The Securities and Exchange Commission (SEC) has been asked to stay true to the spirit of the Supreme Court ruling on foreign ownership, applying restrictions separately on each class of shares in utility companies.
Last week, the Supreme Court issued an entry of judgment on its ruling in June 2011 on the issue of foreign ownership in PLDT where it held that the 60-40 (percent) nationality requirement in public utility corporations, in favor of Filipinos, refers to common shares entitled to vote in the election of directors, not to the totality of the company’s capital stock.
The Securities and Exchange Commission is no longer keen on imposing a 60-40 percent local-foreign ownership restriction on each class of shares, as originally intended by the controversial Supreme Court ruling on the capital of Philippine Long Distance Telephone Co.
The Philippine Stock Exchange is proposing some “safety valve” mechanisms to ensure compliance with foreign equity restrictions without discouraging capital flows within the regulatory framework being drawn up by the Securities and Exchange Commission.
Local stocks tumbled on Monday due to profit-taking and concerns on foreign ownership regulations in the country.
The country’s biggest business groups have urged the Securities and Exchange Commission to change its proposed rules on foreign ownership limits in Filipino firms, warning that the draft regulations in their current form would lead to a massive outflow of capital.
The Joint Foreign Chambers (JFC) said “drastic changes” in the way companies with foreign ownership can do business in the country is a “serious setback” for the Philippines in the race for foreign direct investments.
Those of us who are advocating for a freer foreign investment regime should celebrate the first victory: The leaders of both the Senate and the House of Representatives are convinced that the very restrictive economic provisions against foreign investments in the Philippine Constitution should be amended. There is hope that the legislative process of amendment through Charter change (Cha-cha) can happen during the 2013-2016 term of Congress.
In June 2011, the Supreme Court, in Gamboa vs Finance Secretary (G.R. No. 176579), handed down a decision of far-reaching importance.
The Securities and Exchange Commission has called for a public dialogue this Friday on a proposed compliance framework to address the Supreme Court’s ruling on the foreign equity in telecom giant Philippine Long Distance Telephone Co.—a ruling that also affects utilities and industries subject to the 40-percent constitutional cap on foreign ownership.
Businessman Manuel V. Pangilinan has urged the Aquino administration to prioritize policies, including possible amendments to the Constitution, to welcome foreign investments in restricted industries such as telecommunications and mining.
Korean companies operating in traditional manufacturing hubs like China are “seriously thinking” of moving to the Philippines, according to the Korean Chamber of Commerce Philippines (KCCP).
