IN Monday’s piece, Due Diligencer asked the Securities and Exchange
Commission if it had fully complied with the order of the Supreme Court
for it to review the foreign ownership of Philippine Long Distance
Telephone Co.
Apparently, the high court recognized the competence of the SEC as
the securities industry regulator that it tossed to its officials the
sensitive task of penalizing PLDT for violating the 60-40 ownership rule
between Filipinos and foreigners.
The penalty may be imposed only if the company is found in violation of the 60-40 rule in favor of Filipinos.
Since Due Diligencer failed to find anything either for or against
PLDT that the SEC should have posted on its website, it is expanding its
poser. This time, it wants to know if the SEC should also apply the
SC’s ruling on PLDT ownership to other companies engaged in industries
where Filipinos should own at least 60 percent of outstanding capital
stock.
If the answer is yes, then why has the SEC, led by Chairperson
Teresita J. Herbosa, not even made the first step in reviewing the
ownership profiles of companies registered with it? The commission’s
examiners, if the commissioners would allow them, may want to start with
the ownership filings posted on the website of the Philippine Stock
Exchange by publicly listed companies.
Of course, SEC officials may not agree with a layman’s reading of a
court decision. Being lawyers, they may have different interpretation of
a court decision that may be so full of legalese it is beyond this
writer’s comprehension.
For example, the SEC’s five-man body may have a different
interpretation of the SC’s ruling on the Gamboa-PLDT case that its
members may not agree with this writer. But Due Diligencer has been
rereading said decision too often that it could not forget a very
intriguing portion that deals on the 60-percent minimum Filipino
ownership.
“Thus, if a corporation, engaged in a partially nationalized
industry, issues a mixture of common and preferred non-voting shares, at
least 60 percent of the common shares and at least 60 percent of the
preferred non-voting shares must be owned by Filipinos,” the SC said in
its ruling written by Associate Justice Antonio Carpio.
Then the SC elaborated: “In short, the 60-40 ownership requirement in
favor of Filipino citizens must apply separately to each class of
shares, whether common, preferred non-voting, preferred voting or any
other class of shares.”
The SC went on: “This uniform application of the 60-40 ownership
requirement in favor of Filipino citizens clearly breathes life to the
constitutional command that the ownership and operation of public
utilities shall be reserved exclusively to corporations at least 60
percent of whose capital is Filipino-owned.
“Applying uniformly the 60-40 ownership requirement in favor of
Filipino citizens to each class of shares, regardless of differences in
voting rights, privileges and restrictions, guarantees effective
Filipino control of public utilities, as mandated by the Constitution.”
By its ruling, the SC did not mean adding all the shares whether
common or voting or non-voting preferred shares and dividing the total
by the number of shares owned by Filipinos. If the quotient is less than
60 percent, then the ownership ratio of the company is in violation of
the law.
To a layman, the SC simply means computing separately each class of
shares in a company’s outstanding capital stock to determine if
Filipinos control at least 60 percent of the common voting shares, 60
percent of the voting preferred shares and 60 percent of the non-voting
preferred shares of public utilities.
Due Diligencer hopes it is wrong in concluding that the issuance of
preferred shares would not effectively dilute the foreign ownership in a
company to the legal limit of 40 percent. If it is right, then the SEC
examiners who are underpaid and overworked may have to extend their
working hours beyond eight hours in reviewing the ownership profiles of
companies to see to it that foreigners should not own more than 40
percent of the outstanding capital of public utilities.
esdperez@gmail.com
source: Manila Times
Tuesday, July 1, 2014
Grace Padaca being eased out of Comelec
PRESIDENT Benigno Aquino 3rd is no longer inclined to reappoint
former Isabela governor Grace Padaca to the Commission on Elections
(Comelec) after her confirmation, along with those of two other poll
body officials, was bypassed by the powerful Commission on Appointments
(CA) recently.
Padaca, according to an unimpeachable source of The Manila Times, is not likely to get another ad interim appointment from the President because she has pending cases at the Office of the Ombudsman and the Sandiganbayan.
“She failed to file her SALN [statement of assets liabilities and net worth] for three years when she was still governor. She has also a graft case,” the source said.
The Times tried to get the reaction of Presidential Communications Secretary Herminio Coloma Jr. and Malacañang spokesman Edwin Lacierda but the officials were mum on the issue. Coloma, in a text message, said he will have to verify Padaca’s status with the Office of the President.
