Case Digests Mercantile Law

1. GR No 205835 June 23, 2020 – National Federation of Hog Farmers Inc. et al vs

Board of Investments et al

Facts: The Petitioner National Federation of Hog Farmers Inc, et al. assailed the
registration before the SEC of Charoen Charoen Pokphand Foods Philippines
Corporation (Charoen for brevity) for being 100% foreign owned company from
Thailand to do business in the Philippines.

On March 7, 2013, the National Federation of Hog Farmers, Abono Party-list, Alyansa
ng mga Grupong Haligi ng Agham at Teknolohiya Para sa Mamamayan, Inc.,
Agricultural Sector Alliance of the Philippines, Inc., Pork Producers Federation of the
Philippines, Inc., Sorosoro Ibaba Development Cooperative, and Association of
Philippine Aqua Feeds Millers, Inc., jointly filed before this Court a Petition for
Certiorari with prayer for a temporary restraining order. They mainly claim that the
Board Resolutions of public respondent Board of Investments, which granted private
respondent Charoen's applications for registration, were issued with grave abuse of
discretion.

Petitioners allege that the assailed Board Resolutions violated their constitutional right
to be protected against unfair foreign competition and trade practices.

Issue: Whether or not Charoen, a 100% foreign company can be registered before
the SEC and can enter business in the Philippines relative to
agriculture/agribusinesses.

Held: As such, the State imposes certain conditions and restrictions on foreign
investments operating within the Philippine jurisdiction. For instance, no foreign
enterprise is allowed to venture into the mass media industry. This absolute restriction
also extends to the use of natural resources found in the archipelagic waters, territorial
sea, and exclusive economic zone of the Philippines. Further, the practice of all
professions in the Philippines is reserved for Filipino citizens, save for statutory
exceptions.

While foreign participation is absolutely prohibited in some industries, the Constitution

allows foreign participation in certain industries, such as advertising, public utilities,
educational institutions, ownership of private lands, and the exploration, development,
and utilization of natural resources.

The agribusiness was, and still is, not a nationalized or partly nationalized industry.
Hence, in this case, private respondent's status as a 100% foreign-owned corporation
would not cause the denial of its applications for registration with public respondent.

The Charoen Charoen Pokphand Foods Philippines Corporation, a 100% foreign-

owned is approved to be registered before the SEC and to engaged in
agriculture/agribusiness in the Philippines.