MANILA, Philippines - The Supreme Court will hear oral arguments in appeal of its recent decision, changing the calculation of foreign ownership in public utilities.
But it has yet to set the date as it is still awaiting all the pleadings of the parties in the case.
The high court earlier directed the Securities and Exchange Commission (SEC) to study whether telecom giant Philippine Long Distance Telephone Co. (PLDT), a unit of Hong Kong-based First Pacific Co. Ltd., has breached the 40% limit on foreign ownership of public utilities as prescribed under the Constitution.
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."
In assessing "capital," the high court ruled that only voting or common shares could be counted, and preferred or non-voting shares should be excluded.
PLDT chairman Manuel V. Pangilinan, PLDT president Napoleon Nazareno, the SEC, and the Philippine Stock Exchange (PSE) have filed separate motions for reconsideration of the court ruling.
Pangilinan warned of serious repercussions on the economy. The PSE echoed Pangilinan's view, noting the economy stands to lose more than P630 billion in allowable foreign investments in PSE-listed shares or 9% of the current total market value if it were to follow the SC ruling.
The SEC, for its part, asked the court to abandon the ruling for being "premature."
The SC ruling stemmed from the complaint filed by human rights lawyer Wilson Gamboa who sought to annul the sale of the government's 46% stake in Philippine Telecommunications Investment Corp. -- representing a 6.4% indirect interest in PLDT -- to First Pacific, which partly owns the telco.
Gamboa stressed that as a consequence of the sale, foreign groups First Pacific and NTT DoCoMo, a PLDT minority stockholder, ended up owning 51.56% of PLDT equity, over and above the maximum allowable 40%.
The SEC said Gamboa failed to exhaust administrative remedies with the securities regulators before bringing up the matter to the court.