OPERATING a public utility has for the longest time been limited to Filipino citizens and entities whose capital is at least 60-percent owned and controlled by Filipino citizens. Foreign equity participation also cannot exceed 40 percent of a public utility's capital stock.
The nationality restriction is embodied in Article XII, Section 11, of the 1987 Constitution, which 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 60 per centrum of whose capital is owned by such citizens." This recognizes the sensitive and vital position of public utilities in the national economy and national security (Gamboa v Teves, GR 176579, Oct. 9, 2012 citing Bernas, Joaquin G., S.J).
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