Cruz vs Secretary of DENR

Natural Resources and Environmental Law; Constitutional Law; IPRA; Regalian Doctrine

GR. No. 135385, Dec. 6, 2000

FACTS:

Petitioners Isagani Cruz and Cesar Europa filed a suit for prohibition and mandamus as citizens and
taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371, otherwise
known as the Indigenous People’s Rights Act of 1997 (IPRA) and its implementing rules and regulations
(IRR). The petitioners assail certain provisions of the IPRA and its IRR on the ground that these amount
to an unlawful deprivation of the State’s ownership over lands of the public domain as well as minerals
and other natural resources therein, in violation of the regalian doctrine embodied in section 2, Article
XII of the Constitution.

ISSUE:

Do the provisions of IPRA contravene the Constitution?

HELD:

No, the provisions of IPRA do not contravene the Constitution. Examining the IPRA, there is nothing in
the law that grants to the ICCs/IPs ownership over the natural resources within their ancestral domain.
Ownership over the natural resources in the ancestral domains remains with the State and the rights
granted by the IPRA to the ICCs/IPs over the natural resources in their ancestral domains merely gives
them, as owners and occupants of the land on which the resources are found, the right to the small
scale utilization of these resources, and at the same time, a priority in their large scale development and
exploitation.

Additionally, ancestral lands and ancestral domains are not part of the lands of the public domain. They
are private lands and belong to the ICCs/IPs by native title, which is a concept of private land title that
existed irrespective of any royal grant from the State. However, the right of ownership and possession
by the ICCs/IPs of their ancestral domains is a limited form of ownership and does not include the right
to alienate the same.

Sunbeam Convenience Food vs CA (181 SCRA 443, G.R. No. 50464, 1990)

FACTS:
The Director of Lands issued sales patents in favor of defendant Sunbeam Convenience Foods, Inc., over
the parcels of land both situated in Mariveles, Bataan. Subsequently, such sales patent was transferred
to Coral Beach Development Corporation. The Solicitor General in behalf of the Republic of the
Philippines filed before the CFI an action for reversion,which was dismissed. The Solicitor General then
filed an appeal contending that the CFI committed grave abuse of discretion in not considering (in its
decision to dismiss) the allegation that the subject lans were forest lands. The CFI , therefore, erred in
finding the subject lots disposable and alienable lands of public domain under the jurisdiction of the
Director of Lands. The CA set aside the decision of the CFI, hence the present petition.

ISSUE:

WON the sales patents were validly issued.

HELD:

It cannot be determined unless the land’s classification is identified.

The case is remanded. There is a need to rule on the classification of the land. If the land is indeed a
forest land, then it is not subject to alienation or disposition and the case is moot and academic.
Because of the Regalian doctrine, there is a presumption that unclassified lands are of public dominion.
There must be a positive act from the government classifying a land into an agricultural land which is
alienable.

Republic v Sayo 191 SCRA 71

FACTS: The case at bar started at 1961 whe the spouses Casiano and Luz Sandoval filed an application
for a parcel of land, Lot 7454 srcinally party of Santiago but had since then been transferred to Nueva
Vizcaya. The registration was opposed by Bayaua, Reyes, and the Philippine Cacao and Farm Products.
The case went on until on 1981, 20 years after, the Heirs of Sandoval, Heirs of Bayaua, and the Bureau of
Lands and Bureau of Forest Development entered a compromise agreement, which effectively
distributed parts of lot 7454 among the aforesaid parties and the counsel of the Heirs of Sandoval as
attorney's fees. The compromise agreement was approved by the court and confirmed the title and
ownership of the parties in accordance with its terms. Having knowledge of the incident, the Solicitor
General filed a complaint before the court to annul the decision rendered by the court a quo for being
void and made in excess of jurisdiction or with grave abuse of discretion. The Solicitor General
contended that the the Heirs of Sandoval et. al. did not present any evidence to support their claims of
ownership or registration, nor did the government agencies involve have a y authority to enter into the
compromise agreement, and finally, that he was not notified of the proceedings and so had not
opportunity to take part therein. As for the Heirs of Sandoval et.al.'s contention, they asseverate that
the land is not a public land as the possessory information title in their name and of their predecessors-
in-interest, the pre-war certification appearing in the Bureau of Archives, and the fact that the
proceeding of the registration was brought under the Torrens act which presupposes an existing title to
be confirmed, are all evidences that the land is a private land.

ISSUE:
W/N the respondent's evidences can be considered as proof that the lot 7454 is a private land.