Prior to the sine die adjournment of Congress, the CA did not act on the appointments of Padaca and Comelec Commissioners Louie Tito Guia and Al Parreño. Padaca’s term will only expire on February 2, 2018 because she is serving the remaining term of former Commissioner Augusto Lagman.
Parreño replaced Commissioner Rene Sarmiento while Guia replaced Armando Velasco.
The President will have to reappoint the officials, who will again be subjected to CA scrutiny in the next Congress.
Earlier this year, the Office of the Ombudsman asked the Sandiganbayan to proceed with the trial of Padaca, who is facing charges of malversation and graft.
The graft case stemmed from Padaca’s awarding of a P25-million grant to the Economic Development for Western Isabela and Northern Luzon Foundation Inc. that was disbursed without the concurrence or approval of the Isabela provincial board when she was Isabela governor.
Padaca entered a plea of not guilty on October 22, 2013. She had sought the dismissal of the charges claiming immunity from suit. Her lawyers said when Aquino appointed Padaca to the Comelec on October 2, 2012, she automatically enjoys the protection of Sections 2 and 3, Article 11 of the 1987 Constitution. The provision states that she is already an impeachable officer and only the House of Representatives has the exclusive power to do that.
But Ombudsman prosecutors argued that the former governor cannot hide behind her supposed immunity because the criminal charges were filed before her appointment to the poll body.
The Sandiganbayan also argued that such immunity could lead to an “abuse of political power of appointment” to insulate public officials from liability.
source: Manila Times
Padaca, according to an unimpeachable source of The Manila Times, is not likely to get another ad interim appointment from the President because she has pending cases at the Office of the Ombudsman and the Sandiganbayan.
“She failed to file her SALN [statement of assets liabilities and net worth] for three years when she was still governor. She has also a graft case,” the source said.
The Times tried to get the reaction of Presidential Communications Secretary Herminio Coloma Jr. and Malacañang spokesman Edwin Lacierda but the officials were mum on the issue. Coloma, in a text message, said he will have to verify Padaca’s status with the Office of the President.
Prior to the sine die adjournment of Congress, the CA did not act on the appointments of Padaca and Comelec Commissioners Louie Tito Guia and Al Parreño. Padaca’s term will only expire on February 2, 2018 because she is serving the remaining term of former Commissioner Augusto Lagman.
Parreño replaced Commissioner Rene Sarmiento while Guia replaced Armando Velasco.
The President will have to reappoint the officials, who will again be subjected to CA scrutiny in the next Congress.
Earlier this year, the Office of the Ombudsman asked the Sandiganbayan to proceed with the trial of Padaca, who is facing charges of malversation and graft.
The graft case stemmed from Padaca’s awarding of a P25-million grant to the Economic Development for Western Isabela and Northern Luzon Foundation Inc. that was disbursed without the concurrence or approval of the Isabela provincial board when she was Isabela governor.
Padaca entered a plea of not guilty on October 22, 2013. She had sought the dismissal of the charges claiming immunity from suit. Her lawyers said when Aquino appointed Padaca to the Comelec on October 2, 2012, she automatically enjoys the protection of Sections 2 and 3, Article 11 of the 1987 Constitution. The provision states that she is already an impeachable officer and only the House of Representatives has the exclusive power to do that.
But Ombudsman prosecutors argued that the former governor cannot hide behind her supposed immunity because the criminal charges were filed before her appointment to the poll body.
The Sandiganbayan also argued that such immunity could lead to an “abuse of political power of appointment” to insulate public officials from liability.
source: Manila Times
Government ‘stimulus’ unconstitutional -- SC
THE SUPREME COURT yesterday struck down
“acts and practices” under the Aquino administration’s Disbursement
Acceleration Program (DAP) for violating constitutional provisions on
the transfer of appropriations and separation of powers.
With one justice abstaining, the high court “partially granted” petitions for review and prohibition questioning the DAP’s validity and its related executive issuances, particularly National Budget Circular 541.
Among the practices voided was the withdrawal of unobligated allotments from implementing agencies and declaring these, as well as unreleased appropriations, part of savings before the end of a fiscal year. The SC said this did not conform to the definition of savings under the General Appropriations Act (GAA).
