Clifford Chance
Uncertainty remains for foreign investors in the Philippines
8 February 2013
Once again the Philippine Supreme Court ("SC") has changed the landscape with respect to the interpretation of foreign ownership restrictions in the Philippines. The SC has recently issued a final ruling tightening the rules on foreign investment in public utilities ensuring control remains with Philippine nationals. The new ruling is supplemented by a number of important obiter dicta (non-binding statements), which created new uncertainty. The Philippine Security and Exchange Commission ("SEC"), however, has a more liberal view and declared it shall follow the dispositive (binding portion) of the SC decision, but ignore the obiter dicta.
This uncertainty about the interpretation of the foreign ownership restrictions will also affect investment in other nationalised or partly nationalised industries in the Philippines.
