P25.2-B sale of PTIC shares constitutional – House panel

The House committee on good government has concluded that the government’s sale of its 46-percent stake in the Philippine Telecommunications Investments Corp. (PTIC) did not violate the Constitution.

In a 27-page report on the results of its recent inquiry into the sale, the committee chaired by Iloilo Rep. Arthur Defensor noted that "there are no constitutional issues at all with respect to the subject disposition of PTIC shares."

Hong Kong-based First Pacific Group, through a local subsidiary, paid the government last Tuesday P25.2 billion for 111,415 PTIC shares that the Sandiganbayan has transferred to the state.

PTIC is a holding company that owns 13.847 percent (more than 26 million shares) of telecommunications giant Philippine Long Distance Telephone Co. The state’s 46-percent stake in PTIC is equivalent to more than 12 million PLDT shares. First Pacific owns the controlling interest of 54 percent in the holding company.

On the same day that First Pacific delivered the P25.2-billion payment, lawyer-accountant Wilson Gamboa petitioned the Supreme Court to stop the deal, claiming it would "further exceed, as it has exceeded by now, the maximum allowable 40-percent in (foreign) capital of a public utility company."

He said the state is also on the losing end of the transaction since its 12 million PLDT shares would easily fetch P30 billion if sold in the stock market.

In concluding that the sale did not violate the constitutional limit on foreign ownership of a public utility like PLDT, the Defensor committee relied on the opinion of the Securities and Exchange Commission (SEC) on the matter.

Chairman Fe Barin of the SEC reported to the committee that "the authorized capital stock (of PLDT) is P9,395,000,000, of which 86.32 percent is owned by Filipino subscribers, while foreign equity amounts to 13.68 percent."