Commissioner Ernesto C. Mendiola

October 12, 1988 Commissioner Ernesto C. Mendiola Housing and Land Use Regulatory Board Goodwill Building, 393 Sen. Gil Puyat Avenue, Makati, Metro Manila Dear Commissioner Mendiola: This refers to your letter dated September 29, 1988, enclosing therewith for our consideration and approval a draft of the Memorandum of Agreement between the Housing and Land Use Regulatory Board and the Securities and Exchange Commission relating to companies engaged in real estate development. LexLib Among the covenants stated therein, our attention is especially called on the following provision of paragraph 3A (IV) of the Memorandum of Agreement which reads: "3. Pursuant to the above aims and objectives, the respective agencies shall have the following functions and responsibilities: A. The Securities and Exchange Commission (SEC) xxx xxx xxx IV. Refer to/coordinate with HLURB all applications for incorporation/amendments of corporation engaged in real estate business." Section 17, paragraph 2 of the Corporation Code of the Philippines, prescribes that "No articles of incorporation or amendment to articles of incorporation of banks, banking and quasi-banking institutions, building and loan associations, trust companies and other financial intermediaries insurance companies, public utilities, educational institutions, and other corporations governed by special laws shall be accepted or approved by the Commission unless accompanied by a favorable recommendation of the appropriate government agency to the effect that such articles or amendment is in accordance with law." It is a rule in statutory construction and interpretation that if a statute enumerates the things upon which it is to operate, everything else must necessarily and by implication, be excluded from its operation and effect. (Crawford, Statutory Construction, sec. 195). Formation and organization of corporations which are engaged in real estate development are not governed by special laws. Hence, the Commission may accept and approve the articles of incorporation or amendments thereon upon mere showing of a substantial compliance with the Corporation Code. In view of the foregoing and in line with the policy of the present government of encouraging deregulation in economic activities and eliminating the requirement of unnecessary licenses and permits to such legal extent as possible, (President Corazon Aquino's Speech before the businessmen, on October 20, 1987),the Commission, therefore, takes exception to the covenant of paragraph 3A (IV) of the proposed Memorandum of Agreement. In lieu thereof, the following provision is earnestly recommended: "To furnish the HLURB with copies of all approved articles of incorporation, articles of partnership and all amendments thereto of all companies primarily organized to engage in real estate development." cdll We trust that the foregoing merits your approval. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman