Gamboa v. Teves etal., GR No.

176579, October 9, 2012

Facts:The issue started when petitioner Gamboa questioned the indirect sale of shares involving almost
12 million shares of the Philippine Long Distance Telephone Company (PLDT) owned by PTIC to First
Pacific. Thus, First Pacific’s common shareholdings in PLDT increased from 30.7 percent to 37 percent,
thereby increasing the total common shareholdings of foreigners in PLDT to about 81.47%. The
petitioner contends that it violates the Constitutional provision on filipinazation of public utility, stated
in Section 11, Article XII of the 1987 Philippine Constitution, which limits foreign ownership of the capital
of a public utility to not more than 40%. Then, in 2011, the court ruled the case in favor of the
petitioner, hence this new case, resolving the motion for reconsideration for the 2011 decision filed by
the respondents.

Issue: Whether or not the Court made an erroneous interpretation of the term ‘capital’ in its 2011
decision?

Held/Reason: The Court said that the Constitution is clear in expressing its State policy of developing an
economy ‘effectively controlled’ by Filipinos. Asserting the ideals that our Constitution’s Preamble want
to achieve, that is – to conserve and develop our patrimony , hence, the State should fortify a Filipino-
controlled economy. In the 2011 decision, the Court finds no wrong in the construction of the term
‘capital’ which refers to the ‘shares with voting rights, as well as with full beneficial ownership’ (Art. 12,
sec. 10) which implies that the right to vote in the election of directors, coupled with benefits, is
tantamount to an effective control. Therefore, the Court’s interpretation of the term ‘capital’ was not
erroneous. Thus, the motion for reconsideration is denied.