Article XII - DigestsSection 2: EDU of Natural Resources:MAGALONA VS.

ERMITA, G.R. 187167, August 16, 2011FACTS :The antecedent facts of this
case emerged upon the passing of Republic Act 3046 in 1961. The laws
purpose isto demarcate themaritime baselines of the Philippines as it was
deemed to be an archipelago. RA 3046 stoodunchallenged until 2009, when
Congress amended it and passed RA9522. This amending law shortened one
baseline and determined new base points of the archipelago. Moreso, it has
identified the KalayaanIslandGroup and theScarborough Shoal, as "regimes of
islands", generating their own maritime zones.The petitioners filed a case
assailing the constitutionality of RA 9522. To their opinion, the law has
effectivelyreduced the maritime territory of the country. With this, Article I of
the 1987 Constitution will be violated. The petitioners also worriedthat that
because of the suggested changes in the maritime baselines will allow for
foreign aircrafts and vessels to traverse the Philippine territoryfreely. In effect,
it steps on the statessovereignty and national security. Meanwhile, the
Congress insisted that in no way will the amendments affect anypertinent
power of the state. It also deferred to agree that the law impliedly relinquishes
the Philippines claims over Sabah. Lastly, they have questioned thenormative
force of the notion that all the waters within the rectangular boundaries in the
Treaty of Paris. Now, because this treaty still has undeterminedcontroversies,
the Congress believes that in the perspective of international law, it did not see
any binding obligation to honor it. Thus, this case of prayer for writs
ofcertiorari and prohibition is filed before the court, assailing the
constitutionality of RA 9522.
ISSUE: Is R.A. 9522, the amendatory Philippine Baseline Law, violative of
Section 2, paragraph 2, Article XII of the Constitution?
RULING: No. The Court dismissed the case. It upheld the constitutionality of
the law and made it clear that it has merely demarcated the countrysmaritime
zones and continental shelves in accordance to UNCLOS III. Secondly,
theCourt found that the framework of the regime of islandssuggested by the
law is not incongruent with the Philippines enjoyment of territorial
sovereignty over the areas of Kalayaan Group of Islands and theScarborough.
Third, the court reiterated that the claims over Sabah remained even with the
adoption of the amendments. Further, the Court importantly stressedthat the
baseline laws are mere mechanisms for the UNCLOS III to precisely describe
the delimitations. It serves as a notice to the international family of states andit
is in no way affecting or producing any effect like enlargement or diminution
of territories. With regard to the petitioners assertion that RA 9522
hasconverted the internal waters into archipelagicwaters, the Court did not
appear to be persuaded. Instead, the Court suggested that the political branches
of Government can pass domestic laws that will aid in thecompetent security
measures and policies that will regulate innocent passage. Since the Court
emphasized innocent passage as a right based on customary law, italso
believes that no state can validly invoke sovereignty to deny a right
acknowledged by modern states. In the case of archipelagic states such as
ours, UNCLOS III required the imposition of innocent passage as a concession
in lieu of their right to claim the entire waters landward baseline. It also made
it possible for archipelagic states to be recognized as a cohesive entity under
the UNCLOS III.

