Module 1. Title I. Classification of Property

MODULE NO.
1
TITLE I. CLASSIFICATION OF PROPERTY
1. Articles 414 to 426
 Memorize: Articles 415, 416, 417, 420, 423 and 424
2. Definition of Property. Distinguish from ‘Thing’

 As an object - Property is that which is, or may be, appropriated
- It is an object or a right which is appropriated or susceptible of
appropriation by man, with capacity to satisfy human wants and needs
(Pineda, 1999)
- ‘appropriate’ -to take something for one’s own use
 As a subject – branch of civil law which classifies and defines the different kinds of
appropriable objects, provides for their acquisition and loss, and in general, treats of the
nature and consequences of real rights.
 Characteristics of a Property: utility for the satisfaction of moral or economic wants,

susceptibility of appropriation and individuality or substantivity
 Thing includes appropriable and non-appropriable objects (planets, stars, moon).

Three kinds: res nullius (belonging to no one, either they have not been appropriated or have
been abandoned)- undomesticated or wild animals; may or may not be a property
: res communes (belonging to everyone)- may or may not be a property
: res alicujus (belonging to someone) -definitely considered property
 Human body- not a property whether alive or dead.
-Under the Organ Donation Act of 1991, donation can only be legally made after or
immediately before the death of the donor. Consent will be given by the relatives of a
deceased person.
-There is a 2018 Bill that seeks to impose a ‘presumed consent’ on all deceased Filipino
citizens to donate transplantable organs or tissues.
-Republic Act No. 10364 - An Act Expanding Republic Act No. 9208, Entitled "An Act To
Institute Policies To Eliminate Trafficking In Persons Especially Women And Children,
Establishing The Necessary Institutional Mechanisms For The Protection And Support Of
Trafficked Persons, Providing Penalties For Its Violations And For Other Purposes"
Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:
Section 1. Short Title. – This Act shall be known as the "Expanded Anti-Trafficking
in Persons Act of 2012″.
Section 2. Section 2 of Republic Act No. 9208 is hereby amended to read as follows:
"SEC. 2. Declaration of Policy. – It is hereby declared that the State values the
dignity of every human person and guarantees the respect of individual rights. In
pursuit of this policy, the State shall give highest priority to the enactment of
measures and development of programs that will promote human dignity, protect the
people from any threat of violence and exploitation, eliminate trafficking in persons,
and mitigate pressures for involuntary migration and servitude of persons, not only to
support trafficked persons but more importantly, to ensure their recovery,
rehabilitation and reintegration into the mainstream of society.
3. Classification of Properties
1. As to mobility
a. Immovable or real property – land, railroads, canals,bridges
b. Movable or personal property- books, pen,
2. As to ownership
a. Public dominion – national roads
b. Private ownership- private pathway
3. As to alienability
a. Alienable (within the commerce of man)- clothes
b. Inalienable (outside the commerce of man) – illegal items
4. As to individuality
a. Specific property -ballpen held by A
b. Generic property – ballpen
5. As to susceptibility to touch
a. Tangible (corporeal) – can be identified by the human sense of touch or sight – road
b. Intangible (incorporeal) – rights or credits, road right of way
6. As to susceptibility to substitution
a. Fungible (capable of substitution) - water
b. Non fungible (incapable of substitution)- swab specimen of A
7. As to accession/dependence/importance
a. Principal - car
b. Accessory- stereo
8. As to existence
a. Existing or present property (res existentes) – mother pig
b. Future property (res futurae)- cannot be the subject of a donation – piglets to be borne
by the mother pig
9. As to consumability
a. Consumable – rice grains
b. Non-consumable – machine, tractor
10. As to divisibility
a. Divisible – machine
b. Indivisible- lake
4. Distinguish Movable and Immovable Properties
Immovable properties – those enumerated under Article 415 and those fixed in a definite place
in general. All similar properties that are considered as Real by nature, incorporation, destination
or purposes and by analogy
Article 415. The following are immovable property:
(1) Land, buildings, roads and constructions of all kinds adhered to the soil;
-building regardless of the person who erected it and regardless of the owner of the land
where it is erected; if agreed by parties to be considered a movable property, valid only
insofar as the parties are concerned but void as to third persons; proper subject of a real
estate mortgage; if the building will be the subject of an immediate demolition, it is
considered movable
-construction – those built with the intention to attach the same permanently; railroad tracks,
fence: barong barong and wooden scaffoldings are not included
(2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part
of an immovable;
- Trees attached to the soil whether spontaneous products of the soil or planted thru labor,
includes uprooted timber or trees that remain on the timberland
- Growing Crops- real property as long as attached to the soil regardless of the owner of the
land. Considered movable under the Chattel Mortgage Law since it will ultimately be
harvested in time.
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be
separated therefrom without breaking the material or deterioration of the object;
- ‘breaking’ entails substantial destruction or deterioration

-regardless of who placed it: chimney, fire escape embedded
(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or
on lands by the owner of the immovable in such a manner that it reveals the intention to attach
them permanently to the tenements;
-should be placed by the owner of the tenement or by his agent; may be removed but is intended
to be permanently incorporated on the tenement
(5) Machinery, receptacles, instruments or implements intended by the owner of the
tenement for an industry or works which may be carried on in a building or on a piece of land,
and which tend directly to meet the needs of the said industry or works;
- Elements: 1)must be placed by the owner or his agent; may be placed by the tenant with the
promise to leave the machine at the end of the lease or if he acted as the agent 2)machine
essential and principal elements in the industry, not merely incidental and 3) the industry or
works must be carried on in the building or on the land
-if machine is separated: separation temporary + still used in the industry = still real property;
machine still on the building but no longer used =chattel or personal property;
-a mortgage on the building or land automatically includes the machines (sawmill, sugar central)
Read:
a. PASTOR D. AGO, petitioner, vs. The Hon. Court Of Appeals, et al. (G.R. No. L-17898
October 31, 1962)– the consequence of the nature of the machinery in relation to the
proper mode of execution under the Rules of Court
b. People's Bank And Trust Co. And Atlantic Gulf And Pacific Co. Of Manila, Plaintiffs-
Appellants Vs. Dahican Lumber Company, et al. (G.R. No. L-17500 , May 16, 1967) –
nature of after acquired properties and effect to a contract of mortgage
c. MANILA ELECTRIC COMPANY, Petitioner, v. THE CITY ASSESSOR AND CITY

TREASURER OF LUCENA CITY, G.R. No. 166102, August 05, 2015
https://www.chanrobles.com/cralaw/2015augustdecisions.php?id=705
-machinery under Article 415 vs. machinery under the Local Government Code
-compare with the Board of Assessment Appeals vs Meralco 10 SCRA 68 cited in the
book of Paras
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in
case their owner has placed them or preserves them with the intention to have them permanently
attached to the land, and forming a permanent part of it; the animals in these places are included;
-animals must have the intent to return: however, criminal law treats all kinds of animals as
personal property subject of theft/robbery
(7) Fertilizer actually used on a piece of land;

-must be actually used or spread over the land
(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters
either running or stagnant;
-mines- hole in the ground made for extraction of minerals; include minerals which have not yet
been extracted
-quarries- open areas for mining
-slag dump- dirt +minerals still piled upon the surface of the ground
-waters pertaining to bodies of water; different from the word water
(9) Docks and structures which, though floating, are intended by their nature and object to
remain at a fixed place on a river, lake, or coast;
-docks- enclosed area of water for ships in which the water level can be adjusted
-structures like floating house tied to a shore or bank post
-Vessels are personal property because they do not remain at a fixed place on a river, lake, or
coast but they partake to some extent of the nature and conditions of real property. The rule on
double sale which applies in general to land (real property) applies also to the sale and
registration of vessels
(10) Contracts for public works, and servitudes and other real rights over immovable property.
-intangible real properties
-real rights over real properties: easements- an encumbrance established over an immovable for
the benefit of another immovable belonging to another person, or for the benefit of a person,
group of persons, or a community
Movable Properties
1. Test by description- property is capable of being carried from place to place; change in
location can be made without injuring the property to which it is attached
2. Test by exclusion- the object is not one of those enumerated or included under Article 415
Article 416. The following things are deemed to be personal property:
(1) Those movables susceptible of appropriation which are not included in the preceding
article;
(2) Real property which by any special provision of law is considered as personalty
-growing crops under the Chattel Mortgage Law
(3) Forces of nature which are brought under control by science; and
-oxygen, electricity, gas,
(4) In general, all things which can be transported from place to place without impairment of
the real property to which they are fixed.
-incorporeal movables: patent (exclusive right to market invention), copyright (legal right
of creative artists or publishers to control the use and reproduction of their original works),
personal effects (possession that somebody wears or carries regularly)
Article 417. The following are also considered as personal property:

(1) Obligations and actions which have for their object movables or demandable sums;
and
-right to bring an action to recover persona property or enforce interest over personal
property
(2) Shares of stock of agricultural, commercial and industrial entities, although they may
have real estate. (336a)
-stock- equity participation in a business endeavor
-money is personal property; legal tender if it is domestic circulation, it becomes a
merchandise if exported or smuggled
-Consumable-cannot be used according to its nature without its being consumed
-Non consumable- any other kind of movable property
-Effect of agreement of parties- consumable things may be non-fungible (not capable of
substitution)
(6) Identify Properties of Public Dominion and Properties of Private Ownership