RULING:

NO. Under the Regalian Doctrine 2 all lands not otherwise appearing to be clearly within private
ownership are presumed to belong to the State. Hence it is that all applicants in land registration
proceedings have the burden of overcoming the presumption that the land thus sought to be registered
forms part of the public domain. 3 Unless the applicant succeeds in showing by clear and convincing
evidence that the property involved was acquired by him or his ancestors either by composition title
from the Spanish Government or by possessory information title, or any other means for the proper
acquisition of public lands, the property must be held to be part of the public domain . 4 The applicant
must present competent and persuasive proof to substantiate his claim; he may not rely on general
statements, or mere conclusions of law other than factual evidence of possession and title.

REPUBLIC VS. ROD OF QUEZON

G.R. No. 73974, May 31, 1995

o Regalian Doctrine

o Burden of Proof of private ownership rests on plaintiff

o Doctrine of indefeasibility of Torrens title, exception

FACTS:

Petitioner was awarded a 17-hectare parcel of land, by virtue of which he was issued an OCT.

Through an investigation conducted by the Bureau of Lands, it was found that the free patent acquired
by Petitioner was fraudulent. A case for falsification of public documents was filed by Petitioner was
acquitted of the crime.

Subsequently, the Solicitor-General filed a complaint against Petitioner, praying for the declaration of
nullity of the Free Patent and the OCT.

Petitioner's main contention was that the land in question was no longer within the unclassified public
forest land because by the approval of his application for Free Patent by the Bureau of Lands, the land
was already alienable and disposable public agricultural land. He also claimed that the land was a small
portion of Lot 5139, an area which had been declared disposable public land by the cadastral court.

ISSUE:
 o Whether or not the land is alienable and disposable public land

HELD:

Under the Regalian Doctrine, all lands not otherwise clearly appearing to be privately-owned are
presumed to belong to the State. Forest lands, like mineral or timber lands which are public lands, are
not subject to private ownership unless they under the Constitution become private properties. In the
absence of such classification, the land remains unclassified public land until released therefrom and
rendered open to disposition.

The task of administering and disposing lands of the public domain belongs to the Director of Lands, and
ultimately the Secretary of Agriculture and Natural Resources. Classification of public lands is, thus, an
exclusive prerogative of the Executive Department, through the Office of the President. Courts have no
authority to do so.

Thus, in controversies involving the disposition of public agricultural lands, the burden of overcoming
the presumption of state ownership of lands of the public domain lies upon the private claimant.

In the present case, Petitioner failed to present clear, positive and absolute evidence to overcome said
presumption and to support his claim.

Moreover, the fact the Petitioner acquired a title to the land is of no moment, notwithstanding the
indefeasibility of title issued under the Torrens System. The indefeasibility of a certificate of title cannot
be invoked by one who procured the same by means of fraud. Fraud here means actual and extrinsic --
an intentional omission of fact required by law.

Petitioner committed fraud by his failure to state that the land sought to be registered still formed part
of the unclassified forest lands.

Ituralde vs Falcasantos

(301 SCRA 293, G.R. No. 128017, January 20, 1999)

FACTS:

In 1986, Ramon Ituralde obtained a 6k ha parcel of land in Basilan Province. Falcasantos, meanwhile,

applied with the Bureau of Lands to grant him the same parcel of land under free patent. In 1989 the
Director of

Lands allowed Ituralde to file a public land application for the subject property. 1990 the trial court
named Ituralde
the owner and possessor of the land. The CA reversed this decision and set aside the trial court’s
decision in

Ituralde’s favor as the land was found to be forest land, and therefore, inalienable. Ituralde, in his appeal
to the SC,

claims that since the Director of Lands allowed him to file a public land application, the said land was no
longer

part of public domain.

ISSUE: WON the filing of the public land application in 1989 made the land alienable. NO.

HELD:

The CA is their decision found that since 1951, the subject parcel of land was classified as a Forest
Reserve

Area, and hence, not capable of private appropriation and occupation. Before any land may be
declassified from

the forest group and converted into alienable or disposable land for agricultural or other purposes,
there must be

a positive act from the government.

The filing of the public land application is not such positive act. The parcel of land retained its public

character and it therefore not susceptible to private ownership. As there was no award or grant to
Ituralde of the land by free patent or other ways of acquisition, under the concept of jura regalia, the
State retains ownership

over the land.

