Del Rosario & Del Rosario

November 2, 1995 Del Rosario & Del Rosario 5th Floor, Exchange Corner Building 107 Herrera cor. Esteban St. Legaspi Village, 1229 Makati, Metro Manila S i r : This refers to your letter dated September 20, 1995 requesting for opinion on the following queries: 1. Can a domestic corporation which intends to engage in mining and enter into a financial or technical agreement with the government be organized and registered with the SEC where only one percent (1%) of its capital is owned by Filipino citizens? If in the affirmative, what are the requirements? cdlex 2. The capital of an existing mining company is 40% owned by Filipino citizens. It intends to enter into a financial or technical assistance agreement with the government. Can 39% of the capital owned by Filipino citizens be sold to foreigners? If in affirmative, what are the requirements? The Mines and Geosciences Bureau, in its letter dated October 17, 1995, in reply to our letter-requested for comments dated September 26, 1995, answered your queries in the affirmative, a copy of said letter is herewith attached for ready reference. The opinion of said Office finds support under Article XII, Sec. 2 of the Philippine Constitution quoted in part hereunder: "The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources. The President shall notify the Congress of every contract entered into in accordance with this provisions, within thirty days from execution" (Emphasis supplied) and Section 3 (aq) of RA 7942, otherwise known as the Philippine Mining Act of 1995 which define a "qualified person" as follows: "(aq) " Qualified persons " means any citizens of the Philippines with capacity to contract, or a corporation, partnership, association, or cooperative organized or authorized for the purpose of engaging in mining, with technical and financial capability to undertake mineral resources development and duly registered in accordance with law at least sixty per centum (60%) of the capital of which is owned by citizens of the Philippines: Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person for purposes of granting an exploration permit, financial or technical assistance agreement or mineral processing permit ." (Emphasis supplied) For further information, particularly on the registration requirements, you may visit the Foreign Investments Division of the Corporate and Legal Department of this Commission located at the 7th Floor, SEC Bldg. Edsa, Greenhills, Mandaluyong City. cdlex Please be advised accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner