LAWS - SALES

ACT No. 3952

THE BULK SALES LAW (as amended)
AN ACT TO REGULATE THE SALE, TRANSFER, MORTGAGE OR ASSIGNMENT OF
GOODS, WARES, MERCHANDISE, PROVISIONS OR MATERIALS, IN BULK, AND
PRESCRIBING PENALTIES FOR THE VIOLATION OF THE PROVISIONS THEREOF
Section 1. This Act shall be known as "The Bulk Sales Law."
Sec. 2. Sale and transfer in bulk. Any sale, transfer, mortgage or assignment of a stock of
goods, wares, merchandise, provisions, or materials otherwise than in the ordinary course of
trade and the regular prosecution of the business of the vendor, mortgagor, transferor, or
assignor, or sale, transfer, mortgage or assignment of all, or substantially all, of the business or
trade theretofore conducted by the vendor, mortgagor, transferor, or assignor, or of all, or
substantially all, of the fixtures and equipment used in and about the business of the vendor,
mortgagor, transferor, or assignor, shall be deemed to be a sale and transfer in bulk, in
contemplation of this Act: Provided, however, That if such vendor, mortgagor, transferor or
assignor, produces and delivers a written waiver of the provisions of this Act from his creditors
as shown by verified statements, then, and in that case, the provisions of this section shall not
apply.
Sec. 3. Statement of creditors. It shall be the duty of every person who shall sell, mortgage,
transfer, or assign any stock of goods, wares, merchandise, provisions or materials in bulk, for
cash or on credit, before receiving from the vendee, mortgagee, or his, or its agent or
representative any part of the purchase price thereof, or any promissory note, memorandum, or
other evidence therefor, to deliver to such vendee, mortgagee, or agent, or if the vendee,
mortgagee, or agent be a corporation, then to the president, vice-president, treasurer, secretary
or manager of said corporation, or, if such vendee or mortgagee be a partnership firm, then to a
member thereof, a written statement, sworn to substantially as hereinafter provided, of the
names and addresses of all creditors to whom said vendor or mortgagor may be indebted,
together with the amount of indebtedness due or owing, or to become due or owing by said
vendor or mortgagor to each of said creditors, which statement shall be verified by an oath to
the following effect:
PHILIPPINE ISLANDS
PROVINCE OR CITY OF _________________}
Before me, the undersigned authority, personally appeared __________________
(vendor, mortgagor, agent or representative, as the case may be), bearing cedula No.
____________ issued at ___________ on the day of _____________ who, by me being
first duly sworn, upon his oath, deposes and states that the foregoing statement contains
the names of all of the creditors of ________________ (vendor, or mortgagor) together
with their addresses, and that the amount set opposite each of said respective names, is

the amount now due and owing, and which shall become due and owing by
_____________ (vendor or mortgagor) to such creditors, and that there are no creditors
holding claims due or which shall become due, for or on account of goods, wares,
merchandise, provisions or materials purchased upon credit or on account of money
borrowed, to carry on the business of which said goods, wares, merchandise, provisions
or materials are a part, other than as set forth in said statement.
______________________
Subscribed and sworn to before me this _______ day of ______, 19___, at ________
Sec. 4. Fraudulent and void sale, transfer or mortgage. Whenever any person shall sell,
mortgage, transfer, or assign any stock of goods, wares, merchandise, provisions or materials,
in bulk, for cash or on credit, and shall receive any part of the purchase price, or any promissory
note, or other evidence of indebtedness for said purchase price or advance upon mortgage,
without having first delivered to the vendee or mortgagee or to his or its agent or representative,
the sworn statement provided for in section three hereof, and without applying the purchase or
mortgage money of the said property to the pro rata payment of the bona fide claim or claims of
the creditors of the vendor or mortgagor, as shown upon such sworn statement, he shall be
deemed to have violated this Act, and any such sale, transfer or mortgage shall be fraudulent
and void.
Sec. 5. Inventory. It shall be the duty of every vendor, transferor, mortgagor, or assignor, at
least ten days before the sale, transfer or execution of a mortgage upon any stock of goods,
wares, merchandise, provisions or materials, in bulk, to make a full detailed inventory thereof
and to preserve the same showing the quantity and, so far as is possible with the exercise of
reasonable diligence, the cost price to the vendor, transferor, mortgagor or assignor of each
article to be included in the sale, transfer or mortgage, and notify every creditor whose name
and address is set forth in the verified statement of the vendor, transferor, mortgagor, or
assignor, at least ten days before transferring possession thereof, personally or by registered
mail, of the price, terms conditions of the sale, transfer, mortgage, or assignment.
Sec. 6. Any vendor, transferor, mortgagor or assignor of any stock of goods, wares,
merchandise, provisions or materials, in bulk, or any person acting for, or on behalf of any such
vendor, transferor, mortgagor, or assignor, who shall knowingly or willfully make, or deliver or
cause to be made or delivered, a statement, as provided for in section three hereof, which shall
not include the names of all such creditors, with the correct amount due and to become due to
each of them, or shall contain any false or untrue statement, shall be deemed to have violated
the provisions of this Act.
Sec. 7. It shall be unlawful for any person, firm or corporation, as owner of any stock of goods,
wares, merchandise, provisions or materials, in bulk, to transfer title to the same without
consideration or for a nominal consideration only.

