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MANILA PRINCE HOTEL petitioner, vs.


BELLOSILLO, J.: The FiIipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos, 1 is in oked by petitioner in its bid to acquire 51% of the shares of the Manila Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents maintain that the provision is not self-executing but requires an implementing legislation for its enforcement. Corollarily, they ask whether the 51% shares form part of the national economy and patrimony covered by the protective mantle of the Constitution. The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding shares of respondent MHC. The winning bidder, or the eventual "strategic partner," is to provide management expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability and performance of the Manila Hotel. 2 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. Pertinent provisions of the bidding rules prepared by respondent GSIS state —
I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC — 1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995) or the Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to the other Qualified Bidders: a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International Marketing/Reservation System Contract or other type of contract specified by the Highest Bidder in its strategic plan for the Manila Hotel. . . .

b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS . . . . K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER — The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met: a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/OGCC (Office of the Government Corporate Counsel) are 3 obtained.

Pending the declaration of Renong Berhad as the winning bidder/strategic partner and the execution of the necessary contracts, petitioner in a letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00 per share tendered by Renong Berhad. 4 In a subsequent letter dated 10 October 1995 petitioner sent a manager's check issued by Philtrust Bank for Thirty-three Million Pesos (P33.000.000.00) as Bid Security to match the bid of the Malaysian Group, Messrs. Renong Berhad . . . 5 which respondent GSIS refused to accept. On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale of 51% of the MHC may be hastened by respondent GSIS and consummated with Renong Berhad, petitioner came to this Court on prohibition and mandamus. On 18 October 1995 the Court issued a temporary restraining order enjoining respondents from perfecting and consummating the sale to the Malaysian firm. On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First Division. The case was then set for oral arguments with former Chief Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici curiae. In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and 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. It is a proud legacy of an earlier generation of Filipinos who believed in the nobility and sacredness of independence and its power and capacity to release the full potential of the Filipino people. To all intents and purposes, it has become a part of the national patrimony. 6 Petitioner also argues that since 51% of the shares of the MHC carries with it the ownership of the business of the hotel which is owned by respondent GSIS, a government-owned and controlled corporation, the hotel business of respondent GSIS being a part of the tourism industry is unquestionably a part of the national economy. Thus, any transaction involving 51% of the shares of stock of the MHC is clearly covered by the term national economy, to which Sec. 10, second par., Art. XII, 1987 Constitution, applies. 7

It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also unquestionably part of the national economy petitioner should be preferred after it has matched the bid offer of the Malaysian firm. For the bidding rules mandate that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share. 8 Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of principle and policy since it is not a selfexecuting provision and requires implementing legislation(s) . . . Thus, for the said provision to Operate, there must be existing laws "to lay down conditions under which business may be done." 9 Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national patrimony which only refers to lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna and all marine wealth in its territorial sea, and exclusive marine zone as cited in the first and second paragraphs of Sec. 2, Art. XII, 1987 Constitution. According to respondents, while petitioner speaks of the guests who have slept in the hotel and the events that have transpired therein which make the hotel historic, these alone do not make the hotel fall under the patrimony of the nation. What is more, the mandate of the Constitution is addressed to the State, not to respondent GSIS which possesses a personality of its own separate and distinct from the Philippines as a State. Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still inapplicable since what is being sold is only 51% of the outstanding shares of the corporation, not the hotel building nor the land upon which the building stands. Certainly, 51% of the equity of the MHC cannot be considered part of the national patrimony. Moreover, if the disposition of the shares of the MHC is really contrary to the Constitution, petitioner should have questioned it right from the beginning and not after it had lost in the bidding. Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share, is misplaced. Respondents postulate that the privilege of submitting a matching bid has not yet arisen since it only takes place if for any reason, the Highest Bidder cannot be awarded the Block of Shares. Thus the submission by petitioner of a matching bid is premature since Renong Berhad could still very well be awarded the block of shares and the condition giving rise to the exercise of the privilege to submit a matching bid had not yet taken place.

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. 11 Under the doctrine of constitutional supremacy. It has been defined as the fundamental and paramount law of the nation. if a law or contract violates any norm of the constitution that law or contract whether promulgated by the legislative or by the executive branch or entered into by private persons for private purposes is null and void and without any force and effect. it is deemed written in every statute and contract. Admittedly. 13 As against constitutions of the past. and the function of constitutional conventions has evolved into one more like that of a legislative body. the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not exercise its discretion in a capricious. 12 A provision which lays down a general principle. is usually not self-executing. A constitution is a system of fundamental laws for the governance and administration of a nation. 10 It prescribes the permanent framework of a system of government. since the Constitution is the fundamental. some constitutions are merely declarations of policies and principles. is self-executing. modern constitutions have been generally drafted upon a different principle and have often become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that of statutory enactments. We now resolve. The fundamental conception in other words is that it is a supreme law to which all other laws must conform and in accordance with which all private rights must be determined and all public authority administered. the legislature would have the . unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate. and there is no language indicating that the subject is referred to the legislature for action. imperious. Thus 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. II of the 1987 Constitution. Thus. so that they can be determined by an examination and construction of its terms. or that which supplies sufficient rule by means of which the right it grants may be enjoyed or protected. the petition for mandamus should fail as petitioner has no clear legal right to what it demands and respondents do not have an imperative duty to perform the act required of them by petitioner. Their provisions command the legislature to enact laws and carry out the purposes of the framers who merely establish an outline of government providing for the different departments of the governmental machinery and securing certain fundamental and inalienable rights of citizens. and if ever it did abuse its discretion it was not so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. paramount and supreme law of the nation.Finally. absolute and unalterable except by the authority from which it emanates. Similarly. whimsical manner. It is supreme. But a provision which is complete in itself and becomes operative without the aid of supplementary or enabling legislation. such as those found in Art. Hence. and establishes certain fixed principles on which government is founded. assigns to the different departments their respective powers and duties.

No. . MR. the provisions of the Constitution should be considered self-executing. . why do we not make it clear? To qualified Filipinos as against aliens? THE PRESIDENT. . as it has always been. Unless the contrary is clearly intended. further the operation of such a provision. For example. et cetera (emphasis supplied by respondents) MR. . RODRIGO. the legislature is not precluded from enacting other further laws to enforce the constitutional provision so long as the contemplated statute squares with the Constitution. they shall be effective. the legislature may still enact legislation to facilitate the exercise of powers directly granted by the constitution. . XII.. NOLLEDO. of the 1987 Constitution is clearly not self-executing. NOLLEDO Yes. second par. as they quote from discussions on the floor of the 1986 Constitutional Commission — MR. the Constitution should be considered self-executing rather than non-self-executing . provide a convenient remedy for the protection of the rights secured or the determination thereof. as a contrary rule would give the legislature discretion to determine when. These provisions would be subordinated to the will of the lawmaking body." can it be understood as a preference to qualified Filipinos vis-a-vis Filipinos who are not qualified. qualifications on the setting up of other financial structures. Minor details may be left to the legislature without impairing the selfexecuting nature of constitutional provisions. What is the question of Commissioner Rodrigo? Is it to remove the word "QUALIFIED?". So. which could make them entirely meaningless by simply refusing to pass the needed implementing statute. no. RODRIGO. 10. It is just a matter of style. Art. That is why the prevailing view is. We use the word "QUALIFIED" because the existing laws or prospective laws will always lay down conditions under which business may be done. The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a selfexecuting constitutional provision does not render such a provision ineffective in the . I think that is understood.power to ignore and practically nullify the mandate of the fundamental law. RODRIGO. I am asking this question as the Chairman of the Committee on Style. but say definitely "TO QUALIFIED FILIPINOS" as against whom? As against aliens or over aliens? MR.. 15 Respondents argue that Sec. of Art XII is couched in such a way as not to make it appear that it is non-self-executing but simply for purposes of style. or place reasonable safeguards around the exercise of the right. that — . But. second par. In self-executing constitutional provisions. in case of doubt. 14 This can be cataclysmic. certainly. Sec. If the wording of "PREFERENCE" is given to QUALIFIED FILIPINOS. MR. 16 Quite apparently. Madam President. prescribe a practice to be used for its enforcement. Madam President. 10. or whether.

