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Manila Prince Hotel v.

G.R. No. 122156


In line with the Philippine governments privatization program, Government

Service Insurance System (GSIS) said in a public auction its stake in Manila Hotel
Corporation (MHC) only two bidders participated . One is the petitioner, a filipino
corporation which offered to buy 51 percent of the MHC. Another is Renong Barhad,
a Malaysian firm with ITT-Sheraton as its hotel operator. Renong Barhad bids P2.42
higher than the petitioner.

Manila Prince Hotel (MPH) filed a petition before the Supreme Court to compel
the respondent to allow it to match Renong Barhads bid, invoking the Filipino First
Policy enshrined in Section 10, paragraph 2, Article XII of the 1987 Constitution,
which states: in the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified Filipinos.


Whether or not Section 10, paragraph 2, Article XII is a self-executing provision

and it is in need of legislation to enforce it.

Whether or not GSIS is Compelled to follow the Section 10 paragraph 2 of the

1987 Constitution.


YES. A provision which is complete in itself and becomes operative without the
aid of supplementary or enabling legislation, or that which supplies sufficient rule by
means of which the rights it grants may be enjoyed or protected, is self-executing.
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, so that they can
be determined by an examination and construction of its terms, and there is no
language indicating that the subject is referred to the legislature for action.

Furthermore, GSIS is included in the term state, hence, it is mandated to follow

the Filipino First Policy. In constitutional jurisprudence, acts of persons distinct from
the government are considered state action. In constitutional jurisprudence, 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; (2) when the
government is so significantly involved with the private actor as to make the
government responsible for his action; and, (3) when the government has approved
or authorized the action.

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. In
this case the subject constitutional injunction is addressed among others to the
Executive Department and respondent GSIS, a government instrumentality deriving
its authority from the State.