Article 419. Property is either of public dominion or of private ownership.
Public dominion- ownership by the State or by the public;
Characteristics of Properties of Public Dominion
1. Outside the commerce of man and cannot be leased, sold, donated or be the or be
the object of a contract
Lease of a town plaza to a private individual is void
Owner of a fishery on a river does not acquire title over the river
Inclusion of properties of public domain in a title does not change the character of
the property
2. Cannot be acquired by prescription no matter how long
3. If included in a title, the land still remains at property of public dominion
4. Cannot be levied upon execution
5. Real or personal property and may be used by everybody
Private ownership-ownership by private individuals
Article 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
- (roads, government computers, public streams, creeks, lands formed through accretion from
seawaves, reclaimed lands, shores,forest land)
-ports- harbor, place by the sea, river or waterway where ships and botas can dock, load and
unload
ports – includes airport and seaport-
-bank-steep side of a river, stream, lake/canal, side of waterway
-roadsteads-place for vessels at anchorage
-shore-that space alternately covered and uncovered by the movement of the tide
-torrent- that amount of water which in case of heavy rains gathers in deep places or canals
where it is supposed to flow afterwards
-rivers- the civil code does not distinguish whether or not it is navigable or non-navigable. In
some case, it was impliedly ruled that navigable rivers are the ones considered as property of
public domain
-esteros-small rivers included
-swamps- land which is always wet and grown with various shrubs and tree included
--And other of similar character- public streams, natural beds of rivers, river channels, waters
of rivers, creeks
(2) Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth. (natural resources)
- Commonwealth Act 141. Public Land Act-November 7, 1936

SECTION 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into — (a)
Alienable or disposable; (b) Timber (or forest land), and (c) Mineral lands, and may at any
time and in a like manner transfer such lands from one class to another, for the purposes of
their administration and disposition.
SECTION 7. For the purposes of the administration and disposition of alienable or
disposable public lands, the President, upon recommendation by the Secretary of
Agriculture and Commerce, shall from time to time declare what lands are open to
disposition or concession under this Act.
SECTION 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited and classified and, when practicable, surveyed, and which
have not been reserved for public or quasi-public uses, nor appropriated by the
Government, nor in any manner become private property, nor those on which a private
right authorized and recognized by this Act or any other valid law may be claimed, or
which, having been reserved or appropriated, have ceased to be so However, the President
may, for reasons of public interest, declare lands of the public domain open to disposition
before the same have had their boundaries established or been surveyed, or may, for the
same reason, suspend their concession or disposition until they are again declared open to
concession or disposition by proclamation duly published or by Act of the National
Assembly.
SECTION 9. For the purpose of their administration and disposition, the lands of the
public domain alienable or open to disposition shall be classified, according to the use or
purposes to which such lands are destined, as follows: (a) Agricultural (b) Residential
commercial industrial or for similar productive purposes (c) Educational, charitable, or
other similar purposes (d) Reservations for town sites and for public and quasi-public uses.
The President, upon recommendation by the Secretary of Agriculture and Commerce, shall
from time to time make the classifications provided for in this section, and may, at any
time and in a similar manner, transfer lands from one class to another.
SECTION 10. The words "alienation, "'disposition, or "concession" as used in this Act,
shall mean any of the methods authorized by this Act for the acquisition, lease, use, or
benefit of the lands of the public domain other than timber or mineral lands. TITLE II
Agricultural Public Lands CHAPTER III Forms of Concession of Agricultural Lands
SECTION 11. Public lands suitable for agricultural purposes can be disposed of only as
follows, and not otherwise: (1) For homestead settlement (2) By sale (3) By lease (4) By
confirmation of imperfect or incomplete titles: (a) By judicial legalization (b) By
administrative legalization (free patent)
-1987 Constitution of the Philippines. Article XII. NATIONAL ECONOMY AND

PATRIMONY
Section 1. The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of
human and natural resources, and which are competitive in both domestic and foreign
markets. However, the State shall protect Filipino enterprises against unfair foreign
competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall
be given optimum opportunity to develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be encouraged to broaden the base
of their ownership.
Section 2. All 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 other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be under the full control and
supervision of the State. The State may directly undertake such activities, or it may enter
into co-production, joint venture, or production-sharing agreements with Filipino citizens,
or corporations or associations at least sixty per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years, renewable
for not more than twenty-five years, and under such terms and conditions as may be
provided by law. In cases of water rights for irrigation, water supply fisheries, or industrial
uses other than the development of water power, beneficial use may be the measure and
limit of the grant.
The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea,
and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens, as well as cooperative fish farming, with priority to subsistence fishermen and
fishworkers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the general terms and conditions
provided by law, based on real contributions to the economic growth and general welfare
of the country. In such agreements, the State shall promote the development and use of
local scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with
this provision, within thirty days from its execution.
Section 3. Lands of the public domain are classified into agricultural, forest or timber,
mineral lands and national parks.
Agricultural lands of the public domain may be further classified by law according to the
uses to which they may be devoted. Alienable lands of the public domain shall be limited
to agricultural lands. Private corporations or associations may not hold such alienable lands
of the public domain except by lease, for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and not to exceed one thousand hectares in
area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire
not more than twelve hectares thereof, by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law, the
size of lands of the public domain which may be acquired, developed, held, or leased and
the conditions therefor.
Section 4. The Congress shall, as soon as possible, determine, by law, the specific limits of
forest lands and national parks, marking clearly their boundaries on the ground. Thereafter,
such forest lands and national parks shall be conserved and may not be increased nor
diminished, except by law. The Congress shall provide for such period as it may determine,
measures to prohibit logging in endangered forests and watershed areas.
Section 5. The State, subject to the provisions of this Constitution and national
development policies and programs, shall protect the rights of indigenous cultural
communities to their ancestral lands to ensure their economic, social, and cultural well-
being.
The Congress may provide for the applicability of customary laws governing property
rights or relations in determining the ownership and extent of ancestral domain.
— Secs. 6 and 7 of the Public Land Act provide that the President, upon the recommendation
of the Secretary of Agriculture and Commerce, shall from time to time classify the lands of the
public domain into; (a) alienable or disposable; (b) timber; and (c) mineral lands and may at any
time and in a like manner transfer such lands from one class to another, for the purposes of their
administration and disposition; for the purposes of the administration and disposition of alienable
or disposable public lands, the President, upon recommendation by the Secretary of Agriculture
and Commerce, shall from time to time declare what lands are open to disposition or concession
under this Act. (Rep. of the Phils. vs. Heirs of Meynardo Cabrera, G.R. No. 218418, Nov. 08,
2017)
— The burden of proving that the property is an alienable and disposable agricultural land of
the public domain falls on the applicant, not the State; the Office of the Solicitor General,
however, has the correlative burden to present effective evidence of the public character of the
land; in order to establish that an agricultural land of the public domain has become alienable and
disposable, an applicant must establish the existence of a positive act of the government such as
a presidential proclamation or an executive order; an administrative action; investigation reports
of Bureau of Lands investigators; and a legislative act or a statute. (Rep. of the Phils. vs. Sps.
Noval, G.R. No. 170316, Sept. 18, 2017)
— The 1987 Constitution classifies lands of the public domain into five (5) categories; forest
lands, agricultural lands, timber lands, mineral lands, and national parks; in the absence of any
prior classification by the State, unclassified lands of the public domain assume the category of
forest lands not open to disposition; in turn, the classification of unclassified lands of the public
domain, and the reclassification of those previously classified under any of the categories set
forth in the 1987 Constitution are governed by Commonwealth Act No. 141 dated November 7,
1936, otherwise known as the Public Land Act. (Rep. of the Phils. vs. Heirs of Meynardo
Cabrera, G.R. No. 218418, Nov. 08, 2017)
— The declaration of alienability must be through executive fiat, as exercised by the Secretary
of the Department of Environment and Natural Resources. (Rep. of the Phils. vs. Sps. Noval,
G.R. No. 170316, Sept. 18, 2017)
— The Public Land Act is a special law that applies only to alienable agricultural lands of the
public domain and not to forests, mineral lands, and national parks; alienable and disposable
lands into: (a) patrimonial lands of the State, or those classified as lands of private ownership
under Art. 425 of the Civil Code, without limitation; and (b) lands of the public domain, or the
public lands as provided by the Constitution, but with the limitation that the lands must only be
agricultural. (Rep. of the Phils. vs. Sps. Noval, G.R. No. 170316, Sept. 18, 2017)
— When an applicant is shown to have been in open, continuous, exclusive, and notorious
possession of a land for the period required by law, he or she has acquired an imperfect title that
may be confirmed by the State; the State may not, for the simple reason that an applicant failed
to show documents which the State is in the best position to acquire, indiscriminately take an
occupied property and unjustly and self-servingly refuse to acknowledge legally recognized
rights evidenced by possession, without violating due process; the burden of evidence lies on the
party who asserts an affirmative allegation. (Rep. of the Phils. vs. Sps. Noval, G.R. No. 170316,
Sept. 18, 2017) http://sc.judiciary.gov.ph/case-index/2017/july-2017-december-2017/public-
land-act-c-a-no-141-3/
-forest lands, national parks, military reservation, mineral lands; use of forest lands and mineral
lands may be granted to private individuals as concession
-public markets- usufructuary rights over stalls or public market is public in character and cannot
be alienated except through succession
-lands formed by the actions of the sea are public lands; private lands covered by the sea but later
on reclaimed by the government are public lands
-coastal water- interface or transition areas between land and sea, including large inland lakes;
part of public dominion, structures built on the area may be removed by the government
-Waters gathered in a private canal that forms a river like structure is still a private property
-Remedy if lands of public domain are included in a torrens title- Reversion to be filed by the
State. Principle: the Torrens system of registration is not a means of acquiring ownership over
private or public land; it merely confirms and registers whatever right or title may already be
possessed or had by the applicant.
Notes: (September 9, 2020)