JG SUMMIT HOLDINGS VS. CA

G.R. No. 124293, November 20, 2000

FACTS:

The National Investment and Development Corporation (NIDC), a government corporation, entered into
a Joint Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. for the construction, operation
and management of the Subic National Shipyard, Inc., later became the Philippine Shipyard and
Engineering Corporation (PHILSECO). Under the JVA, NIDC and Kawasaki would maintain a shareholding
proportion of 60%-40% and that the parties have the right of first refusal in case of a sale.

Through a series of transfers, NIDC’s rights, title and interest in PHILSECO eventually went to the
National Government. In the interest of national economy, it was decided that PHILSECO should be
privatized by selling 87.67% of its total outstanding capital stock to private entities. After negotiations, it
was agreed that Kawasaki’s right of first refusal under the JVA be “exchanged” for the right to top by five
percent the highest bid for said shares. Kawasaki that Philyards Holdings, Inc. (PHI), in which it was a
stockholder, would exercise this right in its stead.

During bidding, Kawasaki/PHI Consortium is the losing bidder. Even so, because of the right to top by 5%
percent the highest bid, it was able to top JG Summit’s bid. JG Summit protested, contending that
PHILSECO, as a shipyard is a public utility and, hence, must observe the 60%-40% Filipino-foreign
capitalization. By buying 87.67% of PHILSECO’s capital stock at bidding, Kawasaki/PHI in effect now owns
more than 40% of the stock.

ISSUE:

o Whether or not PHILSECO is a public utility

o Whether or not Kawasaki/PHI can purchase beyond 40% of PHILSECO’s stocks

HELD:

In arguing that PHILSECO, as a shipyard, was a public utility, JG Summit relied on sec. 13, CA No. 146. On
the other hand, Kawasaki/PHI argued that PD No. 666 explicitly stated that a “shipyard” was not a
“public utility.” But the SC stated that sec. 1 of PD No. 666 was expressly repealed by sec. 20, BP Blg. 391
and when BP Blg. 391 was subsequently repealed by EO 226, the latter law did not revive sec. 1 of PD
No. 666. Therefore, the law that states that a shipyard is a public utility still stands.

A shipyard such as PHILSECO being a public utility as provided by law is therefore required to comply
with the 60%-40% capitalization under the Constitution. Likewise, the JVA between NIDC and Kawasaki
manifests an intention of the parties to abide by this constitutional mandate. Thus, under the JVA,
should the NIDC opt to sell its shares of stock to a third party, Kawasaki could only exercise its right of
first refusal to the extent that its total shares of stock would not exceed 40% of the entire shares of
stock. The NIDC, on the other hand, may purchase even beyond 60% of the total shares. As a
government corporation and necessarily a 100% Filipino-owned corporation, there is nothing to prevent
its purchase of stocks even beyond 60% of the capitalization as the Constitution clearly limits only
foreign capitalization.

Kawasaki was bound by its contractual obligation under the JVA that limits its right of first refusal to 40%
of the total capitalization of PHILSECO. Thus, Kawasaki cannot purchase beyond 40% of the
capitalization of the joint venture on account of both constitutional and contractual proscriptions.

Tano vs Socrates
Natural and Environmental Laws; Constitutional Law; Regalian Doctrine

GR No. 110249; August 21, 1997

FACTS:

On Dec 15, 1992, the Sangguniang Panglungsod ng Puerto Princesa enacted an ordinance banning the
shipment of all live fish and lobster outside Puerto Princesa City from January 1, 1993 to January 1,
1998. Subsequently the Sangguniang Panlalawigan, Provincial Government of Palawan enacted a
resolution prohibiting the catching , gathering, possessing, buying, selling, and shipment of a several
species of live marine coral dwelling aquatic organisms for 5 years, in and coming from Palawan waters.

Petitioners filed a special civil action for certiorari and prohibition, praying that the court declare the
said ordinances and resolutions as unconstitutional on the ground that the said ordinances deprived
them of the due process of law, their livelihood, and unduly restricted them from the practice of their
trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution.

ISSUE:

Are the challenged ordinances unconstitutional?

HELD:

No. The Supreme Court found the petitioners contentions baseless and held that the challenged
ordinances did not suffer from any infirmity, both under the Constitution and applicable laws. There is
absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman.
Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to
lay stress on the duty of the State to protect the nation’s marine wealth. The so-called “preferential
right” of subsistence or marginal fishermen to the use of marine resources is not at all absolute.

In accordance with the Regalian Doctrine, marine resources belong to the state and pursuant to the first
paragraph of Section 2, Article XII of the Constitution, their “exploration, development and
utilization...shall be under the full control and supervision of the State.