. It is per se judicially enforceable When our Constitution mandates that [i]n the grant of rights. The rule is that a self-executing provision of the constitution does not necessarily exhaust legislative power on the subject. 25 Tolentino v. of Art. as in the first paragraph. XII of the of the 1987 Constitution is a mandatory. and the State still needs legislation to regulate and exercise authority over foreign investments within its national jurisdiction. 22 the vital role of the youth in nation-building 23 the promotion of social justice. 10. And when our Constitution declares that a right exists in certain specified circumstances an . Basco v. 17 Subsequent legislation however does not necessarily mean that the subject constitutional provision is not. Inc. On the other hand. then a fortiori. privileges and concessions covering the national economy and patrimony. 24 and the values of education. 30 the sanctity of family life. privileges. v. 28 Lastly. second par. second par. but any legislation must be in harmony with the constitution. as in the third paragraph. the State shall give preference to qualified Filipinos. Morato 29 cites provisions on the promotion of general welfare. 10. fully enforceable. 21 the sanctity of family life. 18 The argument is flawed. 19 Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies. Art. The omission from a constitution of any express provision for a remedy for enforcing a right or liability is not necessarily an indication that it was not intended to be self-executing. positive command which is complete in itself and which needs no further guidelines or implementing laws or rules for its enforcement. Sec. Respondents also argue that the non-self-executing nature of Sec. Philippine Amusements and Gaming Corporation 20 speaks of constitutional provisions on personal dignity. Res ipsa loquitur. A constitutional provision may be self-executing in one part and non-self-executing in another. XII is implied from the tenor of the first and third paragraphs of the same section which undoubtedly are not self-executing. Secretary of Finance 26 refers to the constitutional provisions on social justice and human rights 27 and on education. which are basically not self-executing and only placed in the Constitution as moral incentives to legislation. by itself. and concessions covering national economy and patrimony. 31 the vital role of the youth in nationbuilding 32 and the promotion of total human liberation and development. not as judicially enforceable rights — are simply not in point.. 33 A reading of these provisions indeed clearly shows that they are not judicially enforceable constitutional rights but merely guidelines for legislation. Kilosbayan. it means just that — qualified Filipinos shall be preferred. From its very words the provision does not require any legislation to put it in operation. by the same logic. further the exercise of constitutional right and make it more available.absence of such legislation. The very terms of the provisions manifest that they are only principles upon which the legislations must be based. the second paragraph can only be self-executing as it does not by its language require any legislation in order to give preference to qualified Filipinos in the grant of rights. If the first and third paragraphs are not self-executing because Congress is still to enact measures to encourage the formation and operation of enterprises fully owned by Filipinos.

forests. 37 During World War II the hotel was converted by the Japanese Military Administration into a military headquarters. When the American forces returned to recapture Manila the hotel was selected by the Japanese together with Intramuros as the two (2) places fro their final stand. if there is no statute especially enacted to enforce such constitutional right. Dubbed as the Official Guest House of the Philippine Government. Thereafter. We agree. we should develop not only our lands. it immediately evolved to be truly Filipino. As regards our national patrimony. its own historicity associated with our struggle for sovereignty. a member of the 1986 Constitutional Commission explains — 34 The patrimony of the Nation that should be conserved and developed refers not only to out rich natural resources but also to the cultural heritage of out race. mines and other natural resources but also the mental ability or faculty of our people. Where there is a right there is a remedy. consequently. as the Constitution could have very well used the term natural resources. Formerly a concourse for the elite. its existence is impressed with public interest. so that anyone who acquires or owns the 51% will have actual control and management of the hotel. It was the site of the festivities during the inauguration of the Philippine Commonwealth. an acknowledgment of the Filipino talent and ingenuity. the hotel became the center of political activities. Therefore. it refers not only to the natural resources of the Philippines. In its plain and ordinary meaning. For sure. but also to the cultural heritage of the Filipinos.action may be maintained to enforce such right notwithstanding the absence of any legislation on the subject. In 1986 the hotel was the site of a failed coup d' etat where an aspirant for vice-president was "proclaimed" President of the Philippine Republic. independence and nationhood. 35 Manila Hotel has become a landmark — a living testimonial of Philippine heritage. and from which all legislations must take their bearings. in the 1950's and 1960's. For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures. It also refers to our intelligence in arts. In . While it was restrictively an American hotel when it first opened in 1912. it plays host to dignitaries and official visitors who are accorded the traditional Philippine hospitality. It was called the Cultural Center of the 1930's. 51% of the equity of the MHC comes within the purview of the constitutional shelter for it comprises the majority and controlling stock. 36 The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City. In 1970 the hotel reopened after a renovation and reaped numerous international recognitions. loves and frustrations of the Filipinos. playing host to almost every political convention. sciences and letters. it has since then become the venue of various significant events which have shaped Philippine history. Manila Hotel has become part of our national economy and patrimony. the term patrimony pertains to heritage. Ubi jus ibi remedium. such right enforces itself by its own inherent potency and puissance. Verily. When the Constitution speaks of national patrimony.

38 The argument is pure sophistry. MONSOD. MR. This is very clear from the proceedings of the 1986 Constitutional Commission THE PRESIDENT. but we have to raise a question. What about a corporation wholly owned by Filipino citizens? MR. MONSOD. in fact." And the word "Filipinos" here. DAVIDE. Is that the intention? MR. PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY. xxx xxx xxx MR. MR: DAVIDE. I want to get that meaning clear because "QUALIFIED FILIPINOS" may refer only to individuals and not to juridical personalities or entities. because.this instance. MONSOD. Madam President. 51% of the MHC cannot be disassociated from the hotel and the land on which the hotel edifice stands. we cannot sustain respondents' claim that the Filipino First Policy provision is not applicable since what is being sold is only 51% of the outstanding shares of the corporation. MR. Madam President. Consequently. MONSOD. We agree. The amendment will read: "IN THE GRANT OF RIGHTS. THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS. may I request that the amendment be read again. The Nolledo amendment would refer to an individual Filipino. DAVIDE. And the amendment would consist in substituting the words "QUALIFIED FILIPINOS" with the following: "CITIZENS OF THE PHILIPPINES OR CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH CITIZENS. as intended by the proponents. do we not give it preference? MR. RODRIGO. Commissioner Davide is recognized. The term qualified Filipinos as used in Our Constitution also includes corporations at least 60% of which is owned by Filipinos. xxx xxx xxx MR. apparently the proponent is agreeable. we would be limiting it if we say that the preference should only be 100-percent Filipino. Suppose it is a corporation that is 80-percent Filipino. Before we vote. not the Hotel building nor the land upon which the building stands. Madam President. DAVIDE. NOLLEDO. Yes. I would like to introduce an amendment to the Nolledo amendment. MR. MR. At least 60 percent. will include not only individual 39 .

The phrase preference to qualified Filipinos was explained thus — MR. if a foreign enterprise is qualified and a Filipino enterprise is also qualified.Filipinos but also Filipino-controlled entities or entities fully-controlled by 40 Filipinos. . I would like to request Commissioner Nolledo to please restate his amendment so that I can ask a question." it will be "SHALL — THE STATE SHALL GlVE PREFERENCE TO QUALIFIED FILIPINOS. when a choice has to be made between a "qualified foreigner" end a "qualified Filipino. The answer is "yes." MR. If the foreigner is more qualified in some aspects than the Filipino enterprise." the latter shall be chosen over the former. It certainly does NOT mandate the pampering and preferential treatment to Filipino citizens or organizations that are incompetent or inefficient. It is better known as the FILIPINO FIRST Policy . The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still further clarified by Commissioner Nolledo 43 — Paragraph 2 of Section 10 explicitly mandates the "Pro-Filipino" bias in all economic concerns. Thank you. 41 Expounding further on the Filipino First Policy provision Commissioner Nolledo continues — MR. THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS. NOLLEDO. ." MR FOZ. privileges. Instead of "MUST. will the Filipino enterprise still be given a preference? MR. FOZ. In connection with that amendment." . FOZ. FOZ. Madam President. and concessions. In the granting of economic rights. NOLLEDO. privileges and rights covering the national patrimony. since such an indiscriminate preference would be counter productive and inimical to the common good. That means that Filipinos should be given preference in the 42 grant of concessions. MR. This provision was never found in previous Constitutions . The term "qualified Filipinos" simply means that preference shall be given to those citizens who can make a viable contribution to the common good. Madam President. MR. . because of credible competence and efficiency. will the Filipino still be preferred? MR. "IN THE GRANT OF RIGHTS. . . This embodies the socalled "Filipino First" policy. NOLLEDO. NOLLEDO. Yes. PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY. Obviously.

