G.R. No. 164527 15 August 2007 for the current residents on the cleared and levelled site.

for the current residents on the cleared and levelled site. Phase II involves the construction
Ponente: VELASCO, JR., J. of a fenced incineration area for the on-site disposal of the garbage at the dumpsite.

FACTS:
On August 5, 2004, former Solicitor General Francisco Chavez, filed an instant petition
raising constitutional issues on the JVA entered by National Housing Authority and R-II
Builders, Inc.
Due to the recommendations done by the DENR after evaluations done, the JVA was
amended and restated (now ARJVA) to accommodate the design changes and additional
work to be done to successfully implement the project. The original 3,500 units of
temporary housing were decreased to 2,992. The reclaimed land as enabling component
was increased from 40 hectares to 79 hectares, which was supported by the issuance of
Proclamation No. 465 by President Ramos. The revision also provided for the 119-hectare
land as an enabling component for Phase II of the project.

On March 1, 1988, then-President Cory Aquino issued Memorandum order No. (MO) 161
approving and directing implementation of the Comprehensive and Integrated Metropolitan
Manila Waste Management Plan. During this time, Smokey Mountain, a wasteland in
Tondo, Manila, are being made residence of many Filipinos living in a subhuman state.
Subsequently, the Clean Air Act was passed by the legislature which made the
establishment of an incinerator illegal, making the off-site dumpsite at Smokey Mountain
necessary. On August 1, 1998, the project was suspended, to be later reconstituted by
President Estrada in MO No. 33.

As presented in MO 161, NHA prepared feasibility studies to turn the dumpsite into low-
cost housing project, thus, Smokey Mountain Development and Reclamation Project
(SMDRP), came into place. RA 6957 (Build-Operate-Transfer Law) was passed on July
1990 declaring the importance of private sectors as contractors in government projects.
Thereafter, Aquino proclaimed MO 415 applying RA 6957 to SMDRP, among others. The
same MO also established EXECOM and TECHCOM in the execution and evaluation of
the plan, respectively, to be assisted by the Public Estates Authority (PEA).
On August 27, 2003, the NHA and RBI executed a Memorandum of Agreement whereby
both parties agreed to terminate the JVA and subsequent agreements. During this time,
NHA reported that 34 temporary housing structures and 21 permanent housing structures
had been turned over by RBI.
ISSUES:

Notices of public bidding to become NHA’s venture partner for SMDRP were published in
newspapers in 1992, from which R-II Builders, Inc. (RBI) won the bidding process. Then- 1.
President Ramos authorized NHA to enter into a Joint Venture Agreement with RBI.
2.
Under the JVA, the project involves the clearing of Smokey Mountain for eventual
development into a low cost housing complex and industrial/commercial site. RBI is
expected to fully finance the development of Smokey Mountain and reclaim 40 hectares of 3.
the land at the Manila Bay Area. The latter together with the commercial area to be built
on Smokey Mountain will be owned by RBI as enabling components. If the project is 4.
revoked or terminated by the Government through no fault of RBI or by mutual agreement,
the Government shall compensate RBI for its actual expenses incurred in the Project plus a 5.
reasonable rate of return not exceeding that stated in the feasibility study and in the
contract as of the date of such revocation, cancellation, or termination on a schedule to be 6.
agreed upon by both parties. 7.
8.
To summarize, the SMDRP shall consist of Phase I and Phase II. Phase I of the project
involves clearing, levelling-off the dumpsite, and construction of temporary housing units 9.
Whether respondents NHA and RBI have been granted the power and authority to reclaim
lands of the public domain as this power is vested exclusively in PEA as claimed by
petitioner
Whether respondents NHA and RBI were given the power and authority by DENR to
reclaim foreshore and submerged lands
Whether respondent RBI can acquire reclaimed foreshore and submerged lands
considered as alienable and outside the commerce of man
Whether respondent RBI can acquire reclaimed lands when there was no declaration that
said lands are no longer needed for public use
Whether there is a law authorizing sale of reclaimed lands
Whether the transfer of reclaimed lands to RBI was done by public bidding
Whether RBI, being a private corporation, is barred by the Constitution to acquire lands of
public domain
Whether respondents can be compelled to disclose all information related to the SMDRP
Whether the operative fact doctrine applies to the instant position
 HELD: formulated, had ample opportunity to question the said project, but did not do so. The
moment to challenge has passed.

1. Executive Order 525 reads that the PEA shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the National
Government. This does not mean that it shall be responsible for all. The requisites for a
valid and legal reclamation project are approval by the President (which were provided for
by MOs), favourable recommendation of PEA (which were seen as a part of its
recommendations to the EXECOM), and undertaken either by PEA or entity under
contract of PEA or by the National Government Agency (NHA is a government agency
whose authority to reclaim lands under consultation with PEA is derived under PD 727
and RA 7279).
2. Notwithstanding the need for DENR permission, the DENR is deemed to have granted the
authority to reclaim in the Smokey Mountain Project for the DENR is one of the members
of the EXECOM which provides reviews for the project. ECCs and Special Patent Orders
were given by the DENR which are exercises of its power of supervision over the project.
Furthermore, it was the President via the abovementioned MOs that originally authorized
the reclamation. It must be noted that the reclamation of lands of public domain is
reposed first in the Philippine President.
3. The reclaimed lands were classified alienable and disposable via MO 415 issued by
President Aquino and Proclamation Nos. 39 and 465 by President Ramos.
4. Despite not having an explicit declaration, the lands have been deemed to be no longer
needed for public use as stated in Proclamation No. 39 that these are to be “disposed to
qualified beneficiaries.” Furthermore, these lands have already been necessarily
reclassified as alienable and disposable lands under the BOT law.
5. Letter I of Sec. 6 of PD 757 clearly states that the NHA can acquire property rights and
interests and encumber or otherwise dispose of them as it may deem appropriate.
6. There is no doubt that respondent NHA conducted a public bidding of the right to become
its joint venture partner in the Smokey Mountain Project. It was noted that notices were
published in national newspapers. The bidding proper was done by the Bids and Awards
Committee on May 18, 1992.
7. RA 6957 as amended by RA 7718 explicitly states that a contractor can be paid “a portion
as percentage of the reclaimed land” subject to the constitutional requirement that only
Filipino citizens or corporation with at least 60% Filipino equity can acquire the same. In
addition, when the lands were transferred to the NHA, these were considered Patrimonial
lands of the state, by which it has the power to sell the same to any qualified person.
8. This relief must be granted. It is the right of the Filipino people to information on matters
of public concerned as stated in Article II, Sec. 28, and Article III, Sec. 7 of the 1987
Constitution.
9. When the petitioner filed the case, the JVA had already been terminated by virtue of
MOA between RBI and NHA. The properties and rights in question after the passage of
around 10 years from the start of the project’s implementation cannot be disturbed or
questioned. The petitioner, being the Solicitor General at the time SMDRP was