Dizon Copper vs. Dr. Dizon, GR 183573, July 16, 2012

Facts: CelestinoDizon (Celestino) filed with Declarations of Location over 57
mining claims in Zambales. In 1966, herein petitionerDizon Copper-Silver
Mines, Inc. was organized. Among its incorporators were Celestino and his
son, herein respondent Dr. Luis D.Dizon. Celestino assigned their 57 mining
claims to petitioner. Petitioner entered into an Operating Agreement with
BenguetCorporation (Benguet). In such agreement, petitioner authorized
Benguet to, among others, explore, equip, develop and operatethe 57
mining claims. In 1978, the 57 mining claims became the subject of a mining
lease application with the Bureau of Mines.Consequently, the government
issued 5 Mining Lease Contracts (MLCs) covering 6 out of the 57 mining
claims. Benguet filed anMPSA application with the DENR. Benguet and
petitioner terminated their Operating Agreement. In 2004, Benguet assigned
MPSA-P-III-16 in favor of the latter. And this was recorded in the name of
petitioner. Petitioner sent a letter to the DENR MGB RO-III,requesting the
said office to include the 6 mining claims under MLCs in MPSA-P-III-16. The
request was approved. Despite thependency of MPSA-P-III-16, petitioner
nonetheless filed with the DENR another MPSA application designated as
MPSA-P-III-03-05and covers all 57 of its mining claims, inclusive of the 6
under MLCs. On the other hand, respondent filed with the DENR his MPSAP-III-05-05, an MPSA application covering 281.9544 hectares of mineral
location in Zambales. It includes the 6 mining claimsunder MLCs.
Subsequently, the DENR MGB RO-III verified that several areas applied for
by respondent in MPSA-P-III-05-05overlaps with those in petitioners
application. The DENR Secretary issued an Order declaring petitioners
MPSA-P-III-16 andMPSA-P-III-03-05 void ab initio.
Issue:What is a mineral production sharing agreement? Is itviolative of sec. 2,
par. 2g, Article 12 of the Constitution?
Ruling:A Mineral Production Sharing Agreement (MPSA) is one of the
mineral agreements innovated by the 1987 Constitution bywhich the State
takes on a broader and more dynamic role in the exploration, development and
utilization of the countrys mineralresources. By such agreements, the
government does not become a mere licensor, concessor or lessor of mining
resourcesbutactually assumes full control and supervision in the
exploration, development and utilization of the concerned mining claims,
inconsonance with Section 2, Article XII of the Constitution.
2006 BAR: True or False
A law creating a state corporation to exploit, develop, and utilize compressed
natural gas.
SUGGESTED ANSWER: The law is valid as under Article XII, Section 2 of
the 1987 Constitution, the exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State. It is also
provided that the State may directly undertake such activities or it may enter
into co-production, joint venture or sharing agreements with Filipino citizens
or corporations orassociations, at least 60% Filipino-owned. Furthermore, the
President may enter into agreements with foreign-owned corporations
involving technical or financialassistance for large-scale exploration,
development, and utilization of minerals, petroleum and other mineral oils,

according to termsand conditions provided by law. A state corporation, unlike

a private corporation, may be created by special law and placed under
thecontrol of the President, subject to such conditions as the creating statute
may provide.
Section 3. Lands of Public Domain:
Secretary of DENR vs. Yap, G.R. No. 167707, OCT. 8, 2008, 568 SCRA 164
FACTS: On May 22, 2006, during the pendency of G.R. No. 167707,
President Gloria Macapagal-Arroyo issued Proclamation No.1064 classifying
Boracay Island into four hundred (400) hectares of reserved forest land
(protection purposes) and six hundredtwenty-eight and 96/100 (628.96)
hectares of agricultural land (alienable and disposable). The Proclamation
likewise provided for afifteen-meter buffer zone on each side of the centerline
of roads and trails, reserved for right-of-way and which shall form part of
thearea reserved for forest land protection purposes.On August 10, 2006,
petitioners-claimants Dr. Sacay, WilfredoGelito, and otherlandowners in
Boracay filed with this Court an original petition for prohibition, mandamus,
and nullification of Proclamation No.1064. They allege that the Proclamation
infringed on their "prior vested rights" over portions of Boracay. They have
been incontinued possession of their respective lots in Boracay since time
immemorial. They have also invested billions of pesos indeveloping their
lands and building internationally renowned first class resorts on their lots.
Petitioners-claimants contended that there is no need for a proclamation
reclassifying Boracay into agricultural land.Neither being classified as neither
mineral nor timber land, the island is deemed agricultural pursuant to the
Philippine Bill of 1902and Act No. 926, known as the first Public Land
Act.Thus, their possession in the concept of owner for the required period
entitledthem to judicial confirmation of imperfect title.
Issue: Is PGMAs Presidential Proclamation No. 1065 classifying Boracay
Islands into 400 hectares of reserved forest land and 628hectares of
agricultural land (alienable and disposable), valid and constitutional?
Ruling: Yes. Proclamation No. 1064 of 2006 which positively declared part of
Boracay as alienable and opened the same to privateownership. Sections 6 and
7 of CA No. 141 provide that it is only the President, upon the
recommendation of the proper departmenthead, who has the authority to
classify the lands of the public domain into alienable or disposable, timber and
mineral lands. Inissuing Proclamation No. 1064, President Gloria MacapagalArroyo merely exercised the authority granted to her to classify lands ofthe
public domain, presumably subject to existing vested rights. Classification of
public lands is the exclusive prerogative of theExecutive Department, through
the Office of the President. Courts have no authority to do so. Absent such
classification, the landremains unclassified until released and rendered open to
disposition. Proclamation No. 1064 classifies Boracay into 400 hectares
ofreserved forest land and 628.96 hectares of agricultural land. The
Proclamation likewise provides for a 15-meter buffer zone on eachside of the
center line of roads and trails, which are reserved for right of way and which
shall form part of the area reserved for forestland protection purposes.Contrary
to private claimants argument, there was nothing invalid or irregular, much
lessunconstitutional, about the classification of Boracay Island made by the
President through Proclamation No. 1064. It was within herauthority to make

