MANILA PRINCE HOTEL vs.

GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION,

COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL

Citation: G.R. No. 122156 February 3, 1997

a. Facts:

GSIS decided to sell through public bidding 30% to 51% of the issued and outstanding shares of Manila
Prince Hotel pursuant to privatization program of Philippine Government under Proclamation No. 50
dated December 8, 1986. The winning bidder or “strategic partner” will provide management expertise
and/or an international marketing/reservation system, and financial support to strengthen the
profitability and performance of the Manila Hotel.

In a closed bidding, dated September 18, 1995, two bidders participated—Manila Prince Hotel and Renong
Berhad. Manila Prince Hotel, a Filipino corporation, offered to buy 51% of the Manila Hotel or 15.3m
shares at P41.58 per share. Renong Berhad, a Malaysian firm, bid the same number of shares at P44.00--
2.42 higher than MPH’s offer.

Pending declaration of Renong Berhad, Manila Prince Hotel matched the bid price of P44.00 per share
through a letter to GSIS. Manila Prince Hotel also sent a manager’s check for P33 million as bid security to
match Renong Berhad’s bid, to which GSIS refused.

GSIS continued to award the bid and sale of the share to Renong Berhad. Manila Prince Hotel invoked
Section 10(2) of Article 12 of the 1987 Constitution and argued that it must be preferred after it matched
the competitor’s bid offer. The provision states, “In the grant of rights, privileges, and concessions
covering national economy and patrimony, the State shall give preference to qualified Filipinos.”

It submits that the Manila Hotel has been identified with the Filipino nation and has practically become a
historical monument, which reflects the vibrancy of Philippine heritage and culture. Therefore, it has
become a part of the national patrimony. In addition, the shares of Manila Hotel that GSIS owns is part of
the national economy. On the other hand, GSIS contended that Section 10 is merely a statement of
principle and policy as it is not a self-executing provision. In order to become an enforceable right and to
operate, there must be existing laws to lay down conditions under which business may be done. They also
argued that non-self-executing of provision in question is implied from the tenor of the first and third
paragraph of the same section, which are not self-executing.

They also argued that Manila Hotel is not part of national patrimony, and the Constitution’s mandate is
not applicable to GSIS because it possesses a personality of its own separate and distinct from the
Philippines as a state. Furthermore, the provision is inapplicable since what was being sold is 51% of the
outstanding shares, not the hotel building or land. Equity cannot be part of national patrimony. Therefore,
Manila Prince Hotel has no legal right to petition for mandamus.

Issue:

Whether or Section 10(2), Article XII of the 1987 Constitution is self-executing.

Ruling:

Yes. The provision in question is mandatory, positive command, which is complete in itself and which
needs no further guidelines or implementing laws or rules for its enforcement. It does not require
legislation to put it in operation. The rule is that a self-executing provision of the Constitution does not
necessarily exhaust legislative power on the subject, but any legislation must be in harmony with the
Constitution to further the exercise of constitutional rights and make it more available.

The prevailing view with regards the issue is that 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. Therefore, when in doubt, the Constitution should be considered as self-executing
unless contrary is intended.

Section 10 of Article 12 is couched in such a way as not to make it appear that is non-self- executing but
simply for purposes of style. Although the first and third paragraphs of the same provision are not self-
executing, it does not mean that the second paragraph is not self-executing. By not stating that Congress
needs to enact on such provision simply means that it is self-executing.

In terms of national patrimony, the plain and ordinary meaning of term patrimony means heritage. When
Consti speaks of national patrimony, it refers not only to the natural resources of the Phils but also cultural
heritage of Filipinos. Manila Hotel has become a landmark – a living testimonial of Philippine heritage,
which history has been chronicled in the book The Manila Hotel: The Heart and Memory of a City. For
more than 8 decades, Manila Hotel has bore mute witness to triumphs and failures of Filipinos, its
existence is is impressed with public interest.Verily, MH has become part of national economy and
patrimony. Therefore, 51% of MHC cannot be disassociated from the hotel and land on which hotel sands.
The term qualified Filipinos as used in our Constitution also includes corporations of at least 60% of which
is owned by Filipinos. In the granting of economic rights, privileges and concessions, when a choice has to
be made bet. A qualified foreigner and qualified Filipino, the latter shall be chosen over the former.
Since petitioner has matched bid price, GSIS is left with no alternative but award the block of shares and
execute necessary agreements in accordance with bidding guidelines and procedures and Constitution.