“No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the
laws of the Philippines, at least sixty per centum of whose capital is
owned by such citizens; nor shall such franchise, certificate, or
authorization be exclusive in character or for a longer period than fifty
years. Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment, alteration,
or repeal by the Congress when the common good so requires. The
State shall encourage equity participation in public utilities by the
general public. The participation of foreign investors in the governing
body of any public utility enterprise shall be limited to their
proportionate share in its capital, and all the executive and managing
officers of such corporation or association must be citizens of the
Philippines.”
The above language in the Constitution imposes nationality requirements on the operation and management of public utilities, reserving these areas to citizens, or in the case of corporations, those whose capital is at least sixty percent (60%) owned by Philippine citizens, with the remaining forty percent (40%) open to foreign ownership. This provision recognizes the important role of public utilities in the national economy and the need to secure the national interest in utilities against foreign influence.
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