Reconsider PLDT Verdict, SC Asked

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MANILA, Philippines - The Supreme Court (SC) was asked Monday to reconsider its decision that declared that the term "capital" in a public utility corporation refers only to "common shares" and not to the total outstanding capital stocks composed of "common" or voting shares and "preferred" or non-voting shares.There were three motions for reconsideration filed with the SC in connection with its ruling on the 60-40 participation of Filipinos and foreigners, respectively, in public utility firms as provided for under Section 11, Article XII of the 1987 Constitution.Those who filed the motions were Manuel Pangilinan, chairman of the board of the Philippine Long Distance Telephone Co. (PLDT); Napoleon Nazareno, PLDT president; and the Philippine Stock Exchange (PSE).In his motion, Pangilinan warned of a possible collapse of the country's economy with the SC's redefinition of the term "capital" in the constitutional provision that limits foreign ownership in public utility corporations to 40 percent."If the Court does not reconsider, that unwarranted redefinition will have very serious adverse repercussions for the partially nationalized industries affected, the Philippine capital market, the Philippine economy in general, and the country as a whole. There will be no telling if and how those severe consequences can be survived," Pangilinan said in his 52-page motion.According to Pangilinan, the PLDT like the Securities and Exchange Commission (SEC) was not a party to the case filed with the SC since the petition in the case chose to implead only individual respondents such as him and PLDT president Nazareno."Consequently, PLDT has never been brought into this case as a party and has never participated in these proceedings," he said.Nazareno's motion echoed the same concerns raised by Pangilinan.In its motion, the PSE said that the SC's definition of the term "capital" would result in the loss of more than P630 billion in allowable foreign investments in PSE-listed shares or equivalent to a loss of nine percent of the current total fair market value of the PSE-listed shares.It pointed out that the SC ruling would pave the way for a massive decrease in trading transactions brought about by the huge reduction in the PSE-listed shares allowable to foreigners, and would have a severe impact in the trading of PLDT shares which alone represents 12 percent of the total foreign trading activity of the Philippine stock market.According to the PSE, the massive reduction in allowable foreign investments and level of foreign trading transactions will result to a lower PSE Composite Index which will be construed negatively by the international market.It stressed that at present, the movement of the PSE Composite Index is heavily determined by the volume of trading transactions in PLDT shares since PLDT shares are accorded the biggest weight (14 per cent) in determining movements in the PSE Composite Index which is tracked by both local and international funds and is considered a good indicator of the state of the Philippine economy. …