46 When the Constitution addresses the State it refers not only to the people but also to the government as elements of the State. We cannot simply afford the government a defense that arises out of the failure to enact further enabling. To adopt such a line of reasoning is to renounce the duty to ensure faithfulness to the Constitution.J. a constitutional mandate directed to the State is correspondingly directed to the three(3) branches of . S. is in fact a transaction of the State and therefore subject to the constitutional command. Bernas. even before Congress acts — provided that there are discoverable legal standards for executive action. If it were. even some of the provisions of the Constitution which evidently need implementing legislation have juridical life of their own and can be the source of a judicial remedy. not to respondent GSIS which by itself possesses a separate and distinct personality. the acts of persons distinct from the government are considered "state action" covered by the Constitution (1) when the activity it engages in is a "public function. The attempt to violate a clear constitutional provision — by the government itself — is only too distressing. it must be guided by its own understanding of the constitutional command and of applicable laws. As correctly pointed out by Fr.. Respondents further argue that the constitutional provision is addressed to the State. The responsibility for reading and understanding the Constitution and the laws is not the sole prerogative of Congress. Joaquin G. In fine. or it has significant equity ownership in another hotel company. for an interpretation every time the executive is confronted by a constitutional command. For. It is undisputed that the sale of 51% of the MHC could only be carried out with the prior approval of the State acting through respondent Committee on Privatization. It is evident that the act of respondent GSIS in selling 51% of its share in respondent MHC comes under the second and third categories of "state action. S. This argument again is at best specious.J. the word qualified is also determinable. the discourse of Fr." In constitutional jurisprudence. on constitutional government is apt — The executive department has a constitutional duty to implement laws. It was pre-qualified by respondent GSIS in accordance with its own guidelines so that the sole inference here is that petitioner has been found to be possessed of proven management expertise in the hotel industry. 44 The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-executory and requires implementing legislation is quite disturbing.. this fact alone makes the sale of the assets of respondents GSIS and MHC a "state action. including the Constitution. or it has an overall management and marketing proficiency to successfully operate the Manila Hotel. Petitioner was so considered by respondent GSIS and selected as one of the qualified bidders. or perhaps the Court." (2) when the government is so significantly involved with the private actor as to make the government responsible for his action. (3) when the government has approved or authorized the action. the executive would have to ask Congress." Without doubt therefore the transaction. government is composed of three (3) divisions of power — legislative. executive and judicial. When the executive acts. After all.Lastly. and. 45 That is not how constitutional government operates. although entered into by respondent GSIS. Joaquin G. Accordingly. Bernas. implementing or guiding legislation.

as it should be. 1 of the bidding rules provides that [if] for any reason the Highest Bidder cannot be awarded the Block of Shares. the constitutional fiat is. 47 Certainly. Adhering to the doctrine of constitutional supremacy. Those which violate the Constitution lose their reason for being. For. J. It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. Paragraph V. GSIS may offer this to other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share. It must be so if we are to give life and meaning to the Filipino First Policy provision of the 1987 Constitution. The bidding rules expressly provide that the highest bidder shall only be declared the winning bidder after it has negotiated and executed the necessary contracts. the constitutional mandate itself is reason enough not to award the block of shares immediately to the foreign bidder notwithstanding its submission of a higher. bid. there is no question that the Filipino will have to be allowed to match the bid of the foreign entity. omnipresent to be simply disregarded. It is undeniable that in this case the subject constitutional injunction is addressed among others to the Executive Department and respondent GSIS. In fact. But the Constitution and laws of the Philippines are understood to be always open to public scrutiny. thereby exceeding the bid of a Filipino. This Court does not discount the apprehension that this policy may discourage foreign investors.government. nor are they under obligation to enter into one with the highest bidder. And if the Filipino matches the bid of a foreign firm the award should go to the Filipino. where a foreign firm submits the highest bid in a public bidding concerning the grant of rights. It is a basic principle in constitutional law that all laws and contracts must conform with the fundamental law of the land. a government instrumentality deriving its authority from the State. In the instant case. privileges and concessions covering the national economy and patrimony. the subject constitutional provision is. Since the "Filipino First Policy provision of the Constitution bestows preference on qualified Filipinos the mere tending of the highest bid is not an assurance that the highest bidder will be declared the winning bidder. lest the bidding rules be nullified for being violative of the Constitution. we cannot conceive of a stronger reason than the constitutional injunction itself. impliedly written in the bidding rules issued by respondent GSIS. Resultantly. These are given factors which investors must consider when venturing into business in a foreign jurisdiction. while this may neither be expressly stated nor contemplated in the bidding rules. and secured the requisite approvals. Any person therefore desiring to do . For in choosing the awardee respondents are mandated to abide by the dictates of the 1987 Constitution the provisions of which are presumed to be known to all the bidders and other interested parties. To ignore it would be to sanction a perilous skirting of the basic law. or even the highest. respondents are not bound to make the award yet.

Thus it did not have the right or personality then to compel respondent GSIS to accept its earlier bid. while petitioner was already preferred at the inception of the bidding because of the constitutional mandate. 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. only after it had matched the bid of the foreign firm and the apparent disregard by respondent GSIS of petitioner's matching bid did the latter have a cause of action. the duty of upholding the majesty of the Constitution which it is tasked to defend. 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. under any reasonable circumstance. The miscomprehension of the Constitution is regrettable. It is embodied in the 1987 Constitution not merely to be used as a guideline for future legislation but primarily to be enforced. Far from it. 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. much less undermine. In the case before us. Thus we 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. It is worth emphasizing that it is not the intention of this Court to impede and diminish. Undoubtedly. Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules. the Court encourages and welcomes more business opportunities but avowedly sanctions the preference for Filipinos whenever such preference is ordained by the Constitution. But foreigners may be awarded the sale only if no Filipino qualifies. The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since petitioner was well aware from the beginning that a foreigner could participate in the bidding is meritless. Besides. Filipinos and foreigners alike were invited to the bidding. This Court as the ultimate guardian of the Constitution will never shun. Rightly. The Filipino First Policy is a product of Philippine nationalism. the influx of foreign investments. petitioner had not yet matched the bid offered by Renong 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. there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally made. The position of the Court on this matter could have not been more appropriately articulated by Chief Justice Narvasa — As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the executive about the wisdom and feasibility of . regardless of the consequences to the Filipino people. or if the qualified Filipino fails to match the highest bid tendered by the foreign entity. and bound by its mistakes or gross errors of judgment. so must it be enforced.

certain statements were published in a major daily to the effect that injunction "again demonstrates that the Philippine legal system can be a major obstacle to doing business here. . for that matter. A commercial. in connection with a temporary injunction issued by the Court's First Division against the sale of the Manila Hotel to a Malaysian Firm and its partner. Indeed. The nation-state can have no higher purpose. It cannot override the demands of nationalism.legislation economic in nature. 51% of the MHC. And so we ask: . the Court will always defer to the Constitution in the proper governance of a free society. Protection of foreign investments. no 48 matter how buffeted by winds of unfair and ill-informed criticism. a veritable alienation of a nation's soul for some pieces of foreign silver. is not just any commodity to be sold to the highest bidder solely for the sake of privatization. should not take precedence over non-material values. objective should not be pursued at the expense of national pride and dignity. after all. is merely a policy. It will never shirk that duty. Thus the Manila Hotel has played and continues to play a significant role as an authentic repository of twentieth century Philippine history and culture. while laudible. the conveyance of this epic exponent of the Filipino psyche to alien hands cannot be less than mephistophelian for it is. In nationalism. 50 The Manila Hotel or. For. We are talking about a hotel where heads of states would prefer to be housed as a strong manifestation of their desire to cloak the dignity of the highest state function to their official visits to the Philippines. it has become truly a reflection of the Filipino soul — a place with a history of grandeur. or are not adopted or implemented with grave abuse of discretion amounting to lack or excess of jurisdiction. a most historical setting that has played a part in the shaping of a country. Privatization of a business asset for purposes of enhancing its business viability and preventing further losses. there is nothing so sacrosanct in any economic policy as to draw itself beyond judicial review when the Constitution is involved. 51 This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark — this Grand Old Dame of hotels in Asia — to a total stranger. 49 Nationalism is inherent. In this sense. with sovereignty residing in the Filipino people and from whom all government authority emanates. the Supreme Court has not been spared criticism for decisions perceived as obstacles to economic progress and development . indeed. it is its bounden duty to make sure that they do not violate the Constitution or the laws. For the Constitution enshrines higher and nobler non-material values. regardless of the character of the asset. . nay even a budgetary. in whatever manner viewed. the happiness and welfare of the people must be the goal. in the very concept of the Philippines being a democratic and republican state. We are talking about a historic relic that has hosted many of the most important events in the short history of the Philippines as a nation. Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind referred to or set itself up as the judge of whether they are viable or attainable. We are not talking about an ordinary piece of property in a commercial district. Any interpretation of any constitutional provision must adhere to such basic concept.

the COMELEC. alone. 6766 entitled "An Act Providing for an Organic Act for the Cordillera Autonomous Region.676 votes in the rest of the provinces and city above-mentioned. legally and validly constitute such Region. issued Resolution No. Congress enacted Republic Act No. p. ORDILLO VS COMELEC The question raised in this petition is whether or not the province of Ifugao. how much dignity will be preserved and realized if the national patrimony is safekept in the hands of a qualified. Mountain Province. legally and validly constitutes the CAR. on February 14. the Executive Secretary on February 5. And this Court. 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. heeding the clarion call of the Constitution and accepting the duty of being the elderly watchman of the nation. being the only province which voted favorably for the creation of the Cordillera Autonomous Region can. WHEREFORE. 1990. zealous and well-meaning Filipino? This is the plain and simple meaning of the Filipino First Policy provision of the Philippine Constitution. which cannot be equally drawn from a qualified Filipino. respondents GOVERNMENT SERVICE INSURANCE SYSTEM. .00 per share and thereafter to execute the necessary clearances and to do such other acts and deeds as may be necessary for purpose.What advantage." (Rollo. : na d Even before the issuance of the COMELEC resolution. the Secretary of Justice issued a memorandum for the President reiterating the COMELEC resolution and provided: ". The antecedent facts that gave rise to this petition are as follows: On January 30. 13(A) that only the provinces and city voting favorably shall be included in the CAR.889 votes in only the Ifugao Province and was overwhelmingly rejected by 148. On the same date. the province of Ifugao being the only province which voted favorably — then. Ifugao. Abra and Kalinga-Apayao and the city of Baguio cast their votes in a plebiscite held pursuant to Republic Act No. 6861 setting the elections in the Cordillera Autonomous Region of Ifugao on the first Monday of March 1991. on March 8. Consequently. MANILA HOTEL CORPORATION. 1990." The official Commission on Elections (COMELEC) results of the plebiscite showed that the creation of the Region was approved by a majority of 5. can be gained by the Filipinos Manila Hotel — and all that it stands for — is sold to a non-Filipino? How much of national pride will vanish if the nation's cultural heritage is entrusted to a foreign entity? On the other hand. SO ORDERED. 2259 stating that the Organic Act for the Region has been approved and/or ratified by majority of the votes cast only in the province of Ifugao. . 7) As a result of this. 1990. 1990 issued a Memorandum granting authority to wind up the affairs of the Cordillera . the people of the provinces of Benguet. will continue to respect and protect the sanctity of the Constitution. 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. alone. [A]nd considering the proviso in Sec.

cities. 1990. municipalities and geographical areas sharing common and distinctive historical and cultural heritage. pray that the Court: (1) declare null and void COMELEC resolution No. 6766 require that the said Region be composed of more than one constituent unit. To become part of a region. The petitioners. the President issued Administrative Order No. the memorandum of the Secretary of Justice. cities. which was made as part of the law of the land by P.D. Inc. On March 9. No. 165 SCRA 757. 422-423 [1970]). Tuason & Co. be applied in this case. 160. and geographical areas. 220. (Integrated Reorganization Plan (1972). 742) Ifugao is a province by itself. Administrative Order No. J. Gustilo. This petition is meritorious. the memorandum of the Executive Secretary. 770. This is supported by the fact that the thirteen (13) regions into which the Philippines is divided for administrative purposes are groupings of contiguous provinces. it must join other provinces. 1990. It joins other units because of their common and distinctive historical and cultural heritage. . as much as possible should be understood in the sense it has in common use and that the words used in constitutional provisions are to be given their ordinary meaning except where technical terms are employed. economic and social structures.nad The petitioners maintain that there can be no valid Cordillera Autonomous Region in only one province as the Constitution and Republic Act No. v. We treat the Comments of the respondents as an answer and decide the case. 2259. municipalities. Land Tenure Administration.nad The well-established rule in statutory construction that the language of the Constitution. .. and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines. must then. 6861 and prohibit and restrain the respondents from implementing the same and spending public funds for the purpose and (2) declare Executive Order No. 1.Executive Board and the Cordillera Regional Assembly created under Executive Order No. 220 constituting the Cordillera Executive Board and the Cordillera Regional Assembly and other offices to be still in force and effect until another organic law for the Autonomous Region shall have been enacted by Congress and the same is duly ratified by the voters in the constituent units. 160 declaring among others that the Cordillera Executive Board and Cordillera Regional Assembly and all the offices created under Executive Order No. then. [1988]. the petitioner filed a petition with COMELEC to declare the nonratification of the Organic Act for the Region. . There shall be created autonomous regions in Muslim Mindanao and in the Cordillera consisting of provinces. It is explicit in Article X. The term "region" used in its ordinary sense means two or more provinces. The sole province of Ifugao cannot validly constitute the Cordillera Autonomous Region. (See Baranda v. and Republic Act No. Section 15 of the 1987 Constitution that: "Section 15. No.M. municipalities and geographical areas connote that "region" is to be made up of more than one constituent unit." (Emphasis Supplied) The keywords — provinces. 31 SCRA 413. The COMELEC merely noted said petition. 220 were abolished in view of the ratification of the Organic Act.D. The Constitutional requirements are not present in this case. P. economic and social structures and other relevant characteristics. cities. On March 30.

149. Chapter 3. The Board has a counterpart in the provincial level called the Provincial Planning and Development Coordinator. .000. It further provides that: "SECTION 2. Section 10 of the law creates a Regional Planning and Development Board composed of the Cordillera Governor. population-wise. 486. therefore. Mountain Province. The Regional Government shall exercise powers and functions necessary for the proper governance and development of all provinces. and members representing the private sector.332. Benguet.000. Kalinga-Apayao and Baguio City. Total population of these five provinces and one city. fail. 116. 14).000. 1. . And since Ifugao is one of the smallest provinces in the Philippines. Mountain Province. If it takes only one person in the provincial level to perform such functions while on the other hand it takes an entire Board to perform almost the same tasks in the regional level. . Otherwise. Section 220 (4). we would be faced with the absurd situation of having two sets of officials. 6766 strengthens the petitioner's position that the Region cannot be constituted from only one province. a set of provincial officials and another set of regional officials exercising their executive and legislative powers over exactly the same small area." From these sections. 1990.Aside from the 1987 Constitution. 6766 which include Benguet. 2. Article III. 214. Article XXI. Ifugao. it can be gleaned that Congress never intended that a single province may constitute the autonomous region. the members of such Cordillera Assembly shall then be elected only from the province of Ifugao creating an awkward predicament of having two legislative bodies — the Cordillera Assembly and the Sangguniang Panlalawigan — exercising their legislative powers over the province of Ifugao. Section 10. The respondent's theory of the Autonomous Region being made up of a single province must. par. 6766 show that a one province Cordillera Autonomous Region was never contemplated by the law creating it. Article 10.000. chan robles v irt ual law l ibra ry If we follow the respondent's position.000. Abra. The province of Ifugao makes up only 11% of the total population of the areas enumerated in Article I. it would have too many government officials for so few people. Section 13 (B) (c) alloting the huge amount of Ten Million Pesos (P10. cities. The Cordillera population is distributed in round figures as follows: Abra.000 according to the 1990 Census (Manila Standard. Article V. 185. Sections 1 and 2 of the Statute provide that the Cordillera Autonomous Region is to be administered by the Cordillera government consisting of the Regional Government and local government units. It has the second smallest number of inhabitants from among the provinces and city above mentioned. Republic Act No. a reading of the provisions of Republic Act No. two members of the Cordillera Assembly. Sections 1 and 4 of Republic Act 6766 vest the legislative power in the Cordillera Assembly whose members shall be elected from regional assembly districts apportioned among provinces and the cities composing the Autonomous Region. p. municipalities. and Baguio City. September 30. 6766) are almost similar to those of the Provincial Coordinator's (Title Four. :-cra law Article XII. These sections of Republic Act No. 337 — Local Government Code).00) to the Regional Government for its initial organizational requirements cannot be construed as funding only a lone and small province. all the provincial governors and city mayors or their representatives. Batas Pambansa Blg.000.000. 183. Section 2 (b) of Republic Act No. The Board's functions (Article XII.000. and barangay or ili within the Autonomous Region . Kalinga-Apayao. it could only mean that a larger area must be covered at the regional level.

