Gamboa vs.

Teves (2011)
Summary Cases:
Gamboa vs. TevesSubject: Nationality of Corporations,
Definition of Capital

Facts:
Wilson Gamboa, a stockholder of PLDT, seeks to annul the sale
of 111,415 common shares (representing 46.125 percent) of
PTIC by the Philippine Government to Metro Pacific.
The majority shares of PTIC (representing about 54 percent) are
owned by First Pacific, a Bermuda company. Notably, First
Pacific is a stockholder of Metro Pacific, the entity that acquired
the other 46% from the Philippine Government.
PTIC owns 13.847 percent of PLDT. Hence, the sale by the
Philippine Government of 46.125 percent of PTIC shares is
actually an indirect sale of about 6.3 percent of the outstanding
common shares of PLDT. (13.847 percent of 46.125 is 6.38)
Japan's NTT DoCoMo owns 51.56 percent of PLDT common
equity. With the sale, First Pacific's common shareholdings in
PLDT increased from 30.7 percent to 37 percent (30.7 plus 6.3).
In effect, the total common shareholdings of foreigners in PLDT
has violated 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 percent.
Foreign ownership of common shares of PLDT: 51.56 percent
owned by DoCoMo (Japan)
37 percent owned by PTIC, which is 100 percent owned by First
Pacific (Bermuda)
The question posed to the court is whether the term "capital" in
Section 11, Article XII of the Constitution refers to the total

common shares only or to the total outstanding capital stock

(combination of common and non-voting preferred shares) of
PLDT, a public utility.
Held:
Procedural Issues
1. An action for declaratory relief is not within the original
jurisdiction of the Supreme Court. However, since the issue has
far-reaching implications for the country, the Court treats the
petition for declaratory relief as one for mandamus.
2. Petitioner has the requisite locus standi. He is a stockholder of
PLDT, whose franchise is in danger of being revoked for violation
of the nationality requirements.
3. The petition also involves matters of transcendental public
importance, and as a citizen, petitioner has standing. When a
mandamus proceeding involves the assertion of a public right,
the requirement of personal interest is satisfied by the mere fact
that petitioner is a citizen and, therefore, part of the general
'public' which possesses the right.