ABS-CBN: 50 year limit applies to franchises, not companies

ABS-CBN general counsel Mario Bautista has argued that the 50-year cap imposed by the Constitution on franchises refers to the maximum period granted per franchise and not the number of years a company is allowed to operate.

“The 50-year limit applies to each franchise, certificate of authorization, and does not prohibit the grant of a new franchise to the same entity. Hence, Congress may grant several franchises to the same public utility. Wala pong pagbabawal dito. ‘Yun po ang fair reading of the provision as it is written (Nothing is prohibited here. That is the fair reading of the provision as it is written),” said Bautista at the joint hearing of the House committees on Legislative Franchise and on Good Government and Public Accountability.

Section 11 of Article 12 of the 1987 Constitution reads,“no franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted… for a longer period than 50 years.”

Bautista cited companies that have been operating for over 50 years but got their franchises renewed by Congress, such as PLDT, Inc. (100 years), Meralco (126 years), Visayas Electric Company (102 years), Philippine Airlines (93 years), Davao Light and Power Company (95 years), GMA Network (70 years), IBC Philippines (62 years), and TV5 (62 years).

“Kapag ang finding po ng Kongreso ay kailangan 50 years lang ang operation ng isang public utility, lahat po itong korporasyon na aking binanggit ay violative of the Constitution ‘yung kanilang prangkisa,” he said. “Kaya napakabigat po ng bintang na kailangan 50 years lang ang public utility.”

(If Congress finds that a public utility can operate for only 50 years, all the franchises of the corporations I mentioned violate the Constitution. Thus the assertion that public utilities can operate for 50 years is too grave.)

Justice Assistant Secretary Nicholas Ty said at the hearing that Congress can issue another franchise to the same corporation after its franchise has lapsed.

“Congress can once again issue a franchise to the same applicant, the same grantee. Like what Atty Bautista of ABS-CBN said, the 50-year limitation under the Constitution pertains to the franchise itself and not to the grantee,” said Ty. “Congress can issue multiple franchises that collectively exceed 50 years as long as the individual franchises do not exceed 50 years.”