Busol Watershed – outside the commerce of men
Military reservations – even if they acquire title, title is void bec these are properties of public
dominion
Reclaimed lands – properties of public dominion
Regalian doctrine: GR: All lands belong to the State.
Agricultural lands are the only ones that can be disposed to the private individual.—sale,
homestead patent, lease, or confirmation of incomplete title
Townsite reservation—reserved for the constitution of a town – so public dominion—unless
declared alienable and disposable
Read:
a. Republic Of The Philippines, Petitioner, Vs. Sps. Ildefonso Alejandre And Zenaida
Ferrer Alejandre, G.R. No. 217336, October 17, 2018 ]-application for registration of a
land of public domain http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/64792
The CA Decision narrates the antecedents as follows:
On July 18, 1991, Spouses Alejandre (applicants-spouses, for brevity) filed an application for the registration of Lot
No. 6487 under P.D. No. 1529, described in plan Ap-CAR-000007, Cad-536, with an area of 256 square meters.
They alleged that they are the owners of the subject property by virtue of a deed of sale or conveyance; that the
subject property was sold to them by its former owner Angustia Lizardo Taleon by way of a Deed of Absolute Sale
executed on June 20, 1990; that the said land is presently occupied by the applicants-spouses.
On September 16, 1991, the Office of the Solicitor General, as counsel for the Republic, entered its appearance.
On November 12, 1991, the Land Registration Authority (LRA, for brevity) submitted a Report noting that there were
discrepancies in the plan submitted by the applicant spouses, which discrepancies were referred to the Lands
Management Sector for verification and correction.
On January 30, 1992, the trial court issued an order of general default and allowed the applicants-spouses to present
their evidence.
On July 20, 1992, the trial court granted the applicant spouses' motion to submit original tracing cloth plan and
technical description for purposes of facilitating the approval of the re-surveyed plans as well as the submission of the
new plan for the scrutiny and approval of the LRA.
On August 10, 1992, the applicants-spouses filed their Formal Offer of Evidence. On April 26, 1993, they submitted
the corrected advance plan and technical description to the trial court.
On August 20, 1993, the LRA submitted its Supplementary Report stating that the "polygon does not close" even
after the corrections effected on the bearings and distances of the technical description were made. Hence, the LRA
requested for reverification and correction.
In an Order dated December 10, 1997, the trial court deemed the case submitted for decision.
Subsequently, or on April 15, 1998, the LRA submitted its Final Report stating that it applied the corrected technical
description of the subject lot and no more discrepancy exists, however, the area was increased by six (6) meters. As
such, on August 24, 1998, the trial court ordered the submission of publication of the amended or new technical
description. On May 6, 2000, the trial court issued another Notice setting the case for Initial Hearing on July 25, 2000.
On June 1, 2000, the Republic filed its Opposition to the application based on the following grounds: (1) that neither
the applicants nor their predecessors-in-interest have been in open, continuous, exclusive and notorious possession
and occupation of the land in question since June 12, 1945 or earlier as required by Section 48 (b) of Commonwealth
Act No. 141 (CA 141), x x x as amended by Presidential Decree No. 1073 (PD 1073); (2) that applicants failed to
adduce any muniment of title and/or the tax declarations with the petition to evidence bona fide acquisition of the land
applied for or of its open, continuous, exclusive and notorious possession and occupation thereof in the concept of an
owner since 12 June 1945 or earlier; that the tax declaration adverted to in the petition does not appear to be genuine
and the tax declaration indicates pretended possession of applicants to be of recent vintage[;] and (3) that the subject
property applied for is a portion of the public domain belonging to the Republic of the Philippines which is not subject
to private appropriation.
After trial, the trial court rendered its Decision dated March 31, 2006 granting the application for registration of title,
the dispositive portion of which reads:
"WHEREFORE, premises considered, the Court finds the application to be well-taken and the same is hereby
granted.
Let a copy of this decision be furnished the Land Registration Authority, Office of the Solicitor General and Bureau of
Lands.
SO ORDERED."
On June 12, 2008, the trial court issued the Amended Decision which increased the area subject for land registration
to two hundred sixty-two square meters (262 sqm) from two hundred fifty-six square meters (256 sqm) from the
original decision.
Disagreeing with the trial court's grant of the application for land registration, the Republic interposed [an] appeal [to
the CA].[5]
Ruling of the CA
[6]
The CA in its Decision dated February 27, 2015 denied the appeal of the Republic. The dispositive portion thereof
states:
WHEREFORE, premises considered, the present appeal is DENIED. Accordingly, the Amended Decision of the
Regional Trial Court of Bangued, Abra, Branch 2, is SUSTAINED.
SO ORDERED.[7]
The CA justified that based on the allegations of the applicants spouses Ildefonso Alejandre and Zenaida Ferrer
Alejandre (respondents) in their application for land registration and subsequent pleadings, they come under
[8]
paragraph 4 of Section 14, Presidential Decree No. (PD) 1529 - those who have acquired ownership of lands in any
manner provided for by law - because they acquired the land in question by virtue of a Deed of Absolute Sale
[9]
executed on June 20, 1990 from Angustia Alejandre Taleon who acquired the land from her mother by inheritance.
[10]
The Republic filed the instant Petition without filing a motion for reconsideration with the CA on the ground that the
CA decided the Republic's appeal in gross disregard of the law and in a manner not in accordance with the applicable
[11]
decisions of the Court.
[12] [13]
Respondents filed their "Comment and Compliance" dated July 18, 2016. The Republic filed a Reply dated
March 3, 2017.
The Issue
The Petition raises this sole issue: whether the CA seriously misappreciated the facts as well as made findings which
are inconsistent with, or not supported by, the evidence on record; and gravely misapplied the applicable laws and
[14]
jurisprudence.
The Court's Ruling
The Petition is impressed with merit.
The RTC Amended Decision justified the granting of the application for land registration under the Property
Registration Decree (PD 1529) on these factual findings:
It appears from the evidence presented that the applicants acquired the property sought to be registered by means of
a Deed of Absolute Sale [dated June 20, 1990 (Exh. "K" to "K5")] executed by Angustia Alejandre Taleon as vendor
in favor of the petitioners spouses Ildefonso Alejandre and Zenaida F. Alejandre as vendees. Said property was
previously inherited by the vendor from her late mother Angustia Alejandre who inherited the same property from Don
Santiago Alejandre, the grandfather of the applicant Dr. Ildefonso Alejandre.[15]
The CA sustained the RTC Amended Decision in this wise:
Under Section 14 of PD No. 1529, there are four (4) types of applicants who may apply for registration of title to
land[,] viz[.]:
Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application for
registration of title to land, whether personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and
notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim
of ownership since June 12, 1945, or earlier.
(2) Those who have acquired ownership of private lands by prescription under the provision of existing laws.
(3) Those who have acquired ownership of private lands or abandoned river beds by right of accession or accretion
under the existing laws.
(4) Those who have acquired ownership of land in any other manner provided for by law. (Italics and Emphasis Ours)
In the case at bar, basing from the allegations of the applicants spouses in their application for land registration and
subsequent pleadings, clearly, they come under Paragraph 4 of the quoted section and not under Paragraph 1 of the
same section. It is undisputed that they acquired the land in question by virtue of a Deed of Absolute Sale executed
on June 20, 1990 from Angustia Alejandre Taleon who acquired the land from her mother by inheritance. In other
words, the applicant spouses acquired ownership over Lot 6487 through a contract of sale, which is well within the
purview of Paragraph 4 of Section 14 of P.D. No. 1529.
As a consequence, the requirement of open, continuous, exclusive and notorious possession and/or occupation in
the concept of an owner has no application in the case at bar. Not even the requirement that the land applied for
should have been declared disposable and alienable applies considering that this is just one of the requisites to be
proven when applicants for land registration fall under Paragraph 1 of Section 14 of P.D. No. 1529, which is not the
case at bar.[16]
The Republic argues that under the law, citing Section 24 of PD 1529 and Section 48(b) of Commonwealth Act No.
[17] [18]
141, as amended by Section 4 of PD 1073, before an applicant can register his title over a particular parcel of
land, he must show that: (a) he, by himself or through his predecessors-in-interest, has been in open, continuous,
exclusive and notorious possession and occupation of the subject land under a bona fide claim of ownership since
June 12, 1945, or earlier; and (b) the subject land falls within the alienable and disposable portion of the public
[19]
domain.
[20] [21]
The Republic also argues, citing Republic v. Sayo, Director of Lands v. IAC and Director of Lands v. Aquino,
[22]
that in land registration proceedings, the applicant has the burden of overcoming the presumption that the land
sought to be registered belongs to the public domain or the presumption of State ownership of the lands of the public
[23]
domain.
[24]
Citing Bracewell v. Court of Appeals, the Republic further posits that to prove that the subject land is alienable, the
applicant must establish the existence of a positive act of the government, such as a presidential proclamation or an
executive order, an administrative action, investigation reports of Bureau of Land investigators, and a legislative act
[25]
or a statute, declaring the land as already alienable and disposable.
Pursuant to Article 419 of the Civil Code, property, in relation to the person to whom it belongs, is either of public
dominion or of private ownership. As such, properties are owned either in a public capacity (dominio publico) or in a
[26]
private capacity (propiedad privado).
There are three kinds of property of public dominion: (1) those intended for public use; (2) those intended for some
public service; and (3) those intended for the development of national wealth. This is provided in Article 420 of the
Civil Code, to wit:
ART. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some public service or for the
development of the national wealth.
With respect to provinces, cities and municipalities or local government units (LGUs), property for public use "consist
of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public
[27]
works for public service paid for by said provinces, cities, or municipalities."
In turn, the Civil Code classifies property of private ownership into three categories: (1) patrimonial property of the
State under Articles 421 and 422; (2) patrimonial property of LGUs under Article 424; and (3) property belonging to
private individuals under Article 425, hence:
ART. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial
property.
ART. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of
the patrimonial property of the State.
x x x x
ART. 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city
streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid
for by said provinces, cities, or municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to
the provisions of special laws.
ART. 425. Property of private ownership, besides the patrimonial property of the State, provinces, cities, and
municipalities, consists of all property belonging to private persons, either individually or collectively.
From the foregoing, property of private ownership or patrimonial property of the State may be sub-classified into:
(1) "By nature or use" or those covered by Article 421, which are not property of public dominion or imbued with
public purpose based on the State's current or intended use; and
(2) "By conversion" or those covered by Article 422, which previously assumed the nature of property of public
dominion by virtue of the State's use, but which are no longer being used or intended for said purpose. Since those
properties could only come from property of public dominion as defined under Article 420, "converted" patrimonial
property of the State are separate from and not a subset of patrimonial property "by nature or use" under Article 421.
With respect to lands, which are immovable property pursuant to Article 415(1) of the Civil Code, they can either be
lands of public dominion or of private ownership following the general classification of property under Article 419.
Section 3, Article XII of the 1987 Constitution, which embodies the Regalian doctrine, classifies lands of the public
domain into five categories - agricultural lands, forest lands, timber lands, mineral lands, and national parks. The
provision states:
SEC. 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks.
Agricultural lands of the public domain may be further classified by law according to the uses to which they may be
devoted. Alienable lands of the public domain shall be limited to agricultural lands. x x x (Emphasis supplied)
Section 3 mandates that only lands classified as agricultural may be declared alienable, and thus susceptible of
private ownership. As the connotative term suggests, the conversion of land of the public domain into alienable and
[28]
disposable opens the latter to private ownership. At that point (i.e., upon the declaration of alienability and
disposability), the land ceases to possess the characteristics inherent in properties of public dominion that they are
outside the commerce of man, cannot be acquired by prescription, and cannot be registered under the land
[29]
registration law, and accordingly assume the nature of patrimonial property of the State that is property owned by
the State in its private capacity.
As noted by Justice Edgardo L. Paras:
It is believed that forest and mining lands are properties of public dominion of the third class, i.e., properties for the
development of the national wealth. Upon the other hand, the public agricultural lands before being made available to
the general public should also be properties of public dominion for the development of the national wealth (and as
such may not be acquired by prescription); but after being made so available, they become patrimonial property
of the State, and therefore subject to prescription. Moreover, once already acquired by private individuals,
they become private property. x x x[30] (Emphasis and underscoring supplied)
Thus, it can be gathered from the foregoing that the subject of the land registration application under Section 14 of
PD 1529 is either alienable and disposable land of public domain or private land. While Section 14(4) does not
describe or identify the kind of land unlike in (1), which refer to "alienable and disposable lands of the public domain;"
(2), which refer to "private lands"; and (3) "private lands or abandoned river beds," the land covered by (4) cannot be
[31]
other than alienable and disposable land of public domain, i.e., public agricultural lands and private lands or lands
of private ownership in the context of Article 435.
This premise proceeds from the well-entrenched rule that all lands not appearing to be clearly of private dominion or
[32]
ownership presumptively belong to the State. Accordingly, public lands not shown to have been classified,
reclassified or released as alienable agricultural land or alienated to a private person by the State remain part
[33]
of the inalienable lands of public domain. Therefore, the onus to overturn, by incontrovertible evidence,
the presumption that the land subject of an application for registration is alienable and disposable rests with
[34]
the applicant.
Respondents, based on the evidence that they adduced, are apparently claiming ownership over the land subject of
their application for registration by virtue of tradition, as a consequence of the contract of sale, and by succession in
so far as their predecessors-in-interest are concerned. Both modes are derivative modes of acquiring ownership. Yet,
they failed to prove the nature or classification of the land. The fact that they acquired the same by sale and their
transferor by succession is not incontrovertible proof that it is of private dominion or ownership. In the absence of
such incontrovertible proof of private ownership, the well-entrenched presumption arising from the Regalian
doctrine that the subject land is of public domain or dominion must be overcome. Respondents failed to do this.
The real property tax declarations (Exhibits "L" and "M"), the Deed of Absolute Sale dated June 20, 1990 (Exhibit "K"
to "K5"), and the technical descriptions of the subject property (Exhibit "J") are insufficient evidence to overcome the
presumption that the land subject of the registration is inalienable land of public domain or dominion. Thus,
respondents' application for land registration should not have been granted.
WHEREFORE, the Petition is hereby GRANTED. The Decision dated February 27, 2015 of the Court of Appeals in
CA-G.R. CV No. 101259 and the Amended Decision dated June 12, 2008 of the Regional Trial Court of Bangued,
Abra, Branch 2 in LRC Case No. N-20 are REVERSED and SET ASIDE. Respondents' application for registration in
LRC Case No. N-20 is DISMISSED without prejudice.
b. REPUBLIC OF THE PHILIPPINES, PETITIONER, v. NATIONAL COMMISSION ON

