Latest Stories

FedEx can’t operate in PH, appellate court rules

The Court of Appeals has cancelled a government-issued permit that allowed the giant international freight forwarding company FedEx to operate in the Philippines. PHOTO FROM FEDEX’S FACEBOOK ACCOUNT

MANILA, Philippines—Stressing that the court was not bound by the resolutions of the justice secretary, the Court of Appeals cancelled a government-issued permit that allowed the giant international freight forwarding company FedEx to operate in the Philippines.

Contrary to an opinion of the Department of Justice (DOJ), the appellate court said international freight forwarding was a public utility. It upheld its earlier ruling declaring FedEx (Federal Express Pacific Inc.), a foreign corporation, disqualified by the Constitution from involvement in public utilities in the Philippines.

The Civil Aeronautics Board (CAB) in May 2011 had granted FedEx, one of the largest freight forwarding companies in the world, a permit to operate in the country for five years. The CAB decision was backed by an opinion issued by the DOJ in 2004 stating that “international air freight forwarders are not covered by the nationality requirement under the 1987 Constitution, hence, may be issued a certificate of public convenience subject to the CAB’s pertinent rules and regulations set forth under Republic Act No. 776 and other existing laws.”

However, in its decision first issued on Jan. 23, 2013, the appellate court said it was “not bound by the resolution of the justice secretary” and that like other courts, it takes its bearings from the decisions of the Supreme Court, which has the last word on what the law is.

In its more recent two-page decision dated June 6, the appellate court’s Fourth Division denied the motion for reconsideration filed by FedEx.

“This court, after a meticulous study of the arguments set forth in the motion for reconsideration … finds no cogent reason to revise, amend, much less reverse, the decision dated January 23, 2013,” said the ruling penned by Associate Justice Danton Bueser. Associate Justices Amelita Tolentino and Ramon Garcia concurred.

The appellate court had acted in favor of Merit Freight International Inc. (Merit) and Ace Logistics Inc. (Ace), which had questioned the decision of the CAB to grant FedEx a regular permit to operate from May 2, 2011, up to  May 1, 2016.

Merit and Ace went to the appeals court to contend that FedEx was a foreign corporation and therefore could not conduct business in the Philippines because air freight forwarding was a public utility reserved for Filipinos.

The court noted the case of Royal Cargo Corp., which had been allowed by the CAB to operate as an air freight forwarder because the company was 70 percent owned by Filipinos and its president, while a foreigner, was married to a Filipino.

When Royal Cargo sought a renewal of its permit, it reported it had a new president, a German national. This prompted the CAB in 1990 to approve the renewal on condition that the position of president was transferred in 30 days or the permit would be cancelled.

Royal Cargo appealed the decision but this was denied by the CAB, which stated that it was the board’s policy “to grant a permit to engage in international air freight forwarding only to citizens of the Philippines as defined in RA 776.”

The Court of Appeals upheld the CAB decision in the Royal Cargo case in September 1991. The case was elevated to the Supreme Court but because the appellate court had yet to resolve an instant petition, the permit of Royal Cargo expired in 1995. The high court then dismissed the petition for being moot and academic.—Christine O. Avendaño

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , court , fedex , freight forwarding , Philippines

  • go88

    Another good reason for foreigners not to invest in this corrupt country.

  • Pepe Smith

    Wow, I wonder, how much changed hands?

  • abbaj

    Why punish businesses just because of the three stupid judges in CA? San kaya nag graduate ang mga kupal na yun?

  • disqus_nBEsUalTvo

    It upheld its earlier ruling declaring FedEx (Federal Express Pacific Inc.), a foreign corporation, disqualified by the Constitution from involvement in public utilities in the Philippines.

    (Moving freight is considered a utility? Water, electricity, natural gas used in homes are utilities. Must be a culture difference.)

  • http://www.businessinsider.com/the-art-of-war-sun-tzu-2011-5?op=1 Sun Tzu

    How about PLDT? 60% local ba talaga… t a n g a niyo!

  • eight_log

    This is a plain case of … if you don’t pay … you will pay one way or another … in this case FedEX lost its contract to operate in Pinas. The question is, who is on the losing side???? Am sure FedEx is laughing!!!!

    Do the CHA CHA … am sure that is what our biz world will suggest!!!! But if I were an investor … of what use is 100% ownership if I have to deal with massive corruption???

    Drink TSING TAO BEER …. This Sh1t Is No Good – Try Another One!!! Go to Singapore … like what FedEX just did!!!!

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Slain officer’s ‘diagram’ rocks PNP
  • 2 contractors fined P25,000 for delays in Edsa rehab
  • Luisita beneficiaries take over renters
  • 5 years of hard work pay off for top UP grad
  • Art, music, book sale mark Earth Day at Arroceros park
  • Sports

  • Galedo caps ride of redemption
  • Beermen, Express dispute second semis slot today
  • Lady Agilas upset Lady Bulldogs in four sets
  • NLEX roars to 7th D-League win
  • Zaragosa, Park forge PH match play duel
  • Lifestyle

  • Summer Mayhem: The ultimate beach experience
  • A haven for steak lovers
  • Gongs and southern dances star in a workshop at San Francisco Bayanihan Center
  • This woman ate what?
  • Photos explore dynamics of youths’ sexual identity
  • Entertainment

  • Kristoffer Martin: from thug to gay teen
  • Has Ai Ai fallen deeply with ‘sireno?’
  • California court won’t review Jackson doctor case
  • Cris Villonco on play adapted from different medium
  • OMB exec’s assurance: We work 24/7
  • Business

  • Gaming stocks gain, PSEi eases on profit-taking
  • Cebu Pacific flew 3.74M passengers as of March
  • Corporate bonds sweeteners
  • Professionals in the family business
  • Foreign funds flowed out in Q1, says BSP
  • Technology

  • Vatican announces hashtag for April 27 canonizations
  • Enrile in Masters of the Universe, Lord of the Rings?
  • Top Traits of Digital Marketers
  • No truth to viral no-visa ‘chronicles’
  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Opinion

  • Editorial Cartoon, April 25, 2014
  • No deal, Janet
  • Like making Al Capone a witness vs his gang
  • MERS-CoV and mothers
  • A graduation story
  • Global Nation

  • US4GG: Aquino should ask Obama for TPS approval, drone technology
  • Complex health care system for California’s elderly and poor explained
  • Tiff with HK over Luneta hostage fiasco finally over
  • DOLE sees more Filipinos hired by South Koreans
  • Filipinos second-shortest in Southeast Asia
  • Marketplace