WITH current globalization trend, it is timely to discuss the legal implications foreign equity of a corporation as regards ownership of private lands in our jurisdiction. Section 7, Article XII of the 1987 Constitution provides that save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands in the public domain.

Any corporation or association or partnership of which at least sixty per centum of the capital stock or of any interest in said capital stock belongs wholly to citizens of the Philippines, and which is organized and constituted under the laws of the Philippines, and corporate bodies organized in the Philippines authorized under their charters to do so, may purchase land classified as private under the present concept of acquiring land. Furthermore, as a protective mantle, the law also mandates that no person, corporation, association, or partnership may acquire or own agricultural public land or land of any other denomination or classification, which is at the time or was originally, really or presumptively, of the public domain, or any permanent improvement thereon, or any real right on such land and improvement (Reference: C.A. 141, Section 2 and 3).

The capacity to acquire private land is made dependent upon the capacity to acquire or hold lands of the public domain. Private land may be transferred or conveyed only to individuals or entities “qualified to acquire lands of the public domain” (II Bernas, The Constitution of the Philippines 439-440 [1988 ed.]). This provision allows a private corporation to acquire private land provided that it must be a Filipino corporation and must comply with the foreign equity ratio of 60 percent in favor of Philippine national.

Private land means any land of private ownership, which covers lands owned by private individuals and lands, which are patrimonial property of the State or of municipal corporations.  It must be noted that private land may be transferred or conveyed only to individuals or entities qualified to acquire or hold lands of the public domain (Bernas, The Constitution of the Republic of the Philippines, p. 1029.).

Another area of investment that requires 60-40 ratio is the activity regarding the ownership, establishment and administration of educational institutions under Article IV, Section 4, of the 1987 Philippine Constitution.

Presidential Decree 176 requires that ownership of schools other than those established by religious groups and mission boards, shall be vested only in citizens or in corporations or associations 60 percent of the capital of which is owned by Filipino. In this, the State is enjoined to supervise and regulate all educational institutions in the most reasonable means.

The control and administration of all educational institutions already established or hereafter to be established in the Philippines shall be vested in citizens of the Philippines. Membership in the governing bodies or boards of such educational institutions shall be limited to citizens of the Philippines. Appointments and designations to, and employment in, positions involving the exercise of administrative discretion in the management of such educational institutions shall likewise be limited to citizens of the Philippines. The Secretary of Education is hereby authorized to fix the reasonable period within which any educational institution may comply with the requirements embodied in this law (See: Presidential Decree 176).

The exception from the above provision are schools established for dependents of foreign diplomatic personnel and transient aliens. The latter, other than those stationed in the Philippines for a period under public or private contract. The privilege made in favor of dependents of diplomatic personnel, in recognition of international practice, may not be repealed by legislation. The exception made in favor of schools for transient aliens may be repealed by legislation (IV Record 388-394).

Activities concerning culture, production of agricultural products, project proponent and facility operator of BOT projects, operation of deep sea commercial fishing, adjustment companies and ownership of condominium units will be tackled in the next issue.

MAJOR film and entertainment firm Viva Communications Inc. said Tuesday a chunk of the proceeds its initial public offering (IPO) next year will go to content creation and acquisition as well as pay for loans.

Empire East sees ’07 income up 10%

LISTED Empire East Land Holdings Inc., the affordable housing arm controlled by businessman Andrew Tan, expects to end the 2007 with a net income of P271.26 million, up 10 percent from P247 million a year earlier.

INSULAR Life, the largest Filipino life insurance company, said its gross premium income (GPI) from January to October this year reached P6.8 billion up 28 percent from a year earlier.

HONG KONG—Philippine stocks rose, pushing the benchmark index to a two-week high.

Metropolitan Bank & Trust Co. (Metrobank) and Megaworld Corp. advanced on continued speculation the US Federal Reserve will cut interest rates, helping avert a recession in the Southeast Asian nation’s biggest overseas market for labor and goods.

CHINA Banking Corp. (China Bank), plus other local banks signed a notes facility agreement with power producer Quezon Power Phils. Ltd. Co. to participate in the $100-million, seven-year, fixed-rate note facility arranged and underwritten by local-investment house BDO Capital and Investment Corp., a wholly-owned investment banking subsidiary of Banco de Oro Universal Bank (BDO).

WITH current globalization trend, it is timely to discuss the legal implications foreign equity of a corporation as regards ownership of private lands in our jurisdiction. Section 7, Article XII of the 1987 Constitution provides that save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands in the public domain.