Mr. P. V. Vergel De Dios, Jr.

January 29, 1998 Mr. P. V. Vergel De Dios, Jr. Vergel De Dios Maritime Law Offices Rm. 302 PPL Bldg.,1000 U. N. Ave.,Manila S i r : This refers to your letter dated January 6, 1997 requesting opinion on whether or not the primary purpose clause which reads: " To engage in shipping, whether domestic or international " violates the single primary purpose requirement under Section 14 (2) of the Corporation Code because of the use of the phrase " domestic or international ". LibLex It is well-settled that where a government agency regulates the operation of a certain type of business activity by virtue of a special law, that agency has the primary jurisdiction over the same while the SEC assumes only a secondary jurisdiction. Further, Section 17 of the Corporation Code provides: "SECTION 17. Grounds when articles of incorporation or amendments may be rejected or disapproved: xxx xxx xxx, 2. That the purpose or purposes of the corporation are patently unconstitutional, illegal, immoral, or contrary to government rules and regulations . xxx xxx xxx. No articles of incorporation or amendment to articles of incorporation of banks, banking and quasi-banking institutions, building and loan associations, trust companies and other financial intermediaries, insurance companies, public utilities, educational institutions, and other corporations governed by special laws shall be accepted or approved by the Commission unless accompanied by a favorable recommendation of the appropriate government agency to the effect that such articles or amendment is in accordance with law. (Emphasis supplied) Accordingly, while we agree with you that the above-stated purpose clause is treated as a single primary purpose which does not violate Sec. 14 (2) of the Corporation Code, it shall be subject to the laws, rules and regulations implemented by the Maritime Industry Authority (MARINA),the government agency empowered by law to regulate and supervise shipping business operations. Very truly yours, (SGD.) SONIA M. BALLO Director