Telecommunications companies (telcos) cannot go into advertising, an industry reserved by the Constitution only to entities at least 70 percent owned by Filipinos, Catanduanes Rep. Joseph Santiago said yesterday.
Santiago, chairman of the House information and communications technology committee, was reacting to the plan of Philippine Long Distance Telephone Co. (PLDT) to venture into non-traditional advertising business through digital signage like those seen in malls.
He said PLDT “is now substantially owned by foreigners” and is therefore prohibited by the Constitution to go into any kind of advertising business.
He reminded the country’s largest telco of Section 11, Article 16 or the General Provisions of the Constitution, which states:
“The advertising industry is impressed with public interest and shall be regulated by law for the protection of consumers and the promotion of the general welfare. “Only Filipino citizens or corporations or associations at least 70 per centum of the capital of which is owned by such citizens shall be allowed to engage in the advertising industry.”
“The Constitution couldn’t be more categorical about the 70-percent minimum Filipino ownership,” Santiago, who is also vice chairman of the committee on legislative franchises, said.
“PLDT is banned from engaging in advertising for the same reason it is forbidden from venturing into media. Foreigners already materially own the company,” he said.
He said local television and radio broadcasting firms are free to engage in advertising because these are 100-percent Filipino-owned entities.
He pointed out that the Constitution also mandates that all local media companies must be 100-percent Filipino-owned and controlled.
Santiago cited PLDT’s filing with the Philippine Stock Exchange in claiming that foreigners “substantially” own the country’s biggest telco.
He said documents show that J. P. Morgan Asset Holdings of Hong Kong, Japan’s NTT DoCoMo and NTT Communications Corp., also of Japan, own a combined 39.77 percent of PLDT.
Fourteen other aliens control .23 percent of the company, he said.
He said a separate list filed with the New York Stock Exchange, where PLDT shares are also traded, showed that as of last Sept. 30, at least 20 other foreign institutions and mutual funds own 16.69 percent of PLDT’s shares.
These include Lazard Asset Management, 4.22 percent; Credit Agricole, 2.1 percent; Renaissance Technologies, 1.84 percent; Lazard Emerging Markets Portfolio, 1.49 percent; Capital Research Global Investors, 1.4 percent; and Mondrian Investment Partners, 1.26 percent.