Don’t you find it rather funny that the Securities and Exchange Commission (SEC) is actually spurning the services of the Office of the Solicitor General (OSG) in the controversial landmark case regarding what seems to be the alien ownership and control of the Philippine Long Distance Telephone Co. (PLDT)?

At the very least, the SEC is in a very awkward position here. The OSG is supposed to be the government’s chief lawyer; it is that arm of government actually tasked by law to represent all state agencies in any litigation. (The OSG’s entire budget, in fact, supports a panoply of lawyers for the singular purpose of serving as the state’s legal shield. But the combined expertise of the OSG’s legal team apparently does not impress the SEC one bit.)

So now here is the SEC asking the High Court that it be allowed to choose its own lawyers. In its petition, it is claiming that the OSG’s definition of “capital” as used in the Constitution does not quite jibe with its own concept of the term.

As far as I know (but I’d, of course, welcome anybody who can prove me wrong), the SEC’s legal maneuver is unprecedented. Never have I seen the SEC—or any other state agency, for that matter—take a legal position that is diametrically opposed to that of the Office of the Solicitor General. This has never happened before because as a rule, the OSG and the state agency involved collaborate on the details of a case before the OSG starts doing its thing.

The question, however, is why the SEC not raise the issue (on its philosophical disagreement with the OSG) earlier? It had plenty of time to do so during the course of the long series of hearings that preceded the High Court’s ruling. (The High Court had ordered the SEC to determine if the 60-40 ownership ratio [in favor of Filipino citizens] set by the Constitution had, in fact, been breached with the takeover of the Manuel V. Pangilinan group of the giant public utility.)

But now, the SEC—in an apparent attempt to project itself as pro-big business—finds itself in this ridiculous position of having to oppose Solicitor General Anselmo Cadiz in this crucial courtroom battle. This would then be a hilarious g-to-g thing—or a government versus government fight. Pangilinan, I imagine, must be so pleased with himself for successfully promoting this rare legal duel.

Cadiz has manifested before the High Court that the government agreed with the High Court’s interpretation of Section 11, Article XII of the Constitution. Cadiz added that the government particularly agreed with the Tribunal’s ruling that “capital” refers only to the shares of stock that can vote in the election of directors.

This is the very heart or crux of the whole controversy. Control by any business group of any private corporation may be attained only through ownership of the majority of the voting stock. You may own all the preferred, nonvoting stock—which may be worth more than the majority voting stock—but you cannot take actual control of the corporation’s management with those shares. One should have at least 51 percent of the common, voting stock for effective control.

The Court has ruled that the ownership structure of domestic public utilities limited foreign ownership to 40 percent, using only common or voting shares in the computation.

The SEC, in its belated petition, said it did not agree with the Court’s definition of “capital” in determining the foreign ownership limitation in Philippine companies. The SEC added that it regarded capital as “the sum total of the shares subscribed, irrespective of their nomenclature, and whether they were voting or nonvoting.”

The SEC’s position is strikingly similar to the one taken by the Pangilinan group. Right after the adverse SC ruling was handed down several weeks ago, the Pangilinan group described the ruling as “economic suicide.” He was actually saying that if the Supreme Court followed through on this, it would be ushering in the demise of the country’s economy.

Did you notice how a spate of press releases attributed to influential groups and individuals have since been echoing Pangilinan’s warning? In effect, the Pangilinan group has since been saying that if the High Court does not reverse its own ruling, the Philippine economy would collapse in one colossal heap. Does that not scare you?

All these doomsday warnings, of course, are meant to stampede our Supreme Court justices into reversing their own ruling. It’s so obvious from the way the group has used its media clout and mobilized its awesome resources to create a simulated public outcry. Its only purpose is to avert a reaffirmation by the High Court of its own ruling, and when it does, it would be both “final and executory.” That’s what scares the Pangilinan group, I imagine.

But I don’t believe for one moment that any of the grim economic scenarios the group has been trying to foist on the public would take place in the event that the SC sticks to its guns. If, indeed, Section 11 Article XII has been violated with the takeover of PLDT by the Metro Pacific group, then the wrong must be corrected, and corrected immediately.

Tell anybody who tries to convince you that what is bad for the Pangilinan group would, in fact, be bad for the nation to—well, take a long hike or fly a kite. I’m sure there are enough groups with the right Filipino-foreign mix and financial muscle that would be raring to cut down the Pangilinan group’s equity in PLDT to its proper constitutional size.

If the Constitution has been violated, the SC should never stoop to compromise merely to please this or any influential business group.

From his own statements, Pangilinan—the sole representative in the Philippines of the Hong Kong-based Metro Pacific Corp., which is controlled by the Salim family of Indonesia—has unwittingly admitted that foreign ownership of PLDT’s common stock—based on the SC’s “narrow” definition of what the term “capital” means—may amount to more than 60 percent.

The essence of the Pangilinan group’s position is that if you determine the ownership profile of all the preferred and common stocks lumped together (including all the shares that are being traded in the Philippine Stock Exchange), Filipino ownership of the shares would easily add up to 60 percent of the giant public utility. Ergo, its takeover of PLDT is perfectly legal. That’s what it is saying.

I’m no lawyer, but I do know that the Constitution is what the Supreme Court says it is. But even a plain journalist or citizen can easily understand what Section 11 under Article XII (National economy and patrimony) means. Let me just quote in full this particular provision:

“Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least 60 per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years.…”

And, if I may add, Section 19 of Article II (Declaration of principles and state policies) also tersely states that:

“The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.”

In other words, my position is that the nation’s economic and business policies are practically writ in stone. Until such policies are changed and accordingly enshrined in the Constitution, the Pangilinan group must not expect to be treated as exemptions from those policies.

Incidentally, I nearly forgot to credit the vigilant and valiant lawyer—Wilson Gamboa—who had persevered to question the constitutionality of the Pangilinan group’s takeover of PLDT. If it hadn’t been for him…well, this column would be about something else altogether.

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