CA Banned FedEx for Being a Threat to Local Competitors and PH Economy; Over 700 Filipinos Lost Jobs

The Court of Appeals has finally banned international forwarding firm Federal Express (FedEx) from operating in the country for two main reasons.

First, it is a foreign-owned corporation and thus it could not engage in public utility services such as international airfreight forwarding. Second, the appellate court opined that FedEx’s continued operations in the country are detrimental to the interest of local competitors and the country’s economy as a whole.

The CA’s decision categorically states that foreign investment is inimical to the corporate interest of Filipino oligarchs and the country’s third-world economy.

The result? More than 700 Filipinos lost their jobs, as the world’s largest air-cargo shipper was forced to end its 13-year operations in the Philippines. Based on the CA justices’ hilarious legal reasoning, more unemployed Filipinos due to protectionism is good for our ailing economy.

Yes, Philippine protectionism has disastrous consequences. It punishes ordinary Filipinos and protects moneyed local competitors, cronies and oligarchs that despise competition.

Here’s an additional report from Saudi Gazette:

As the last FedEx flight took off from the Subic Bay International Airport, fears mounted that an unprecedented jobs crisis loomed in the country as some 900,000 new graduates and job seekers will enter the labor force in April.

They will join some 236,000 displaced workers expected within the first semester, according to group Ecumenical Institute for Labor Education and Research, Inc. (Eiler). To cut cost amid the worsening global economic crisis, FedEx had decided to relocate its Asia-Pacific hub operations to Guangzhou, China.

FedEx operated in the Philippines since May 1995, signing a lease contract in Subic that was supposed to expire in 2010. But it opted to end the contract earlier, vacating its 300,000-square foot facility at the Subic free port.

“With the alarming increase in local layoffs as well as migrant workers displacement and the new entrants to the labor force of new graduates and job seekers, the jobs crisis will reach unprecedented levels in the next few months and will further exacerbate poverty in the country,” said Paul Quintos, executive director of Eiler.

Unemployment and underemployment in the Philippines is already pegged at 10.7 million last year, according to Ibon Foundation.

But the highly compensated CA justices would rather see more unemployed Filipinos than allow FedEx to ruin the country’s struggling economy.

There’s no question that the Philippine Constitution limits foreign investment and involvement in our domestic economy to allegedly support national patrimony, natural resources, local industries and Filipino jobs, professions and opportunities.

As reiterated by the CA, foreign corporations and investors cannot provide and engage in public utility services .

“We hereby declare respondent Federal Express Pacific, Inc., a ‘foreign corporation,’ disqualified in our country from operating as an ‘international airfreight forwarder’ which is clearly a public utility,” read the ruling penned by Associate Justice Danton Bueser.

The ruling effectively revoked the May 2, 2011 resolution of the Civil Aeronautics Board (CAB) granting FedEx a permit to operate international airfreight forwarding in the country.

The court cited Article XII, Section 11 of the Constitution, which mandates that “operation of a public utility shall be granted to Filipino citizens or to corporations or associations organized under the laws of the Philippines.”

The case arose when Filipino-owned companies Ace Logistics Inc. and  Merit Freight International Inc. filed a petition questioning CAB’s decision to grant FedEx a regular permit to operate international airfreight forwarding.

So, according to the CA justices, foreign companies that provide jobs and opportunities to Filipinos yet compete with Filipino-owned companies,  which include LBC Express that operates in the United States, are a threat not just to local industries but to the country’s economy as well.

The government’s protectionist policy and the CA’s anti-economics and anti-reality ruling merely shows that our failing system values the interest of two companies– Ace Logistics Inc. and Merit Freight International Inc.– that questioned the legality of FedEx’s operations more than the interest and survival of over 700 Filipinos. Which means that the two Filipino-owned companies are more “public” than the 700-plus Filipinos who just lost their jobs.


Someone shared similar story on this Facebook group wherein I posted the following comment: “All we can do is hope that those who work for FedEx are protectionists and leftists or semi-leftists… Wait! It’s impossible to know…”

Some group members made the following comments:

  • “Oh great… more unemployed folks.”
  • “That is ridiculous…”
  • “a law is a law…if it would solve the unemployment problem then let congress/senate do their job [by way of amendment]”
  • “Mas gusto mo payatang lalong maghirap ang ating mga kababayan kesa mga congreso wala naming alam… buti ka mayaman ka na.”
  • “This just proves that the restrictions are not a sort of a “paper” thing. It is really happening.”

A member named Deli France made the following comment: “60/40 does not automatically applies to FEDEX line business unless Foreign Investment Act applies it. even so,mandatory 60/40 for its nature of business is UNCONSTITUTIONAL. They can APPEAL it or challenge it before SC.”

My reply: “The ruling is pretty clear: ” The CA ruled with finality that FedEx’s operations in the country violate the constitutional ban on foreign ownership of firms delivering public utility services.” It really helps if you try to read, folks. The Aranetas own LBC, a direct competitor. And Mar Roxas is part of the old-rich Araneta.”

Deli France: “FEDEX hindi yan kagaya ng operation ng PHILPOST , did CA quantify the volume of general public transaction as compared to business related transaction of cargo forwarding.general public will use Philpost , LBC etc simply because of higher cost of the efficient FEDEX.”

 My reply: “If it is a public utility, the higher the restrictions. In fact, some public utilities are off limits to foreign investors. Like any regular business not covered by PEZA, FedEx must be shut down for violating the constitutional ban. Unless you are Deli France, which I assume, is licensed just like Starbucks, which is owned and operated by the Aranetas. Try to read the decision. LBC is owned by Filipinos. The Aranetas. Are you saying the constitutional ban or 60-40 law does not exist?”

My further comments:

“All FedEd needs to do is urge the American government to impose reciprocity rules on Filipinos doing business in America. Filipinos in America should also observe the same 60-40 rule and other restrictions imposed on Americans here. Also, the U.S. gov should also ban Filipino doctors, nurses, engineers and all professionals. In other words, the U.S. government should deport all Filipinos -not yet American citizenz- working as doctors, nurses, etc. back to the Philippines.

Deli France: “the main point is what qualifies a cargo or freight forwarding business a public utility, OFWs would not even avail of FEDEX service because of prohibitive cost associated with its fast and efficient service.”

My final reply: “That’s not the main point. The main point is RP is in violation of the international principle on reciprocity. Again read the decision. I don’t know what you are talking about. The US gov should impose the same rules and restrictions on Filipinos para alam natin kung sino ang tama at mali. It should also ban Filipino professionals for the same reason we ban foreign profs here. Puro tayo anti-US. Lalo na yung mga mangmang na komunista. Hindi nila alam ang America ay OPEN sa lahat. It’s time for US to do the same thing.




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