Manila Prince Hotel vs.

GSIS
G.R. No. 122156
February 3, 1997
Facts:
Pursuant to the privatization program of the Philippine Government,
the GSIS sold in public auction its stake in Manila Hotel Corporation
(MHC). Only 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.
Petitioner filed a petition before the Supreme Court to compel the GSIS
to allow it to match the bid of Renong Berhad. It invoked the Filipino
First Policy enshrined in 10, paragraph 2, Article XII of the 1987
Constitution, which provides that in the grant of rights, privileges, and
concessions covering the national economy and patrimony, the State
shall give preference to qualified Filipinos.

Issue:

Assuming GSIS is part of the State, whether it should give preference

to the petitioner, a Filipino corporation, over Renong Berhad, a foreign
corporation, in the sale of the controlling shares of the Manila Hotel
Corporation.
Held:
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.
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. It also refers to Filipinos 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. In the granting
of economic rights, privileges, and concessions, especially on matters
involving national patrimony, when a choice has to be made between a
qualified foreigner and a qualified Filipino, the latter shall be
chosen over the former.
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 we are 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.
The Supreme Court directed the GSIS, the Manila Hotel Corporation,
the Committee on Privatization and the Office of the Government
Corporate Counsel to cease and desist from selling 51% of the Share of
the MHC to Renong Berhad, and to accept the matching bid of Manila
Prince Hotel at P44 per shere and thereafter execute the necessary
agreements and document to effect the sale, to issue the necessary
clearances and to do such other acts and deeds as may be necessary
for the purpose.

Tanada vs. Angara

G.R. No. 118295
May 2, 1997
Facts:
On April 15, 1994, Rizalino Navarro, then Secretary of the Department
of Trade and Industry, in behalf of the Philippines, signed the Final Act,
Embodying the Results of Uruguay Round of Multilateral Negotiations.
On December 14, 1994, Philippine Senate adopted Resolution no. 7 in
concurring with the ratification of the Agreement establishing the
World Trade Organization, included therein are the Multilateral Trade
Agreements.

Above-mentioned agreements submit the Philippines

international law and treaties included therewith.

to

the

Petitioner contends that said agreements violate the constitutional

provisions of Sec. 19 Art. 10 and Secs. 10 and 12 Art. 12 pertaining to
the Declaration of Principles and State Policies and National Economy
and Patrimony, respectively.
Respondents hold that said Charter provisions are not self-executing.
Issue:
Whether or not the WTO agreements parity provisions as well as the
national treatment provisions violates the flagship constitutional
provisions.
Held:
NO. The Declarations of Principles and State Policies are not selfexecuting. They are used by the judiciary as aids or guides in the
exercise of its power of judicial review. Broad constitutional provisions
as such need legislative enactment to implement them.
Furthermore, Secs. 10 and 12 of Art. 12 should not be read in isolation
but together with Secs. 1 and 13 thereof which relate to the goal of
economic nationalism; that is a balanced and developed economy.
It is true that in the recent case of Manila Prince Hotel vs. Government
Service Insurance System, et al., 31 this Court held that "Sec. 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 se judicially enforceable." However, as the
constitutional provision itself states, it is enforceable only in regard to
"the grants of rights, privileges and concessions covering national
economy and patrimony" and not to every aspect of trade and
commerce. It refers to exceptions rather than the rule. The issue here
is not whether this paragraph of Sec. 10 of Art. XII is self-executing or
not. Rather, the issue is whether, as a rule, there are enough balancing
provisions in the Constitution to allow the Senate to ratify the
Philippine concurrence in the WTO Agreement. And we hold that there
are.

While the Constitution indeed mandates a bias in favor of Filipino

goods, services, labor and enterprises, at the same time, it recognizes
the need for business exchange with the rest of the world on the bases
of equality and reciprocity and limits protection of Filipino enterprises
only against foreign competition and trade practices that are unfair. In
other words, the Constitution did not intend to pursue an isolationist
policy. It did not shut out foreign investments, goods and services in
the development of the Philippine economy. While the Constitution
does not encourage the unlimited entry of foreign goods, services and
investments into the country, it does not prohibit them either. In fact it
allows an exchange on the basis of equality and reciprocity, frowning
only on foreign competition that is unfair.
A self-reliant and independent national economy does not
necessarily rule out the entry of foreign trade. A portion of sovereignty
may be waived without violating the Constitution, based on the
rationale that the Philippines adopts the generally accepted principles
of international law as part of the law of the land and adheres to the
policy of cooperation and amity with all nations.
Hence, the act of the Senate in giving consent to the WTO Agreement
making it part of the law of the land is a legitimate exercise of its
sovereign duty and power and is not an act constituting grave abuse of
discretion.