INDIGENOUS PEOPLES, et al. G.R. No. 208480, September 25, 2019
c. https://www.chanrobles.com/cralaw/2019septemberdecisions.php?id=780
The Case
Before this Court is a Petition for Review 1 under Rule 45 of the Rules of Court assailing
the Decision2 and Resolution3 of the Court of Appeals in CA-G.R. SP No. 126498 dated
15 January 2013 and22 July 2013, respectively. The Decision dismissed the Petition
for Certiorari, Prohibition and Mandamus with Prayer for the Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction filed by petitioner Republic of
the Philippines (Republic) against public respondent National Commission on Indigenous
Peoples (NCIP). The NCIP issued Certificates of Ancestral Land Title (CALTs) in favor of
private respondents, the heirs of Cosen Piraso (Pirasos) and private respondents, the
heirs of Josephine Molintas Abanag (Abanags) through Resolution Nos. 107-2010-
AL4 and 108-2010-AL,5 both dated 10 November 2010. Subsequently, public
respondent Land Registration Auhority (LRA) issued the corresponding Transfer
Certificates of Title (TCTs) covering the said properties. 6
The Antecedent Facts
Below are the facts of the case according to the Decision 7 of the Court of Appeals:
In Resolution No. 107-2010-AL, the petitioners are the heirs of Co[s]en "Sarah" Piraso,
the daughter of Piraso, otherwise known as Kapitan Piraso, an Ibaloi, who occupied an
ancestral land located at what is known as Session Road, Baguio City. Aside from
having five (5) children, Kapitan Piraso also adopted, in accordance with the Ibaloi
tradition, a son in the name of Nimer. Nimer and his family, in turn, [have] been
planting and harvesting vegetables and fruit-bearing trees on several portions of the
ancestral land.
Thereafter, the petitioners as represented by Richard A. Acop filed an application for the
identification, delineation and recognition of the ancestral land initially before Baguio
NCIP City Office pursuant to the provisions of R.A. 8371, otherwise known as the
Indigenous Peoples' Rights Act of 1997 (IPRA). The petitioners alleged that the subject
ancestral land has been occupied, possessed, and utilized by them and their
[predecessors]-in-interest for so many years. Subsequently, the NCIP recognized the
petitioners' rights over the subject parcels of ancestral land after finding that the
genealogy of the petitioners shows an unbroken line of generations starting from Piraso
who have never left the subject ancestral land for the last 120 years.
In view of said findings, the NCIP ordered the issuance of eight (8) Certificates of
Ancestral Land Titles (CALTs) under the petitioners' names as well as that of Nimer.
With respect to Resolution No. 108-2010-AL, the petitioners are the heirs of Josephine
Molintas Abanag, who in turn was a descendant of an Ibaloi native named Menchi.
Menchi originally owned several parcels of ancestral land located in various parts of
what is now known as Baguio City and these parcels were subsequently inherited by his
descendants.
Consequently, the petitioners as represented by Isaias M. Abanag and Marion T. Pool

filed a petition for the identification, delineation and recognition of their ancestral lands
in Baguio City pursuant to R.A. 8371. Thereafter, an ocular inspection was conducted
which revealed the coverage of the ancestral lands of the Molintas. In addition, the
petitioners therein also submitted numerous pieces of documentary evidence such as
the narrative of customs and traditions of the Ibaloi community in Baguio City,
Assessment of Real Property, Tax receipts, photographs of improvements, rituals, and
members of the Molintas family led by Josephine Molintas Abanag. In the end, the NCIP
granted the petition and ordered the issuance of twenty-eight (28) CALTs covering the
same number of parcels of ancestral land in the name of the petitioners and Joan L.
Gorio, a transferee often (10) parcels of land from the heirs of Josephine Molintas
Abanag.
Almost two (2) years after, here now comes the Republic of the Philippines as
represented by the Office of the Solicitor General (OSG) seeking to annul, reverse and
set aside the assailed Resolutions of the NCIP through this instant petition x x x. 8
The Resolutions of the NCIP
In its Resolution No. 107-2010-AL9 and Resolution No. 108-2010-AL10 dated 10

