Mr. Rosendo K. Go

April 2, 2004 SEC OPINION NO. 22-04 Re : DBP Data Center Inc. as Government owned and controlled corporation (GOCC) Mr. Rosendo K. Go Director Microcircuits Corporation 9th Floor Summit One Tower Building 530 Shaw Boulevard, Mandaluyong City Sir : This refers to your query on the issue whether or not DBP Data Center Inc. (SEC Reg. No. 107887) is a government owned and controlled corporation (GOCC). You stated that you have examined the Articles of Incorporation and By-Laws of the subject company and there is nothing to indicate that it is a GOCC. However, a thorough inspection of the company's financial statements would show that the Commission on Audit acknowledged that the company is a wholly-owned subsidiary of the Development Bank of the Philippines which is a government financial institution. Regretfully, this Commission cannot render the opinion requested for the query does not relate to interpretation and application of laws and rules being enforced and implemented by the Commission .[ SEC Memorandum Circular No. 15 (2003) ] Nonetheless, for your information and guidance, hereunder are the definitions of " government owned and controlled corporation ",to wit: P.D. No. 2029 (Defining Government-Owned or Controlled Corporations and Identifying their Role in National Development) "SECTION 2. Definition . A government-owned or controlled corporation is a stock or non-stock corporation, whether performing governmental or proprietary functions, which is directly chartered by a special law or if organized under the general corporation law is owned or controlled by the government directly, or indirectly through a parent corporation or subsidiary corporation, to the extent of at least a majority of its outstanding capital stock or of its outstanding voting capital stock; Administrative Code of 1987 [Introductory Provisions, Section 2 (13)]: "(13) Government-owned or controlled corporation refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) per cent of its capital stock: Provided ,That government-owned or controlled corporations may be further categorized by the Department of the Budget, the Civil Service Commission, and the Commission on Audit for purposes of the exercise and discharge of their respective powers, functions and responsibilities with respect to such corporations." Administrative Order No. 59 (1988) "SECTION 2. Definition of Terms . As used in this Administrative Order, the following terms shall mean: (a) Government-owned and/or controlled corporation, hereinafter referred to as GOCC or government corporation, is a corporation which is created by special law or organized under the Corporation Code in which the Government, directly or indirectly, has ownership of the majority of the capital or has voting control; Provided ,That an acquired asset corporation as defined in the next paragraph shall not be considered as GOCC or government corporation. (b) Acquired asset corporation is a corporation (1) which is under private ownership, the voting or outstanding shares of which (i) were conveyed to the government or to a government agency, instrumentality or corporation in satisfaction of debts whether by foreclosure or otherwise; or (ii) were duly acquired by the government through final judgment in a sequestration proceeding; or (2) which is a subsidiary of a government corporation organized exclusively to own and manage, or lease, or operate specific physical assets acquired by a government financial institution in satisfaction of debts incurred therewith, and which in any case by law or by enunciated policy is required to be disposed of to private ownership within a specified period of time." Memorandum Circular No. 64 (1993) : "Section 1. Government-Owned and Controlled Corporations (GOCCs) . As used in these Guidelines, a GOCC is a corporation created by special law or incorporated and organized under the Corporation Code and in which government, directly or indirectly, has ownership of the majority of the capital or voting stock. Any subsidiary of a GOCC shall also be deemed a GOCC . A corporation, either created by special law or where the government has majority control and which is explicitly intended under the law and government policy for ultimate transfer to private ownership under certain specified conditions, shall be considered a GOCC until it is transferred to private ownership and control." Administrative Order No. 24 (2001) "SECTION 1. Definition of Terms. a. Government-owned and/or Controlled Corporation (GOCC) As used herein, a GOCC is a corporation created by special law or incorporated and organized under the Corporation Code in which government, directly or indirectly, has ownership of the majority of the capital or voting stock. Any subsidiary of a GOCC shall also be deemed a GOCC . A Corporation, whether created by special law or incorporated and organized under the Corporation Code, where the government has majority control and which is explicitly intended under the law and government policy for ultimate transfer to private ownership under certain specified conditions, shall be considered a GOCC until it is transferred to private ownership and control." Moreover, we invite your attention to Secretary of Justice Opinion No. 21 (1998) ,hereto attached, which states that subsidiary corporations owned or controlled by GOCCs up to at least 51% of their capital stock are GOCCs themselves. For your information and guidance. CTDAaE Very truly yours, (SGD.) VERNETTE G. UMALI PACO General Counsel