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Point of Law

The following articles were written by Francisco Ed. Lim and also published in The Philippine Daily Inquirer.

March 10, 2016

The common understanding is that the 60/40 percent nationality restriction on ownership by corporations of private land is constitutional  in nature. But is it really constitutional that an amendment to the Constitution is needed to lift or liberalize the restriction?  Or can it be done through an act of Congress? As background, the 1987 Constitution provides that “[s]ave  in... Read More

February 11, 2016

Is the concept of merger and acquisition in corporate law the same under the Philippine Competition Act (PCA)? In corporation law, merger is the absorption of one or more corporations by another existing corporation, which retains its identity and takes over the rights, privileges, franchises, properties, claims, liabilities and obligations of the absorbed corporation(s). The absorbing... Read More

January 28, 2016

A few weeks ago, ANC’s business program, Business Nightly, interviewed me when China activated the circuit breaker system for its stock market. Believe it or not, China’s circuit breaker system was activated immediately after it was put in place last Jan. 4. To make matters worse, the circuit breaker was activated twice within a span of three trading days—the first on Jan. 4, when the market... Read More

January 07, 2016

In my July 9, 2015 column, I pointed out that one of the features of the recently enacted Philippine Competition Act (PCA) is the inclusion in it of merger control provisions. The new law prohibits mergers or acquisitions that substantially prevent, restrict or lessen competition.  To help ensure there is no violation of this prohibition, the law requires that where the merger or... Read More

December 17, 2015

In my Oct. 15, 2015 column, I discussed a fairly recent trend where our Supreme Court is now trying to strike the right balance in rehabilitation law. It is trying to do it by enforcing provisions of the Financial Rehabilitation and Insolvency Act (FRIA) and the Financial Rehabilitation Rules of Procedure (FR Rules) requiring that a petition for rehabilitation must include material financial... Read More

December 03, 2015

A program that was launched in the recently-concluded Asia-Pacific Economic Cooperation (Apec) conference in Manila was the Financial Infrastructure Development Network (FIDN). The FIDN is the brainchild of the Philippines, the host country for the 2015 Apec conference. It is a roadmap to make financial growth inclusive in the Apec region. In his introductory remarks during the... Read More

November 19, 2015

Is the sale of a controlling interest in a corporation necessarily a sale of securities governed by the Securities Regulation Code (SRC)? The question appears simple as the sale invariably involves sale of shares, which are included in the definition of the term “securities” under the SRC. The question has not yet been decided in the Philippines, but it is not unlikely that it will crop... Read More

November 05, 2015

The Enactment of the Philippine Competition Act (PCA) has given rise to a myriad of issues for businesses. One of these is whether there can be interlocking directors in different boards. Say, can an individual simultaneously serve as a director in competing businesses? In the United States, the prohibition has been around for about 100 years. There are two legal bases for prohibiting... Read More

October 15, 2015

To the chagrin of creditors, one of the most abused legal remedies these days is the remedy of rehabilitation under the Financial Rehabilitation and Insolvency Act (FRIA) and the Financial Rehabilitation Rules of Procedure (FR Rules). More often than not, whenever business entities find difficulties in paying their lawfully contracted debts, they threaten their creditors with, and eventually... Read More

October 02, 2015

One of the changes introduced during the bicameral conference committee meetings on the Philippine Competition Act (PCA) is the single economic entity concept or doctrine under Section 14 of the new law. Section 14 has three subsections. Sections 14(a) and (b) prohibit anti-competitive agreements “between or among competitors.” Section 14(c) prohibits “[a]greements other than those specified... Read More

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