the Commission would have a Chairman and only one member. 6766 for the Cordillera and Republic Act No. 487492 [1986]).R. is not applicable in the case at bar contrary to the view of the Secretary of Justice. (See III. (G. 89651. November 10. 6734 for the Autonomous Region in Muslim Mindanao determine — (1) whether there shall be an autonomous region in the Cordillera and in Muslim Mindanao and (2) which provinces and cities. [I]t is thus clear that what is required by the Constitution is simple majority of votes approving the Organic Act in individual constituent units and not a double majority of the votes in all constituent units put together. The Abbas case laid down the rate on the meaning of majority in the phrase "by majority of the votes cast by the constituent units called for the purpose" found in the Constitution. No.A. 1969)." This was the pronouncement applied by the Secretary of Justice in arriving at his conclusion stated in his Memorandum for the President that: x x x ". The plebiscites mandated by the Constitution and Republic Act No. et al. 40). Section 1 of Article VII creates a system of tribal courts for the various indigenous cultural communities of the Region. as far as practicable. Record of the Constitutional Commission. Section 3 of Article VI calls for cabinet members. . to come from various provinces and cities of the Region. Section 16 of Article V calls for a Regional Commission on Appointments with the Speaker as Chairman and are (6) members coming from different provinces and cities in the Region. 6766 but would also be impractical and illogical. Article X. 6766 which are either violated or which cannot be complied with. 6766 creating the Cordillera Autonomous Region is infused with provisions which rule against the sole province of Ifugao constituting the Region. in either Muslim Mindanao or Cordillera could exist despite the fact that only one province or one city is to constitute it." (Rollo. Under the respondents' view. And considering the proviso in Section 13 (a) that only the provinces and city voting favorably shall be included in the CAR. chanrob les vi rtual law lib rary . Section 9 of Article XV requires the development of a common regional language based upon the various languages and dialects in the region which regional language in turn is expected to enrich the national language. legally and validly constitute the CAR. :-cra law To contemplate the situation envisioned by the respondent would not only violate the letter and intent of the Constitution and Republic Act No. [i]t is believed that the creation of the Cordillera Autonomous Region (CAR) as mandated by R. there is nothing in the Abbas decision which deals with the issue on whether an autonomous region. COMELEC. . 6766 became effective upon its approval by the majority of the votes cast in the province of Ifugao. alone. However. Section 18. shall comprise said Autonomous Regions. No. consequently. It stated: x x x ". . as well as in the individual constituent units.There are other provisions of Republic Act No. the same rule to follow with regard to the autonomous region in the Cordillera. The Abbas case established the rule to follow on which provinces and cities shall comprise the autonomous region in Muslim Mindanao which is. It would never have a quorum. Our decision in Abbas. the province of Ifugao being the only province which voted favorably — can. . v. among those enumerated in the two Republic Acts. The entirety of Republic Act No. p.

Stated in another way. Gutierrez. 6861 are declared null and void while Executive Order No. petitioners. orders and instructions relative to the said referendum. AQUINO VS COMELEC G. After the oral argument of over 7 hours on January 30. SO ORDERED.. insofar as it upholds the creation of an autonomous region. No. Administrative Order No. Tañada. III. TRINIDAD HERRERA. The respondents.:p I This petition for prohibition. ANTONIO ARANETA. BISHOP FRANCISCO CLAVER. which was filed on January 21. Puno for respondents. 220 is declared to be still in force and effect until properly repealed or amended. 1975. RAUL GONZALES. 1366-A. It is the first issue which the Court answers in the instant case. BISHOP JESUS VALERA. Mendoza & Assistant Solicitor General Reynato S. Tañada for petitioners Office of the Solicitor General Estelito P Mendoza. 1975. S. JOKER ARROYO. 2259 of the Commission on Elections. JR. and Republic Act No. Resolution No. and NATIONAL TREASURER. 637 and 637-A specifying the referendum questions. The issue is not whether the province of Ifugao is to be included in the Cordillera Autonomous Region. Jr. 1975. MAKASIAR. 1990 memorandum of the Executive Secretary. SERGIO OSMEÑA. seeks the nullification of Presidential Decrees Nos. Assistant Solicitor General Vicente V. ANTONIO MIRANDA. 1366. the February 14. . the Court resolved to consider the comment as answer and the case submitted for decision. calling a referendum for February 27. vs... and EMILIO DE PERALTA. BISHOP ANTONIO NEPOMUCENO. EUGENIO LOPEZ. BISHOP TEOTIMO PACIS. J. 629 and 630 appropriating funds therefor. and Presidential Decrees Nos. Assistant Solicitor General Hugo E. as well as other presidential decrees. Presidential Decrees Nos. BISHOP FELIX ZAFRA. 1975. WHEREFORE. 160.R.J. the issue in this case is whether the sole province of Ifugao can validly and legally constitute the Cordillera Autonomous Region. Renato E. 1975 BENIGNO S.. through the Solicitor General. the petition is hereby GRANTED. JR. Lorenzo M. filed their comment on January 28. L-40004 January 31. 1990 memorandum of the Secretary of Justice. respondents. Tañada and Wigberto E. COMMISSION ON ELECTIONS. the February 5. AQUINO.

Enrile and 8 companion cases. al. decrees.The first ground upon which the petition is predicated states that President Ferdinand E. decrees and orders. and Nacionalista Party vs. Vera. Marcos does not hold any legal office nor possess any lawful authority under either the 1935 Constitution or the 1973 Constitution and therefore has no authority to issue the questioned proclamations. Hence. 17 SCRA 231-232. Del Rosario. et. This challenges the title of the incumbent President to the office of the Presidency and therefore is in the nature of a quo warranto proceedings. L-35571 and L-35573. The petitioners do not claim such right to the office and not one of them is the incumbent Solicitor General. 59 SCRA 183. 1081 issued on September 22. Nacionalista Party vs. orders. 85 Phil. Jan. Because of the far-reaching implications of the herein petition. 241). 127). that the question is to the validity of the Martial Law proclamation has been foreclosed by Section 3(2) of Article XVII of the 1973 Constitution. 50 SCRA 30. 17. Abelardo Subido. the appropriate action by which the title of a public officer can be questioned before the courts. L-35538-40. May 20. II This Court already ruled in the Ratification Cases "that there is no further judicial obstacle to the new Constitution being considered in force and effect. L-35546. Sept. 235-236. March 31. L-35538-40. 1973. binding and effective even after the lifting of Martial Law or the ratification of . 1972 by President Marcos because there was no arbitrariness in the issuance of said proclamation pursuant to the 1935 Constitution that the factual bases had not disappeared but had even been exacerbated. Bautista.. and of course by the existing political realities both in the conduct of national affairs and in our relation with countries" (Aquino. The foregoing governing legal principles on public officers are re-stated in order to avert any misapprehension that they have been eroded by Our resolution in the instant petition. 85 Phil." As Chief Justice Makalintal stressed in the Habeas Corpus cases. vs. 1966. 1967. 141). It is established jurisprudence that the legality of the appointment or election of a public officer cannot be questioned collaterally through a petition for prohibition which assails the validity of his official acts. L-35547. 30. issued or done by the incumbent President shall be part of the law of the land and shall remain valid. the issue as to its effectivity "has been laid to rest by Our decision in Javellana versus Executive Secretary (L-36142. City of Manila & Antonio Villegas vs. which provides that "all proclamations. instructions and acts promulgated. L-35556. the Court resolved to pass upon the issues raised. III In the aforesaid Habeas Corpus cases. legal. We affirmed the validity of Martial Law Proclamation No. Jr. Only the Solicitor General or the person who asserts title to the same office can legally file such a quo warranto petition. 1971. they have no personality to file the suit (Castro vs. 19 SCRA 197. 101.

