Manila Prince Hotel vs.

GSIS
267 SCRA 402
February 1997 En Banc

FACTS:

Pursuant to the privatization program of the government, GSIS chose to award during bidding in
September 1995 the 51% outstanding shares of the respondent Manila Hotel Corp. (MHC) to the
Renong Berhad, a Malaysian firm, for the amount of Php 44.00 per share against herein
petitioner which is a Filipino corporation who offered Php 41.58 per share. Pending the
declaration of Renong Berhad as the winning bidder/strategic partner of MHC, petitioner
matched the former’s bid prize also with Php 44.00 per share followed by a manager’s check
worth Php 33 million as Bid Security, but the GSIS refused to accept both the bid match and the
manager’s check.

One day after the filing of the petition in October 1995, the Court issued a TRO enjoining the
respondents from perfecting and consummating the sale to the Renong Berhad. In September
1996, the Supreme Court En Banc accepted the instant case.

ISSUE:

Whether or not the GSIS violated Section 10, second paragraph, Article 11 of the 1987
Constitution

COURT RULING:

The Supreme Court directed the GSIS and other respondents to cease and desist from selling the
51% shares of the MHC to the Malaysian firm Renong Berhad, and instead to accept the
matching bid of the petitioner Manila Prince Hotel.

According to Justice Bellosillo, ponente of the case at bar, Section 10, second paragraph, Article
11 of the 1987 Constitution is a mandatory provision, a positive command which is complete in
itself and needs no further guidelines or implementing laws to enforce it. The Court En Banc
emphasized that qualified Filipinos shall be preferred over foreigners, as mandated by the
provision in question.

The Manila Hotel had long been a landmark, therefore, making the 51% of the equity of said
hotel to fall within the purview of the constitutional shelter for it emprises the majority and
controlling stock. The Court also reiterated how much of national pride will vanish if the nation’s
cultural heritage will fall on the hands of foreigners.
In his dissenting opinion, Justice Puno said that the provision in question should be interpreted as
pro-Filipino and, at the same time, not anti-alien in itself because it does not prohibit the State
from granting rights, privileges and concessions to foreigners in the absence of qualified
Filipinos. He also argued that the petitioner is estopped from assailing the winning bid of Renong
Berhad because the former knew the rules of the bidding and that the foreigners are qualified,
too.