Manila Prince Hotel v GSIS (DIGEST)

G.R. No. 122156, February 03, 1997

FACTS:
The controversy arose when respondent Government Service Insurance System (GSIS),
decided to sell through public bidding 30%-51% of the issued and outstanding shares of the
Manila Hotel Corporation.
In a close bidding held on 18, September 1995, only 2 bidders participated: Manila Prince
Hotel Corporation (petitioner) which offered to buy 51% of the MHC 15,300,00 shares at P41.58
per share, and Renong Berhad, a Malaysian firm with ITT-Sheraton as its hotel operator, which
bid the same number of shares at P44 per share or P2.42 more than the MPHC.
Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the
execution of the necessary contracts. Petitioner – MPHC, sent a letter to GSIS to match the bid
price of P44 per share. On October 10, 1995, a subsequent letter sent by the petitioner with
managers cheque issued by Philtrust Bank at an amount of P33M as a bid security to match the
bid of Renong Berhard which was later refused to accept by the respondent. Perhaps
apprehensive that GSIS has disregarded the tender of the matching bid, MPHC came to the
court on prohibition and mandamus.
The petitioner invokes the second paragraph of the Art. 12, section 10 of 1987 Constitution
which provides that in the grant of rights, concessions, privileges covering the national economy
and patrimony, the state shall give preference to the qualified Filipinos. And since MHC has
been identified with the Filipino nation and has practically become a historical monument or a
landmark which reflects the vibrancy of the Philippine heritage and culture. it has become a
part of the national patrimony.
The petitioner further argues that since 51% of the shares owned by the respondent – GSIS
a government owned and controlled corporation, thus the hotel business of the respondent is
unquestionably a part of the economy, any transactions involving 51% of the shares of stocks of
the MHC is clearly covered by the term National Economy, to which Sec., 10 Article 12, 1987
Constitution applies.
Respondent asserts that the second par of Art 12, section 10 of 1987 Constitution is merely
a statement of principle and policy and is clearly not a self-executing provision where such
requires implementing legislation(s). Thus, the said provision to operate there must be existing
laws.
 ISSUE:

Whether or not the provisions of the Constitution, particularly Section 10, Article 12, are self-
executing.

RULING:

Yes. Sec 10, Art. XII of the 1987 Constitution is a self-executing provision.

A provision which lays down a general principle, such as those found in Article 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.

Hence, 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.

* Article 12, section 10 of 1987 constitution provides that the state shall give preference to the qualified Filipinos
and that the corporations or associations whose capital is owned by at least 60%, or such higher percentage as the
Congress may prescribe.