Sec. 8. Nothing in this Act contained shall apply to executors, administrators, receivers,
assignees in insolvency, or public officers, acting under judicial process.
Sec. 9. The sworn statement containing the names and addresses of all creditors of the vendor
or mortgagor provided for in section three of this Act, shall be registered in the Bureau of
Commerce. For the registration of each such sworn statement a fee of five pesos shall be
charged to the vendor or mortgagor of the stock of goods, wares, merchandise, provisions or
materials, in bulk.
Sec. 10. The provisions of this Act shall be administered by the Director of the Bureau of
Commerce and Industry, who is hereby empowered, with the approval of the Department Head,
to prescribe and adopt from time to time such rules and regulations as may be deemed
necessary for the proper and efficient enforcement of the provisions of this Act.
Sec. 11. Any person violating any provision of this Act shall, upon conviction thereof, be
punished by imprisonment not less than six months, nor more than five years, or fined in sum
not exceeding five thousand pesos, or both such imprisonment and fine, in the discretion of the
court.
Sec. 12. This Act shall take effect on its approval.
Approved: 01 December 1972
REPUBLIC ACT NO. 8762 AN ACT LIBERALIZING THE RETAIL TRADE BUSINESS,
REPEALING FOR THE PURPOSE REALING FOR THE PURPOSE REPUBLIC ACT NO. 1180,
AS AMENDED, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of
Representatives of the Philippines of Representatives of the Philippines in Congress
assembled: Section 1. Title This Act shall be known as the "Retail Trade Liberalization Act of
2000." Section 2. Declaration of Policy. It is the policy of the State to promote consumer
welfare in attracting promoting and welcoming productive investment that will bring down price
for the Filipino consumer, create more jobs, promote tourism, assist small manufacturers,
stimulate economic growth and enable Philippine goods and services to become globally
competitive through the liberalization of the retail trade sector. Pursuant to this policy, the
Philippine retail industry is hereby liberalized to encourage Filipino and competitive retail trade
sector in the interest of empower the Filipino consumer through lower prices, higher quality
goods, better services and wider choices. Section 3. Definition. - As used in this Act. (1) "Retail
trade" shall mean any act, occupation or calling of habitually selling direct to the general public
merchandise, commodities or good for consumption, but the restriction of this law shall not
apply to the following: (a) Sales by manufacturer, processor, laborer, or worker, to the general
public the products manufactured, processed or products by him if his capital dose not exceed
One hundred thousand pesos(100,000.00); (b) Sales by a farmer or agriculturist selling the
products of his farm; (c) Sales in restaurant operations by a hotel owner or inn-keeper
irrespective of the amount capital: provided, that the restaurant is incidental to the hotel
business; and (d) Sales which are limited only to products manufactured, processed or
assembled by a manufactured, processed or assembled by a manufacturer though a single

