SEC Memorandum Circular (MC) No. 14, Series of 2025, issued on December 10, 2025, sets the ceilings on interest rates and other fees charged by financing companies (FCs) and lending companies (LCs). Highlights include applicability and coverage of the circular to all unsecured, general-purpose loans offered by FCs and LCs, prescribed ceilings on interest rates and other fees for specific loans, and imposition of penalties for non-compliance. | | [CORPORATION IS AUTHORIZED TO DISTRIBUTE DIVIDENDS BY THE VERY EXISTENCE OF COMMON SHARES, BUT MAY CHOOSE TO WAIVE THE DECLARATION OF DIVIDENDS] [SCHOOL CAN BE STOCK BUT NON-PROFIT IF THERE IS A WAIVER ON DIVIDEND DECLARATION IN THE BY-LAWS] U University is seeking an opinion on whether it can amend its Articles of Incorporation (AOI) to confirm its actual nature as a stock corporation pursuant to law and the 1987 Constitution. In reply, U University is a stock corporation and may amend its AOI to reflect this status. Under the Revised Corporation Code (RCC), a stock corporation is one with capital stock divided into shares and authorized to distribute dividends or allotments of the surplus profits. U University meets these requisites because it has capital stock divided into shares, notwithstanding an AOI provision prohibiting dividends, since the authority to declare dividends is inherent in common shares and may simply be waived. Moreover, U University’s stockholders retain an interest in corporate assets upon dissolution, reinforcing its stock character. The SEC further noted that provisions in the AOI inconsistent with U University’s nature as a stock corporation must be amended to conform with the law. Thus, U University may amend its AOI, subject to compliance with the RCC and review by the SEC’s Company Registration and Monitoring Department (CRMD) or the proper Extension Office. [SEC OFFICE OF THE GENERAL COUNSEL OPINION NO. 25-13, AUGUST 29, 2025] | | THE RPH PROGRAM & THE IMPLEMENTATION OF ITS GUIDELINES BY NEA CONSTITUTE A LEGITIMATE EXERCISE OF ITS MANDATE, POWERS & FUNCTIONS UNDER THE LAW The National Electrification Administration (NEA) is requesting a legal opinion on whether it has the authority to issue and implement the Guidelines for the Regional Procurement Hub (RPH) Program for Electric Cooperatives (ECs), following issues raised during the 2026 Budget Deliberations of the House Committee on Appropriations. In reply, the DOJ finds that NEA acted well within its mandate in issuing NEA Memorandum No. 2024-061, as amended by Memorandum No. 2025-032, which established and refined the RPH Program. Anchored on NEA’s quasi-legislative and supervisory powers under Presidential Decree (P.D.) No. 269/National Electrification Administration Decree, as amended by Republic Act (R.A.) No. 10531/National Electrification Administration Reform Act of 2013, NEA is expressly authorized to promulgate rules and governance standards for the efficient operation of ECs, including the observance of transparent and competitive procurement procedures. Consistent with jurisprudence on administrative rulemaking and aligned with the principles of R.A. No. 9184/Government Procurement Reform Act, the RPH Guidelines constitute a valid exercise of subordinate legislation intended to streamline procurement, ensure availability and quality of equipment and materials, promote economies of scale, and strengthen EC resiliency. Thus, the DOJ concludes that the issuance and implementation of the RPH Guidelines are lawful and within NEA’s powers and functions under the law. [DEPARTMENT OF JUSTICE OPINION NO. 32, SERIES OF 2025, NOVEMBER 17, 2025]
[WATER DISTRICTS, ONCE FORMED, ARE SUBJECT TO PROVISIONS OF PD NO. 198 & NOT UNDER THE JURISDICTION OF ANY POLITICAL SUBDIVISION] [P.D. NO. 198 & SUBSEQUENT DILG ISSUANCES ESTABLISH THAT WATER DISTRICTS ARE INDEPENDENT FROM LGU] Lupon Water District (LWD) is requesting a legal opinion on whether a Local Government Unit (LGU) can assume the management and operations of a local water district. In reply, Sections 6 and 49 of Presidential Decree (P.D.) No. 198, or the “Provincial Water Utilities Act of 1973,” provides that water districts are created through a resolution of an LGU, but once formed, they become independent entities not under the jurisdiction of any political subdivision. It expressly provides that LGUs have no power to dissolve, alter, or interfere with a water district except as specifically allowed by law. This is further reiterated in Department of Interior and Local Government (DILG) Memorandum Circular No. 2019-03, which emphasizes that water districts are autonomous agencies that should operate with minimal interference from local officials, notwithstanding the provisions of the Local Government Code (LGC). Thus, while water districts are created through the passage of a resolution by an LGU, P.D. No. 198 and subsequent DILG issuances establish that water districts are independent from any individual political subdivision or LGU. [DEPARTMENT OF JUSTICE OPINION NO. 29, SERIES OF 2025, NOVEMBER 17, 2025]