such classification, subject to existing vested rights.Proclamation No. 1064

does not violate the Comprehensive Agrarian Reform Law.
2004 BAR:EAP is a government corporation created for the purpose of
reclaiming lands including foreshore and submerged areas,as well as to
develop, improve, acquire, lease and sell any and all kinds of lands. A law was
passed transferring title to EAP of landsalready reclaimed in the foreshore and
offshore areas of MM Bay, particularly the so-called Liberty Islands, as
alienable anddisposable lands of the public domain. Titles were duly issued in
EAPs name. Subsequently, EAP entered into a joint ventureagreement (JVA)
with ARI, a private foreign corporation, to develop Liberty Islands.
Additionally, the JVA provided for thereclamation of 250 hectares of
submerged land in the area surrounding Liberty Islands. EAP agreed to sell
and transfer to ARI aportion of Liberty Islands and a portion of the area to be
reclaimed as the consideration for ARIs role and participation in the
jointventure, upon approval by the Office of the President. Is there any
constitutional obstacle to the sale and transfer by EAP to ARI ofboth portions
as provided for in the JVA?
SUGGESTED ANSWER: ARI cannot acquire a portion of Liberty Islands
because, although EAP has title to Liberty Islands and thus such lands
arealienable and disposable land, they cannot be sold, only leased, to private
corporations. The portion of the area to be reclaimedcannot be sold and
transferred to ARI because the seabed is inalienable land of the public domain.
(Section 3, Article XII of the 1987Constitution; Chavez v. Public Estates
Authority, 384 SCRA 152 [2002]).
Section 4. Forest Lands and Parks:
Apex Mining vs SMGM Corp., G.R. No. 152613,November 20, 2009Facts:
Southeast Mindanao Gold Mining Corporation (SMGM) assails the Courts
Decision dated 23 June 2006, which held thatthe assignment of Exploration
Permit (EP) 133 in favor of SMGM violated one of the conditions stipulated in
the permit, i.e., that thesame shall be for the exclusive use and benefit of
Marcopper Mining Corporation (MMC) or its duly authorized agents. In view
of this, and considering that under Section 5 of Republic Act No. 7942,
otherwise known as the Mining Act of1995, mining operations in mineral
reservations may be undertaken directly by the State or through a contractor,
the Court deemedthe issue of ownership of priority right over the contested
Diwalwal Gold Rush Area as having been overtaken by the said proclamation.
Thus, it was held in the Assailed Decision that it is now within the prerogative
of the Executive Department to undertake directly the mining operations of the
disputed area or to award the operations to private entities including
petitionersApex and Balite, subject to applicable laws, rules and regulations,
and provided that these private entities are qualified.
Issue: Is PP No. 297, declaring the Diwalwal Gold Rush Area as a mineral
reservation, valid and constitutional, on the ground thatit lacks the concurrence
of Congress as mandated by Section 4, Article XII of the Constitution?
Ruling: PP No. 297 is valid and constitutional even without concurrence from
Congress. The Court recognized that the questionedproclamation came from a
co-equal branch of government, which entitled it to a strong presumption of
constitutionality. Thepresumption of its constitutionality stands inasmuch as
the parties in the instant cases did not question its validity, much lesspresent
any evidence to prove that the same is unconstitutional. Section 4, Article XII

of the Constitution provides that the area covered by forest lands and national
parks may not beexpanded or reduced, unless pursuant to a law enacted by
Congress. SEM does not allege nor present any evidence that Congress
hadalready enacted a statute determining with specific limits forest lands and
national parks. Considering the absence of such law,Proclamation No. 297
could not have violated Section 4, Article XII of the 1987 Constitution. In
addition, there is nothing in the constitutional provision that prohibits the
President from declaring a forest land as anenvironmentally critical area and
from regulating the mining operations therein by declaring it as a mineral
reservation in order toprevent the further degradation of the forest
environment and to resolve the health and peace and order problems that beset
thearea. **you can opt not to write the 3rd paragraph in the index card**
Section 7. Private Land Ownership:
Matthews vs. Taylor, G.R. 164584, June 22, 2009
Facts: On June 20, 1988. Respondent Benjamin Taylor, a British, married a
Filipina named Joselyn Taylor. Eventually, they bought a lot. The transaction
was said to be financed by Benjamin. Joselyn and Benjamin constructed
improvements and made an inn to the said lot. Permits and licenses were
secured for the establishment. Three years passed and their relationship turned
sourand Joselyn ran away with Philip Matthews. On July 20, 1992, Joselyn as
lessor and petitioner Philip Matthews as lessee, entered into an Agreement of
Lease (Agreement)involving the Boracay property for a period of 25 years,
with an annual rental of P12,000.00. The agreement was signed by theparties
and executed before a Notary Public. Petitioner thereafter took possession of
the property and renamed the resort as MusicGarden Resort.Claiming that the
Agreement was null and void since it was entered into by Joselyn without his
(Benjamins) consent, Benjamininstituted an action for Declaration of Nullity
of Agreement of Lease with Damages against Joselyn and the petitioner.
Issue: Can an alien husband nullify a lease contract entered into by his Filipina
wife over a land bought during their marriage?
Ruling: The rule is clear and inflexible: aliens are absolutely not allowed to
acquire public or private lands in the Philippines, saveonly in constitutionally
recognized exceptions. There is no rule more settled than this constitutional
prohibition, as more and more aliens attempt to circumvent the provision by
trying to own lands through another. Benjamin has no right to nullify the
Agreement of Lease between Joselyn and petitioner. Benjamin, being an alien,
isabsolutely prohibited from acquiring private and public lands in the
Philippines. Considering that Joselyn appeared to be the designated vendee
in the Deed of Sale of said property, she acquired sole ownership thereto. This
is true even if we sustainBenjamins claim that he provided the funds for such
acquisition. By entering into such contract knowing that it was illegal,
noimplied trust was created in his favor; no reimbursement for his expenses
can be allowed; and no declaration can be made that the subject property was
part of the conjugal/community property of the spouses. In any event, he had
and has no capacity orpersonality to question the subsequent lease of the
Boracay property by his wife on the theory that in so doing, he was
merelyexercising the prerogative of a husband in respect of conjugal property.

1998 BAR:Express your agreement or disagreement with any of the following

statements. Begin your answer with the statement: "IAGREE" or
"DISAGREE" as the case may be.
1. Anyone, whether Individual, corporation or association, qualified to acquire
private lands is also qualified to acquire public landsin the Philippines.
2. A religious corporation is qualified to have lands in the Philippines on
which it may build Its church and make otherimprovements provided these are
actually, directly and exclusively used for religious purposes.
3. A religious corporation cannot lease private lands In the Philippines.
4. A religious corporation can acquire private lands in the Philippines provided
all its members are citizens of the Philippines.
5. A foreign corporation can only lease private lands in the Philippines.
SUGGESTED ANSWER:
1.) I disagree. Under Section 7, Article XII of the Constitution, a corporation
or association which is sixty percent owned by Filipinocitizens can acquire
private land, because it can lease public land and can therefore hold public
land. However, it cannot acquirepublic land. Under Section 3, Article XII of
the Constitution, private corporations and associations can only lease and
cannot acquirepublic land. Under Section 8, Article XII of the Constitution, a
natural-born Filipino citizen who lost his Philippine citizenship mayacquire
private land only and cannot acquire public land.
2.) I disagree. The mere fact that a corporation is religious does not entitle it to
own public land. As held In Register of Deeds vs.UngSiu Si Temple, 97 Phil.
58, 61, land tenure is not indispensable to the free exercise and enjoyment of
religious profession ofworship. The religious corporation can own private land
only if it is at least sixty per cent owned by Filipino citizens.
3.) I disagree. Under Section 1 of Presidential Decree No. 471, corporations
and associations owned by aliens are allowed to leaseprivate lands up to
twenty-five years, renewable for another period of twenty-five years upon
agreement of the lessor and the lessee.Hence, even if the religious corporation
is owned by aliens, it can lease private lands.
4.) I disagree. For a corporation to qualify to acquire private lands in the
Philippines, under Section 7, Article Xn of the Constitutionin relation to
Section 2, Article XII of the Constitution, only sixty per cent (60%) of the
corporation is required to be owned byFilipino citizens for it to qualify to
acquire private lands.
5.) I agree. A foreign corporation can lease private lands only and cannot lease
public land. Under Section 2, Article XII of theConstitution, the exploration,
development and utilization of public lands may be undertaken through coproduction. Joint ventureor production-sharing agreements only with Filipino
citizen or corporations or associations which are at least sixty per cent
ownedby Filipino citizen.
2009 BAR: True or FalseAliens are absolutely prohibited from owning private
lands in the Philippines.
SUGGESTED ANSWER:False, Aliens may own private lands in the
Philippines if they acquire the property through hereditary succession. Also,
natural-bornFilipino citizen who lost their Philippine citizenship may be
transferees of private lands, subject to limitations provided by law.2011 BAR:
Althea, a Filipino citizen, bought a lot in the Philippines in 1975.
Herpredecessors-in-interest have been in open, continuous, exclusive and

notoriouspossession of the lot since 1940, in the concept of owner. In 1988,

Altheabecame a naturalized Australian citizen.
Is she qualified to apply for registrationof the lot in her name?
The answer is C
A. Yes, provided she acquires back her Filipino citizenship.
B. No, except when it can be proved that Australia has a counterpart domestic
law that also favors former Filipino citizens residing there.
C. Yes, the lot is already private in character and as a former naturalbornFilipino, she can buy the lot and apply for its registration in her name
D. No, foreigners are not allowed to own lands in the Philippines.Section 8.
Property Rights of former natural born Filipinos:
2000 BAR:State whether or not the following law is constitutional. Explain
briefly. No XVIII.
a) Andy Lim, an ethnic Chinese, became a naturalized Filipino in 1935. But
later he lost his Filipino citizenshipwhen he became a citizen of Canada in
1971. Wanting the best of both worlds, he bought, in 1987, a residential lot in
Forbes Park anda commercial lot in Binondo. Are these sales valid? Why?
(3%)Answer: No, the sales are not valid. Under Section 8, Article XII of the
Constitution, only a natural-born citizen of the Philippineswho lost his
Philippine citizenship may acquire private land. Since Andy Lim was a former
naturalized Filipino citizen, he is notqualified to acquire private lands.
Section 10.Filipinized Areas of Investments:
Espina vs. Bautista, G.R. 143855, Sept. 21, 2010
On March 7, 2000 President Joseph E. Estrada signed into law Republic Act
(R.A.) 8762, also known as the Retail TradeLiberalization Act of 2000. It
expressly repealed R.A. 1180, which absolutely prohibited foreign nationals
from engaging in the retail trade business. R.A. 8762 also allows natural-born
Filipino citizens, who had lost their citizenship and now reside in the
Philippines,to engage in the retail trade business with the same rights as
Filipino citizens. On October 11, 2000 petitioners filed the present petition,
assailing the constitutionality of R.A. 8762 on the grounds that the
implementation of R.A. 8762 would lead to alien control of the retail trade,
which taken together with alien dominance of other areas of business, would
result in the loss of effective Filipino control of the economy, foreign retailers
like Walmart and K-Mart would crush Filipino retailers and sari-sari store
vendors, destroyself-employment, and bring about more unemployment
.Issue: Does R.A. 8762 [Retail Trade Liberalization Act of 2000], violate the
constitutional mandate in Filipinization of areas ofinvestments?
Ruling: No, there is no showing that the law has contravened any
constitutional mandate. The Court is not convinced that the implementation of
R.A. 8762 would eventually lead to alien control of the retail trade business.
Petitioners have not mustered any concrete and strong argument to support its
thesis. The law itself has provided strict safeguards on foreign participation in
that business. The Court explained in Taada v. Angara, the provisions of
Article II of the 1987 Constitution, the declarations of principles and state
policies, are not self-executing. Legislative failure to pursue such policies
cannot give rise to a cause of action in the courts. While Section 19, Article II
of the 1987 Constitution requires the development of a self-reliant and
independent national economy effectively controlled by Filipino