The “cross-border” transfer of funds from the executive to other branches of government and the funding of projects not included in the GAA were likewise struck down.
“The Court further declares void the use of unprogrammed funds... for noncompliance with the conditions provided in the relevant General Appropriation Acts,” SC Spokesperson Theodore O. Te said in a briefing where he also announced that the high court had upheld the constitutionality of the Reproductive Health Law.
Mr. Te said the DAP, in particular, violated Article 6, Section 25 (5) of the 1987 Constitution stating that “No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.”
The DAP was a stimulus package designed to fast-track public spending and push economic growth. It was approved by President Benigno S. C. Aquino III on Oct. 12, 2011, with funds to be sourced and augmented out of “savings” generated during the year and additional revenue sources. A total of P83.53 billion was released under in 2011 and another P58.7 billion in 2012. The initiatives funded included P30 billion of the government’s required P50-billion equity infusion in the Bangko Sentral ng Pilipinas.
The government, in its defense, said it was within the President’s power to spend and augment the budget, insisting that the DAP is a “fund management system” and not a “fund” as claimed by petitioners.
The high court’s Mr. Te sidestepped a question on Budget Secretary Florencio B. Abad’s liability as one of the main defendants, but a legal expert from the University of the Philippines-College of Law said Mr. Abad could face administrative sanctions.
“It amounts to malversation except there’s no element of whether or not Secretary Abad benefited from it. At the very least, there is an administrative liability,” UP professor Herminio Harry L. Roque said.
Mr. Abad, for his part, said in a text message: “I will reserve my comment until I read the full text of the SC decision.” The Budget department, meanwhile, said: “We will yield to the Office of the President to issue a statement on the SC decision on the DAP.”
Deputy Presidential Spokesperson Abigail F. Valte said the Palace was deferring comment pending receipt of the court ruling.
A copy of the decision written by Associate Justice Lucas P. Bersamin was not made immediately available. Five other magistrates will likewise write separate opinions on the DAP’s constitutionality, namely Associate Justices Estela M. Perlas-Bernabe, Mario Victor F. Leonen, Arturo D. Brion, Mariano C. del Castillo and Antonio T. Carpio.
A member of the 15-person tribunal, who asked not to be named for lack of authority to speak to the press, said in a text message that the ruling, which strikes down the four practices, “effectively covers the entire DAP.”
“[The] word ‘partially grant’ was used because other prayers of petitioners, like disclosure of documents, were not granted because they were moot,” the Justice said.
Senator Miriam Defensor-Santiago, meanwhile, lauded the decision.
“It’s basically a no-brainer. The DAP is illegal because it was not contained in the 2011 or 2012 budgets, and because the alleged savings were used to augment new budget items which were not previously authorized by Congress,” she said in a statement.
Business groups, meanwhile, asked if the decision would affect the Aquino administration’s reform efforts.
Gregorio S. Navarro, Management Association of the Philippines president, said: “The SC has declared PDAF (Priority Development Assistance Fund) illegal, hence it would have been highly unusual not to likewise declare DAP illegal, at least partially so. The question is what next?”
Peter Angelo V. Perfecto, Makati Business Club executive director, who noted that the DAP had addressed the business sector’s concern over an infrastructure project slowdown, said the court ruling “will better guide our government in the prudent management and utilization of public resources.”
“We recall that DAP was the means by which government accelerated much needed infrastructure projects that had slowed down due to careful review by the Aquino administration of all projects in line with its policy of zero tolerance for corruption,” Mr. Perfecto said.
Nine petitions were filed questioning the DAP. These came from the Volunteers Against Crime and Corruption; Confederation for Unity, Recognition and Advancement of Government Employees; losing senatorial candidate Greco Antonious Beda B. Belgica and two others; lawyer Manuelito R. Luna; Integrated Bar of the Philippines; Philippine Constitutional Association; Jose Malvar Villegas Jr.; militant leaders and party-list lawmakers; and former Iloilo Representative Augusto L. Syjuco, Jr. -- Mikhail Franz E. Flores and Bettina Faye V. Roc with reports from Ailyn D. Galura and Daryll Edisonn D. Saclag
source: Businessworld
With one justice abstaining, the high court “partially granted” petitions for review and prohibition questioning the DAP’s validity and its related executive issuances, particularly National Budget Circular 541.