In addition, one of the devolved powers of the LCG on devolution is the enforcement of fishery laws in
municipal waters including the conservation of mangroves. This necessarily includes the enactment of
ordinances to effectively carry out such fishery laws within the municipal waters. In light of the
principles of decentralization and devolution enshrined in the LGC and the powers granted therein to
LGUs which unquestionably involve the exercise of police power, the validity of the questioned
ordinances cannot be doubted.
[G.R. No. 110249. August 21, 1997]

ALFREDO TANO, et al, petitioners, vs. GOV. SALVADOR P. SOCRATES, et al, respondents.

FACTS:

On December 15, 1992, the Sangguniang Panlungsod of Puerto Princesa enacted Ordinance no. 15-92
which banned the shipment of live fish and lobster outside Puerto Princesa City from January 1, 1993 to
January 1, 1998. Likewise, on February 19, 1993, the Sangguniang Panlalawigan of Palawan enacted
Resolution No. 33, Ordinance No. 2, Series of 1993. Said resolution prohibits the catching, gathering,
possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms for a period of 5
years in and coming from Palawan waters. Charged for violating the above laws by the city and
provincial governments were the petitioners Airline Shippers Association of Palawan, together with
several marine merchants. The petitioners assert that they have the preferential rights as marginal
fishermen granted with privileges provided by the Local Government Code, specifically in Section 149
thereof, invoking the invalidity of the above-stated enactments as violative of their rights.

ISSUE:

Were the enacted laws by the said local government units or LGUs [(1) The City Government of Puerto
Princesa, and (2) The Provincial Government of Palawan] violative of the preferential rights of the
fishermen?

HELD:

NO. The enacted resolution and ordinance of the LGU were not violative of their preferential rights. The
court recognized these laws as a valid exercise of the police power of the LGUs to protect public
interests.

More importantly, the right to a balanced and healthful ecology has been emphasized, as enshrined in
Section 16, Article II, 1987 Philippine Constitution, which states:

The State shall protect and advance the right of the people to a balanced and healthful ecology in accord
with the rhythm and harmony of nature.

The court decided that such right carries with it a correlative duty to refrain from impairing the
environment.
The rights and privileges invoked by the petitioners are not absolute. Though Congress may, by law,
allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons (as stated in
Section 2, Article XII, 1987 Philippine Constitution), there has been absolutely no showing that any of the
petitioners qualifies as a subsistence or marginal fisherman (in the petition, one petitioner was even
described as a private association composed of Marine Merchants). The general welfare provisions in
the Local Government Code of 1991 shall be liberally interpreted to give more powers to local
government units in accelerating economic development and upgrading the quality of life for the people
in the community. Power is given to the LGUs to enact fishery laws in its municipal waters which
necessarily includes the enactment of ordinances in order to effectively carry out the enforcement of
fishery laws in their local community. The ordinances in question are meant precisely to protect and
conserve marine resources to the end that their enjoyment by the people may be guaranteed not only
for the present generation, but also for the generations to come, as what has been provided for in
Section 7 of Article XIII of the Constitution. Thus, aside from dismissing the petition for lack of merit, the
court even commended the Sangguniang Panlungsod of Puerto Princesa and Sangguniang Panlalawigan
of Palawan for exercising the requisite political will to enact urgently needed legislation to protect and
enhance the marine environment.

La Bugal-B’laan Tribal Association, Inc. Vs Ramos

Natural Resources and Environmental Laws

G.R. No. 127882; January 27, 2004

FACTS:
This petition for prohibition and mandamus challenges the constitutionality of Republic Act No. 7942
(The Philippine Mining Act of 1995), its implementing rules and regulations and the Financial and
Technical Assistance Agreement (FTAA) dated March 30, 1995 by the government with Western Mining
Corporation(Philippines) Inc. (WMCP).
Accordingly, the FTAA violated the 1987 Constitution in that it is a service contract and is antithetical to
the principle of sovereignty over our natural resources, because they allowed foreign control over the
exploitation of our natural resources, to the prejudice of the Filipino nation.

ISSUE:
What is the proper interpretation of the phrase “Agreements involving Either Technical or Financial
Assistance” contained in paragraph 4, Section 2, Article XII of the Constitution.

