestic cargo for a fee, such as trucks-for-hire, UV express service, public utility buses (PUBs), public utility jeepneys (PUJs), tricycles, filcabs, and taxis, except transport vehicles accredited with and operating through transport network corporations.
They have powers to issue certificates authorizing public service operations, fix rates and tariffs, determine rates of depreciation, and suspend or revoke any certificate for failure to comply with annual performance audits.
They are subject to a fine between Five Thousand Pesos (₱5,000) and Two Million Pesos (₱2,000,000) per day of violation, and may face suspension of their certificate until compliance.
Public service corporations and their officers, directors, or employees holding managerial positions can be imprisoned (6 to 12 years) for willful commission of prohibited acts, willful neglect or failure to perform required acts, or destruction of apparatus owned or operated by Administrative Agencies.
Control exists when the parent company or entity owns directly or indirectly more than 50% of the capital or voting rights or has power to govern financial and operating policies or appoint/remove majority of the board, or possesses decisive influence over the entity.
NEDA reviews the classification upon request of an Administrative Agency, considering documents like entity profiles, financial statements, performance audits, and market studies and submits recommendations to the President for referral to Congress for classification.
The public service must regularly supply through a network a commodity or service of public consequence; be a natural monopoly needing regulation; provide essential services for life and occupation; and be obligated to supply adequate service on demand.
Foreign governments, foreign state-owned enterprises, and entities controlled by them are prohibited from investing or owning capital in public utilities or critical infrastructure. Sovereign wealth and independent pension funds have a 30% ownership cap, and foreign nationals are restricted to 50% ownership unless reciprocity is granted.
NEDA provides periodic advice on legal restrictions, conducts reviews and recommendations on reclassification and critical infrastructure declaration, undertakes studies on regulatory reforms, and submits recommendations to the President and Congress as appropriate.
Hearings are governed by rules adopted by the agency, are not bound by technical legal evidence rules, allow issuance of subpoenas, provide witness fees, impose penalties for contempt or obstructive behavior, and administrative officers may administer oaths.
If after review and recommendation by relevant agencies a proposed merger, acquisition, or investment results in control by a foreigner or foreign corporation and has national security implications, the President may suspend or prohibit such transaction within 60 calendar days.
Administrative Agencies must ensure an annual independent performance audit to monitor costs, service quality, emergency response, and for critical infrastructure and utilities, additional audits on risk assessment, emergency response, and cybersecurity. Metrics for services must be established and regularly updated.