In correlation to the issue about PLDT-Digitel Merger, section 19, Art. XII of the 1987 Constitution states: “The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.”. Essentially the same provisions can be found in the franchises of PLDT, RA 7082 renewed in 1991, Globe Telecom RA 7229 granted in 1992, and Smart Communications RA 7294 also in 1992. This provision was also reiterated in the franchise granted by Congress in 2002 to Digitel Mobile Philippines, Inc., which owns Sun Cellular. Under the said franchises, Digitel, PLDT and Globe – the top three telecommunications companies – are required to get congressional approval before any lease, transfer, grant of usufruct, sale, and transfer of rights and privileges of their franchise.
First thing’s first. The merger is illegal because such a buyout or swap and share deal, whatever you call it, requires congressional approval. This is explicit in Digitel’s and Digitel Mobile’s franchises. Proponents of the merger say congressional approval of such mergers and acquisitions have already been waived by virtue of the 1995 Public Telecommunications Policy Act (RA 7925), which ensures equality of treatment for franchise holders. Now that were the words from Bayan Muna Representative Teddy A. Casino. Why do you think the Congress did such provisions? Will this help us in our queries?