Mr. Cesar J. Bautista

February 4, 1988 Mr. Cesar J. Bautista 1596 Cypress Street Dasmarias Village Makati, Metro Manila Sir : This relates to your letter, dated January 27, 1988, requesting the opinion of this Commission on the query posed therein. cdlex It appears therein that you have a friend, a Filipino citizen who holds more than forty (40) percent equity in a manufacturing Firm, as well as land holdings used for commercial and residential purposes. Your friend is about to take his oath of allegiance as an American citizen. Now, your problem is what would be the effect of such change of citizenship viz-a-viz his stocks and land holdings in the Philippines considering that these assets were acquired prior to his becoming an American citizen. In connection with his stockholdings consisting of more than 40% of the outstanding capital of a manufacturing firm, the pertinent provisions of Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, reads thus: ARTICLE 47. Permissible Investments . If an investment by a non-Philippine national in an enterprise not registered under Book one hereof is such that the total participation by non-Philippine nationals in the outstanding capital thereof shall exceed forty percent (40%) ,the enterprise must obtain prior authority from the Board of Investments, which authority shall be granted unless the proposed investment: a) Would conflict with existing constitutional provisions and laws regulating the degree of required ownership by Philippine national in the enterprise, or b) Would pose a clear and present danger of promoting monopolies or combinations in restraint of trade; or c) Would be made in an enterprise engaged in an area adequately being exploited by Philippine nationals; or d) Would conflict or be inconsistent with the Investment Priorities Plan in force at the time the investment is sought to be made; or e) Would not contribute to the sound and balanced development of the national economy on a self-sustaining basis. xxx xxx xxx As regard the effect of his loss of Philippine citizenship, the relevant provisions of the New Constitution of the Philippines are quoted hereunder: "ARTICLE IV. Citizenship . "SECTION 5. Dual allegiance of citizens is inimical to the national interest and shall be dealt with by law". "ARTICLE XII. National Economy and Patrimony . "SECTION 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. "SECTION 8. Notwithstanding the provisions of Section 7 of this Article, a natural born citizen of the Philippines who has lost his Philippine citizenship may be transferee of private lands, subject to limitations provided by law". Section 8, Article XII of the Constitution permits a natural-born Filipino who lost his citizenship to be a transferee of private land, and congress, may be law provide limitations (e.g. maximum area of the land) on the exercise of this right to own private lands. For further particulars, it is suggested that you communicate directly with the Land Registration Commission. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman