Atty. Renato Calma

April 18, 2001 ATTY. RENATO CALMA Ortega, Del Castillo, Bacorro, Odulio Calma and Carbonell ALPAP I Bldg., 5th and 6th Floors 140 LP. Leviste Street Salcedo Village, Makati City, Philippines Dear Atty. Calma, This has reference to your letter dated November 16, 2000 requesting confirmation of your view that a construction corporation that will cater exclusively to private construction contracts or projects can be 100% owned by a foreign national provided the minimum capitalization requirement is satisfied. As a business, private construction contracts used to be included in List A of the Regular Foreign Investment Negative List (RFINL) with 40% foreign equity limitation. In the 4th and present RFINL, said economic activity is no longer included. This means that corporations which undertake private construction contract may be wholly owned by foreign nationals. However, please be informed that the Construction Industry Authority of the Philippines, through the Philippine Contractors Accreditation Board, still maintains the 40% foreign equity limit as a requirement for the issuance of regular contractors licenses. We therefore suggest that you clarify this with the said government agency. Further, pursuant to the aforementioned negative list, practice of all provisions is limited to Filipino citizens. Hence, all activities which constitute practice of profession can not be engaged in by foreign nationals. As hereunder quoted, the purpose of your corporation is: "To engage in the business of and act as general contractors in private construction and development projects or contracts except locally-funded public works and in connection therewith, to make estimates for itself and for others, and to bid upon, enter into, and carry out such private construction and development projects or contracts; to do building, structural, construction, erection, surveying , dredging, shoring, wrecking, salvage, electrical and mechanical work for private construction and development projects or contracts of every kind in every part of the world; to manufacture or otherwise produce, buy, sell at wholesale, and deal in building materials, and all kinds of materials, supplies, and equipment incidental or related or connected with any and every phase of the building construction trades; to acquire, use, employ, sell and deal in all suitable means, apparatus, machinery, contrivances, equipment, and facilities for its business."(emphasis ours) We have noted that some of the activities listed as part of the purposes of the corporation fall within the sphere of practice of profession (pls refer to the italics above). Ergo, your client is hereby directed to make the necessary amendments in its articles of incorporation to exclude the aforementioned activities in the corporate purpose within thirty (30) days from receipt hereof. Very truly yours, (SGD.) FE ELOISA C. GLORIA Commissioner