VI. Electronic Commerce Act (R.A. No. 8792)
Any legal requirement that a document
Objective: To facilitate domestic and
international transactions, contract and
exchanges, and storage of information through
the utilization of electronic technology
E-Commerce Act applies to all kinds of
electronic data message and electronic
document used in commercial and non
commercial activities including international
transactions, contract and exchanges, and
storage of information through the utilization of
electronic technology
Electronic Data Message - Refers to
information generated, sent, received, or stored
by electronic means
Electronic Document - Information or the
representation of information, data, figures,
symbols, or other modes of written expression
by which a right is established, or an obligation
extinguished , or by which a fact may be proved
and affirmed, which is received, recorded,
transmitted, stored, processed, retrieved, or
produced electronically.
A. Legal Recognition of Electronic Data
Messages, Documents, and Signatures
(Section 6 & 7 RA 8792)
1. Electronic Documents shall have the
legal effect, validity, or enforceability as
any other document or legal writing
2. Any legal requirement that a document
be in writing is complied by an electronic
document if:
2..1 The E-Document maintains it
integrity and reliability
2.2 The document can be authenticated
so as to be usable for subsequent
reference such that (1) it has remained
complete and unaltered, apart from the
addition of any indorsement and
authorized change; and (2) The E-
Document is reliable in light of the
purpose for which it was generated
3.
be presented or retained in its original
form is met by an e document if:
3.1 There exists a reliable assurance as
to the integrity of the document from the
time it was first generated in its original
form
3.2 Document is capable of being
displayed to the person whom it is to be
presented.
NB: For evidentiary purposes, an E-Document is
the functional equivalent of an original document
under the Original Document Rule if it is a
printout or output readable by sight or other
means, shown to reflect the data accurately.
- Further, E-Document presupposes that it is
‘paperless’. Thus, A facsimile transmission
cannot be admissible as an electronic document
since it is not ‘paperless’, and it is not a
functional equivalent of an original under the
Best Evidence Rule.
B. Presumption Relating to Electronic
Signatures
E-Signature - is any distinctive mark
representing the identity of a person and
attached to or logically associated with the
electronic data message.
Presumption Relating to E-Signature:
In any proceedings involving an electronic
signature, it shall be presumed that,
a.) The electronic signature is the signature of
the person to whom it correlates; and
b.) The electronic signature was affixed by that
person with the intention of signing or approving
the electronic document unless the person
relying on the electronically signed electronic
document knows or has notice of defects in or
unreliability of the signature or reliance on the
electronic signature is not reasonable under the
circumstances.
NB: An electronic signature on the electronic
document shall be equivalent to the signature of
a person on a written document if the signature
is an electronic signature and proved by
showing that a prescribed procedure, not
alterable by the parties interested in the
electronic document, exists and conforms with
Section 8 of RA 8792
C. Admissibility and Evidential Weight of
Electronic Data Message or Electronic
Document
In any legal proceedings, the admissibility of an
electronic data message or electronic document
in evidence cannot be denied:
a. On the sole ground that it is in
electronic form; or
b. On the ground that it is not in the
standard written form, and the electronic
data message or electronic document
meeting, and complying with the
requirements under Sections 6 or 7
hereof shall be the best evidence of the
agreement and transaction contained
therein.
In assessing the evidential weight of an
electronic data message or electronic document,
the reliability of the manner in which it was
generated, stored or communicated, the
reliability of the manner in which its originator
was identified, and other relevant factors shall
be given due regard.
D. Obligation of Confidentiality
SECTION 32(31). Obligation of Confidentiality.
— Except for the purposes authorized under this
Act, any person who obtained access to any
electronic key, electronic data message or
electronic document, book, register,
correspondence, information, or other material
pursuant to any powers conferred under this Act,
shall not convey to or share the same with any
other person.
Prohibited Acts:
1. Hacking or cracking which refers to
unauthorized access into or interference in a
computer system/server or information and
communication system; or any access in order
to corrupt, alter, steal, or destroy using a
computer or other similar information and
communication devices, without the knowledge