entrepreneurs, it does not impose a policy of Filipino monopoly of the

economic environment. The objective is simply to prohibit foreign powers or
interests from maneuvering our economic policies and ensure that Filipinos
are given preference in all areas of development. More importantly, Section
10, Article XII of the 1987 Constitution gives Congress the discretion to
reserve to Filipinos certain areas of investments upon the recommendation of
the NEDA and when the national interest requires. Thus, Congress can
determine what policy to pass and when to pass it depending on the economic
exigencies. It can enact laws allowing the entry of foreigners into certain
industries not reserved by the Constitution to Filipino citizens. In this case,
Congress has decided to open certain areas of the retail trade business to
foreign investments instead of reserving them exclusively to Filipino citizens.
The NEDA has not opposed such policy.
2006 BAR:
State whether or not the following laws are constitutional. Explain briefly.
A law prohibiting Chinese citizens from engaging in retail trade.
(2%)SUGGESTED ANSWER: The law is invalid as it singles out and
deprives Chinese citizens from engaging in retail trade. In Ichong v.
Hernandez, G.R.No. L-7995, May 31,1957, the court held that the Treaty of
Amity between the Republic of the Philippines and the Republic of China
guarantees equality of treatment to the Chinese nationals upon the same
terms as the nationals of any other country. Thus, the court ruled therein that
the nationals of China are not discriminated against because nationals of all
other countries, except those of the United States, who are granted special
rights by the Constitution, are all prohibited from engaging in the retail trade.
In the case at bar, the law discriminates only against Chinese citizens and thus
violates the equal protection Clause. ____
Section 11. Public Utilities:Francisco vs. TRB, G.R. No. 166910, Oct. 19,
2010
Facts: In 1977, Pres. Marcos issued P.D. 1112, authorizing the establishment
of toll facilities on public improvements. It acknowledged the huge financial
requirements and the need to tap into the resources of the private sector to
implement the program.In order to attract the private sector, P.D. 1112 created
the Toll Regulatory Board (TRB) and allowed the collection of toll fees for the
use of certain public improvements, allowing a reasonable rate of ROI.
P.D.1113 was also issued, granting to PNCC a franchise to construct toll
facilities with a right to collect fees as the TRB may fix. TRB and PNCC
signed an agreement for the operation of the expressway. In 1983, PNCC was
granted a franchise over MMEX. As stated in the previous P.D.s. PNCC may
sell its franchise upon the Presidents approval, then came the 1987
Constitution with its franchise provision. Petitioners assail the constitutionality
ofSections 3 (a) and (d) of P.D. 1112 in relation to Section 8 (b) of P.D. 1894
insofar as they vested the TRB, on one hand,toll operation awarding power
while, on the other hand, granting it also the power to issue, modify and
promulgate toll rate charges. The TRB, so petitioners bemoan, cannot be an
awarding party of a TOA and, at the same time, be the regulator of the toll way
industry and an adjudicator of rate exactions disputes.
Issue: Is the authority to grant public utility franchise an exclusive legislative
power? Can it be delegated? Is a congressional franchise necessary before a
public utility may operate?

Ruling: A franchise is basically a legislative grant of a special privilege to a

person, which includes not only authorizations issuing directly from Congress
in the form of statute, but also those granted by administrative agencies to
which the power to grant franchise has been delegated by Congress. The
power to authorize and control a public utility is admittedly a prerogative that
stems from the Legislature. Any suggestion, however, that only Congress has
the authority to grant a public utility franchise is less than accurate. As stressed
in Albano v. Reyes, there is nothing in the Constitution remotely indicating the
necessity of a congressional franchise before each and every public utility may
operate. That the Constitution provides that the issuance of a franchise,
certificate or other form of authorization for the operation of a public utility
shall be subject to amendment, alteration or repeal by Congress does not
necessarily imply that only Congress has the power to grant such
authorization. In such a case, therefore, a special franchise directlyemanating
from Congress is not necessary if the law already specifically authorizes an
administrative body to grant a franchise or toaward a contract. Under the 1987
Constitution, Congress has an explicit authority to grant a public utility
franchise. However, it mayvalidly delegate its legislative authority, under the
power of subordinate legislation, to issue franchises of certain public utilities
tosome administrative agencies.Gamboa vs. Teves, G.R. No. 176579, June 28,
2011 This is a petition to nullify the sale of shares of stock of Philippine
Telecommunications Investment Corporation (PTIC) bythe government of the
Republic of the Philippines, acting through the Inter-Agency Privatization
Council (IPC), to Metro PacificAssets Holdings, Inc. (MPAH), an affiliate of
First Pacific Company Limited (First Pacific), a Hong Kong-based
investmentmanagement and holding company and a shareholder of the
Philippine Long Distance Telephone Company (PLDT). The petitioner
questioned the sale on the ground that it also involved an indirect sale of 12
million shares (or about 6.3percent of the outstanding common shares) of
PLDT owned by PTIC to First Pacific. With the this sale, First Pacifics
commonshareholdings in PLDT increased from 30.7 percent to 37 percent,
thereby increasing the total common shareholdings of foreignersin PLDT to
about 81.47%. This, according to the petitioner, violates Section 11, Article
XII of the 1987 Philippine Constitution whichlimits foreign ownership of the
capital of a public utility to not more than 40%.Issue: Is section 11, Article
XII, enabling or self-executing? Does the term capital in Section 11,
Article refer to the total commonshares only or to the total outstanding capital
stock (combined total of common and non-voting preferred shares) of PLDT, a
publicutility?Ruling:a.) Self-executing. Section 11, Article XII of the
Constitution, like other provisions of the Constitution expressly reserving
toFilipinos specific areas of investment, such as the development of natural
resources and ownership of land, educational institutionsand advertising
business, is self-executing. There is no need for legislation to implement these
self-executing provisions of theConstitution. The rationale why these
constitutional provisions are self-executing was explained in Manila Prince
Hotel v. GSIS. To treat Section 11, Article XII of the Constitution as not selfexecuting would mean that since the 1935 Constitution, or overthe last 75
years, not one of the constitutional provisions expressly reserving specific
areas of investments to corporations, at least 60percent of the capital of
which is owned by Filipinos, was enforceable. In short, the framers of the

1935, 1973 and 1987Constitutions miserably failed to effectively reserve to

Filipinos specific areas of investment, like the operation by corporations
ofpublic utilities, the exploitation by corporations of mineral resources, the
ownership by corporations of real estate, and theownership of educational
institutions. All the legislatures that convened since 1935 also miserably failed
to enact legislations toimplement these vital constitutional provisions that
determine who will effectively control the national economy, Filipinos
orforeigners. This Court cannot allow such an absurd interpretation of the
Constitutionb.) It refers to the total Common shares. The petition and rule that
the term capital in Section 11, Article XII of the 1987Constitution refers
only to shares of stock entitled to vote in the election of directors, and thus in
the present case only to commonshares, and not to the total outstanding capital
stock (common and non-voting preferred shares). Respondent Chairperson of
theSecurities and Exchange Commission is directed to apply this definition of
the term capital in determining the extent of allowableforeign ownership in
respondent Philippine Long Distance Telephone Company, and if there is a
violation of Section 11, Article XII ofthe Constitution, to impose the
appropriate sanctions under the law. **Indisputably, construing the term
capital in Section 11,Article XII of the Constitution to include both voting
and non-voting shares will result in the abject surrender of
ourtelecommunications industry to foreigners, amounting to a clear abdication
of the States constitutional duty to limit control ofpublic utilities to Filipino
citizens. Such an interpretation certainly runs counter to the constitutional
provision reserving certainareas of investment to Filipino citizens, such as the
exploitation of natural resources as well as the ownership of land,
educationalinstitutions and advertising businesses. The Court should never
open to foreign control what the Constitution has expressly reservedto
Filipinos for that would be a betrayal of the Constitution and of the national
interest. The Court must perform its solemn duty todefend and uphold the
intent and letter of the Constitution to ensure, in the words of the Constitution,
a self-reliant andindependent national economy effectively controlled by
Filipinos.**
Section 16. GOCC and Economic Viability:BSP vs. COA, G.R. No. 177131,
June 7, 2011Facts: The COA issued a resolution in 1999 defining its policy
with respect to the audit of the Boy Scouts of the Philippine, whichwas created
as a public corporation and that in BSP vs.NLRC, the SC ruled that the BSP,
as constituted under its charter, was aGOCC within the meaning of Art. IX (B)
(2) (1) of the Constitution, and that the BSP is regarded as a government
instrumentalityunder the Administrative Code. For the purposes of audit
supervision, the BSP shall be classified among the governmentcorporations to
be audited by employing the team audit approach. The BSP sought
reconsideration of the COA Resolution in a lettersigned by then BSP National
President Jejomar C. Binay, saying that it is not subject to the COAs
jurisdiction.Issues: a.) Is CA. no. 111, as amended by R.A. 7278 constitutional
and consistent with section 16, Article XII of the constitution? b.) Does the
test of economic viability apply to public corporations dealing with
governmental functions?Ruling: a.) Yes. The BSP (CA no. 111, as amended by
RA 7278) is a public corporation or a government agency or
instrumentalitywith juridical personality, which does not fall within the
constitutional prohibition in Article XII, Section 16, notwithstanding