3. 1973. the term of President Marcos tinder the 1935 Constitution was to terminate on December 30. While his term of office under the 1935 Constitution should have terminated on December 30. if he so desires. 1973. The logical consequence therefore is that President Marcos is a de jure President of the Republic of the Philippines.498 to 1. still during his incumbency. Marcos who shall initially convene the interim Assembly. 1973 by the sovereign people) in order to finish the reforms he initiated under Martial Law. As heretofore stated.. Enrile.this Constitution . 1973.". has become moot and purposeless as a consequence of the general referendum of July 2728. Jan. It was the incumbent President Marcos alone who issued Martial Law Proclamation No.. voted affirmatively on the proposal.118 (Osmeña vs. Jr. 240-242). vs. 1972 and issued orders and decrees as well as instructions and performed other acts as President prior to the approval on November 30... Do you want President Marcos to continue beyond 1973 and finish the reforms be initiated under Martial Law?" The overwhelming majority of those who cast their ballots. in whom "sovereignty resides . Enrile.000 electors as against 3. 1973 by the people. supra. by the general referendum of July 27-28. Marcos was duly reelected by the vote of the sovereign people in the Presidential elections of 1969 by an overwhelming vote of over 5. Jr. the sovereign people expressly authorized him to continue in office even beyond 1973 under the 1973 Constitution (which was validly ratified on January 17. can continue in office beyond 1973. vs. Whatever may be the nature of the exercise of that power by the President in the beginning — whether or not purely political and therefore non-justiciable — this Court is precluded from applying its judicial yardstick to the act of the sovereign.. and that "any inquiry by this Court in the present cases into the constitutional sufficiency of the factual bases for the proclamation of Martial Law. the President. 1973).436. al. The question propounded to the voters was: "Under the (1973) Constitution. Presidential Election Contest No." (Aquino. President Ferdinand E.000. The question was thereby removed from the area of presidential power under the Constitution and transferred to the seat of sovereignty itself. by virtue of his reelection in 1969. as this was the decision of the people. and all government authority emanates . 59 SCRA 183. 1973.000 votes for his rival. . 1972 of the new Constitution by the Constitutional Convention and prior to its ratification on January 17. Being the only incumbent President of the Philippines at the time of the approval of the new Constitution by the Constitutional Convention." it is therefore beyond the scope of judicial inquiry (Aquino.000. The new Constitution was approved by the Constitutional Convention on November 30. garnering a majority of from about 896. Under the 1935 Constitution. including citizens beyond 15 and 18 years. 1081 on September 22. the Constitutional Convention had nobody in mind except President Ferdinand E. et. and as aforestated.. 8. 242). supra. p.. 1972. Marcos.. IV The next issue is whether he is the incumbent President of the Philippines within the purview of Section 3 of Article XVII on the transitory provisions of the new or 1973 Constitution.

or unless expressly and explicitly modified or repealed by the regular National Assembly. instructions and acts promulgated. who shall then exercise their legislative powers vested by this Constitution (Sec. see also Chief Justice Stone's Concurring Opinion in Duncan vs. Art. because his term under the 1935 Constitution has yet to expire on December 30.. 1973 Constitution). to the defense of the political and social liberties of the people and to the institution of reforms to prevent the resurgence of rebellion or insurrection or secession or the threat thereof as well as to meet the impact of a worldwide recession. the Constitutional Convention.Consequently. 303. 327 US 304). Under the 1973 Constitution. binding and effective even after lifting of Martial Law or the ratification of this Constitution. in approving the new Constitution. 1972 and when it was ratified. decrees. the incumbent President of the Philippines can promulgate proclamations. the President is empowered to proclaim martial law. instructions or other acts of the incumbent President. Art. 3[l]. orders. IX. issued or done by the incumbent President shall be part of the law of the land. since President Marcos was the only incumbent President at the time. 1948 Ed. This conclusion is further buttressed by Section 10 of the same Article XVII which provides that "the incumbent members of the Judiciary may continue in office until they reach the age of 70 years unless sooner replaced in accordance with the preceding section hereof. Because President Ferdinand E. revoked or superseded by subsequent proclamations. pp. inflation or economic crisis which presently threatens all nations including highly developed countries (Rossiter. had in mind only him when in Section 3(2) of Article XVII of the new Constitution it provided "that all the proclamations. . 7. Marcos is the incumbent President referred to in Article XVII of the transitory provisions of the 1973 Constitution. he can "continue to exercise the powers and prerogatives under the nineteen hundred and thirty five Constitution and the powers vested in the President and the Prime Minister under this Constitution until he calls upon the interim National Assembly to elect the interim President and the interim Prime Minister. XVII. 12. decrees. unless modified. . Under the 1935 Constitution. Kahanamoku. and shall remain valid." There can be no dispute that the phrase "incumbent members of the Judiciary" can only refer to those members of the Judiciary who were already Justices and Judges of the various courts of the country at the time the Constitutional Convention approved the new Constitution on November 30. 1973 Constitution). Constitutional Dictatorship. WE affirm the proposition that as Commander-in-Chief and enforcer or administrator of martial law. orders. orders and decrees during the period of Martial Law essential to the security and preservation of the Republic. Marcos. it is the Prime Minister who is vested with such authority (Sec. legal. 1973." The term incumbent President of the Philippines employed in Section 9 of the same Article XVII likewise could only refer to President Ferdinand E.

extent and scope of the powers of the incumbent President of the Philippines. orders. revoking or superseding all his proclamations. 1973 Ed. Aruego. instructions. orders. are "part of the law of the land. But even if . p. 1973 Ed. or unless expressly and specifically modified or repealed by the regular National Assembly. decrees. decrees. decrees.. binding and effective even after the lifting of Martial Law or the ratification of this Constitution. rebellion or imminent danger thereof. 314.To dissipate all doubts as to the legality of such law-making authority by the President during the period of Martial Law. Dr." The entire paragraph of Section 3(2) is not a grant of authority to legislate. It expressly recognizes that the commander-in-chief. issued or done prior to the ratification of the 1973 Constitution. can exercise all necessary powers to meet the perils of invasion. when he states thus: 108. under general principles of constitutional law. and shall remain valid. underscores this recognition of the legislative power of the incumbent President as Commander-in-Chief during martial Law. — These Presidential Proclamations. Jose M.. (Aruego. revoked or superseded by subsequent proclamations. order. noted authority in Constitutional Law as well as delegate to the 1935 and 1971 Constitutional Conventions. modified. This provision complements Section 7. at the apex of which is the Supreme Court. Delegate Arturo Pacificador. in explaining Section 3(2) of Article XVII. insurrection. but a recognition of such power as already existing in favor of the incumbent President during the period of Martial Law. Both these classes of rules of law — by the President and by the lawmaking body — were. decrees and instructions by the incumbent President in the light of the prevailing conditions obtaining in the country. thus: The second paragraph sets forth the understanding of the Convention of the nature. 1973 of the new Constitution.. the inclusion of both group of rules — President rules and legislative rules — in the new Constitution for the people to approve or disapprove in the scheduled plebiscite. Hence. or repealed by the National Assembly. . instructions or other acts promulgated. decrees. shares this view. p. had been issued by the incumbent President in the exercise of what he consider to be his powers under martial law. 230).. Article XVII of the Constitution that "all existing laws not inconsistent with this Constitution shall remain operative until amended." The second paragraph is an express recognition on the part of the framers of the new Constitution of the wisdom of the proclamations. 1972 and prior to the ratification by the people on January 17. (Montejo. The power under the second clause of Section 3(2) is not limited merely to modifying. unless modified. under martial law. in the same manner that the lawmaking body had enacted several thousand statutes in the exercise of what it consider to be its power under the Organic Laws. instructions or other acts of the incumbent President. etc. issued or did prior to the approval by the Constitutional Convention on November 30. The New Constitution. instructions and acts he promulgated. under martial law. legal. a Floor Leader of the 1971 Constitutional Convention. presumed to be constitutional until declared unconstitutional by the agency charged with the power and function to pass upon constitutional law question — the Judiciary. emphasis supplied). orders. Section 3(2) of Article XVII of the New Constitution expressly affirms that all the proclamations. New Constitution. orders.

