GAMBOA v.

TEVES
[GR. No. 176579; October 9, 2012]
Facts:
Philippine Telecommunications Investment Corporation (PTIC) held 13.847% of the total
outstanding common shares of PLDT
PTIC stockholders holdings (of the outstanding capital stock):
o Prime Holdings, Inc. (PHI) - 46.125%
o First Pacific (a Hong Kong-based investment firm)- 54%
1986 - The 111,415 shares (46.125% ownership of PHI) were sequestered by the Presidential
Commission on Good Government (PCGG). These were subsequently declared as part of the illgotten wealth of former President Ferdinand Marcos.
Aug 8, 2006- stocks were reconveyed to the Republic of the Philippines
RP decided to sell in the form of a public bidding. Philippines to Metro Pacific Assets Holdings,
Inc. (MPAH), a First Pacific affiliate, matched the highest bid. (Now, First Pacific owns 100% of
PTIC.)
First Pacifics equity in PLDT went up from 30.7 percent to 37.0 percent of its common or
voting- stockholdings which increased foreign entities holdings in PLDT.
Subsequently, stockholdings in PLDT (of the voting shares) were:
o Foreigners- 64.27% ; Filipinos- 35.73%
hereby violating the 40% limit on foreign ownership of a public utility (Art 12, Sec 11)*.
Issue:
1) WON the term capital in Section 11, Article XII of the Constitution refers to the total
outstanding capital stock (combined total of common and non-voting preferred shares) of PLDT,
a public utility?
Held: No. Capital in Section 11, Article XII of the 1987 Constitution refers only to shares of stock
entitled to vote in the election of directors, and thus in the present case only to common shares, and not to
the total outstanding capital stock (common and non-voting preferred shares). SEC to provide sanctions in
any violation of Art 12, Sec 11.