November 2010, the NCIP held that private respondents Pirasos and Abanags have
vested rights over their ancestral lands on the basis of a native title and as mandated
by Article XII, Section 5 of the 1987 Constitution and Republic Act No. 8371 (RA 8371),
otherwise known as "The Indigenous Peoples' Rights Act of 1997."
The NCIP described native title as "the interests and rights of indigenous inhabitants in
land, whether communal, group or individual, possessed under the traditional laws
acknowledged by, and the traditional customs observed by, the indigenous
inhabitants."11 It "has its origin in and is given its content by the traditional laws
acknowledged by and the traditional customs observed by the indigenous inhabitants of
a territory. The nature and incidents of native title must be ascertained as a matter of
fact by reference to those laws and customs." 12 The NCIP held that the Pirasos and
Abanags' entitlement to the land is mandated by Article XII, Section 5 of the 1987
Constitution which provides that "[t]he State, subject to the provisions of this
Constitution and national development policies and programs, shall protect the rights of
indigenous cultural communities to their ancestral lands to ensure their economic,
social, and cultural well-being."
The said Resolutions granted both Petitions and directed the Ancestral Domains Office,
through the Director, to prepare the necessary CALTs for each respective parcel of land
described. The NCIP ruled in both Resolutions that the Pirasos and the Abanags are
guaranteed the right to their ancestral lands provided for under Section 8, 13 RA 8371,
and such other rights granted by law.
The dispositive portion of Resolution No. 107-2010-AL provides:
WHEREFORE, premises considered, Petition is hereby GRANTED and the Ancestral

Domains Office, through the Director is directed to prepare eight (8) Certificate of
Ancestral Land Titles (CALTs) for each of the respective parcel of land described in the
technical descriptions hereto attached, bearing CALT number as follows:
1. CALT NO. CAR-BAG-1110-000268 for Parcel Lot 1
7. CALT NO. CAR-BAG-1110-000274 for Parcel Lot 7 and
Lot No. 1 shall be in the name of Manuel Nimer, of legal age, married, Filipino citizen,
and with residence and postal address at Upper Session Road, Baguio City while Lot
Nos. 2, 3 and 4 shall be in the name of the Heirs of Cosen Piraso represented by
Richard A. Acop, of legal age, married, Filipino citizen, and with residence and postal
address at Acop, Tublay, Benguet Province and Lot Nos. 3, 5, 6, 7 and 8 shall be in the
name of Joan L. Gorio of legal age, single, Filipino citizen, and with residence and postal
address at Romulo Drive, Pacdal, Baguio City.
Petitioners are guaranteed the right to ancestral lands provided for under Section 8,
R.A. 8371 and such other rights granted by law.
SO ORDERED.14
The dispositive portion of Resolution No. 108-2010-AL provides:
WHEREFORE, premises considered, Petition is hereby GRANTED and the Ancestral

Domains Office, through the Director, is directed to prepare Certificate of Ancestral
Land Titles (CALTs) for each of the respective parcel of ancestral land described in the
technical descriptions, bearing CALT number as follows:
10.CALT NO. CAR-BAG-1110-000285 for Parcel Lot 10
Lots 1, 2, 4, 5, 6, 8, 10, 14, 15, 16, 18, and 21 will each be issued Certificates of
Ancestral Land Title in the name of the Heirs of Josephine Abanag and Heirs of
Mercedes A. Tabon, represented by Isaias Abanag, of legal age, single, Filipino, and
with residence and postal address at No. 1 Gibraltar Road, Pacdal, Baguio City and
Marion T. Pool, of legal age, widow, Filipino, and with residence and postal address at
No. 1 Gibraltar Road, Pacdal, Baguio City[.]
Lots 11, 12, 13, 19, 22, 23, 25, 26, 27, and 30 will each be issued Certificates of
Ancestral Land Title in the name of Joan L. Gorio, of legal age, single, Filipino citizen
and with residence and postal address at Romulo Drive, Pacdal, Baguio City[.]
Lots 3, 7, 9, 20, 24, 29, 31 ad 32 will each be issued Certificates of Ancestral Land Title
in the name of Virginia C. Gao-an, of legal age, single, Filipino citizen, and with
residence and postal address at Justice Village, Baguio City.
Lot 17 will be issued a Certificate of Ancestral Land Title in the name of Virginia C. Gao-
an, of legal age, single, Filipino citizen, and with residence and postal address at Justice
Village, Baguio City and the 600 sq.m. portion thereof will be in the name of Isaias
Abanag, of legal age, single, Filipino citizen, and with residence and postal address at
No. 1 Gibraltar Road, Baguio City.
Lot 28 will be in the name of Virginia C. Gao-an, of legal age, single, Filipino citizen,
and with residence and postal address at Justice Village, Baguio City and the 1,000
sq.m. in the name of Isaias Abanag, of legal age, single, Filipino citizen, and with
residence and postal address at No. 1 Gibraltar Road, Baguio City.
There was a Deed of Undertaking by the Petitioners supporting their claim. Petitioners
are guaranteed the right to ancestral lands provided for under Section 8, R.A. 8371 and
such other rights granted by law.
SO ORDERED.15
The Ruling of the Court of Appeals
In its Decision16 promulgated on 15 January 2013, the Court of Appeals "agrees with

the finding of the NCIP that Baguio City is no different from any part of the Philippines
and that there is no sensible difference that merits the city's exclusion from the
coverage of the IPRA x x x."17 The dispositive portion of the ruling provides:
WHEREFORE, premises considered, the instant Petition for Certiorari, Prohibition and
Mandamus is DENIED for lack of merit, the Prayer for Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction are DENIED for being moot and
academic and the assailed Resolution Nos. 107-2010-AL and 108-2010-AL both dated
10 November 2010 and both rendered by the National Commission on Indigenous
Peoples are hereby AFFIRMED.
SO ORDERED.18
The Issues
In this Petition, the Republic of the Philippines seeks a reversal of the decision of the
Court of Appeals and raises the following arguments:
A. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR

WHEN IT DECLARED THAT LANDS WITHIN BAGUIO CITY AND THE
BAGUIO TOWNSITE RESERVATION ARE COVERED BY IPRA, CONTRARY TO
LAW AND JURISPRUDENCE COROLLARY FOR THE FOLLOWING REASONS:
1. THE BAGUIO TOWNSITE RESERVATION, WITH THE EXCEPTION OF
EXISTING PROPERTY RIGHTS RECOGNIZED OR VESTED BEFORE
THE EFFECTIVITY OF THE IPRA, IS EXEMPT FROM THE COVERAGE
OF SAID LAW AS PROVIDED IN SECTION 78 THEREOF.
2. THE NCIP HAS NO JURISDICTION TO ISSUE CALTS OVER LANDS

WITHIN BAGUIO CITY AND THE BAGUIO TOWNSITE RESERVATION,
OUTSIDE OF THOSE OVER WHICH PRIOR LAND RIGHTS AND
TITLES HAVE BEEN EARLIER RECOGNIZED BY JUDICIAL,
ADMINISTRATIVE, OR OTHER PROCESSES BEFORE THE
EFFECTIVITY OF THE IPRA.
B. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE

ERROR WHEN IT RULED THAT THE ASSAILED NCIP RESOLUTIONS ARE
VALID, CONTRARY TO THE CONSTITUTION AND APPLICABLE LAWS AND
JURISPRUDENCE.
C. ASSUMING ARGUENDO THAT THE SUBJECT CERTIFICATES OF

ANCESTRAL LAND TITLES ARE VALID, THE HONORABLE COURT OF
APPEALS COMMITTED REVERSIBLE ERROR WHEN IT UPHELD THE
ISSUANCE OF TCT BASED ON THE CALTS. THERE IS NO LAW WHICH
ALLOWS THEIR CONVERSION INTO TORRENS CERTIFICATES OF TITLE. 19
The Republic seeks the issuance of a writ of preliminary prohibitory injunction, and a
permanent injunction to restrain and enjoin the NCIP from further issuing Certificates of
Ancestral Domain Title (CADT) and CALTs in Baguio City. The subject CALTs cover
almost one-fifth (1/5) of the 57.49 square kilometers that comprise Baguio City.
The Ruling of this Court
We grant the petition.
Under the facts, the NCIP has

no legal authority to issue
CALTs or CADTs in favor of
the subject properties included
as Townsite Reservation areas
in Baguio City.
Republic Act No. 8371 (RA 8371) or the "Indigenous Peoples' Rights Act of 1997"
(IPRA) expressly excludes the City of Baguio from the application of the general
provisions of the IPRA. Section 78 of RA 8371 provides that "[t]he City of Baguio shall
remain to be governed by its Charter and all lands proclaimed as part of its townsite
reservation shall remain as such until otherwise reclassified by appropriate legislation."
Section 78 of RA 8371 states:
SECTION 78. Special Provision. — The City of Baguio shall remain to be governed

