The Market Monitor Minding the Nation's Business
By Riza Lozada
The Securities and Exchange Commission (SEC) has reiterated that corporations are absolutely banned from providing political campaign donations after queries were again raised about top corporations funding the campaigns of candidates in the May 9 elections.
SEC Chairman Teresita Herbosa said Section 36 (9) of the Corporation Code absolutely prohibits foreign and domestic corporations from giving donations to any political party, candidate, or for any partisan political activity.
Despite this “absolute prohibition,” however, it is an open secret that most, if not all, of the country’s big firms contribute “humongous sums”—the words of a political gadfly—to the campaign chest of all candidates, especially those running for national office who may be able to “return the favor” when they are elected.
“In fact, there are even those who contribute to the kitties of all the candidates as an insurance of sorts that he, the donor, will be on the winning side, whoever wins. Only those born yesterday would believe that the prohibition is being observed. As they say, it is observed more in breach than in compliance,” the observer said.
Queries about political donations surged lately after social media posts showed a P500-million check for Sen. Antonio Trillanes IV supposedly coming from San Miguel Corp. (SMC). The check turned out to be spurious.
SMC immediately issued a denial and reported to the Philippine Stock Exchange (PSE) that the company observes a strict code of ethics and does not make political donations. The supposed check was “nothing more than a fabrication and blatant disinformation,” SMC told the PSE.
“It has come to our attention that a photo of a supposed Banco de Oro Unibank (BDO) check for P500 million purportedly issued by San Miguel Corp. to Sen. Antonio Trillanes IV has been circulating in social media,” SMC said in a statement.
“BDO has attested in the attached certification that it does not have any record of any account maintained by SMC with the bank’s Tandang Sora branch and that the alleged account number 001168795215 does not exist in the bank’s system and records,” SMC said.
“We denounce, in the strongest terms, this apparent effort to deceive the public and drag our company’s good name in current political issues,” it added.
“As a responsible corporate citizen, we enforce a strict code of ethics that ensure the company does the right thing and that it safeguards the long-term interest of its customers and stakeholders,” SMC said.
Section 95 of the Omnibus Election Code also enumerates specific natural and juridical persons who are prohibited from making political contributions because of benefits, privileges, license, or franchise received from the government.
Asked if the Election Code repealed the general prohibition under the Corporation Code such that if you are not specifically prohibited, you are allowed to make political donation, the SEC said in an opinion that there is no conflict in the two provisions of the laws and that both can be harmonized and given effect.
“In the absence of any showing of the intention of the legislature to amend or repeal the law, or any clear inconsistency between the two laws preventing their effective implementation, there is no express or implied amendment or repeal of Section 36(9) of the Corporation Code by the Election Code. As such, all corporations, regardless of nationality or percentage of foreign ownership or participation, cannot make political contributions to any candidate or political party,” the SEC opinion said.