Among the practices voided was the withdrawal of unobligated allotments from implementing agencies and declaring these, as well as unreleased appropriations, part of savings before the end of a fiscal year. The SC said this did not conform to the definition of savings under the General Appropriations Act (GAA).
The “cross-border” transfer of funds from the executive to other branches of government and the funding of projects not included in the GAA were likewise struck down.
“The Court further declares void the use of unprogrammed funds... for noncompliance with the conditions provided in the relevant General Appropriation Acts,” SC Spokesperson Theodore O. Te said in a briefing where he also announced that the high court had upheld the constitutionality of the Reproductive Health Law.
Mr. Te said the DAP, in particular, violated Article 6, Section 25 (5) of the 1987 Constitution stating that “No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.”
The DAP was a stimulus package designed to fast-track public spending and push economic growth. It was approved by President Benigno S. C. Aquino III on Oct. 12, 2011, with funds to be sourced and augmented out of “savings” generated during the year and additional revenue sources. A total of P83.53 billion was released under in 2011 and another P58.7 billion in 2012. The initiatives funded included P30 billion of the government’s required P50-billion equity infusion in the Bangko Sentral ng Pilipinas.
The government, in its defense, said it was within the President’s power to spend and augment the budget, insisting that the DAP is a “fund management system” and not a “fund” as claimed by petitioners.
The high court’s Mr. Te sidestepped a question on Budget Secretary Florencio B. Abad’s liability as one of the main defendants, but a legal expert from the University of the Philippines-College of Law said Mr. Abad could face administrative sanctions.
“It amounts to malversation except there’s no element of whether or not Secretary Abad benefited from it. At the very least, there is an administrative liability,” UP professor Herminio Harry L. Roque said.
Mr. Abad, for his part, said in a text message: “I will reserve my comment until I read the full text of the SC decision.” The Budget department, meanwhile, said: “We will yield to the Office of the President to issue a statement on the SC decision on the DAP.”
Deputy Presidential Spokesperson Abigail F. Valte said the Palace was deferring comment pending receipt of the court ruling.
A copy of the decision written by Associate Justice Lucas P. Bersamin was not made immediately available. Five other magistrates will likewise write separate opinions on the DAP’s constitutionality, namely Associate Justices Estela M. Perlas-Bernabe, Mario Victor F. Leonen, Arturo D. Brion, Mariano C. del Castillo and Antonio T. Carpio.
A member of the 15-person tribunal, who asked not to be named for lack of authority to speak to the press, said in a text message that the ruling, which strikes down the four practices, “effectively covers the entire DAP.”
“[The] word ‘partially grant’ was used because other prayers of petitioners, like disclosure of documents, were not granted because they were moot,” the Justice said.
Senator Miriam Defensor-Santiago, meanwhile, lauded the decision.
“It’s basically a no-brainer. The DAP is illegal because it was not contained in the 2011 or 2012 budgets, and because the alleged savings were used to augment new budget items which were not previously authorized by Congress,” she said in a statement.
Business groups, meanwhile, asked if the decision would affect the Aquino administration’s reform efforts.
Gregorio S. Navarro, Management Association of the Philippines president, said: “The SC has declared PDAF (Priority Development Assistance Fund) illegal, hence it would have been highly unusual not to likewise declare DAP illegal, at least partially so. The question is what next?”
Peter Angelo V. Perfecto, Makati Business Club executive director, who noted that the DAP had addressed the business sector’s concern over an infrastructure project slowdown, said the court ruling “will better guide our government in the prudent management and utilization of public resources.”
“We recall that DAP was the means by which government accelerated much needed infrastructure projects that had slowed down due to careful review by the Aquino administration of all projects in line with its policy of zero tolerance for corruption,” Mr. Perfecto said.
Nine petitions were filed questioning the DAP. These came from the Volunteers Against Crime and Corruption; Confederation for Unity, Recognition and Advancement of Government Employees; losing senatorial candidate Greco Antonious Beda B. Belgica and two others; lawyer Manuelito R. Luna; Integrated Bar of the Philippines; Philippine Constitutional Association; Jose Malvar Villegas Jr.; militant leaders and party-list lawmakers; and former Iloilo Representative Augusto L. Syjuco, Jr. -- Mikhail Franz E. Flores and Bettina Faye V. Roc with reports from Ailyn D. Galura and Daryll Edisonn D. Saclag
source: Businessworld
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