HELD:
The Supreme Court upheld the constitutionality of the Philippine Mining Law, its implementing rules and
regulations – insofar as they relate to financial and technical agreements as well as the subject Financial
and Technical Assistance Agreement.
Full control is not anathematic to day-to-day management by the contractor, provided that the State
retains the power to direct overall strategy; and to set aside, reverse or modify plans and actions of the
contractor. The idea of full control is similar to that which is exercised by the board of directors of a
private corporation, the performance of managerial, operational, financial, marketing and other
functions may be delegated to subordinate officers or given to contractual entities, but the board
retains full residual control of the business.

Oposa vs Factoran

Natural and Environmental Laws; Constitutional Law: Intergenerational Responsibility

GR No. 101083; July 30 1993

FACTS:

A taxpayer’s class suit was filed by minors Juan Antonio Oposa, et al., representing their generation and
generations yet unborn, and represented by their parents against Fulgencio Factoran Jr., Secretary of
DENR. They prayed that judgment be rendered ordering the defendant, his agents, representatives and
other persons acting in his behalf to:

1. Cancel all existing Timber Licensing Agreements (TLA) in the country;

2. Cease and desist from receiving, accepting, processing, renewing, or appraising new TLAs;

and granting the plaintiffs “such other reliefs just and equitable under the premises.” They alleged that
they have a clear and constitutional right to a balanced and healthful ecology and are entitled to
protection by the State in its capacity as parens patriae. Furthermore, they claim that the act of the
defendant in allowing TLA holders to cut and deforest the remaining forests constitutes a
misappropriation and/or impairment of the natural resources property he holds in trust for the benefit
of the plaintiff minors and succeeding generations.

The defendant filed a motion to dismiss the complaint on the following grounds:

1. Plaintiffs have no cause of action against him;

2. The issues raised by the plaintiffs is a political question which properly pertains to the
legislative or executive branches of the government.
ISSUE:

Do the petitioner-minors have a cause of action in filing a class suit to “prevent the misappropriation or
impairment of Philippine rainforests?”

HELD:

Yes. Petitioner-minors assert that they represent their generation as well as generations to come. The
Supreme Court ruled that they can, for themselves, for others of their generation, and for the
succeeding generation, file a class suit. Their personality to sue in behalf of succeeding generations is
based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful
ecology is concerned. Such a right considers the “rhythm and harmony of nature” which indispensably
include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the
country’s forest, mineral, land, waters, fisheries, wildlife, offshore areas and other natural resources to
the end that their exploration, development, and utilization be equitably accessible to the present as
well as the future generations.

Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony
for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minor’s assertion
of their right to a sound environment constitutes at the same time, the performance of their obligation
to ensure the protection of that right for the generations to come.

Manila Prince Hotel vs GSIS

Self Executing Statutes

MANILA PRINCE HOTEL VS. GSIS

G.R. NO. 122156. February 3, 1997

MANILA PRINCE HOTEL petitioner,

vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON
PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL, respondents.
Facts:

The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the
privatization program of the Philippine Government, decided to sell through public bidding 30% to 51%
of the issued and outstanding shares of respondent Manila Hotel Corporation (MHC). The winning
bidder, or the eventual “strategic partner,” will provide management expertise or an international
marketing/reservation system, and financial support to strengthen the profitability and performance of
the Manila Hotel.

In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner Manila Prince
Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000 shares
at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator,
which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner.
Prior to the declaration of Renong Berhard as the winning bidder, petitioner Manila Prince Hotel
matched the bid price and sent a manager’s check as bid security, which GSIS refused to accept.

Apprehensive that GSIS has disregarded the tender of the matching bid and that the sale may be
consummated with Renong Berhad, petitioner filed a petition before the Court.

Issues:

1. Whether or not Sec. 10, second par., Art. XII, of the 1987 Constitution is a self-executing
provision.

2. Whether or not the Manila Hotel forms part of the national patrimony.

3. Whether or not the submission of matching bid is premature

4. Whether or not there was grave abuse of discretion on the part of the respondents in refusing
the matching bid of the petitioner.

Rulings:

In the resolution of the case, the Court held that:

1. It is a self-executing provision.

1. Since the Constitution is the fundamental, paramount and supreme law of the nation, it
is deemed written in every statute and contract. A provision which lays down a general
principle, such as those found in Art. II of the 1987 Constitution, is usually not self-
executing. But a provision which is complete in itself and becomes operative without
 the aid of supplementary or enabling legislation, or that which supplies sufficient rule by
means of which the right it grants may be enjoyed or protected, is self-executing.

