DGN Guillermo A. Castasus

February 17, 1994 DGN Guillermo A. Castasus Rotary International 127 R. Berroya St.,San Vicente, San Pedro ,Laguna S i r : This refers to your letter inquiring on the legality of the practice of PLDT and Meralco requiring prior payments in the form of subscriptions before one can be provided with telephone and power services. In response to your inquiry, we wish to point out the following: 1. That said corporation are listed issuers which are allowed under the law to offer their shares of stock to the public in the form of subscription; 2. That the subscribers to the shares of stock of these corporations become stockholder thereof who are then entitled to receive dividends from the income of said corporation; 3. That the payments for subscription received by said corporations are not considerations for the services to be rendered by the company to their clients but as payment for their investments which are to be used for their operation and expansion as contained in the work program submitted to this Office and which is available for inspection by the investigating public. On the matter of alleged practice of PLDT & Meralco requiring prior payments in the form of subscription before one can avail the services of said corporations, it is suggested that the same be referred to the National Telecommunications Commission and Energy Regulation Board in as much as their business operation, particularly the installation of facilities are regulated and supervised by said government agencies limited only to corporate transactions or matters involving the implementation of and/or compliance with the provision of the Corporation Code and Revised Securities Act. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman