Foreign companies can compete for the right to become the country’s third telecommunication player for as long as it complies with the constitutional 60-40 percent equity requirement, Justice Secretary Menardo Guevarra said on Monday.
Guevarra said that foreign firms may vie for the slot that would break the duopoly of telco giants PLDT-Smart and Globe Telecom, and hopefully, to improve the services of the telecoms in the country.
“Foreign equity participation in public utilities is allowed under the 1987 Constitution, provided it complies with the 60-40 equity requirement,” Guevarra said in an interview.
The Justice secretary was referring to Section 11, Article XII of the Constitution, which limits foreign ownership in public utilities to 40 percent.
The said provision states that: “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 sixty 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.”