MANILA, Philippines - The Philippine Long Distance Telephone Company (PLDT) may still correct any violation of Sec. 11, Art. XII of the 1987 Constitution which states that foreign ownership of corporation in the Philippines should be limited to 40% of the firm's capital, for as long as the violation, if any, was committed following the commencement of a formal investigation or administrative proceeding by the Securities and Exchange Commission (SEC).
Thus ruled the Supreme Court (SC), in a 51-page ruling dated Oct. 9 but released to the public only on Monday, as it junked PLDT chairman Manuel V. Pangilinan's motion for reconsideration on its June 28, 2011 decision directing the SEC to determine if PLDT violated the above-stated provision.
“Under prevailing jurisprudence, public utilities that fail to comply with the nationality requirement under Section 11 Article XII and the Foreign Investments Act can cure their deficiencies prior to the start of the administrative case or investigation,” the high court said through the ponencia of Associate Justice Antonio Carpio.
In its June 2011 ruling, the high court held that Sec. 11, Art. XII of the Constitution meant that “capital” should mean the shares of stock entitled to vote in the election of directors and thus refers only to common shares and not to the total outstanding capital stock.
In dismissing Pangilinan's MR, the high court ruled that his claim that his right to property and right to due process will be violated with the SEC investigation, is misplaced. The high court also pointed out that PLDT can present evidence of its compliance with the constitutional requirement before the SEC proceeding.
“Since the Court limited its resolution on the purely legal issue on the definition of the term “capital” in Section 11 Article 12 of the 1987 Constitution and directed the SEC to investigate any violation by PLDT on the 60-40 ownership requirement in favor of Filipino citizens, there is no deprivation of PLDT’s property or denial of right to due process,” the high court said.
The high court added that it made no ruling on whether PLDT violated the subject constitutional provision because there is a need for a "presentation and determination of evidence through a hearing" which is not within the jurisdiction of the high tribunal.
Nine justices voted with Carpio in favor of the junking of Pangilinan's MR: Chief Justice Maria Lourdes Sereno, and Associate Justices Teresita Leonardo-De Castro, Arturo Brion, Diosdado Peralta, Lucas Bersamin, Mariano Del Castillo, Martin Villarama, Jr., Jose Perez, and Jose Mendoza.
Those who dissented were Associate Justices Presbitero Velasco, Jr., Roberto Abad, and Bienvenido Reyes.
Associate Justice Estela Perlas-Bernabe inhibited for handling a related case during her stint as trial court judge.
The case stemmed from a petition by lawyer Wilson Gamboa, who told the high court that since foreign interests, notably First Pacific Company, owns at least 61.8 percent of PLDT’s outstanding common stocks, the phone giant can no longer be regarded a Philippine national.
Gamboa sought the annulment of the sale of P26.5 billion worth of PLDT shares to First Pacific in 2007.