IRIS RECOGNITION, AS COMPARED TO FINGERPRINT OR FACIAL RECOGNITION, IS MORE SECURED, MORE ACCURATE & MORE RELIABLE The Department of Information and Communications Technology (DICT) is requesting an opinion on its findings arising from the technical assessments it conducted on the World App and its identity verification system. After evaluation, the Department of Justice (DOJ) opined that there is nothing legally objectionable in DICT’s plan of a possible collaboration with the World App as part of the government’s efforts to strengthen the digital identity safeguards of the country, particularly in light of the increasing threats posed by deepfakes, AI-driven impersonation, and bot-enabled frauds. The DOJ recognized Iris recognition as an emerging and advanced technology in the field of identity verification, noting that it is consistent with DICT’s strategic initiatives to strengthen digital identity systems. It further emphasized that iris recognition offers a higher level of security, accuracy, and reliability compared to traditional biometric methods such as fingerprint and facial recognition. Moreover, the DOJ noted that the system does not store or retain biometric images or personal data that could be linked or traced back to individual users. Nonetheless, the DOJ underscored that any such collaboration remains subject to compliance with applicable data privacy and security laws. In this regard, DICT was reminded of the need to closely coordinate with the National Privacy Commission (NPC) to ensure that the rights of users—particularly with respect to privacy, data security, and confidentiality—are adequately protected. [DEPARTMENT OF JUSTICE OPINION NO. 30, SERIES OF 2025, OCTOBER 27, 2025] | | FAILURE TO ISSUE A NOTICE OF INFORMAL CONFERENCE (NIC) CONSTITUTES A DENIAL OF DUE PROCESS & RENDERS THE ASSESSMENT VOID The Petitioner, Commissioner of Internal Revenue, filed a Petition for Review before the Court of Tax Appeals (CTA) En Banc, seeking to reverse and set aside the Decision and Resolution of the CTA Second Division, which canceled the deficiency Final Withholding Tax (FWT) assessment against the Respondent, Berong Nickel Corporation, for taxable year 2015. The Petitioner argued that there was no violation of the Respondent’s right to due process since a Notice of Informal Conference (NIC) was not required under Revenue Regulations (RR) No. 18‑2013, which was allegedly controlling at the time the Letter of Authority (LOA) was issued. The Petitioner further claimed that the Respondent was adequately informed of the audit findings and proposed assessment through emails and meetings. On the other hand, the Respondent countered that RR No. 7‑2018, which requires issuance of an NIC, was already in effect when the Preliminary Assessment Notice (PAN) was issued in August 2018, and that the absence of an NIC is a substantial violation of due process, making the assessment void. In ruling, the Court En Banc held that the Petition for Review was filed out of time, reiterating that in cases involving the government, the counting of reglementary period to appeal is based on the date the Office of Solicitor General (OSG) receives the Decision or Resolution. The Court further held that the Petitioner violated the Respondent’s right to due process by failing to issue a mandatory NIC, emphasizing that RR No. 7‑2018 reinstated the NIC requirement before the issuance of the PAN in 2018. Thus, the Petition for Review was DISMISSED for having been filed out of time and for lack of merit. [COMMISSIONER OF INTERNAL REVENUE VS. BERONG NICKEL CORPORATION, CTA EN BANC CASE NO. 3017, DECEMBER 17, 2025] NEA-REGISTERED ELECTRIC COOPERATIVES ENJOY PERMANENT INCOME TAX EXEMPTION Petitioner Bukidnon II Electric Cooperative (BUSECO II) filed a Petition for Review praying for the cancellation of the Final Decision on Disputed Assessment (FDDA) issued by the Respondent Commissioner of Internal Revenue (CIR), which demands payment of alleged Income Tax deficiencies for taxable year (TY) 2019. The Petitioner argued that being a non-stock, non-profit electric cooperative duly registered with National Electrification Administration (NEA), it is permanently exempted from payment of income tax pursuant to Section 39(a) of Presidential Decree (P.D.) No. 269. Conversely, the Respondent contended that the tax exemptions must be granted based on a clear and explicit provision of law and that the Petitioner failed to justify its claim for tax exemption. In ruling, the Court held that electric cooperatives registered with NEA are permanently exempted from paying income taxes under Section 39(a) of P.D. No. 269. However, tax exemptions are strictly construed against the taxpayer whose burden of proof lies with the claimant. In the case at bar, the Petitioner failed to prove that it is a non-stock, non-profit electric cooperative duly registered with NEA, hence it cannot invoke the permanent tax exemption granted under P.D. No. 269. On the issue of imposition of compromise penalty, under Revenue Memorandum Order (RMO) No. 