Law Summary
Definitions of Key Terms
- Defines terms such as Administrative Agencies, Certificates, Concession, Critical Infrastructure, Public Utility Vehicles, Telecommunications, etc.
- Specifies that "Commission" refers to transferred powers from the Public Service Commission.
- Clarifies public utilities, foreign state-owned enterprises, and national security concepts.
Transfer of Jurisdiction
- Jurisdiction of Public Service Commission transferred to specific Administrative Agencies such as:
- Civil Aeronautics Board
- Energy Regulatory Commission
- National Telecommunications Commission
- Department of Transportation, among others.
Jurisdiction and Definition of Public Utilities
- Administrative Agencies have jurisdiction and supervision over all public services including government-owned.
- Congress retains exclusive power to grant franchises.
- Public utilities include sectors such as electricity, water pipelines, seaports, and public utility vehicles.
- Criteria for classifying a public service as a public utility include natural monopoly status and public necessity.
- Non-public utility public services are regulated differently with no nationality restrictions.
Certificate of Public Convenience
- Certificates for public service must allow acquisition by the state upon just compensation.
- Certificates are valid for a definite period.
- Violation of conditions can lead to cancellation of certificates.
Powers of Administrative Agencies over Public Services
- Issue certificates to operate public services only to Philippine-organized entities.
- Fix and regulate rates, tariffs, and charges ensuring they are fair, reasonable, and not discriminatory.
- Provisional approval of rates possible followed by mandatory hearings.
- Monitor depreciation accounts to protect stakeholders.
- Suspend or revoke certificates for failure in performance audits.
Investigative and Enforcement Powers
- Can investigate matters without prior hearing.
- Require compliance with service standards and regulations.
- Can assess reasonable investigation costs against violating public services.
- Mandate uniform accounting systems.
Unlawful Acts
- Prohibition on operating public services without certificates except for expressly exempted entities.
- Duties include carrying public mail upon request and urgent service provision during calamities.
Acts Requiring Agency Approval
- Public services must obtain approval for rates, service extensions, stock issuance, and property transactions.
- Approval based on prudence, public interest, and necessity.
- Transfer of shares reducing Filipino ownership below 60% is void and may cause certificate cancellation.
Penalties for Violations
- Fines ranging from P5,000 to P2,000,000 per day for violations.
- Possible refund orders for over-collection of rates.
- Non-payment or failure to comply may lead to certificate suspension.
- Criminal penalties include fines and imprisonment for prohibited acts or negligence.
Handling Critical Infrastructure
- Entities must address complaints promptly with action plans.
- Monthly reporting to regulatory agencies on service interruptions and complaints is mandated.
Legal Proceedings and Hearings
- Commission may issue subpoenas and enforce contempt penalties.
- Hearings are governed by Commission rules, not technical legal evidence rules.
- Deposition of witnesses may be taken within or outside the Philippines.
- Legal representation of Commission handled by its attorneys or Solicitor General.
Administrative Fees
- Agencies can collect reasonable fees and penalties.
- Adjustments are made every five years based on CPI.
Presidential Powers on National Security
- President may suspend or prohibit foreign mergers/acquisitions affecting public services within 60 days upon recommendation.
- Philippine Competition Commission may be consulted.
Restrictions on Foreign Investment
- Foreign state-owned enterprises are restricted from owning capital in public utilities and critical infrastructure.
- Existing foreign state-owned investments cannot increase ownership.
- Sovereign wealth and pension funds may own up to 30% collectively.
Reciprocity Clause
- Foreign nationals limited to 50% ownership unless reciprocity is granted.
- Foreign employment requires permits and must include skills transfer programs.
Information Security
- Telecommunications entities must maintain ISO information security certifications.
- Exemptions for MSMEs apply.
Regulatory Review and Oversight
- NEDA to conduct regular sector studies and baseline surveys.
- Creation of Congressional Oversight Committee for 5-year evaluations.
- Annual performance audits for public services with specific metrics for critical infrastructure.
Implementation and Interpretation
- Administrative Agencies must issue implementing rules within six months.
- Franchises limited to 50 years; non-exclusive and subject to amendment by Congress.
- Existing agreements remain valid until expiration.
- Severability clause included for unconstitutional provisions.
- Repeals conflicting laws and amends specific acts on foreign ownership.
Effectivity
- The Act takes effect 15 days after publication in the Official Gazette or newspapers of general circulation.