Is PLDT owned by foreigners?

James Ryan Jonas

The recent Supreme Court ruling ordering the Securities and Exchange Commission (SEC) to look into the extent of foreign ownership in PLDT raises a very important question: Did the telecommunications giant violate the Philippine Constitution with regard to the maximum 40% foreign equity rule?

In layman’s terms, the Supreme Court is basically asking the SEC: is PLDT owned by Filipinos or by foreigners?

Article 12, Section 11 of the Philippine Constitution lays down the rule on local and foreign ownership in Philippine utility companies:

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 citizen. (Article XII, Section XI)

This means that only corporations owned by at least 60% of Filipinos can operate a public utility such as PLDT. In effect, the provision limits foreign ownership to 40%.

The Supreme Court (SC) recently clarified that the term “capital” in the cited provision refers to “common shares” alone (whose holders have voting rights) and not to “total capital stock,” which includes both common shares and preferred shares (whose holders have no voting rights).

The SC ruling stemmed from a petition filed in 2007 by lawyer Wilson Gamboa citing that PLDT violated the Constitution in 2006 when total foreign ownership in PLDT reached 59.14%. According to Gamboa, as of May 2006, the total foreign ownership in PLDT is:

Foreign Ownership in PLDT, as of May 2006
(as per Gamboa’s petition)



PinoyMoneyTalk conducted a check on PLDT’s foreign ownership by analyzing the General Information Sheet submitted by the company to the SEC on June 28, 2011.

Our analysis shows that — using the SEC’s definition of “capital” as “common shares” — majority of PLDT’s shares are indeed owned by foreigners.

The table below shows that as of June 2011, foreign equity in PLDT has reached 64.23% while Filipino ownership has been diluted to only 35.77%.

Foreign Ownership in PLDT, as of June 2011
(as per PLDT’s General Information Sheet)


Source: Securities and Exchange Commission

This, now, begs the question: Did PLDT violate the constitutional provision on maximum foreign ownership?

That is something for the SEC to figure out. We’ll wait for their own conclusion.

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.