2. A constitutional provision is self-executing if the nature and extent of the right

conferred and the liability imposed are fixed by the constitution itself, so that they can
be determined by an examination and construction of its terms, and there is no
language indicating that the subject is referred to the legislature for action. Unless it is
expressly provided that a legislative act is necessary to enforce a constitutional
mandate, the presumption now is that all provisions of the constitution are self-
executing. If the constitutional provisions are treated as requiring legislation instead of
self-executing, the legislature would have the power to ignore and practically nullify the
mandate of the fundamental law.

3. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command
which is complete in itself and which needs no further guidelines or implementing laws
or rules for its enforcement. From its very words the provision does not require any
legislation to put it in operation. It is per sejudicially enforceable. When our Constitution
mandates that in the grant of rights, privileges, and concessions covering national
economy and patrimony, the State shall give preference to qualified Filipinos, it means
just that – qualified Filipinos shall be preferred. And when our Constitution declares that
a right exists in certain specified circumstances an action may be maintained to enforce
such right notwithstanding the absence of any legislation on the subject; consequently,
if there is no statute especially enacted to enforce such constitutional right, such right
enforces itself by its own inherent potency and puissance, and from which all
legislations must take their bearings. Where there is a right there is a remedy. Ubi jus ibi
remedium.

2. The Court agree.

1. In its plain and ordinary meaning, the term patrimony pertains to heritage. When the
Constitution speaks of national patrimony, it refers not only to the natural resources of
the Philippines, as the Constitution could have very well used the term natural
resources, but also to the cultural heritage of the Filipinos.

2. It also refers to Filipino’s intelligence in arts, sciences and letters. In the present case,
Manila Hotel has become a landmark, a living testimonial of Philippine heritage. While it
was restrictively an American hotel when it first opened in 1912, a concourse for the
elite, it has since then become the venue of various significant events which have
shaped Philippine history.

3. Verily, Manila Hotel has become part of our national economy and patrimony. For sure,
51% of the equity of the MHC comes within the purview of the constitutional shelter for
it comprises the majority and controlling stock, so that anyone who acquires or owns
the 51% will have actual control and management of the hotel. In this instance, 51% of
the MHC cannot be disassociated from the hotel and the land on which the hotel edifice
stands.
 3. It is not premature.

1. In the instant case, where a foreign firm submits the highest bid in a public bidding
concerning the grant of rights, privileges and concessions covering the national
economy and patrimony, thereby exceeding the bid of a Filipino, there is no question
that the Filipino will have to be allowed to match the bid of the foreign entity. And if the
Filipino matches the bid of a foreign firm the award should go to the Filipino. It must be
so if the Court is to give life and meaning to the Filipino First Policy provision of the 1987
Constitution. For, while this may neither be expressly stated nor contemplated in the
bidding rules, the constitutional fiat is omnipresent to be simply disregarded. To ignore
it would be to sanction a perilous skirting of the basic law.

2. The Court does not discount the apprehension that this policy may discourage foreign
investors. But the Constitution and laws of the Philippines are understood to be always
open to public scrutiny. These are given factors which investors must consider when
venturing into business in a foreign jurisdiction. Any person therefore desiring to do
business in the Philippines or with any of its agencies or instrumentalities is presumed to
know his rights and obligations under the Constitution and the laws of the forum.

4. There was grave abuse of discretion.

1. To insist on selling the Manila Hotel to foreigners when there is a Filipino group willing
to match the bid of the foreign group is to insist that government be treated as any
other ordinary market player, and bound by its mistakes or gross errors of judgement,
regardless of the consequences to the Filipino people. The miscomprehension of the
Constitution is regrettable. Thus, the Court would rather remedy the indiscretion while
there is still an opportunity to do so than let the government develop the habit of
forgetting that the Constitution lays down the basic conditions and parameters for its
actions.

2. Since petitioner has already matched the bid price tendered by Renong Berhad pursuant
to the bidding rules, respondent GSIS is left with no alternative but to award to
petitioner the block of shares of MHC and to execute the necessary agreements and
documents to effect the sale in accordance not only with the bidding guidelines and
procedures but with the Constitution as well. The refusal of respondent GSIS to execute
the corresponding documents with petitioner as provided in the bidding rules after the
latter has matched the bid of the Malaysian firm clearly constitutes grave abuse of
discretion.

Hence, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION,

COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are directed
to CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to RENONG
BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL CORPORATION to
purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00 per share and
thereafter to execute the necessary agreements and documents to effect the sale, to issue the
necessary clearances and to do such other acts and deeds as may be necessary for the purpose.