outlet, irrespective of capitalization. (2) "High-end or luxury goods" shall refer to goods which
are not necessary for life maintenance and whose demand is generated in large part by the
higher income groups. Luxury goods shall include, but are not limited to products such as;
jewelry, branded or designer clothing and footwear, wearing apparel, leisure and sporting goods,
electronics and other personal effects. Section 4. Treatment of Natural Born Citizen Who Has
Lost His Philippine Citizenship. - A natural-born citizen of the Philippines who resides in the
Philippines shall be granted the same rights as Filipino citizens for purposes of this Act. Section
5. Foreign Equity Participation. - Foreign-owned partnerships, associations and corporation
formed and organized under the laws of the Philippines may, upon registration with the
Securities and Exchange Commission (SEC) and the Department of Trade and Industry (DTI),
or in case of foreign owned single proprietorships, with the DTI, Engage or invest in the retail
trade business, subject to the following categories. Category A Enterprises with paid-up capital
of the equivalent in Philippine Peso of the than Two million five hundred thousand US dollars
(US$2,500,000.00) shall be reserved exclusively for Filipino citizens and corporations wholly
owned by Filipino citizens. Category B Enterprises with a minimum paid-up capital of the
equivalent in Philippine Pesos of two million five hundred thousand US dollar
(US$2,500,000.00) but less than Seven million five hundred thousand US dollars
(US$7,500,000.00) may be wholly owned by foreigners except for the first two (2) years after
the effectivity of this Act wherein foreign participation shall be limited to not more than sixty
percent (60%) of total equity. Category C Enterprises with a paid-up capital of the equivalent
in Philippine Pesos of Seven million five hundred thousand US dollars (US$7,500,000.00), or
more may be wholly owned by foreigners: Provided, however, That in no case shall the
investments for establishing a store in vestments for establishing a store in Categories B and C
be less than the equivalent in Philippine pesos of Eight hundred thirty thousand US dollars
(US$830,000.00). Category D Enterprises specializing in high-end or luxury products with a
paid-up capital of the equivalent in Philippine Pesos of Two hundred fifty thousand US dollars
(US$250,000.00) per store may be wholly owned by foreigners. The foreign investor shall be
required to maintain in the Philippines the full amount of the prescribed minimum capital unless
the foreign investor has notified the SEC and the DTI of its intention to repatriate its capital and
cease operations in the Philippines. The actual use in Philippine operations of the inwardly
remitted minimum capital requirement shall be monitored by the SEC. Failure to maintain the full
amount of the prescribed minimum capital prior to notification of the SEC and the DTI, shall
subject the foreign investor to penalties or restrictions on any future trading activities/business in
the Philippines. Foreign retail stores shall secure a certification from the Bangko Sentral ng
Pilipinas (BSP) and the DTI, which will verify or confirm inward remittance of the minimum
required capital investments. Section 6. Foreign Investors Acquiring Shares of Stock of Local
Retailers. - Foreign investors acquiring shares from existing retail stores whether or not publicly
listed whose net worth is in the excess of the peso equivalent of Two million five hundred
thousand US dollars (US$2,500,000.00) may purchase only up to a maximum of sixty percent
(60%) of the equity thereof within the first two (2) years from the effectivity of this Act and
thereafter, they may acquire the remaining percentage consistent with the allowable foreign
participation as herein provided. Section 7. Public Offering of Shares of Stock. All retail trade
enterprises under Categories B and C in which foreign ownership exceeds eighty percent (80%)
of equity shall offer a minimum of thirty percent (30%) of their equity to the public through any