by its Charter and all lands proclaimed as part of its townsite reservation shall
remain as such until otherwise reclassified by appropriate legislation: Provided,
That prior land rights and titles recognized and/or acquired through any judicial,
administrative or other processes before the effectivity of this Act shall remain valid:
Provided, further, That this provision shall not apply to any territory which becomes
part of the City of Baguio after the effectivity of this Act. (Emphasis supplied)
Section 78 is a special provision in the IPRA which clearly mandates that (1) the City of
Baguio shall not be subject to provisions of the IPRA but shall still be governed
by its own charter; (2) all lands previously proclaimed as part of the City of
Baguio's Townsite Reservation shall remain as such; (3) the re-classification of
properties within the Townsite Reservation of the City of Baguio can only be made
through a law passed by Congress; (4) prior land rights and titles recognized and
acquired through any judicial, administrative or other process before the effectivity
of the IPRA shall remain valid; and (5) territories which became part of the City of
Baguio after effectivity of the IPRA are exempted. Thus, RA 8371 is clear that, for
properties part of the townsite reservation of Baguio City before the passage of the
IPRA, no new CALT or CADT can be issued by the NCIP. Under RA 8371, the NCIP is
devoid of any power to re-classify lands previously included as part of the
Townsite Reservation of Baguio City before RA 8371 was enacted. The said
power to re-classify these properties is solely vested in Congress and can only
be exercised by Congress through the enactment of a new law. Such prohibition
to reclassify is reiterated in the Implementing Rules of the IPRA. Rule XIII, Section 1 of
the IPRA law provides:
Section 1. Special Provision. The provisions of the Act relating to the civil, political,
social and human rights and those pertaining to the identification, delineation,
recognition, and titling of ancestral lands and domains are applicable throughout the
country; Provided; That lands within the Baguio Townsite Reservation shall not
be reclassified except through appropriate legislation x x x. (Emphasis supplied)
Section 78 of the IPRA is clear that the Charter of Baguio City shall govern the
determination of land rights within Baguio City and not the IPRA. The said declaration
by Congress is conclusive. In fact, a review of the Congressional Deliberations on both
the House and Senate bills which gave birth to the IPRA reveal that the clear intent of
the framers is to exempt Baguio City's land areas particularly the Baguio City's
Townsite Reservation from the coverage of the IPRA. House Bill No. 9125 was
sponsored by Abra Rep. Jeremias Zapata, then Chairman of the Committee on Cultural
Communities. The said House bill was originally authored and subsequently presented
and defended on the floor by Rep. Gregorio Andolana of North Cotabato. During the
Congressional Debates, House Bill No. 9125 contained a special provision on Baguio
City. The particular provision, Section 86 was amended during the House Deliberations
thereon, as follows:
MR: AVILA: One last amendment, Mr. Speaker. On page 35, line 25 (27), after the
phrase, "This Act shall not apply to lands of the City of Baguio which shall
remain to be covered by its charter and its townsite reservation status," the
phrase "NOTHING IN THIS ACT SHALL BE READ TO MEAN A DIMINUTION OF PREVIOUS
OR EXISTING RIGHTS," subject to style, Mr. Speaker.
MR. ZAPATA: The Committee accepts subject to style, Mr. Speaker.
THE DEPUTY SPEAKER (Mr. Perez, H.) Is there any objection? (Silence) The Chair hears
none; amendment is approved.20 (Emphasis supplied)
Consequently, Section 86 was amended to read:
The City of Baguio shall remain to be governend by its Charter and all lands proclaimed
as part of its townsite reservation shall remain as such until otherwise reclassified by
appropriate legislation: Provided, That prior land rights and titles recognized and/or
acquired through any judical, administrative or other processes before the effectivity of
this Act shall remain valid: Provided, further, That this provision shall not apply to any
territory which becomes part of the City of Baguio after the effectivity of this Act. 21
The amended version of Section 86, House Bill No. 9125 was eventually adopted in
whole as Section 78 of Senate Bill No. 1728. Senate Bill No. 1728, sponsored by
Senator Juan Flavier, passed into law as Republic Act No. 8371 or the IPRA in
1997. The clear legislative intent is that, despite the enactment of the IPRA,
Baguio City shall remain to be governed by its charter and that all lands
proclaimed as part of Baguio City's Townsite Reservation shall remain to be a
part of the Townsite Reservation unless reclassified by Congress. The NCIP
cannot transgress this clear legislative intent. The IPRA expressly excludes land
proclaimed to be part of the Baguio Townsite Reservation. Absent legislation passed by
Congress, the Baguio Townsite Reservation shall belong to the public and exclusively
for public purpose. The Wright Park, the Secretary's Cottage, the Senate President's
Cottage, the Mansion House, and the public roads therein which are all covered by the
assailed CALTs shall remain to exist for the benefit and enjoyment of the public. These
subject lands comprise of historical heritage and belong9 to the State. Article 420 of the
Civil Code provides:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth. (Emphasis supplied)
While the IPRA does not generally authorize the NCIP to issue ancestral land titles
within Baguio City, there are also recognized exceptions under Section 78. These refer
to (1) prior land rights and titles recognized and acquired through any judicial,
administrative or other process before the effectivity of the IPRA; and (2) territories
which became part of Baguio after the effectivity of the IPRA. (3) if declared as
alienable and disposable thru PDs or laws
For prior land rights, the remedy afforded to indigenous cultural communities is Act No.
926.22 Section 32 of Act No. 926 provides:
CHAPTER IV
FREE PATENTS TO NATIVE SETTLERS
Sec. 32. Any native of the Philippine Islands now as occupant and cultivator of
unreserved, unappropriated agricultural public land, as defined by the Act of Congress
of July first, nineteen hundred and two, who has continuously occupied and cultivated
such land, either by himself or through his ancestors, since August first, eighteen
hundred and ninety; or who prior to August first, eighteen hundred and ninety eight
continuously occupied and cultivated such land for three years immediately prior to said
date, and who has been continuously since July fourth, nineteen hundred and two, until
the date of the taking effect of this Act, an occupier and cultivator of such land, shall be
entitled to have a patent issued to him without compensation for such tract of land, not
exceeding sixteen hectares, as hereinafter in this chapter provided.
On 1 September 1909, Baguio City was incorporated by the Philippine Assembly. On 12

April 1912, the Baguio Townsite Reservation was established. Upon the establishment
of the Baguio Townsite Reservation, there remained a question as to what portions of
the reservation were public and private. If declared private, such lands were registrable
under Act No. 496 or the Land Registration Act, as provided for by Act No. 926 or the
Public Land Act. In 1912, Civil Reservation Case No. 1, General Land Registration Office
(GLRO) Reservation Record No. 211 was filed with the Court of Land Registration to
resolve which lands were declared public and private. Section 62 of Act No. 926
provides:
Sec. 62. Whenever any lands in the Philippine Islands are set apart as town sites, under
the provisions of chapter five of this Act, it shall be lawful for the Chief of the Bureau of
Public Lands, with the approval of the Secretary of the Interior, to notify the judge of
the Court of Land Registration that such lands have been reserved as a town site and
that all private lands or interests therein within the limits described forthwith to be
brought within the operation of the Land Registration Act, and to become registered
land within the meaning of said Registration Act. It shall be the duty of the judge of
said court to issue a notice thereof, stating that claims for all private lands of
interests therein within the limits described must be presented for registration
under the Land Registration Act in the manner provided in Act Numbered six
hundred and twenty seven entitled "An Act to bring immediately under the operation
of the land Registration Act all lands lying within the boundaries lawfully set apart for
military reservations, and all land[s] desired to be purchased by the Government of the
United [S]tates for military purposes." The procedure for the purpose of this section
and the legal effects thereof shall thereupon be in all respect as provided in sections
three, four, five, and six of said Act numbered six hundred and twenty seven.
(Emphasis supplied)
Under Act No. 627, any landowner affected by the declaration of military reservations
must register their titles within the period stated in the Land Registration Act.
Otherwise, such land rights would be considered barred.23 Pursuant to Section 62, the
Court of First Instance (CFI) of Benguet issued a notice on 22 July 1915 requiring all
persons claiming lots inside the Baguio Townsite Reservation to file within six months
from the date of the notice petitions for the registration of their titles under Act No.
496. On 14 June 1922, the General Land Registration Office submitted to the CFI a
report on the applications for registration and the case was duly heard. On 13
November 1922, the CFI of Benguet, in resolving Civil Reservation Case No. 1, held
that all claims for private lands by all persons not presented for registration within the
period in Act No. 627 are barred forever. Notwithstanding the CFI decision, several
native residents of Baguio City sought the exclusion of lands occupied by them from the
Baguio Townsite Reservation. Thus, on 16 August 1954, President Ramon Magsaysay
issued Administrative Order No. 55,24 series of 1954. The said Order authorized the
formation of a committee to study the claims of the inhabitants, with a view of
determining whether it was in public interest that the said landholdings
be segregated from the Baguio Townsite Reservation and opened to disposition under
the Public Land Act. Forty-eight (48) Igorot claimants originally filed claims under the
said administrative order. Two hundred eighty-five (285) others later filed additional
claims.25Respondents were not among the original and additional
claimants. Finally, in Republic v. Fañgonil,26 this Court laid to rest claims within the
Baguio Townsite Reservation, to wit:
This case is about the registration of lots located within the Baguio Townsite

