E. Public Services (CA 146, as amended by RA 11659)

Public Services: Regulatory Scope, Certification, and Nationality Restrictions

Under the Public Service Act, the relevant administrative agencies exercising the transferred authority of the Public Service Commission have general supervision, jurisdiction, and control over all public services and their properties, franchises, and facilities, subject to specific statutory exclusions and rate-limiting restrictions on certain operations such as aircraft, ships, and radio enterprises¹,². In exercising these regulatory functions, an administrative agency possesses the power, without prior hearing, to investigate service standards upon complaint or motu proprio, require the provision of safe and adequate service, prohibit operations lacking the necessary certificate, and direct payment of required fees or investigation expenses under penalty of cancellation or revocation³.

Upon notice and hearing, the administrative agency is empowered to issue certificates authorizing the operation of public services whenever the proposed service and business authorization will suitably promote the public interest⁴,⁵. However, any certificate authorizing the operation, management, or control of a public service may only be issued to corporations, partnerships, associations, or joint-stock companies constituted and organized under the laws of the Philippines⁵. The agency may likewise determine fair and reasonable rates and tolls, and it retains discretion to grant provisional approval of proposed rates without an initial hearing, provided it convenes a hearing within fifteen days thereafter upon proper notice and publication to ratify, alter, or modify such provisional rate⁵.

For public services classified as critical infrastructure—namely, those owning, using, or operating vital physical or virtual systems and assets whose incapacity or destruction would detrimentally impact national security, including telecommunications—specific restrictions apply²:

• Foreign Equity Limitation: Foreign nationals are prohibited from owning more than fifty percent (50%) of the capital of entities operating and managing critical infrastructure, unless the foreign national's country accords reciprocity of similar value to Philippine nationals by law, treaty, or international agreement⁶.
• Employment of Foreign Nationals: Unless otherwise provided by law or by an international agreement, a public service may employ a foreign national only after a determination that no competent, able, and willing Philippine national is available, and the foreign national must secure an employment permit under the Labor Code and participate in required understudy or skills development programs for technology transfer⁶.