Supreme Court rules PLDT in breach of Charter on foreign ownership

15 Oct 2012

The Supreme Court, upholding an earlier decision, has ruled that Philippine Long Distance Telephone Company (PLDT) breached the 1987 Constitution where it concerns a 40% cap on foreign firms owning stakes in public utilities. GMANews cites Associate Justice Antonio Carpio as confirming: ‘There is no dispute, and respondents do not claim the contrary, that foreigners own 64.27% of the common shares of PLDT, which class of shares exercises the sole right to vote in the election of directors, and thus foreigners control PLDT.’ The decision, released today, asserts that with a 35.73% holding of PLDT common shares, ‘Filipinos do not control PLDT’ – contrary to local laws. It is unclear what remedial action will required, but as it stands, PLDT is in breach of Section 11, Article XII of the 1987 Constitution, which states that corporations should be at least 60% owned by Filipino citizens.