Reservation. As background, it should be noted that in 1912 a petition was
filed in the Court of Land Registration regarding the Baguio Townsite
Reservation, Expediente de Reserva No. 1, GLRO Reservation Record No. 211.
In 1914, when the Land Registration Court was abolished, the record was
transferred to the Court of First Instance of Benguet.
The purpose of Case No. 211 was to determine once and for all what portions of the
Baguio Townsite Reservation were private and registerable under Act No. 496 as
provided in section 62 of Act No. 926. Once so determined, no further registration
proceeding would be allowed (Sees. 3 and 4, Act No. 627).
The court on July 22, 1915 issued a notice requiring all persons claiming lots inside the
reservation to file within six months from the date of the notice petitions for the
registration of their titles under Act No. 496. On June 13, 1922, the General Land
Registration Office submitted to the court a report regarding the applications for
registration. The case was duly heard.
Judge C. M. Villareal in a decision dated November 13, 1922 held that all lands within
the Reservation are public lands with the exception of (1) lands reserved for specified
public uses and (2) lands claimed and adjudicated as private property. He ruled that
claims for private lands by all persons not presented for registration within the period
fixed in Act No. 627, in relation to the first Public Land Law, Act No. 926, were barred
forever. (Sees. 3 and 4, Act No. 627.)
That 1922 decision established the rule that lots of the Baguio Townsite Reservation,
being public domain, are not registerable under Act No. 496. As held by Judge
Belmonte in a 1973 case, the Baguio Court of First Instance "has no Jurisdiction to
entertain any land registration proceedings" under Act No. 496 and the Public Land
Law, covering any lot within the Baguio Townsite Reservation which was terminated in
1922 (Camdas vs. Director of Lands, L-37782, Resolution of this Court of March 8,
1974, dismissing petition for review of Judge Belmonte's ruling).
In the instant case, after more than half a century from the 1922 decision declaring the
townsite public domain, or during the years 1972 to 1976, Modesta Paris, Lagya Paris,
Samuel Baliwan, Pablo Ramos, Jr., Josephine Abanag, Menita T. Victor, Emiliano
Bautista and Odi Dianson filed with the Court of First Instance of Baguio applications for
the registration of lots (with considerable areas) inside the Baguio Townsite
Reservation.
Alternatively, they allege that in case the lots are not registerable under Act No. 496,
then section 48 (b) and (c) of the Public Land Law should be applied because they and
their predecessors have been in possession of the lots for more than thirty years.
The Director of Lands opposed the applications. He filed motions to dismiss on the
grounds of lack of jurisdiction, prescription and res judicata. He relied on the decision in
the first registration case, a proceeding in rem, which barred all subsequent
registrations of the Baguio Townsite lots. He contended that the disposition of said lots
should be made by the Director of Lands under Chapter 11 of the Public Land Law
regarding Townsite Reservations. (See Cojuangco vs. Marcos, 82 SCRA 156).
The trial judge admits that section 48 cannot be invoked by the applicants because it
applies only to disposable agricultural lands situated outside the reservation. He
concedes that lands within the Baguio Townsite Reservation may not be acquired by
long possession for over thirty years subsequent to Case No. 211 (p. 195, Rollo).
But he refused to dismiss the application[s] because in his opinion "there is a necessity
[for] the presentation of satisfactory evidence in a regular hearing as to the presence or
absence of complete service of notice" so that the court can determine whether the
applications are barred by res judicata. He relies on the isolated case of Zarate vs.
Director of Lands, 58 Phil. 156.
The Solicitor General assailed by certiorari that order denying the motions to dismiss.
Sections 3 and 4 of Act No. 627, the law governing military reservations, contemplate
notification to two classes of persons, namely, (1) those who are living upon or in
visible possession of any part of the military reservation and (2) persons who are not
living upon or in visible possession but are absentees.
A distinction is made between these two classes of persons as to the manner in which
service of the notice shall be made. Service is complete as to absentees when
publication of the notice in the newspaper is completed and duly fixed upon the four
corners of the premises. The six-month period commences to run from that time.
On the other hand, as to those who are living upon or in visible possession of the lands,
service is not complete, and the six-month period does not begin to run until the notice
is served upon them personally. Their rights relative to the period within which they
must respond are determined by the date of the personal service.
Their notice was a personal notice given by personal service. Only such notice could set
the running of the six-month period against them. (Lagariza, Saba and Garcia vs.
Commanding General, 22 Phil. 297, 302; Zarate vs. Director of Lands, 58 Phil.
156,159-160.)
As already noted, the fact is that the notice in Case No. 211 was issued on July
22,1915. The clerk of court certified that 134 persons living upon or in visible
possession of any part of the reservation were personally served with notice
of the reservation. Section 3 of Act No. 627 provides that the certificate of the clerk
of court is "conclusive proof of service". (Zarate case, pp. 158,162.)
In the Zarate case, the applications for registration of lots within the Baguio Townsite
Reservation were filed in 1930 and 1931 or more than eight years after the decision
was rendered in 1922.
The Zarate case is truly an exceptional case because the applicants were able to prove
that in 1915 they were in visible occupation of their lots and the clerk of court did not
serve personal notice upon them. The expediente of Case No. 211 was then still
existing. The Zarate case cannot be a precedent at this late hour.
The situation in the Zarate case has not been duplicated since 1933. Judge Fangonil
seeks to apply the ruling therein to the instant eight cases. We find that his order is
unwarranted or unreasonable. It would reopen Case No. 211. It would give way to
baseless litigations intended to be foreclosed by that 1912 case.
Private claimants to lands within the Baguio Townsite Reservation were given
a chance to register their lands in Case No. 211. The provisions of Act No. 627,
allowing them to do so, are in harmony with the 1909 epochal decision of
Justice Holmes in Cariño vs. Insular Government, 212 U.S. 449,41 Phil. 935.
The two Igorots named Zarate and those who were allowed to register their
lots in Case No. 211, like Mateo Cariño, the Igorot involved in the Cariño case,
inherited their lands from their ancestors. They had possession of the lands
since time immemorial. The Igorots were allowed to avail themselves of
registration under Act No. 496.
Here, the eight applicants do not base their applications under Act No. 496 on
any purchase or grant from the State nor on possession since time
immemorial. That is why Act No. 496 cannot apply to them. (See Manila
Electric Company vs. Castro-Bartolome, L- 49623, June 29, 1982, 114 SCRA
799.) They are not "Igorot claimants" (See p. 35, Memo of Solicitor General).
Moreover, Annex I of the petition for certiorari shows that the previous attempts of

some applicants and their predecessors to reopen Case No. 211 were dismissed as
shown below:
Name Date Filed Date Dismissed

1) Samuel Baliwan Dec. 27, 1968 Aug. 15, 1970
Tommy Banguillas,
2) predecessor of May 6, 1965 June 19, 1967
Pablo Ramos, Jr.
3) Josephine Abanag Jan. 9, 1961 July 9, 1963
Sergio Molintas,
4) predecessor of Dec. 26, 1968 Oct. 31, 1974
Josephine Abanag
5) Josephine Abanag April 26, 1966 Nov. 12, 1974

6) Lagya Paris Oct. 15, 1965 Nov. 13, 1974
In the case of Abanag, she succeeded to two lots claimed by Sumay and Molintas for
which Torrens titles were issued in Case No. 211 on October 21, 1919 (Annexes J and K
of Petition). The lots, which Abanag now seeks to register, were not previously claimed
by her predecessors in Case No. 211 (p. 33, Sol. Gen.'s Memo).
We hold that the trial court erred in requiring the presentation of evidence as to the
notice required under Act No. 627. Such evidence cannot be produced at this time
because the court record of Case No. 211 was completely destroyed during the last
war.
Anyway, the applicants have the burden of proving that their predecessors were living
upon or in visible possession of the lands in 1915 and were not served any notice. If
they have such evidence, apart from unreliable oral testimony, they should have
produced it during the hearing on the motions to dismiss.
To support his motions to dismiss, the Solicitor General introduced evidence proving
that after Case No. 211 it has always been necessary to issue Presidential
proclamations for the disposition of portions of the Baguio Townsite Reservation (Annex
E of Petition).
The period of more than fifty years completely bars the applicants from securing relief
due to the alleged lack of personal notice to their predecessors. The law helps the
vigilant but not those who sleep on their rights. "For time is a means of destroying
obligations and actions, because time runs against the slothful and contemners of their
own rights."
WHEREFORE, the order denying the motions to dismiss is reversed and set aside. The
applications for registration are hereby dismissed. No costs.
SO ORDERED. 27 (Boldfacing supplied, italicization in the original)

In Fañgonil, the alleged claims were not previously claimed by the predecessors-in-
interest and, therefore, the Court declared that the said properties were not susceptible
of registration. Since the claimants did not base their applications under Act No. 496 or
any purchase from the State, the Court held that the said claims were not considered
valid native claims. Under Fañgonil, 134 persons living upon or in visible possession
were personally served with the notice of reservation. Section 3 of Act No. 627 provides
that the certification by the clerk of court is "conclusive proof of service" of the said
notice. Since respondents in the present case claim possession since time immemorial,
their predecessors were necessarily given notice of the reservation and, hence, should
have filed their claims within the stated period. However, no such claim was filed.
In fact, the said lots in the present case were not shown to be part of any
ancestral land prior to the effectivity of the IPRA. To stress, private
respondents' rights over the subject properties located in the Townsite
Reservation in Baguio City were never recognized in any administrative or
judicial proceedings prior to the effectivity of the IPRA law. The CALTs and
CADTs issued by the NCIP to respondents are thus void.
WHEREFORE, the Court GRANTS the petition. The Court REVERSES the Decision and

Resolution of the Court of Appeals in CA-G.R. SP No. 126498. The National Commission
on Indigenous Peoples Resolution Nos. 107-2010-AL and 108-2010-AL; O-CALT Nos.
129 and 130 including corresponding TCT Nos. with CALT Nos.:
CALT NO. CAR-BAG-1110-000268 for Parcel Lot 1

and all derivative titles thereto issued subsequent to the filing of the petition are
declared NULL and VOID.
Article 421. All other property of the State, which is not of the character stated in the preceding
article, is patrimonial property. (340a)
-Patrimonial Property- property it owns but which is not devoted to public use, public service
or the development of national wealth. Owned by the State in its private capacity.
-Churches and properties of the Roman Catholic Church especially those built during and
before the Spanish Regime belong to the Church as private properties.
-can be validly leased by the government to private individuals
-Friar Lands. Thousands of hectares of the best land in the archipelago were owned or held
by the religious orders. The friars had held these lands for centuries. The economic
effect of these holdings was detrimental on account of the prohibitive rents which
were demanded for them. The religious orders would not sell these lands of their own
accord, and thus the Filipino agriculturists who desired to utilize them were
prevented either from buying or renting. The government was also at a loss, since no
taxes were paid on the lands of the church. This state of affairs was held by the
American authorities to be inconsistent with the best interests of the Filipino people,
and with the ideals of a free government.(
https://www.cambridge.org/core/journals/american-political-science-
review/article/origin-of-the-friar-lands-question-in-the-
philippines/363A795A7FCBB92F3352A3E6B1CDDC5F)
Were purchased by the government for sale to actual occupants under the provisions
of Act 1120 or the Friar Lands Act
These lands are not public lands but private and patrimonial lands of the government.
The Land Management Bureau shall first issue a certificate stating therein that the
government has agreed to sell the land to such settler or occupant.
-properties obtained in escheat proceedings, donated to the government, municipal-owned
waterworks
-since these are private properties of the State, these can be acquired by private individuals
Article 422. Property of public dominion, when no longer intended for public use or for public
service, shall form part of the patrimonial property of the State. (341a)
-conversion- abandonment of intention to use a property for public service; abandonment
must be definite and made by authorized persons. Non-use does not automatically convert
a property of public dominion into patrimonial property.
-there must be a presidential proclamation by the President or a law/ordinance expressly
converting the use of a property from public use to private property
-reclaimed lands- result of the intervention of man; does not fall under the category of
natural resource which under the Constitution are inalienable; it is statutory law which
determines the status of reclaimed land
Read:
a. Francisco I. Chavez, Petitioner, Vs.National Housing Authority, et al. G.R. No. 164527

