Lately, there have been news about the contradictory positions of the Philippine Securities and Exchange Commission (SEC) and the Office of the Solicitor General concerning the definition of capital for purposes of determining the shares of stocks held by foreigners, leading to testy exchanges between the officials of the two government agencies. Earlier, the Supreme Court declared that the term "capital" under Section 11, Article XII of the 1987 Constitution refers only to shares of stock entitled to vote in the election of directors, i.e., common shares, and not to the total outstanding, capital stock, i.e., both common and non-voting preferred shares, in the case of the ownership of PLDT. (See http://sc.judiciary.gov.ph/jurisprudence/2011/june2011/176579.html)
According to SEC, the SolGen did not adopt its stand that capital must refer to the total outstanding, capital stock. The SolGen agreed with the Supreme Court. Based on the news, SEC would want to remove the SolGen as its counsel and handle the case on its own, or with the help of the Office of the Government Corporate Counsel (OGCC). The question then is, can a government agency like the SEC fire SolGen as its counsel owing to alleged differences with its stand?
The case of Comelec vs. Quijano-Padilla (G. R. No. 151992) comes to mind. There the Supreme Court adroitly explained the relationship between the SolGen and its client agency, thus:
“PHOTOKINA alleges that the OSG has no standing to file the present petition since its legal position is contrary to that espoused by the majority of the COMELEC Commissioners. This is a leap to a non-sequitur conclusion. The OSG is an independent office. Its hands are not shackled to the cause of its client agency. In the discharge of its task, the primordial concern of the OSG is to see to it that the best interest of the government is upheld. This is regardless of the fact that what it perceived as the “best interest of the government” runs counter to its client agency’s position. Endowed with a broad perspective that spans the legal interest of virtually the entire government officialdom, the OSG may transcend the parochial concerns of a particular client agency and instead, promote and protect the public weal. Our ruling in Orbos vs. Civil Service Commission, is relevant, thus:
"x x x It is incumbent upon him (Solicitor General) to present to the court what he considers would legally uphold the best interest of the government although it may run counter to a client’s position. x x x.
"In the present case, it appears that after the Solicitor General studied the issues he found merit in the cause of the petitioner based on the applicable law and jurisprudence. Thus, it is his duty to represent the petitioner as he did by filing this petition. He cannot be disqualified from appearing for the petitioner even if in so doing his representation runs against the interests of the CSC.
"This is not the first time that the Office of the Solicitor General has taken a position adverse to his clients like the CSC, the National Labor Relations Commission, among others, and even the People of the Philippines. x x x”
Hence, while petitioners’ stand is contrary to that of the majority of the Commissioners, still, the OSG may represent the COMELEC as long as in its assessment, such would be for the best interest of the government. For, indeed, in the final analysis, the client of the OSG is not the agency but no less than the Republic of the Philippines in whom the plenum of sovereignty resides.”