G.R. No. 180323 September 16, 2015
PURINA PHILIPPINES, INC., Petitioner, vs. HON. WALDO Q. FLORES, in His capacity as Senior Deputy Executive Secretary of the Office of the President, and NATIONAL FOOD AUTHORITY, Respondents.

FACTS

Petitioner Purina Philippines, Inc., a domestic corporation with 100% foreign equity, is engaged in the manufacture of animal feeds, using corn as a component. It buys corn from local suppliers or imports it with NFA authority. In 1995, the NFA required petitioner to acquire a warehouse license to store corn. Its application was denied in 1996 due to its 100% foreign equity, citing legal impediments under the Foreign Investment Act and Presidential Decree No. 194, which limits foreign equity in the rice and corn industry to 40%. The NFA granted provisional authority to continue business on condition that petitioner submit a divestment plan to comply with the 40% foreign equity limit. Petitioner sought reconsideration, arguing it was not engaged in the corn industry. The NFA, relying on an opinion from the Office of the Government Corporate Counsel, maintained its position. Petitioner appealed to the Secretary of Agriculture, and later, due to jurisdictional transfer, to the Office of the President (OP). The OP dismissed the appeal, ruling petitioner was engaged in the corn industry as it uses corn as raw material, falling under the definition in P.D. 194. The Court of Appeals affirmed the OP’s decision.

ISSUE

Whether petitioner is engaged in the corn industry.

RULING

Yes, petitioner is engaged in the corn industry. The Supreme Court affirmed the decisions of the lower bodies. Republic Act No. 3018 nationalized the rice and corn industry, prohibiting non-citizens or entities not wholly owned by Filipinos from engaging in it. The law defines the industry to include culture, milling, warehousing, transporting, importation, and acquisition for trade of rice or corn and by-products. Petitioner’s activities of importing and warehousing corn clearly fall under this definition. Subsequently, P.D. 194 allowed foreign equity participation up to 40% in the rice and corn industry, which includes acquiring rice or corn as raw materials for manufacturing finished products. Since petitioner uses corn as a raw material in manufacturing animal feeds, it is engaged in the corn industry under P.D. 194. The Court rejected petitioner’s argument that its acquisition was not for trade, noting that importation and warehousing themselves are commercial activities covered by the law. Petitioner, therefore, must comply with the foreign equity divestment requirement under P.D. 194.