Public utilities or public services are business activities generally characterized as natural monopolies with large sunk costs. They are allowed to operate as regulated monopolies since they provide services that are indispensable or necessary to everyday life.

The Public Service Act (Commonweaith Act No. 146) remains the principal law that enumerates business activities classified as public utilities or public services. It was enacted in 1936 based on even older statutes in the United States and in the Philippines. Since then, vast advances have taken place in technology and modes of delivery of services. Capital and other requirements and ways of doing business, among others, have drastically changed as well. These require a review of the Public Service Act and the introduction of greater market competition with a view to attaining more effective and efficient services to the public, reducing socio-economic inequities and alleviating poverty.

This bill is introduced in order to update the coverage of public utilities or public services in the Public Service Act, reserving it to business activities exhibiting the simultaneous characteristics of natural monopoly and vital public necessity, and to ensure that every Filipino has access to the best quality, value-for-money essential services that effective competition can provide.

In view of the foregoing, the approval of this bill is earnestly sought.