stock exchange in the Philippine within eight (8) years from their start of operations. Section 8.
Qualification of Foreign Retailers. - No foreign retailer shall be allowed to engage in retail trade
in the Philippine unless all the following qualifications are met: (a) A minimum of Two hundred
million US dollar (US$200,000,000.00) net worth in its parent corporation for Categories B and
C, and Fifty million US dollar (US$50,000,000.00) net worth in its parent corporation for
category D; (b) (5) retailing branches or franchises in operation anywhere around the word
unless such retailer has at least one (1) store capitalized at a minimum of Twenty-five million US
dollars (US$25,000,000.00); (c) Five (5)-year track record in retailing; and (d) Only nationals
from, or juridical entities formed or incorporated in Countries which allow the entry of Filipino
retailers shall be allowed to engage in retail trade in the Philippines. The DTI is hereby
authorized to pre-qualify all foreign retailers, subject to the provisions of this Act, before they are
allowed to conduct business in the Philippine. The DTI shall keep a record of Qualified foreign
retailers who may, upon compliance with law, establish retail stores in the Philippine. It shall
ensure that parent retail trading company of the foreign investor complies with the qualifications
on capitalization and track record prescribed in this section The Inter- Agency Committee on
Tariff and Related Matters Authority (NEDA) Board shall formulate and regularly update a list of
foreign retailers of high-end or luxury goods and render an annual report on the same to
Congress. Section 9. Promotion of Locally Manufactured Products. - For ten (10) year after the
effectivity of this Act, at least thirty percent (30%) of the aggregate cost of the stock inventory of
foreign retailers falling under Categories B and C and ten percent (10%) for category D shall be
made in the Philippines. Section 10. Prohibited Activities of Qualified Foreign Retailers.
Qualified foreign retailers shall not be allowed to engage in certain retailing activities outside
their accredited stores through the use of mobile or rolling stores or carts, the use of sales
representatives, door-to-door selling, restaurants and sari-sari stores and such other similar
retailing activities: Provided, That a detailed list of prohibited activities shall hereafter be
formulated by the DTI Section 11. Implementing Agency: Rule and Regulations. The
monitoring and regulation of foreign sole proprietorships, partnerships, associations or
corporations allowed to engage in retail trade shall be the responsibility of the DTI. This shall
include resolution of conflicts. The DTI, in coordination with the SEC, the NEDA and the BSP,
shall formulate and issue the implementing rules and regulation necessary to implement this Act
within ninety (90) days after its approval. Section 12. Penalty Clause. - Any person who shall be
Found guilty of Violation of any provision of this Act shall be punished by imprisonment of not
less that six (2) years and one (1) day but not more than eight (8) years, and a fine of not less
than One million pesos (P1,000,000.00) but not more that Twenty million pesos
(P20,000,000.00) In the case of associations, partnerships or corporations, the penalty shall be
imposed upon its partners, president, directors, manager and other officers responsible for the
violation. If the offender is not a citizen of the Philippines he shall be deported immediately after
service of sentence. If the Filipino of fender is a public officer or employee, he shall, in addition
to the penalty prescribed herein, suffer dismissal and permanent disqualification from public
office Section 13. Repealing Clause. Republic Act No. 1180, as amended, is hereby repealed.
Republic Act No. 3018, as amended, and all other laws, executive orders, rules and regulations
or parts thereof inconsistent with this Act are repealed or modified accordingly. Section 14.
Separability Clause. If any provisions of this Act shall be held unconstitutional, the other
provisions not otherwise affected thereby shall remain in force and effect. Section 15. Effectivity.

 This act shall take effect fifteen (150 days after its approval and publication in at least two (2)
newspapers of general circulation in the Philippines. Approved: March 07, 2000 (SGD.)
JOSEPH E. ESTRADA President of the Philippines

COMMONWEALTH ACT No. 108

AN ACT TO PUNISH ACTS OF EVASION OF THE LAWS ON THE NATIONALIZATION OF
CERTAIN RIGHTS, FRANCHISES OR PRIVILEGES
Be it enacted by the National Assembly of the Philippines
Section 1. Penalty In all cases in which any constitutional or legal provisions requires
Philippine or any other specific citizenship as a requisite for the exercise or enjoyment of a right,
franchise or privilege, any citizen of the Philippines or of any other specific country who allows
his name or citizenship to be used for the purpose of evading such provision, and any alien or
foreigner profiting thereby, shall be punished by imprisonment for not less than five nor more
than fifteen years, and by a fine of not less than the value of the right franchise or privilege,
which is enjoyed or acquired in violation of the provisions hereof but in no case less than five
thousand pesos.
The fact that the citizen of the Philippines or of any specific country charged with a violation of
this Act had, at the time of the acquisition of his holdings in the corporations or associations
referred to in section two of this Act, no real or personal property, credit or other assets the

