Legal basis and referenced statutes
- Presidential Decree No. 489 authorizes the franchise transfer by virtue of the President’s powers as Commander-in-Chief and pursuant to Proclamation No. 1081 dated September 21, 1972 and General Order No. 1 dated September 22, 1972 as amended.
- Presidential Decree No. 489 concerns the franchise under Republic Act No. 808 granted to Eastern Extension Australasia and China Telegraph Company, Limited.
- Presidential Decree No. 489 recognizes that Republic Act No. 808 was amended by Republic Act No. 5002.
- Presidential Decree No. 489 expressly conditions its authority on Section 15 of Republic Act No. 808, as amended.
Policy intent and franchise-transfer objective
- Presidential Decree No. 489 implements the State policy limiting the grant of franchises and authorizations for public utilities (including telecommunications carriers) to Philippine citizens or to corporations where at least 60% of the capital is owned by Filipino citizens.
- Presidential Decree No. 489 is intended to promote that policy by authorizing the franchise holder to sell, transfer, or assign its franchise to a qualified Philippine corporation.
- Presidential Decree No. 489 identifies Eastern Telecommunications Philippines, Inc. as a duly organized Philippine corporation with at least 60% Filipino ownership.
Franchise term and transfer restriction
- Republic Act No. 808, as amended, grants a franchise to land, construct, maintain, and operate a telecommunications system for reception and transmission of messages between points in the Philippines and points exterior thereto, including airplanes, airships, or vessels even though such airplanes, airships, or vessels may be located within territorial limits of the Philippines.
- Section 12 of Republic Act No. 808, as amended, provides a franchise term of fifty (50) years, expiring only on June 21, 2002.
- Section 15 of Republic Act No. 808, as amended, prohibits the franchise holder from leasing, transferring, selling, or assigning the franchise without the approval of the then Philippine Congress first obtained.
- Presidential Decree No. 489 authorizes the proposed transfer subject to the provision of Section 15 of Republic Act No. 808, as amended.
Authorized franchise sale/transfer/assignment
- Presidential Decree No. 489 authorizes Eastern Extension Australasia and China Telegraph Company, Limited to sell, transfer, or assign its franchise under Republic Act No. 808, as amended by Republic Act No. 5002.
- The authorized transferee is Eastern Telecommunications Philippines, Inc.
- The transferee must be a duly organized corporation under Philippine laws with at least 60% of its capital owned at all times by Filipino citizens.
- The transfer is allowed upon such terms and condition as the grantee and its prospective transferee may agree upon.
- Presidential Decree No. 489 makes the authorization effective subject to compliance with Section 15 of Republic Act No. 808, as amended.
Administration and legal effect of compliance
- Presidential Decree No. 489 preserves the operation of Section 15 of Republic Act No. 808, as amended as a controlling condition for any lease, transfer, sale, or assignment of the franchise.
- Presidential Decree No. 489 requires that the transfer proceed consistently with the statutory condition that first requires the corresponding approval referenced in Section 15.
- Presidential Decree No. 489 grants authority to effectuate the franchise transfer without altering the franchise term described in Section 12 of Republic Act No. 808, as amended.
- Presidential Decree No. 489 confers the transfer authority for the franchiseholder’s assignment to a qualified Philippine corporation meeting the 60% Filipino ownership condition.