Ready for Business: The Philippines Further Liberalizes Its Communications Sector

On August 24, 2025, the Philippines’ Konektadong Pinoy Act became law. This new law recognizes that access to digital services and technologies is essential to participation in today’s global economy. It seeks to enable development of data transmission infrastructure by removing barriers to entry for new participants and in increasing competition in the data transmission services market. 

Key Features of New Law

Notable features of the new law:

• It eliminates the need for participants in the data transmission sector to secure a congressional franchise, instead requiring only a streamlined administrative registration. This development builds upon the Philippine government’s 2023 lowering of barriers to foreign investments in the data transmission sector, which allows foreign investments of more than 50%, subject to reciprocity requirements and foreign government and state-owned enterprise investment prohibitions. 
• It requires incumbent sector providers to grant access to new sector participants on an open, fair, reasonable, and non-discriminatory basis, subject to technical requirements. A “Reference Access Offer” system will be used to standardize and publish access rates and terms to enhance competition among access providers. 
• It implements policies to ensure that passive data transmission infrastructure is (a) made available for co-location and co-use by its owner or operator on an open, fair, reasonable, and non-discriminatory basis, subject to technical requirements, and (b) built in the most cost-efficient and timely manner, including by encouraging independent entities to build and operate towers, dark fiber and utility corridors, and other passive infrastructure. 
• Allowing sector participants to use satellite technology and associated spectrum in any or all segments of their networks without having to lease or rent capacity from public telecommunications entities. 

What the New Law Means for Investors

The new law represents an essential step change in the deregulation of the Philippines’ data transmission sector. Its implementation is anticipated to:

• remove a major barrier to foreign investment in Philippine data transmission infrastructure assets and services, given the administrative and financial burdens imposed by the congressional franchise requirement.
• reduce incumbent sector participants’ regulation-driven competitive advantage.
• enable greater competition across the Philippine data transmission sector, increasing service accessibility and choice for consumers and eventually expanding the scale of the total accessible consumer market.

According to the Philippine government’s 2024 National Information and Communications Technology Household Survey, while the percentage has increased significantly in recent  years, only 48.8% of Philippine households have access to the internet. At the same time, in 2024, two out of three Filipinos aged 10 and over, totaling 61.46 million individuals, used the internet, reflecting massive demand for data transmission services.

The new law’s implementing regulations remain subject to further industry consultation and are required to be promulgated within 90 days of the law’s effectiveness. On finalization of these rules, the overall effect of the new law on investors’ ability to engage with the Philippine data transmission market will become clearer, but current indications are that the sector’s attractiveness as a destination for foreign capital may increase. 

In the meantime, please feel free to reach out to your Sidley contact for further discussion and additional insights.