value of which shall at least be equivalent to said holdings, shall be evidence of a violation of
this Act.1
Section 2. Simulation of minimum capital stock In all cases in which a constitutional or legal
provision requires that, in order that a corporation or association may exercise or enjoy a right,
franchise or privilege, not less than a certain per centum of its capital must be owned by citizens
of the Philippines or of any other specific country, it shall be unlawful to falsely simulate the
existence of such minimum stock or capital as owned by such citizens, for the purpose of
evading said provision. The president or managers and directors or trustees of corporations or
associations convicted of a violation of this section shall be punished by imprisonment of not
less than five nor more than fifteen years, and by a fine not less than the value of the right,
franchise or privilege, enjoyed or acquired in violation of the provisions hereof but in no case
less than five thousand pesos.2
Section 2-A. Unlawful use, Exploitation or enjoyment Any person, corporation, or association
which, having in its name or under its control, a right, franchise, privilege, property or business,
the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to
citizens of the Philippines or of any other specific country, or to corporations or associations at
least sixty per centum of the capital of which is owned by such citizens, permits or allows the
use, exploitation or enjoyment thereof by a person, corporation or association not possessing
the requisites prescribed by a the Constitution or the laws of the Philippines; or leases, or in any
other way, transfers or conveys said right, franchise, privilege, property or business to a person,
corporation or association not otherwise qualified under the Constitution, or the provisions of the
existing laws; or in any manner permits or allows any person, not possessing the qualifications
required by the Constitution, or existing laws to acquire, use, exploit or enjoy a right, franchise,
privilege, property or business, the exercise and enjoyment of which are expressly reserved by
the Constitution or existing laws to citizens of the Philippines or of any other specific country, to
intervene in the management, operation, administration or control thereof, whether as an officer,
employee or laborer therein with or without remuneration except technical personnel whose
employment may be specifically authorized by the Secretary of Justice, and any person who
knowingly aids, assists or abets in the planning consummation or perpetration of any of the acts
herein above enumerated shall be punished by imprisonment for not less than five nor more
than fifteen years and by a fine of not less than the value of the right, franchise or privilege
enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand
pesos: Provided, however, That the president, managers or persons in charge of corporations,
associations or partnerships violating the provisions of this section shall be criminally liable in
lieu thereof: Provided, further, That any person, corporation or association shall, in addition to
the penalty imposed herein, forfeit such right, franchise, privilege, and the property or business
enjoyed or acquired in violation of the provisions of this Act: And provided, finally, That the
election of aliens as members of the board of directors or governing body of corporations or
associations engaging in partially nationalized activities shall be allowed in proportion to their
allowable participation or share in the capital of such entities.3
Section 2-B. Any violation of the provisions of this Act by the spouse of any public official, if
both live together, shall be cause for the dismissal of such public official. 4itc@lawphil
Section 2-C. The exercise, possession or control by a Filipino citizen having a common-law
relationship with an alien of a right, privilege, property or business, the exercise or enjoyment of
which is expressly reserved by the Constitution or the laws to citizens of the Philippines, shall
constitute a prima facie evidence of violation of the provisions of Section 2-A hereof.5

Section 3. Any corporation or association violating any of the provisions of this Act shall, upon
proper court proceedings, be dissolved.
Section 3-A. Reward to informer. In case of conviction under the provisions of this Act,
twenty-five per centum of any fine imposed shall accrue to the benefit of the informer who
furnishes to the Government original information leading to said conviction and who shall be
ascertained and named in the judgment of the court. If the informer is a dummy, who shall
voluntarily take the initiative of reporting to the proper authorities any violation of the provisions
of this Act and assist in the prosecution, resulting in the conviction of any person or corporation
profiting thereby or involved therein, he shall be entitled to the reward hereof in the sum
equivalent to twenty-five per centum of the fine actually paid to or received by the Government,
and shall be exempted from the penal liabilities provided for in this Act. 6
Section 4. This Act shall take effect upon its approval.
itc-alf
Approved, October 30, 1936.

