Recent amendments have added a new paragraph (d) to section 13 of the Public Service Act, which defines the public service as a public service that operates, manages or controls for public use any of the following – 4: The existing restriction on foreign ownership of public services is based on the Philippine Constitution of 1987, which provides that no franchise, certificate or other form of permit to operate a public service is granted, except to Filipino citizens or companies organized under Philippine laws and owned by at least 60% of Filipino citizens. However, the Constitution does not define the term “public service” and, in the absence of a clear legal definition of such a term, the authorities relied on the Civil Service Act, enacted in 1936 to regulate the provision of public services, to determine in which public services the public services were located. *7 In the interest of national welfare or national defence and against payment of fair compensation, the State may transfer ownership and operation of public services and other private enterprises to the Government. (Article XII of Article 18 of the Philippine Constitution of 1987) The most common of these are public convenience certificates issued by the Land Transportation Franchising and Regulatory Board to individual operators of public commercial vehicles such as jeepneys, UV express, minibuses and taxis. and franchises awarded by local government entities to individual utility tricycle operators. Any foreigner applying for employment in the Philippines and any public service wishing to hire a foreigner for employment in the Philippines must obtain a work permit in accordance with the Philippine Labor Code. It should be noted that nothing in RA 11659 can be construed as diminishing, restricting, or restricting Congress` power to grant concessions to public services, including utilities, and other activities required by law. Any franchise or certificate required for the operation of a public service shall be issued by Congress, unless otherwise provided by law to the competent administrative authorities. With the passage of ACT 11659, the term “public service” was limited to a public service that operates, manages, or controls any of the following for public use: In the interest of national security, the Philippine president can now suspend or prohibit a proposed merger, acquisition, or investment in a public service that effectively results in: that a foreign alien or company is granted direct or indirect control over that public function. However, the Philippine President must exercise this power within 60 days of receipt of the recommendation of the relevant department or administrative authority. The National Economic Development Authority is responsible for issuing rules and regulations to implement these provisions. Another notable change is section 6, which amends section 16 of the Public Service Act, which appears to prevent individuals from obtaining the right to vote in the operation, maintenance or control of a public service.

The latest amendments explicitly provide that nationality requirements may not be imposed by the competent administrative authorities on any public service that is not classified as a non-profit organisation, notwithstanding laws to the contrary. However, a public service that is not classified as a public service will continue to be considered a “public-interest entity” for the purposes of Article XII, Sections 17 and 18 of the Philippine Constitution of 1987. These constitutional clauses refer to cases where the state can temporarily take control of private companies or nationalize industries.※7 In retrospect, section 14 of the 1936 version of the Civil Service Act used the terms “public service” and “public service” interchangeably. However, after the passage of several Acts amending and renumbering section 14※2, references to “public service” no longer appeared in the definition of “public service”. It was at this time that case law emerged, combining the two concepts and defining the public service as “an undertaking or service engaged in the regular supply of the public with a good or service of public importance, such as electricity, gas, water, transport, telephone or telegraph service”. The Supreme Court has also ruled on several occasions that, as its name suggests, the term “public service” implies public use and public service to the public and that the most important defining characteristic of a public service is the service or willingness to serve an indefinite public or a part of the public that has the legal right to: to demand and receive their services or goods.※3 As a result, businesses that were classified as public services under the Public Service Act were considered public services and were subject to the constitutional restriction of 40% foreign ownership.