Atty. Gregorio M. Batiller, Jr.

May 22, 1991 Atty. Gregorio M. Batiller, Jr. Gonzales, Batiller Bilog and Associates Unit B, 7th Floor, ALPAP I Bldg. 140 Alfaro St.,Salcedo Village Makati, Metro Manila S i r : This refers to your letter of January 23, 1991, inquiring whether a Japanese stockholder of United Doctors Medical Center, Inc. (UDMC),which operates a hospital and a School of Nursing, may qualify to be a director in said corporation. Batas Pambansa Blg. 232, otherwise known as the Education Act of 1982 provides: "SECTION 31. Governing Board . Every government college or university established as a tertiary institution and every private school shall have a governing board pursuant to its charter or to the Corporation Code of the Philippines, as the case may be." (Emphasis supplied) The Corporation Code is silent on the matter, however, Art. XIV Section 4 (2 par. 2) of the 1986 Philippine Constitution which was patterned and adopted from the old Constitution (Article XV Sec. 8(7), provides in part: "The control and administration of educational institution shall be vested in the citizens of the Philippines ." (Emphasis supplied) While the term "control" in the above provision may not be construed to mean "all" of the members of the Board shall be citizens as only "majority" thereof may be considered sufficient to control the management, Presidential Decree No. 176 (Implementing Section 8(7), Article XV of the Old Constitution) requires that membership in the Board of educational institutions shall be limited to citizens of the Philippines. The law provides, thus: "2. Control and Administration . The control and administration of all educational institutions already established or hereafter to be established in the Philippines shall be vested in citizens of the Philippines. Membership in the governing bodies or boards of such educational institutions shall be limited to citizens of the Philippines .Appointments and designations to, and employment in, positions involving the exercise of administrative discretion in the management of such educational institutions shall likewise be limited to citizens of the Philippines. ..." (Emphasis supplied) Taking into consideration that the provision of the new Constitution on the matter was adopted from the old one, PD 176 should also be made to implement said provision. It is worth mentioning in this connection that under the Transitory Provisions of the 1986 Constitution, Presidential Decrees issued by the previous administration shall remain operative until amended, repealed or revoked. Article XVIII, Sec. 3 of the 1986 Constitution states thus: "SECTION 3. All existing laws, decrees , executive orders, proclamations, letters of instructions, and other executive issuances not inconsistent with the Constitution shall remain operative until amended, repealed, or revoked ." (Emphasis supplied) Therefore, the above-mentioned Presidential Decree, not having been repealed or revoked, is still effective and enforceable, and should implement the new Constitution. Accordingly, only citizens of the Philippines are qualified to be elected as members of the board of directors of educational institutions. Applying the foregoing observations in the case of UDMC which operates a School of Nursing, while foreign equity participation may be allowed to the extent of 40% of the capital stock of the corporation, foreigners are barred from being elected as members of the Board of Directors. cdlex Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Chairman