Footnotes
*As amended by RA 421, RA 134, RA 6084, and PD 715.
1

Words in bold in the text above are amendments introduced by RA 134, section 1,
approved June 14, 1947.
Statutory History of section 1:
Original text
SEC. 1. In all cases in which any constitutional or legal provision requires Philippine or
[United States] citizenship as requisite for the exercise or enjoyment of a right, franchise
or privilege, any citizen of the Philippines or [the United States] who allows his name or
citizenship to be used for the purpose of evading such provision, and any alien or
foreigner profiting thereby, shall be punished by imprisonment for not less than [two] nor
more than [ten] years, and by, fine of not less than [two thousand nor more than ten
thousand pesos.]
The fact that the citizen of the Philippines or of [the United States] charged with, violation
of this Act had, at the time of acquisition of his holdings in the corporations or association
referred to in section two of this Act, no real or personal property, credit or other assets
the value of which shall at least be equivalent to said holdings, shall be admissible as
circumstantial evidence of, violation of this act. (Ed. Note: Words in brackets were
deleted in RA 134, supra)
2

Words in bold in the text above are amendments introduced by RA 134, section 1,
approved June 14, 1947.

Statutory History of section 2:

Original text
SEC. 2. In all cases in which a constitutional or legal provisions requires that, in order
that a corporation or association may exercise or enjoy a right, franchise or privilege, not
less than a certain per centum of its capital must be owned by citizens of the Philippines
or [the United States, or both.] It shall be unlawful to falsely simulate the existence of
such minimum of stock or capital as owned by such citizens of the Philippines [or the
United States or both,] for the purpose of evading said provision. The president or
managers and directors or trustees of corporations or associations convicted of a
violation of this section shall be punished by imprisonment [for] not less than [two] nor
more than [ten] years, and by a fine of not less than [two thousand nor more than ten
thousand pesos.] (Ed. Note: Words in brackets were deleted in RA 134, supra.)
3

Words in bold in the text above are amendments introduced by PD 715, section 1,
promulgated May 28, 1975.
Statutory History of section 2-A:
a) Original text (inserted by CA 421)
SEC. 2-A. Any person, corporation or association which, having in its name or under its
control, a right, franchise, privilege, property or business, the exercise or enjoyment of
which is expressly reserved by the constitution or the laws [of the Philippines] to citizens
of the Philippines or of [the United States,] or to corporations or associations at least
sixty per centum of the capital of which is owned by such citizens, permits or allows the
use, exploitation or enjoyment thereof by a person, corporation or association not
possessing the requisites prescribed by the Constitution or the laws of the Philippines; or
leases, or in any other way transfers or conveys said right, franchise, privilege, property
or business to a person, corporation or association not otherwise qualified under the
Constitution, or the provisions of the existing [Acts,] any person who knowingly aids,
assists, or abets in the planning, consummation or perpetuation of any of the acts herein
above enumerated, shall be punished by imprisonment for not less than [two] nor more
than [ten] years, and by a fine of not less than [two thousand nor more than ten
thousand pesos:] Provided, however, That presidents, managers, or persons in charge
of corporations, associations or partnerships violating the provisions of this section shall
be criminally liable in lieu thereof. (Ed, Note: Words in brackets were deleted in RA
134, infra.)
b) Words in bold in the next immediately following are amendments introduced by RA
134, section 2, approved June 14, 1947.
SEC. 2-A. Any person, corporation, or association which, having in its name or under its
control, a right franchise, privilege, property or business, the exercise or enjoyment of
which is expressly reserved by the Constitution or the laws to citizens of the Philippines
or of any other specific country, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, permits or allows the use,
exploitation or enjoyment thereof by a person, corporation or association not possessing
the requisites prescribed by the Constitution or the laws of the Philippines; or leases, or

