THE ANTI-DUMMY LAW

(C.A. No. 108, as amended by C.A. No. 421, R.A. Nos. 134 and 6084, and P.D. No. 715)

AN ACT TO PUNISH ACTS OF EVASION OF THE LAWS ON THE NATIONALIZATION OF CERTAIN RIGHTS, FRANCHISES OR PRIVILEGES

Be it enacted by the National Assembly of the Philippines:

Source note. In Section 2-C, inserted by R.A. No. 6084, the official text reads "expressedly reserved"; this page reads "expressly reserved."

PD715 replaced §2-A, including its proportional alien-board-representation proviso. Neunzig v. Court of Appeals, February 10, 2025, applied the constitutional and Anti-Dummy framework to a land-related arrangement, dismissed the ejectment complaint and counterclaim, and directed referrals for escheat and possible prosecution; it was not a criminal conviction under this Act. RA11659 changed the Public Service Act’s public-utility classification and nationality framework. Those sector-specific changes are a separate layer, not a substitution of this Act’s printed words. This compilation is held for the identified original-text conflicts and does not certify every sector’s current nationality rules or exact publication-triggered dates.

SEC. 1. Penalty — In all cases in which any constitutional or legal provision requires Philippine or any other specific citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege, any citizen of the Philippines or of any other specific country who allows his name or citizenship to be used for the purpose of evading such provision, and any alien or foreigner profiting thereby, shall be punished by imprisonment for not less than five nor more than fifteen years, and by a fine of not less than the value of the right, franchise or privilege, which is enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand pesos.

The fact that the citizen of the Philippines or of any specific country charged with a violation of this Act had, at the time of the acquisition of his holdings in the corporations or associations referred to in section two of this Act, no real or personal property, credit or other assets the value of which shall at least be equivalent to said holdings, shall be evidence of a violation of this Act. (As amended by R.A. No. 134, approved June 14, 1947)

SEC. 2. Simulation of minimum capital stock — In all cases in which a constitutional or legal provision requires that, in order that a corporation or association may exercise or enjoy a right, franchise or privilege, not less than a certain per centum of its capital must be owned by citizens of the Philippines or of any other specific country, it shall be unlawful to falsely simulate the existence of such minimum of stock or capital as owned by such citizens, for the purpose of evading said provision. The president or managers and directors or trustees of corporations or associations convicted of a violation of this section shall be punished by imprisonment of not less than five nor more than fifteen years, and by a fine not less than the value of the right, franchise or privilege, enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand pesos. (As amended by R.A. No. 134, approved June 14, 1947)

SEC. 2-A. Unlawful use, Exploitation or enjoyment — Any person, corporation, or association which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines or of any other specific country, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation or association not possessing the requisites prescribed by the Constitution or the laws of the Philippines; or leases, or in any other way, transfers or conveys said right, franchise, privilege, property or business to a person, corporation or association not otherwise qualified under the Constitution, or the provisions of the existing laws; or in any manner permits or allows any person, not possessing the qualifications required by the Constitution, or existing laws to acquire, use, exploit or enjoy a right, franchise, privilege, property or business, the exercise and enjoyment of which are expressly reserved by the Constitution or existing laws to citizens of the Philippines or of any other specific country, to intervene in the management, operation, administration or control thereof, whether as an officer, employee or laborer therein with or without remuneration except technical personnel whose employment may be specifically authorized by the Secretary of Justice, and any person who knowingly aids, assists or abets in the planning, consummation or perpetration of any of the acts herein above enumerated shall be punished by imprisonment for not less than five nor more than fifteen years and by a fine of not less than the value of the right, franchise or privilege enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand pesos: Provided, however, That the president, managers or persons in charge of corporations, associations or partnerships violating the provisions of this section shall be criminally liable in lieu thereof: Provided, further, That any person, corporation or association shall, in addition to the penalty imposed herein, forfeit such right, franchise, privilege, and the property or business enjoyed or acquired in violation of the provisions of this Act: And provided, finally, That the election of aliens as members of the board of directors or governing body of corporations or associations engaging in partially nationalized activities shall be allowed in proportion to their allowable participation or share in the capital of such entities. (As amended by P.D. No. 715, promulgated 28 May 1975)

SEC. 2-B. — Any violation of the provisions of this Act by the spouse of any public official, if both live together, shall be cause for the dismissal of such public official. (As amended by C.A. No. 421, approved 31 May 1939)

SEC. 2-C. — The exercise, possession or control by a Filipino citizen having a common-law relationship with an alien of a right, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines, shall constitute a prima facie evidence of violation of the provisions of Section 2-A hereof. (Added by R.A. No. 6084, approved August 4, 1969)

SEC. 3. — Any corporation or association violating any of the provisions of this Act shall, upon proper court proceedings, be dissolved.

SEC. 3-A. Reward to informer. — In case of conviction under the provisions of this Act, twenty-five per centum of any fine imposed shall accrue to the benefit of the informer who furnishes to the Government original information leading to said conviction and who shall be ascertained and named in the judgment of the court. If the informer is a dummy, who shall voluntarily take the initiative of reporting to the proper authorities any violation of the provisions of this Act and assist in the prosecution, resulting in the conviction of any person or corporation profiting thereby or involved therein, he shall be entitled to the reward hereof in the sum equivalent to twenty-five per centum of the fine actually paid to or received by the Government, and shall be exempted from the penal liabilities provided for in this Act. (Added by R.A. No. 134, approved June 14, 1947)

SEC. 4. — This Act shall take effect upon its approval.

Approved: October 30, 1936