7-2015, compromise penalties cannot be unilaterally imposed by the BIR because it implies a mutual agreement between the parties involved regarding the matter being compromised. In view of this, the Petition was PARTIALLY GRANTED, the assessment for deficiency income tax was UPHELD, and the compromise penalties were CANCELLED and SET ASIDE. [BUKIDNON II ELECTRIC COOPERATIVE, INC. (BUSECO) VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10930, DECEMBER 5, 2025] FAILURE TO PROVIDE SPECIFIC REASONS FOR REJECTING THE TAXPAYER’S DEFENSES VIOLATES DUE PROCESS & RENDERS THE ASSESSMENT VOID The Petitioner, Commissioner of Internal Revenue, filed a Petition for Review seeking to reverse and set aside the Court of Tax Appeals (CTA) Second Division’s Decision and Resolution which cancelled the assessment for deficiency taxes issued against the Respondent, Bio-Resource Power Generation Corporation. The Petitioner argued that the Formal Letter of Demand (FLD) and Final Decision on Disputed Assessment (FDDA) contained a valid demand for payment and definite tax liability and that the phrase “requested to pay” is tantamount to a demand. The Petitioner also maintained that the assessments were timely issued within the 10-year prescriptive period under Section 222 of the Tax Code, stating that the substantial underdeclaration and overstatement constituted prima facie evidence of a false return. On the other hand, the Respondent counters that the FDDA lacked specific reasons for rejecting the evidence. Also, the assessments were issued beyond the three-year prescriptive period for tax assessments. In ruling, the Court En Banc held that the Petition for Review was filed out of time, having been filed beyond the 15-day reglementary period to file an appeal. Likewise, the Court ruled that the assessment is VOID for failure to comply with due process requirements. It found that the Petitioner disregarded the Respondent’s explanations and the FLD merely replicated the PAN without addressing arguments thereby violating procedural due process. The failure of the Petitioner to provide specific reasons for rejecting the taxpayer’s defenses renders the assessment void. Consequently, the Petition for Review is DISMISSED for being filed out of time and for lack of merit. [COMMISSIONER OF INTERNAL REVENUE VS. BIO-RESOURCE POWER GENERATION COMPANY, CTA EN BANC CASE NO. 3021, NOVEMBER 27, 2025] | | THE MERE INCLUSION OF A PERSON AS A SHAREHOLDER IN A CORPORATION’S GENERAL INFORMATION SHEET (GIS) IS, BY ITSELF, INSUFFICIENT TO PROVE STOCK OWNERSHIP The Respondents, Lolito S. Lopez, et. al., filed a Motion for Reconsideration challenging the Supreme Court’s earlier Decision which granted the Petition for Review filed by the Petitioner, Lily C. Lopez, which upheld the ruling of the Regional Trial Court (RTC) declaring the Special Stockholders’ Meetings and election of Board of Directors (BOD) of LC Lopez Resources, Inc. Conqueror International, Inc. and iSpecialist Development Corporation null and void. The Petitioner argued that they were prevented from attending said stockholders’ meeting and their proxies were excluded therefrom, resulting in the absence of the required quorum and consequently the invalidity of the meetings and elections conducted therein. Likewise, shares acquired by the Respondent were invalidly issued for having been issued in violation of her pre-emptive rights as a stockholder. In ruling, the Supreme Court held that the Stockholders’ Meetings and the elections of BOD were validly conducted and must be upheld. The Petitioner failed to satisfactorily establish their status as stockholders through acceptable evidence, reiterating that the Stock and Transfer Book is the primary basis for determining the stockholders of a corporation. Jurisprudence likewise establishes that the mere inclusion of a person as a shareholder in the corporation’s General Information Sheet (GIS) is, by itself, insufficient proof that such person is a shareholder. Thus, the exclusion of the Petitioner from the Special Stockholders’ Meetings would have no effect on the quorum and would not serve as a ground for nullifying the meetings and the elections of the BOD. Moreover, the Respondent’s purchase of unissued shares without a Board Resolution was not void but merely voidable for being an ultra vires corporate act. Thus, the ratification by stockholders of an ultra vires act that is not illegal cures the infirmity of the unauthorized corporate act and makes it valid and enforceable. The Court further applied the “Business Judgment Rule,” noting that the acquisition of the shares was motivated by the urgent necessity to infuse additional capital into the corporations. In view of the foregoing, the Supreme Court GRANTED the Motion for Reconsideration, reinstating the Court of Appeals decision declaring as valid the February 2019 Stockholders’ Meetings and elections. [LILY C. LOPEZ VS LOLITO S. LOPEZ, ET. AL., G.R. NO. 254957-58, APRIL 21, 2025, UPLOADED JULY 31, 2025] | |
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