and consent of the owner of the computer or
information and communication system
2. Piracy or the unauthorized copying,
reproduction, dissemination, distribution,
importation, use, removal, alteration,
substitution, modification, storage, uploading,
downloading, communication, making available
to the public, or broadcasting of protected
material, electronic signature or copyrighted
works
VII. Foreign Investments Act (RA 7042, as
amended by RA 11647)
A. Policy of the Law [Sec. 1, RA 11647]
it is the policy of the State to attract, promote
and welcome productive investments from
foreign individuals, partnerships, corporations,
and governments, including their political
subdivisions, in activities which significantly
contribute to sustainable, inclusive, resilient, and
innovative economic growth, productivity, global
competitiveness, employment creation,
technological advancement, and countrywide
development to the extent that foreign
investment is allowed in such activity by the
Constitution and relevant laws, and consistent
with the protection of national security. Foreign
investments shall be encouraged in enterprises
that significantly expand livelihood and
employment opportunities for Filipinos; enhance
economic value of agricultural products; promote
the welfare of Filipino consumers; expand the
scope, quality and volume of exports and their
access to foreign markets; and/or transfer
relevant technologies in agriculture, industry and
support services. Foreign investments shall be
welcome as a supplement to Filipino capital and
technology in those enterprises serving mainly
the domestic market.
Who are Filipino Nationals:
1. a citizen of the Philippines
2. a domestic partnership or association
wholly owned by citizens of the
Philippines;
 3. a corporation organized under the laws
of the Philippines of which at least sixty
percent (60%) of the capital stock
outstanding and entitled to vote is
owned and held by citizens of the
Philippines;
4. a trustee of funds for pension or other
employee retirement or separation
benefits, where the trustee is a
Philippine national and at least sixty
(60%) of the fund will accrue to the
benefit of the Philippine nationals:
Provided, That where a corporation and its non-
Filipino stockholders own stocks in a Securities
and Exchange Commission (SEC) registered
enterprise, at least sixty percent (60%) of the
capital stocks outstanding and entitled to vote of
both corporations must be owned and held by
citizens of the Philippines and at least sixty
percent (60%) of the members of the Board of
Directors of both corporations must be citizens
of the Philippines, in order that the corporations
shall be considered a Philippine national
B. Definition of Terms [Sec. 2, RA 11647]
1. Foreign Investment
The term "foreign investment" shall mean an
equity investment made by a non-Philippine
national in the form of foreign exchange and/or
other assets actually transferred to the
Philippines and duly registered with the Bangko
Sentral ng Pilipinas
2. Doing Business
The phrase "doing business" shall include:
1. soliciting orders, service contracts,
opening offices, whether called "liaison"
offices or branches;
2. appointing representatives or
distributors domiciled in the Philippines
or who in any calendar year stay in the
country for a period or periods totalling
one hundred eighty (180) days or more;
3. participating in the management,
supervision or control of any domestic
business, firm, entity or corporation in
the Philippines; and
4. any other act or acts that imply a
continuity of commercial dealings or
arrangements,
Not Doing Business
1. mere investment as a shareholder by a
foreign entity in domestic corporations
duly registered to do business, and/or
the exercise of rights as such investor;
2. having a nominee director or officer to
represent its interests in such
corporation;
3. appointing a representative or distributor
domiciled in the Philippines which
transacts business in its own name and
for its own account
4. The publication of a general
advertisement through any print or
broadcast media;
5. Maintaining a stock of goods in the
Philippines solely for the purpose of
having the same processed by another
entity in the Philippines;
6. Consignment by a foreign entity of
equipment with a local company to be
used in the processing of products for
export;
7. Collecting Information in the Philippines
8. Performing services auxiliary to an
existing isolated contract of sale which
are not on a continuing basis, such as
installing in the Philippines machinery it
has manufactured or exported to the
Philippines, servicing the same, training
domestic workers to operate it, and
similar incidental services.
Tests to determine WON A Foreign
Corporation is doing business
1. Substance Test - WON the foreign
corporation is continuing the body of the
business or enterprise for which it was
organized
2. Continuity Test - Continuity of commercial
dealings and arrangements
3. Export Enterprise
Export enterprise shall mean an enterprise