theamendments to its charter. Not all corporations, which are not government
owned or controlled, are ipso facto to be consideredprivate corporations as
there exist another distinct class of corporations or chartered institutions which
are otherwise known as"public corporations." These corporations are treated
by law as agencies or instrumentalities of the government which are not
subjectto the tests of ownership or control and economic viability but to
different criteria relating to their public purposes/interests orconstitutional
policies and objectives and their administrative relationship to the government
or any of its Departments or Offices. b.) No. Section 16, Article XII deals with
the formation, organization, or regulation of privatecorporations, which
should be done through a general law enacted by Congress, provides for an
exception, that is: if thecorporation is government owned or controlled; its
creation is in the interest of the common good; and it meets the test of
economicviability. The rationale behind Article XII, Section 16 of the 1987
Constitution was explained in Feliciano v. Commission on Audit,Art. XII, Sec.
16 bans the creation of private corporations by special law, however said
constitutional provision should not beconstrued so as to prohibit the creation
of public corporations or a corporate agency or instrumentality of the
government intendedto serve a public interest or purpose. This should not be
measured on the basis of economic viability, but according to the
publicinterest or purpose it serves as envisioned by par. 2, Art. 44 of the Civil
Code, and of the Administrative Code.Republic vs. City of Paranaque, G.R.
no. 191109, July 18, 2012 This is a petition for review on certiorari under Rule
45 of the 1997 Rules of Civil Procedure, on pure questions of law,assailing the
January 8, 2010 Order of the Regional Trial Court, Branch 195, Parafiaque
City (RTC), which ruled that petitionerPhilippine Reclamation Authority
(PRA) is a government-owned and controlled corporation (GOCC), a taxable
entity, and, therefore,. not exempt from payment of real property taxes. The
pertinent portion of the said order reads: In view of the finding of this
courtthat petitioner is not exempt from payment of real property taxes,
respondent Paraaque City Treasurer Liberato M. Carabeo did notact xxx
without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or in excess of jurisdiction in issuingthe warrants of levy on
the subject properties. On August 3, 2009, after an exchange of several
pleadings and the failure of both parties to arrive at a compromiseagreement,
PRA filed a Motion for Leave to File and Admit Attached Supplemental
Petition which sought to declare as null and voidthe assessment for real
property taxes, the levy based on the said assessment, the public auction sale
conducted on April 7, 2003, andthe Certificates of Sale issued pursuant to the
auction sale. On January 8, 2010, the RTC rendered its decision dismissing
PRAspetition. In ruling that PRA was not exempt from payment of real
property taxes, the RTC reasoned out that it was a GOCC underSection 3 of
P.D. No. 1084. It was organized as a stock corporation because it had an
authorized capital stock divided into no parvalue shares. Not in conformity,
PRA filed this petition for certiorari assailing the January 8, 2010 RTC Order
based on the followingGROUNDSIssue: Is the Philippine Reclamation
Authority a government-owned and controlled corporation (GOCC) under
Sec. 16, Article XII?Ruling: A GOCC must have been organized as a stock or
non-stock corporation. The Philippine Reclamation Authority is neither. Itis
not a GOCC.When the law vests in a government instrumentality corporate

powers, the instrumentality does not necessarily become acorporation. Unless

the government instrumentality is organized as a stock or non-stock
corporation, it remains a governmentinstrumentality exercising not only
governmental but also corporate powers. In the case at bench, PRA is not a
GOCC because it isneither a stock nor a non-stock corporation. Furthermore,
there is another reason why the PRA cannot be classified as a GOCC.Section
16, Article XII of the 1987 Constitution provides as follows: Section 16.
The Congress shall not, except by general law,provide for the formation,
organization, or regulation of private corporations. Government-owned or
controlled corporations may becreated or established by special charters in the
interest of the common good and subject to the test of economic
viability.**The fundamental provision above authorizes Congress to create
GOCCs through special charters on two conditions: 1) the GOCCmust be
established for the common good; and 2) the GOCC must meet the test of
economic viability. In this case, PRA may havepassed the first condition of
common good but failed the second one economic viability. Undoubtedly,
the purpose behind thecreation of PRA was not for economic or commercial
activities. Neither was it created to compete in the market place
consideringthat there were no other competing reclamation companies being
operated by the private sector. As mentioned earlier, PRA wascreated
essentially to perform a public service considering that it was primarily
responsible for a coordinated, economical andefficient reclamation,
administration and operation of lands belonging to the government with the
object of maximizing theirutilization and hastening their development
consistent with the public interest.**Section 17. Temporary Take Over:2011
BAR:The President issued an executive order directing all department heads to
secure his consent before agreeing to appear duringquestion hour before
Congress on matters pertaining to their departments. Is the executive order
unconstitutional for suppressinginformation of public concern? The answer is
D.
(A) No, because those department heads are his alter egos and he is but
exercising his right against self-incrimination. (B) Yes, the President cannot
control the initiative of the department heads to conform with the oversight
function of Congress. (C) Yes, the President cannot withhold consent to the
initiative of his department heads as it will violate the principle of check and
balance. (D) No, the President has the power to withhold consent to
appearance by his department heads during question
hour.___________________________________________________________
________