Atty. Romeo J. Balili

May 8, 1986 Atty. Romeo J. Balili Balili Parado Cavada & Maamo IBAA Bldg.,Gorordo Avenue Lahug, Cebu City Sir : This refers to your letter dated April 21, 1986 requesting for an opinion on whether a non-resident alien can be elected as president of a corporation. prcd It appears that in the election of officers of Cebu Cane City Corporation on January 10, 1986. Mr. Mario Salvaggio, a non-resident Australian citizen who owns 1,400 shares thereof was elected as president. Allegedly, however, the Cebu Extension Office of the Securities and Exchange Commission in a letter to the corporation, dated March 24, 1986, opined that "the President must be a citizen and a resident of the Philippines".Thus, you are requesting for a final ruling on the matter. The Commission, on several occasions, has ruled that in firms engaged in wholly or partially nationalized activities, aliens are banned from being appointed to management positions as president, vice-president, treasurer, auditor, etc., of the same companies pursuant to a ruling of the Ministry of Justice, although they can be elected directors in proportion to their allowable participation or share in the capital of such activities in accordance with the Anti-Dummy Law, as amended by Presidential Decree No. 715. (SEC Opinion dated June 14, 1982; July 1, 1983; May 15, 1985; May 28, 1985). Accordingly, a foreigner cannot be elected as president of a domestic corporation engaged in a nationalized or partially nationalized activities. Conversely, "where the existing law does not forbid any non-Philippine ownership in the enterprise or does not limit ownership by non-Philippine nationals to a certain proportion, such foreigner may be elected as president thereof, subject to the qualification provided for in Section 25 of the Corporation Code quoted in part as follows: "Immediately after their election, the directors of a corporation must formally organize by the election of a president, who shall be a director," . . . (SEC Opinion dated M a y 28, 1985). The aforecited provision does not require additional qualification for president other than of being a "director",unlike in the case of a "secretary" wherein the law explicitly provides that he must be a "resident and citizen" of the Philippines. Had it been the intention of the lawmaking body to prescribe a residency requirement for president, the law would have expressly provided for such qualification. It is a basic and fundamental rule in the construction and interpretation of statutes that if the law does not qualify we should not qualify. Hence, residency requirement should not be imposed. A verification of the articles of incorporation of Cebu Cane City Corporation disclosed that the corporation is engaged in the business of buying, selling at wholesale basis ,exportation, manufacturing of native products, which activities are not considered under the law either as nationalized or partially nationalized business. In reply therefore to your query, it is opined that the above-mentioned non-resident alien is qualified to be a president of subject corporation. Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Acting Chairman