100% foreign ownership in telcos ‘unconstitutional’—ex-SC justice

Former Supreme Court Associate Justice Antonio Carpio has insisted that allowing 100 percent foreign ownership in telecommuciations firms in the country is illegal without a constitutional amendment.

In a webinar hosted by the Philippine Bar Association (PBA), Carpio said that under the 1987 Constitution, Filipino citizens should own 60 percent of public utilities.

Although transportation and telecommunications are not considered  as public utilities anymore under the approved House Bill 78, which aims to amend the Public Service Act, the former SC justice said that telecommunications can be clearly considered as a public utility under the current and past Constitutions.

"Under the 1935, 1973, and 1987 Constitutions, telecommunications companies or telcos have always been understood to be public utilities," said Carpio. 

“Even if they can be classified as non-public utilities, they must still be at least 60 percent Filipino owned since telcos utilize radio frequencies, a natural resource whose exportation is reserved under the Constitution," he added.

Citing Article 2, Section 12 of the Constitution, Carpio said: "All natural resources are owned by the State. The State may directly [exploit such natural resources], or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations at least 60 percent of whose capital is owned by such persons.”

“In short, even if [HB 78] becomes a law and is somehow declared constitutional, it is not sufficient to allow foreigners to own more than 40% equity in telcos,” he added.

The SC magistrate’s position was supported by lawyer Marlon Anthony R. Tonson, director/founding member of Tagapagtanggol ng Watawat.

Tonson, one of the reactors in the webinar, said a telco is a public utility, thus the 60-40 ownership is "just appropriate" and could not be changed by a congressional act.

“The Constitution cannot be changed by mere act of Congress,” said Tonson.

Topics: Antonio Carpio , Philippine Bar Association , Public Service Act , Marlon Anthony R. Tonson
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