Balolong. al. The actions of the incumbent President are not without historical precedents.the scope of his legislative authority thereunder is to be limited to the subject matter of his previous proclamations. it cannot function until it is convened and thereafter duly organized with the election of its interim speaker and other officials. And yet President Abraham Lincoln during the Civil War. 637 and 637-A are analogous to the referenda of January. 1973. 1973. because Section 1 of Article XVII states that "there shall be an interim National Assembly which shall exist immediately upon the ratification of this Constitution and shall continue until the members of the regular National Assembly shall have been elected and shall have assumed office . . but the date of the organization of the city government was to be fixed by the President of the Philippines. does not confer expressly on the American President the power to proclaim Martial Law or to suspend the writ of habeas corpus. consistent with the prevailing conditions of peace and order in the country.. 486. and President Roosevelt during the Second World War. 1973 and July 27-28. et. 490492). decrees or instructions or acts. which National Assembly alone can exercise legislative powers during the period of transition. the theater of war was not in the United States. 1366 and 1366-A. vs. This distinction was clearly delineated in the case of Mejia. and necessarily was subsequent to the approval of its organic law (81 Phil. et. created agencies and offices and appropriated public funds therefor in connection with the prosecution of the war. Aruego himself. orders. emphasizing the immediacy of the peril to the safety of the Republic itself. This was revealed by no less than Delegate Jose M. Petitioners further argue that the President should call the interim National Assembly as required of him by Section 3(1) of Article XVII. 629. Petitioners likewise urge that the President should have convened the interim Assembly before the expiration of his term on December 30.. The interim Assembly already existed from the time the new Constitution was ratified. as well as Presidential Decrees Nos. 630. unlike the 1935 or 1973 Constitution of the Philippines. in the continents of Europe and Africa and in the Far East. which is hereby created. It should be stressed that there is a distinction between the existence of the interim Assembly and its organization as well as its functioning. The Constitutional Convention intended to leave to the President the determination of the time when he shall initially convene the interim National Assembly. There is therefore greater reason to affirm this law-making authority in favor of the incumbent President during the period of Martial Law. Nobody raised a finger to oppose the same.. where We held that from the phrase "the City of Dagupan.. without express constitutional or statutory authority. In the case of President Roosevelt." However. al. It should be recalled that the American Federal Constitution. the challenged Proclamations Nos. In the Philippines.." Dagupan City came into existence as a legal entity upon the approval of its Charter. who stated: . It was thousands of miles away. military engagements between the government forces and the rebels and secessionists are going on.

conditions have already normalized to permit the convening of the interim National Assembly. who affirmed: Under the first paragraph of this section. The Constitutional Convention. His decision to defer the initial convocation of the interim National Assembly was supported by the sovereign people at the referendum in January. many delegates felt that the incumbent President should be given the discretion to decide when the interim National Assembly should be convened because he would need its counsel and help in the administration of the affairs of the country.. 1973 referendum by the sovereign people indicating thereby their disenchantment with any Assembly as the former Congress failed to institutionalize the reforms they demanded and had wasted public funds through the endless debates without relieving the suffering of the general mass of citizenry. 314). — The Constitutional Convention could have fixed the date when the interim National Assembly should convene itself as it did with respect to the regular National Assembly. Petitioners likewise impugn the scheduled referendum on the ground that there can be no true expression of the people's will due to the climate of fear generated by Martial . Pacificador. 1973 Ed. p. . who are already ipso facto members of the interim National Assembly. the incumbent President is mandated to initially convene the interim National Assembly. with respect to the regular National Assembly. The New Constitution. Note that the word used is "shall" to indicate the mandatory nature of the desire of the Constitutional Convention that the interim National Assembly shall be convened by the incumbent President. 230). This was also disclosed by Delegate Arturo F. Convening the interim National Assembly. and state expressly when the election of the members of the regular National Assembly should be called? Many of the delegates felt that they could not be sure even of the proximate date when the general conditions of peace and order would make possible orderly elections.109. And in the event that it should convene.. (Montejo. 1973 when the people voted to postpone the convening of the interim National Assembly until after at least seven (7) years from the approval of the new Constitution. 1975. It is thus patent that the President is given the discretion as to when he shall convene the interim National Assembly after determining whether the conditions warrant the same. (The New Philippine Constitution by Aruego. because the issue was already decided in the January. 1973 Ed. This decision was deliberate to allow the incumbent President enough latitude of discretion to decide whether in the light of the emergency situation now prevailing. are against such inclusion. p. however. did not fix any definite time at which the incumbent President shall initially convene the interim National Assembly. is that even some members of the Congress and delegates of the Constitutional Convention. There would not have been any need for any Presidential call as there is none. why did the interim National Assembly not fix its tenure. But considering that the country had been already placed under martial law rule the success of which was conditioned upon the unity not only of planning but also in the execution of plans.. And the reason why the same question was eliminated from the questions to be submitted at the referendum on February 27..

And as opined by the Solicitor General. were a lot more free than the elections under the Old Society previous to the proclamation of Martial Law. the ballots were filled up and the election returns were accomplished before election day. And as heretofore stated. PC. if they were not being subjected to various forms of intimidation. And such assignment would be impossible.Law and that the period of free discussion and debate is limited to two weeks from February 7 to 21. such a brief period of discussion has its counterpart in previous plebiscites for constitutional amendments. In the Habeas Corpus cases. The first objection is not tenable because during the senatorial elections in 1951 and 1971. There was no Army. There was no buying of votes or buying the right not to vote. Yet the election was so free that a majority of the senatorial candidates of the opposition party were elected and there was no reprisal against or harrassment of any voter thereafter. but failure to fill up the ballot is not penalized. because the combined membership of the police. which was done also through secret ballot. Even animals and dead persons voted. and Army was then as now very much less than the number of precincts. In some areas. the previous referenda of January and July. during which period of suspension there was fear of arrest and detention. every qualified voter who fails to register or go to the polling place on referendum day is subject to prosecution. The voting was orderly. bus or other mode of transportation utilized to transport the voters to the various precincts of the country. 1973. as well as through fraud. Under the Old Society. 1973. let alone the number of voting booths. PC. 1973 was a decision by the sovereign people which cannot be reviewed by this Court. it is too late now for petitioners to challenge the validity of said referendum. where the will of the voter was subverted through "guns. as stressed by the Solicitor General. At any rate. 15 days were allotted for the publication in three consecutive issues of the Official Gazette of the women's suffrage . or police truck. is addressed to the wisdom of the President who may still amend the proclamation to extend the period of free discussion. Army or police personnel assigned to each election precinct or voting booth. Moreover. The second objection that the two-week period for free debate is too short. goons and gold". the privilege of the writ of habeas corpus was suspended. There was no PC. The same thing was true in the referendum of July 27-28. And no one would be left to fight the rebels or to maintain peace and order. The voters were likewise wined and dined and so prostituted that they refused to vote until the required monetary persuasion was proffered. without right of rebuttal from February 22 until the day of the referendum. Then again. We declared that the result of the referendum on July 2728. the voting was done in secrecy. Only one voter at a time entered the voting booth. The decisions in the electoral contests filed after every election under the Old Society attest to this very unflattering fact in our history. All modes of transportation were utilized by the candidates and their leaders to transport the voters to the precinct.

637 AND 637-A ARE HEREBY DECLARED VALID. DAR VS SUTTON DEPARTMENT OF AGRARIAN REFORM. ELLA T. 6657. which declared DAR Administrative Order (A. 2003 and February 4.: This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the Court of Appeals. respectively.And the Parity Amendment. Act No. an involved constitutional amendment affecting the economy as well as the independence of the Republic was publicized in three consecutive issues of the Official Gazette for 20 days prior to the plebiscite (Rep. PRESIDENTIAL PROCLAMATIONS NOS. DECISION PUNO. 20 days of publication in three consecutive issues of the Official Gazette was fixed (Com. AND THE PETITION IS HEREBY DISMISSED. took effect. On October 26. 1988. Act No.630. 517). . 629.O. Petitioner vs. inherited by respondents which has been devoted exclusively to cow and calf breeding. 1366 AND 1366-A AND PRESIDENTIAL DECREES NOS. 2004. For the 1940 constitutional amendments providing for the bicameral Congress. and the creation of the Commission on Elections. dated September 19. 34).) No. The period of 14 days for free discussion can compare favorably with the period required for publication of the proposed amendments under the Old Society. It included in its coverage farms used for raising livestock. On June 10. a new agrarian law. poultry and swine. Respondents. The constitutional amendment to append as ordinance the complicated Tydings-Kocialskowski Act of the US Federal Congress to the 1935 Constitution was published in only three consecutive issues of the Official Gazette for 10 days prior to the scheduled plebiscite (Com. 1937 (Com. Act No. Masbate. Act No. MARCOS IS HEREBY DECLARED DE JURE PRESIDENT OF THE REPUBLIC. respondents made a voluntary offer to sell (VOS)1 their landholdings to petitioner DAR to avail of certain incentives under the law. the reelection of the President and VicePresident. SUTTON-SOLIMAN and HARRY T. 9.A.amendment to the Constitution before the scheduled plebiscite on April 30. 492). The case at bar involves a land in Aroroy. PONCE (OIC). series of 1993. also known as the Comprehensive Agrarian Reform Law (CARL) of 1988. 73). pursuant to the then existing agrarian reform program of the government. 1987.) No. WITHOUT COSTS. WHEREFORE. J. SUTTON. DELIA T. SUTTON. PRESIDENT FERDINAND E. Republic Act (R. represented by SECRETARY JOSE MARI B. null and void for being violative of the Constitution.

