...warns of economic backlash
MANILA, Philippines - Businessman Manuel V. Pangilinan has appealed a Supreme Court ruling, which changes the calculation of foreign ownership in public utilities, warning it could lead to the collapse of the economy.
The high court had directed the Securities and Exchange Commission (SEC) to study whether Pangilinan-led telecom giant Philippine Long Distance Telephone Co. (PLDT), a unit of Hong Kong-based First Pacific Co. Ltd., has breached the 40% foreign ownership limit for utilities.
It said only voting or common shares could be used in assessing the capital stock, excluding preferred or non-voting shares.
In his 52-page motion for reconsideration, Pangilinan said: "If the court does not reconsider, that unwarranted redefinition will have very serious adverse repercussions for the partially nationalized industries affected, the Philipine capital market, the Philippine economy in general and the country as a whole."
"There will be no telling if and how those severe consequences can be survived," he added.
Pangilinan filed his appeal through his lawyers, led by E.M. Lombos.
The PLDT official, who also heads another First Pacific unit, Metro Pacific Investments Corp., argued that the Supreme Court should have dismissed for lack of jurisdiction to rule the petition filed by human rights lawyer Wilson Gamboa seeking probe into PLDT's ownership structure.
He said Gamboa's petition also does not merit the court's attention for it was not of transcendental importance, and it failed to implead the proper parties in the case -- the SEC and PLDT.
Gamboa's petition only named him, PLDT president Napoleon Nazareno and SEC chairman Fe Barin as respondents.
SEC earlier filed its own motion for reconsideration, saying Gamboa failed to exhaust administrative remedies with the SEC before bringing up the matter to the Supreme Court, and cited only Barin, not the whole SEC, as respondent.
"Neither have any PDT's shareholders, a Filipino or foreign, been impleaded or brought into, nor have they participated in this case. Even respondent (Pangilinan), has not been impleaded as a PLDT shareholder and the court is left merely to imply that he must be that by virtue of his chairmanship of PLDT's board," Pangilinan said.
"Consequently, PLDT has never been brought into this case as a party and has never participated in these proceedings."
No due process
Pangilinan also argued that the SC deprived PLDT of its constitutional right to due process when it placed the company under investigation by the SEC.
He stressed that the ruling, if not reversed, would constitute unconstitutional usurpation of the administrative rule-making power of the Executive Branch; a violation of the separation of the jurisdiction and powers of three branches of government; and unconstitutional deprivation of PLDT's shareholders' property without due process of law.
"In short, the majority has already loaded, cocked and aimed the gun at PLDT and its shareholders and has just ordered the SEC to pull the trigger."
"The extent of PLDT's and its shareholders' permitted participation, when summoned to the SEC for its purpose, will merely be to line up against the wall to be shot," Pangilinan added.
What 'capital' means
In its June 28 ruling, the SC ordered the SEC to investigate whether PLDT violated the foreign ownership rule.
Section 11, Article XII of the 1987 Constitution states that "no franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years."
The SC held that the term "capital" refers only to shares of stock entitled to vote in the election of directors or the so-called common shares and and not to the total outstanding capital stock composed of "common" or voting shares and "preferred" or non-voting shares.
Pangilinan said the court misread the Constitution. He insisted that the term "capital" was used without qualification so it retains its universal meaning.
He also noted that the 1986 Constitutional Commission's repeated rejection of the proposals to replace the term "capital" with more restricted and specific terms such as "voting capital" or "controlling interest" showed an unmistakable intention to refer to all types of capital and not just to voting shares.
Nazareno also filed a separate motion for reconsideration of the said court ruling, raising the same arguments.