Former Supreme Court Justice Antonio Carpio said Thursday that House Bill 78 was an attempt to free telcos from the 60 percent Filipino ownership requirement of the Constitution.
HB No. 78 was passed by the House of Representatives on March 10, 2020, a week before Metro Manila and some parts of the country was placed by President Rodrigo Duterte under an Enhanced Community Quarantine due to the spread of the coronavirus.
“That House bill, if approved by the Senate, will amend the Public Service Act to exclude telcos as public utilities which, under the Constitution, must at least be 60 percent Filipino-owned,” said the retired SC magistrate.
He added the amendment would allow foreign investors to own 100 percent of telco companies, implying that China Telecom ccould be 100 percent owner of the third telco being prodded by Duterte as early as Nov. 21, 2017.
As it stands today, the ticket for the country’s third telco was awarded to Dito Telecommunity, a partnership of Davao-based Udenna consortium and China’s State-owned telecom.
But the former magistrate of the high court said: “Apparently China Telecom wants to come in as a majority, or even 100 percent owner, of the third telco.”
Carpio said HB 78 was unconstitutional, explaining that “the framers of our Constitution, in discussing Section 11, Article XII of the Constitution requiring public utilities to be at least 60 percent Filipino-owned, expressly referred to telco companies.”
He added: “Another provision of the Constitution, not covered in HB 78, also required telcos to be 60 percent Filipino-owned.”
He explained telcos, which cannot operate without utilizing radio frequencies, must also comply with Sec. 2, Article VII of the Constitution, which provides that:“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.”
He explained that radio frequencies are natural resources owned by the State.
“Every franchise granted by Congress to utilize radio frequencies contains this provision: The radio spectrum is a finite resource that is part of the national patrimony and the use thereof is a privilege conferred upon the grantee by the State.”
“This is a clear acknowledgment that radio frequencies are natural resources owned by the State, and can be utilized only by a corporation that is 60 percent Filipino-owned,” Carpio said.