2001. On February 4.4 Petitioner ignored their request. No. On December 27. s. Hence. 1993.O. 1993. 9. s.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the operations of the CARL. Petitioner ordered the rest of respondents’ landholding to be segregated and placed under Compulsory Acquisition. 1988 shall be excluded from the coverage of the CARL. and a ratio of 1. 1993.5635 hectares for infrastructure. their entire landholding is exempted from the CARL. which provided for a ratio between land and livestock in determining the land area qualified for exclusion from the CARL. 9. In determining the area of land to be excluded.O. s. 1 hectare of land per 1 head of animal shall be retained by the landowner). then DAR Secretary Ernesto D.O. fixed the following retention limits. Respondents moved for reconsideration. 1993.8 They filed a notice of appeal9 with the Office of the President assailing: (1) the reasonableness and validity of DAR A. and a maximum of 102. poultry and swine as of June 15.. On October 9. No. we declared as unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian reform. inspected respondents’ land and found that it was devoted solely to cattle-raising and breeding. in an en banc decision in the case of Luz Farms v. DAR issued A. On April 27.O. Their motion was denied. petitioner exempted 1. Secretary of DAR. In view of the Luz Farms ruling. They contend that their entire landholding should be exempted as it is devoted exclusively to cattle-raising. 1993. 9. the Municipal Agrarian Reform Officer of Aroroy. series of 1993. No. 1990. Applying the retention limits outlined in the DAR A.209 hectares of respondents’ land for grazing purposes. viz: 1:1 animal-land ratio (i. He recommended to the DAR Secretary that it be exempted from the coverage of the CARL.5 which provided that only portions of private agricultural lands used for the raising of livestock.On December 4. the A. Garilao issued an Order7 partially granting the application of respondents for exemption from the coverage of CARL. 1995. the Office of the President affirmed the impugned Order of petitioner DAR. under the Luz Farms doctrine. No.e. Masbate. does not run counter to the Luz Farms case as . No. in view of the Luz Farms case which declared cattle-raising lands excluded from the coverage of agrarian reform.10 It ruled that DAR A. 9. respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the supporting papers they submitted in connection therewith.O. respondents filed with petitioner DAR a formal request to withdraw their VOS as their landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL.3 On December 21.O.2 this Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of agricultural land. respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal of their VOS as.6 On September 14. 1992. 9. and (2) the constitutionality of DAR A. 1994.

i. Nor can it be used to enlarge the power of the administrative agency beyond the scope intended. Administrative agencies are endowed with powers legislative in nature. Invoking its rule-making power under Section 49 of the CARL.O. 09. Petitioner’s arguments fail to impress. They have been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. they are not immune from judicial review.e. On appeal. Petitioner also contends that the A. However. series of 1993. provided the guidelines to determine whether a certain parcel of land is being used for cattle-raising.11 Hence. No. DAR Administrative Order No. void for being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform program of the government. was left for the determination of the courts as the sole arbiters of such issue. However. SO ORDERED. the power to make rules and regulations. this petition.the A.. 9. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department of Agrarian Reform’s ruling that petitioners’ landholding is covered by the agrarian reform program of the government is REVERSED and SET ASIDE.O. while administrative rules and regulations have the force and effect of law. Series of 1993 is hereby DECLARED null and void.O. premises considered. No. to be valid.O.14 . 9.12 They may be properly challenged before the courts to ensure that they do not violate the Constitution and no grave abuse of administrative discretion is committed by the administrative body concerned. No. the issue on the constitutionality of the assailed A. The dispositive portion reads: WHEREFORE. The fundamental rule in administrative law is that. The main issue in the case at bar is the constitutionality of DAR A. It declared DAR A.O. administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution.O. 1993. petitioner submits that it issued DAR A. s. which prescribes a maximum retention limit for owners of lands devoted to livestock raising.13 The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their regulations. 9 to limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private agricultural lands under the coverage of agrarian reform. Delegated rule-making has become a practical necessity in modern governance due to the increasing complexity and variety of public functions. the Court of Appeals ruled in favor of the respondents. seeks to remedy reports that some unscrupulous landowners have converted their agricultural farms to livestock farms in order to evade their coverage in the agrarian reform program.

poultry and swine have been classified as industrial. in Natalia Realty. lands and thus exempt from agrarian reform. petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. we find that the impugned A. activity. It must be stressed that what the CARL prohibits is the conversion of agricultural lands for non-agricultural purposes after the effectivity of the CARL. deepwells. the term "agricultural land" does not include lands classified as mineral. feedmill with grinders.In the case at bar. anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds. The A. it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial change is an implied legislative approval and adoption of the . However. forest. swine and poultry is different from crop or tree farming. in issuing the impugned A.17 We stressed anew that while Section 4 of R. Inc. commercial or industrial. Indeed. inter alia. A great portion of the investment in this enterprise is in the form of industrial fixed assets. and other technological appurtenances. such as: animal housing structures and facilities. Lands devoted to raising of livestock. Petitioner DAR argues that. the Court held that industrial. it was seeking to address the reports it has received that some unscrupulous landowners have been converting their agricultural lands to livestock farms to avoid their coverage by the agrarian reform. drainage. pumphouses. elevated water tanks. DAR16 reiterated our ruling in the Luz Farms case. The subsequent case of Natalia Realty. It is an industrial. The Court clarified in the Luz Farms case that livestock. In Natalia Realty. we find neither merit nor logic in this contention. exhausts and generators. conveyors. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. The undesirable scenario which petitioner seeks to prevent with the issuance of the A. not an agricultural. all lands exclusively devoted to livestock.18 Petitioner DAR does not dispute this fact. No.O. v. Again. swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural activity. sprayers. extensive warehousing facilities for feeds and other supplies. There has been no change of business interest in the case of respondents. is invalid as it contravenes the Constitution..raising. which are arable yet still undeveloped. there is no evidence on record that respondents have just recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended to evade its coverage. commercial and residential lands are not covered by the CARL. Respondents’ family acquired their landholdings as early as 1948. Moreover.A. could not be considered as agricultural lands subject to agrarian reform as these lots were already classified as residential lands. 6657 provides that the CARL shall cover all public and private agricultural lands. swine and poultry. It has exceeded its power in issuing the assailed A.O.O. not agricultural. residential. even portions of the Antipolo Hills Subdivision. Thus. waterers and blowers.O. mixers.O.15 Clearly. A similar logical deduction should be followed in the case at bar. clearly does not apply in this case." The raising of livestock. They have long been in the business of breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the Philippines. the deliberations of the 1987 Constitutional Commission show a clear intent to exclude.

No. IN VIEW WHEREOF. dated September 19. To be valid.22 The assailed A. are AFFIRMED. Congress seeks to supersede an earlier one. Specifically. Congress enacted R. poultry and swineraising. 788120 which amended certain provisions of the CARL.21 With this significant modification. No pronouncement as to costs. In case of conflict between an administrative order and the provisions of the Constitution. They cannot amend or extend the Constitution. In sum. the latter prevails. after the passage of the 1988 CARL. it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. 2004. by making a new law. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution. Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform. SO ORDERED. respectively.19 In the case at bar. . the new law changed the definition of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands that are devoted to commercial livestock. On the other hand. 2003 and February 4.O.previous law. The assailed Decision and Resolution of the Court of Appeals.A. the petition is DISMISSED. they must conform to and be consistent with the Constitution.