wherein a manufacturer, processor or service
(including tourism) enterprise exports sixty per
cent (60%) or more of its output, or wherein a
trader purchases products domestically and
exports sixty per cent (60%) or more of such
purchases.
4. Domestic Market Enterprise
domestic market enterprise shall mean an
enterprise which produces goods for sale, or
renders services to the domestic market entirely
or if exporting a portion of its output fails to
consistently export at least sixty percent (60%)
thereof;
C. Registration of Investment of Non-
Philippine Nationals [Sec. 6, RA 11647]
Without need of prior approval, a non-Philippine
national, and not otherwise disqualified by law
may, upon registration with the Securities and
Exchange Commission (SEC), or the DTI in the
case of single proprietorships:
1. do business as defined in Section 3(d)
of this Act or
2. invest in a domestic enterprise up to one
hundred percent (100%) of its capital,
unless participation of non-Philippine
nationals in the enterprise is prohibited
or limited to a smaller percentage by this
law under the Foreign Investment
Negative List
D. Foreign Investments in Export Enterprises
[Sec. 7, RA 11647]
Foreign investment in export enterprises whose
products and services do not fall within Lists A
and B of the Foreign Investment Negative
List provided under Section 8 hereof is allowed
up to one hundred percent (100%) ownership
Export enterprises which are non-Philippine
nationals shall register with BOI and submit the
reports that may be required to ensure
continuing compliance of the export enterprise
with its export requirement. BOI shall advise
SEC or DTI, as the case may be, of any export
enterprise that fails to meet the export ratio
requirement. The SEC or DTI shall thereupon
order the non-complying export enterprise to
reduce its sales to the domestic market to not
more than forty percent (40%) of its total
production; failure to comply with such SEC or
DTI order, without justifiable reason, shall
subject the enterprise to cancellation of SEC or
DTI registration, and/or the penalties provided in
Section 14 hereof|
Export enterprises shall register and comply with
the export requirements in accordance with Title
XIII of the National Internal Revenue Code
(NIRC),as amended, for purposes of availing
any tax incentive or benefit.
E. Foreign Investments in Domestic Market
Enterprises [Sec. 7, RA 7042]
Non-Philippine nationals may own up to one
hundred percent (100%) of domestic
market enterprises unless foreign ownership
therein is prohibited or limited by existing
law or the Foreign Investment Negative List
A domestic market enterprise may change its
status to export enterprise if over a three (3)-
year period it consistently exports in each year
thereof sixty per cent (60%) or more of its
output.
Take Note of the FF:
1. Micro and small domestic market
enterprises with paid-in equity capital less
than the equivalent of Two hundred thousand
US dollars (US$200,000.00),are reserved to
Philippine nationals
2. Non-Filipino Nationals may own (up to
100%) Micro and small domestic market
enterprises with paid-in equity capital greater
than or equal to Two hundred thousand US
dollars (US$200,000.00)
3. If the enterprise (1)involves advanced
technology as determined by the Department
of Science and Technology, or (2) they are 2. Which have implications on public health and
endorsed as startup or startup enablers by the morals, such as:
lead host agencies pursuant to Republic Act 1. the manufacture and distribution
No. 11337, otherwise known as the Innovative of dangerous drugs;
Startup Act; or (3) a majority of their direct 2. all forms of gambling;
employees are Filipinos, but in no case 3. nightclubs, bars,
shall the number of Filipino employees be less 4. beerhouses,
than fifteen (15), then a minimum paid-in 5. dance halls;
capital of One hundred thousand US dollars 6. sauna and steambath houses
(US$100,000.00) shall be allowed to non- and massage clinics.
Philippine nationals
TN: Check 11th Negative List (Pg 438 on the
NB: Take note of the thresholds above, if
Book of Divina) kay kapoy nag buhat 🙂
the non-filipino is not qualified to own
100%, he/she/it may still own but apply the
60/40 requirement. If the non-filipino is
qualified, he/she/it can own up to 100%
equity capital.
F. Foreign Investment Negative List [Sec. 8,
RA 11647

List A

List B
Under this list, Foreign Ownership is Limited by
reason of Security, Defense, Risk to Heal and
Morals, and Protection of Small and Medium
Scale Enterprises.

NB: Non-Filipinos are only allowed to own

upt o 40% Equity under List B.

1. Defense-related activities, requiring prior

clearance and authorization from Department of
National Defense (DND) to engage in such
activity, such as the manufacture, repair,
storage and/or distribution of:
1. firearms,
2. ammunition,
3. lethal weapons,
4. military ordinance,
5. explosives,
6. pyrotechnics
7. and similar materials (Ingredients)
unless such manufacturing or repair activity is
specifically authorized by the Secretary of
National Defense;