Request for Reconsideration of DOJ Opinion No. 05, s. 2005 Re: Registry of Scripless Securities of the Bureau of the Treasury

DOJ OPINION NO. 016, s. 2005 April 11, 2005 Hon. Omar T. Cruz Treasurer Bureau of the Treasury Department of Finance Intramuros, Manila Sir : This has reference to the letters of former Treasurer Norma L. Lasala, dated February 4 and 18, 2005, requesting this Department to reconsider Opinion No. 05, s. 2005 of this Department addressed to the then Secretary of Finance Juanita D. Amatong. Specifically, the request for reconsideration of your Office on the aforesaid Opinion is based on the following grounds, to wit: 1. The Registry of Scripless Securities of the Bureau of the Treasury (BTr) is presently the sole and official registry of ownership or interest in scripless securities floated by the Republic of the Philippines. 2. The delegation by the Department of Finance to a private entity of a clearly "public" registry function of the Bureau of the Treasury is an ultra vires act ; hence, illegal and void ab initio . 3. The Finance Department letter request for opinion dated 23 December 2004 deliberately confused the registry and custody functions of the Bureau of the Treasury with that of a third party custodian. 4. The Bureau of the Treasury has legal authority to evaluate risks posed by the operating system/s intended to be electronically linked by third party custodians to the Registry of Scipless Securities. Your Office also states that the creation of third-party custodians adds an unnecessary step to a transaction that has already been simplified. It means added cost to an investor who would now have to pay custodian fees (which was not the case before). Your Office further states that given the fact that the government has Php 2.3 trillion debt issues, such added cost would translate itself to at least Php 267 billion added cost which will ultimately be borne by the issuer of the securities, the Republic of the Philippines a staggering amount it cannot afford at this time. After going over the arguments and issues presented, and review of the relevant documents, this Department believes that the matter at hand does not involve purely questions of law but questions of a highly technical nature involving the application of technical and policy matters which properly fall within the jurisdiction of the Department of Finance (DOF), the BTr and the Bangko Sentral ng Pilipinas (BSP). This is even bolstered by the fact that the Secretary of Finance is the Cabinet member designated by the President to sit in the Monetary Board. As Attorney-General, the Secretary of Justice renders opinion only on questions of law and not on technical and/or policy issues (Opinion No. 1, s. 2001). SaCDTA Moreover, as to the other issues or questions presented, the same should be declined for being hypothetical and highly anticipatory. Any ruling that this Office may render on the said issues would be purely hypothetical and anticipatory, hence, not determinative of the questions raised ( Ibid ., No. 148, s. 1998, citing opinions). Premises considered, we regret that we are unable to reconsider Opinion No. 05, s. 2005. Very truly yours, (SGD.) RAUL M. GONZALEZ Secretary