in any other way transfers or conveys said right, franchise, privilege, property or
business to a person, corporation or association not otherwise qualified under the
constitution, or the provisions of the existing laws; or in any manner permits or allows
any person, not possessing the qualifications required by the Constitution or existing
laws to acquire, use, exploit or enjoy a right, franchise, privilege, property or business,
the exercise and enjoyment of which are expressly reserved by the constitution or
existing laws to citizens of the Philippines or of any other specific country, to intervene in
the management, operation, administration or control thereof, whether as an officer,
employee or laborer therein, with or without remuneration except technical personnel
whose employment may be specifically authorized by the [President of the Philippines
upon recommendation of the Department Head concerned, if any,] and any person who
knowingly aids, assists or abets in the planning, consummation or perpetration of any of
the acts hereinabove enumerated shall be punished by imprisonment for not less than
five nor more than fifteen years and by a fine of not less than the value of the right,
franchise, or privilege enjoyed or acquired in violation of the provisions hereof but in no
case less than five thousand pesos: Provided, however, That the president, managers,
or persons in charge of corporations, associations, or partnerships violating the
provisions of this section shall be criminally liable in Lieu thereof: Provided further, That
any person, corporation or association shall, in addition to the penalty imposed herein,
forfeit such right, franchise, privilege, and the property or business enjoyed or acquired
in violation of the provisions of this Act. (Ed. Note: Words in brackets were deleted in PD
715, supra.)
4

Inserted by CA 421, section 1, approved May 31, 1939.

Inserted by RA 6084, section 1, approved August 4, 1969.

. Inserted by RA 134, section 3, approved June 14, 1947

MALACAANG
Manila
PRESIDENTIAL DECREE No. 715 May 28, 1975

AMENDING COMMONWEALTH ACT NO. 108, AS AMENDED, OTHERWISE KNOWN AS

"THE ANTI-DUMMY LAW"
WHEREAS, there have been conflicting interpretations as to whether Section 2-A of
Commonwealth Act No. 108, as amended, otherwise known as the Anti-Dummy Law, allows
aliens to become members of the board of directors or governing body of corporations or
associations engaging in partially nationalized activities;
WHEREAS, it is fair and equitable and in line with the constitutional policy expressed in Article
XIV, Section 5 of the Constitution, that foreign investors be allowed limited representation in the
governing board or body of corporations or associations in proportion to their allowable
participation in the equity of the said entities;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the
powers vested in me by the Constitution, do hereby order and decree:
Section 1. Section 2-A of Commonwealth Act No. 108, as amended, is hereby further amended
to read as follows:
"Section 2-A. Any person, corporation, or association, which, having in its name or under its
control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is
expressly reserved by the Constitution or the laws to citizens of the Philippines or of any other
specific country, or to corporations or associations at least sixty per centum of the capital of
which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by
a person, corporation or association not possessing the requisites prescribed by the
Constitution or the laws of the Philippines; or leases, or in any other way, transfers or conveys
said right, franchise, privilege, property or business to a person, corporation or association not
otherwise qualified under the Constitution, or the provisions of the existing laws; or in any
manner permits or allows any person, not possessing the qualifications required by the
Constitution, or existing laws to acquire, use, exploit or enjoy a right, franchise, privilege,
property or business, the exercise and enjoyment of which are expressly reserved by the
Constitution or existing laws to citizens of the Philippines or of any other specific country, to
intervene in the management, operation, administration or control thereof, whether as an officer,
employee or laborer therein with or without remuneration except technical personnel whose
employment may be specifically authorized by the Secretary of Justice, and any person who
knowingly aids, assists, or abets in the planning, consummation or perpetration of any of the
acts herein above enumerated shall be punished by imprisonment for not less than five nor
more than fifteen years and by a fine of not less than the value of the right, franchise or privilege
enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand
pesos: Provided, however, that the president, managers or persons in violating the provisions of
this section shall be criminally liable in lieu thereof: Provided, further, That any person,
corporation or association shall, in addition to the penalty imposed herein, forfeit such right,
franchise, privilege and the property provisions of this Act; and Provided, finally, That the
election of aliens as members of the board of directors or governing body of corporations or

associations engaging in partially nationalized activities shall be allowed in proportion to their

allowable participation or share in the capital of such entities.
Section 2. This Decree shall take effect immediately.
DONE in the City of Manila, this 28th day of May, in the year of Our Lord, nineteen hundred and
seventy-five.