Employees of local broadcast giant ABS-CBN holding placards ask motorists to hink their cars during a protest in front of ABS-CBN building in Manila on February 14, 2020. Philippine government lawyers moved on February 10 to strip the nation's biggest media group of its operating franchise in what campaigners branded a fresh attack on press freedom under President Rodrigo Duterte.
AFP/Ted Aljibe
Group slams admin's push for foreign ownership as ABS-CBN's PDRs are questioned
(Philstar.com) - February 21, 2020 - 9:43am

Manila, Philippines — A militant group lambasted the House of Representatives Thursday after lawmakers once again pushed for amendments on the 84-year-old Public Service Act to allow 100% foreign ownership in transportation, communication and power industries.

The lower chamber voted on second reading to pass the controversial House Bill 78 recently, which sought to separately define "public service" from "public utility" — lifting the required 40% limit on foreign ownership set by the 1987 Constitution in some industries.

"[I]t is tragically ironic that while the Duterte administration is questioning the Philippine depository receipt (PDR) of ABS-CBN, its allies in Congress are pushing for the 100% foreign ownership of key public utilities like telecommunications, transportation and energy," Bayan Muna representative and House Deputy Minority Leader Carlos Zarate said in a statement.

"We've already seen the detrimental effects of opening up public service to business interest, and now they want to do it on a grander scale, involving foreign business." 

Solicitor General Jose Calida filed a quo warranto petition on Monday morning against ABS-CBN Corporation and ABS-CBN Convergence Inc., arguing that the network's issuance of PDRs to foreigners is “a scheme employed making it appear that the shares remain with the Filipino corporation while granting influence over the mass media enterprise to foreign investors.”

Zarate said that such amendments could turn into "super-profit generating, 100% foreign-owned enterprises," with the Filipino nation at their mercy. 

"In the end we would all suffer from the complete sellout of our sovereign rights and resources that this amendment would be allow. It's completely unacceptable and should be opposed." said Zarate.

The private sector, however, welcomed the push for said reforms as it opens the economy to foreign competition.

"It can certainly appease and encourage investors to see in a different light the current decisions of the government," exclaimed University of Asia and the Pacific economist Cid Terosa in an interview with Philstar.com.

PDRs not proof of foreign ownership?

While Calida alleged that the Kapamilya network has a questionable issue of foreign ownership, some corporate lawyers think otherwise.

Francis Lim, a senior partner at ACCRA Law, in an interview with ANC’s "Early Edition" explained that PDRs give their holders “the right to own a share, but that right is subjected to law.”

“If you are a foreigner, you cannot convert it into a share for example into a share of ABS-CBN Corporation because you’re disqualified from owning shares of ABS-CBN Corporation,” hsaid.

According to Lim, the PDRs issued by ABS-CBN do not even come from the corporation itself, but from ABS-CBN Holdings, which own shares in the network together with other stockholders.

Article XVI, Section 11. (1) of the Constitution states:

The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.

In response, the broadcasting giant network said: "[E]verything we do is in accordance with the law. We did not violate the law. This case appears to be an attempt to deprive Filipinos of the services of ABS-CBN.”

The case of ABS-CBN, said Lim, may also be considered as "essentially the same" with the SEC case of Rappler.

Bayan Muna chairperson Neri Colmenares earlier said that Calida's filing might be proof that the OSG's only "kowtowing to the wishes of the president instead of its self imposed role as tribune of the people” should it be proven that it is linked to Duterte's claims that some of his ads were not shown by ABS-CBN in the 2016 elections.

Duterte once said that he wouldn't let the company have their legislative license renewed should he have his way, in connection to the non-airing of his ads.

The quo warranto petition also seeks to have the said network's franchise be revoked due to the various "violations" it has commited.

"The OSG should not allow itself to become a private law firm due to its loyalties to a temporary president. They should be reminded na walang (there is no) forever. It should be loyal justice and the Filipino people and not the whims of one man who holds temporary powers," he added. — Philstar.com intern Krizzia Mae Furio with reports from Ian Nicolas Cigaral

ABS-CBN BAYAN MUNA FOREIGN OWNERSHIP HOUSE OF THE REPRESENTATIVES LEGISLATIVE FRANCHISE PUBLIC UTILITIES RODRIGO DUTERTE
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