November 6, 1989

Roco Bunag & Kapunan Law Offices

C/o Attys. Barbara Anne C. Migollos
and Peter Dunnely A. Barot
4th Floor, A. Soriano Building
8776 Paseo de Roxas
Makati, Metro Manila

Sir/Madam:
This refers to your letter dated June 20, 1989, requesting confirmation of your
contention that a corporation 70% of the capital stock of which is owned by San
Miguel Corporation (SMC) and 30% by a foreign entity, is qualified to acquire
private lands in the Philippines. (SMC itself is 70% owned by Filipinos). cdtai

In connection therewith, the Commission en Banc, in its meeting of November 2,

1989, resolved to adopt the method of determining corporate nationality on the
basis of the opinion of the Department of Justice No. 18, s. 1989, dated January
19, 1989. The rule in the determination of citizenship of corporations with alien
equity states as follows:
"Shares belonging to corporations or partnerships at least 60% of the
capital of which is owned by Filipino citizens shall be considered as of
Philippine nationality, but if the percentage of Filipino ownership in the
corporation or partnership is less than 60% only the number of shares
corresponding to such percentage shall be counted as of Philippine
nationality. Thus, if 100,000 shares are registered in the name of a
corporation or partnership at least 60% of the capital stock or capital
respectively, of which belong to Filipino citizens, all of the said shares shall
be recorded as owned by Filipinos. But if less than 60% or, say, only 50%
of the capital stock or capital of the corporation or partnerships,
respectively belongs to Filipino citizens, only 50,000 shares shall be
counted as owned by Filipinos and the other 50,000 shares shall be
recorded as belonging to aliens."

In the light of the foregoing, the Commission hereby confirms your view on the
matter. cdlex

Please be advised accordingly.

Very truly yours,

(SGD.) ROSARIO N. LOPEZ

Chairman

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