August 15, 2007
https://lawphil.net/judjuris/juri2007/aug2007/gr_164527_2007.html) -rules related to reclaimed
lands
G.R. No. 164527 August 15, 2007
FRANCISCO I. CHAVEZ, Petitioner,

vs.
NATIONAL HOUSING AUTHORITY, R-II BUILDERS, INC., R-II HOLDINGS, INC.,
HARBOUR CENTRE PORT TERMINAL, INC., and MR. REGHIS ROMERO II, Respondents.
DECISION
VELASCO, JR., J.:
In this Petition for Prohibition and Mandamus with Prayer for Temporary Restraining Order
and/or Writ of Preliminary Injunction under Rule 65, petitioner, in his capacity as taxpayer,
seeks:
to declare NULL AND VOID the Joint Venture Agreement (JVA) dated March 9, 1993 between
the National Housing Authority and R-II Builders, Inc. and the Smokey Mountain Development
and Reclamation Project embodied therein; the subsequent amendments to the said JVA; and all
other agreements signed and executed in relation thereto – including, but not limited to the
Smokey Mountain Asset Pool Agreement dated 26 September 1994 and the separate agreements
for Phase I and Phase II of the Project––as well as all other transactions which emanated
therefrom, for being UNCONSTITUTIONAL and INVALID;
to enjoin respondents—particularly respondent NHA—from further implementing and/or

enforcing the said project and other agreements related thereto, and from further deriving and/or
enjoying any rights, privileges and interest therefrom x x x; and
to compel respondents to disclose all documents and information relating to the project––
including, but not limited to, any subsequent agreements with respect to the different phases of
the project, the revisions over the original plan, the additional works incurred thereon, the current
financial condition of respondent R-II Builders, Inc., and the transactions made respecting the
project.1
The Facts
On March 1, 1988, then President Corazon C. Aquino issued Memorandum Order No. (MO)
1612 approving and directing the implementation of the Comprehensive and Integrated
Metropolitan Manila Waste Management Plan (the Plan). The Metro Manila Commission, in
coordination with various government agencies, was tasked as the lead agency to implement the
Plan as formulated by the Presidential Task Force on Waste Management created by
Memorandum Circular No. 39. A day after, on March 2, 1988, MO 161-A3 was issued,
containing the guidelines which prescribed the functions and responsibilities of fifteen (15)
various government departments and offices tasked to implement the Plan, namely: Department
of Public Works and Highway (DPWH), Department of Health (DOH), Department of
Environment and Natural Resources (DENR), Department of Transportation and
Communication, Department of Budget and Management, National Economic and Development
Authority (NEDA), Philippine Constabulary Integrated National Police, Philippine Information
Agency and the Local Government Unit (referring to the City of Manila), Department of Social
Welfare and Development, Presidential Commission for Urban Poor, National Housing
Authority (NHA), Department of Labor and Employment, Department of Education, Culture and
Sports (now Department of Education), and Presidential Management Staff.
Specifically, respondent NHA was ordered to "conduct feasibility studies and develop low-cost
housing projects at the dumpsite and absorb scavengers in NHA resettlement/low-cost housing
projects."4 On the other hand, the DENR was tasked to "review and evaluate proposed projects
under the Plan with regard to their environmental impact, conduct regular monitoring of
activities of the Plan to ensure compliance with environmental standards and assist DOH in the
conduct of the study on hospital waste management."5
At the time MO 161-A was issued by President Aquino, Smokey Mountain was a wasteland in
Balut, Tondo, Manila, where numerous Filipinos resided in subhuman conditions, collecting
items that may have some monetary value from the garbage. The Smokey Mountain dumpsite is
bounded on the north by the Estero Marala, on the south by the property of the National
Government, on the east by the property of B and I Realty Co., and on the west by Radial Road
10 (R-10).
Pursuant to MO 161-A, NHA prepared the feasibility studies of the Smokey Mountain low-cost
housing project which resulted in the formulation of the "Smokey Mountain Development Plan
and Reclamation of the Area Across R-10" or the Smokey Mountain Development and
Reclamation Project (SMDRP; the Project). The Project aimed to convert the Smokey Mountain
dumpsite into a habitable housing project, inclusive of the reclamation of the area across R-10,
adjacent to the Smokey Mountain as the enabling component of the project.6 Once finalized, the
Plan was submitted to President Aquino for her approval.
On July 9, 1990, the Build-Operate-and-Transfer (BOT) Law (Republic Act No. [RA] 6957) was
enacted.7 Its declared policy under Section 1 is "[t]o recognize the indispensable role of the
private sector as the main engine for national growth and development and provide the most
appropriate favorable incentives to mobilize private resources for the purpose." Sec. 3 authorized
and empowered "[a]ll government infrastructure agencies, including government-owned and
controlled corporations and local government units x x x to enter into contract with any duly pre-
qualified private contractor for the financing, construction, operation and maintenance of any
financially viable infrastructure facilities through the build-operate-transfer or build and transfer
scheme."
RA 6957 defined "build-and-transfer" scheme as "[a] contractual arrangement whereby the

contractor undertakes the construction, including financing, of a given infrastructure facility, and
its turnover after the completion to the government agency or local government unit concerned
which shall pay the contractor its total investment expended on the project, plus reasonable rate
of return thereon." The last paragraph of Sec. 6 of the BOT Law provides that the repayment
scheme in the case of "land reclamation or the building of industrial estates" may consist of
"[t]he grant of a portion or percentage of the reclaimed land or industrial estate built, subject to
the constitutional requirements with respect to the ownership of lands."
On February 10, 1992, Joint Resolution No. 038 was passed by both houses of Congress. Sec. 1
of this resolution provided, among other things, that:
Section 1. There is hereby approved the following national infrastructure projects for
implementation under the provisions of Republic Act No. 6957 and its implementing rules and
regulations:
xxxx
(d) Port infrastructure like piers, wharves, quays, storage handling, ferry service and related
facilities;
xxxx
(k) Land reclamation, dredging and other related development facilities;
(l) Industrial estates, regional industrial centers and export processing zones including steel mills,
iron-making and petrochemical complexes and related infrastructure and utilities;
xxxx
(p) Environmental and solid waste management-related facilities such as collection equipment,
composting plants, incinerators, landfill and tidal barriers, among others; and
(q) Development of new townsites and communities and related facilities.
This resolution complied with and conformed to Sec. 4 of the BOT Law requiring the approval
of all national infrastructure projects by the Congress.
On January 17, 1992, President Aquino proclaimed MO 4159 approving and directing the
implementation of the SMDRP. Secs. 3 and 4 of the Memorandum Order stated:
Section 3. The National Housing Authority is hereby directed to implement the Smokey
Mountain Development Plan and Reclamation of the Area Across R-10 through a private sector
joint venture scheme at the least cost to the government.
Section 4. The land area covered by the Smokey Mountain dumpsite is hereby conveyed to the
National Housing Authority as well as the area to be reclaimed across R-10. (Emphasis
supplied.)
In addition, the Public Estates Authority (PEA) was directed to assist in the evaluation of
proposals regarding the technical feasibility of reclamation, while the DENR was directed to (1)
facilitate titling of Smokey Mountain and of the area to be reclaimed and (2) assist in the
technical evaluation of proposals regarding environmental impact statements.10
In the same MO 415, President Aquino created an Executive Committee (EXECOM) to oversee
the implementation of the Plan, chaired by the National Capital Region-Cabinet Officer for
Regional Development (NCR-CORD) with the heads of the NHA, City of Manila, DPWH, PEA,
Philippine Ports Authority (PPA), DENR, and Development Bank of the Philippines (DBP) as
members.11 The NEDA subsequently became a member of the EXECOM. Notably, in a
September 2, 1994 Letter,12 PEA General Manager Amado Lagdameo approved the plans for
the reclamation project prepared by the NHA.
In conformity with Sec. 5 of MO 415, an inter-agency technical committee (TECHCOM) was

created composed of the technical representatives of the EXECOM "[t]o assist the NHA in the
evaluation of the project proposals, assist in the resolution of all issues and problems in the
project to ensure that all aspects of the development from squatter relocation, waste
management, reclamation, environmental protection, land and house construction meet
governing regulation of the region and to facilitate the completion of the project."13
Subsequently, the TECHCOM put out the Public Notice and Notice to Pre-Qualify and Bid for
the right to become NHA’s joint venture partner in the implementation of the SMDRP. The
notices were published in newspapers of general circulation on January 23 and 26 and February
1, 14, 16, and 23, 1992, respectively. Out of the thirteen (13) contractors who responded, only
five (5) contractors fully complied with the required pre-qualification documents. Based on the
evaluation of the pre-qualification documents, the EXECOM declared the New San Jose
Builders, Inc. and R-II Builders, Inc. (RBI) as the top two contractors.14
Thereafter, the TECHCOM evaluated the bids (which include the Pre-feasibility Study and
Financing Plan) of the top two (2) contractors in this manner:
(1) The DBP, as financial advisor to the Project, evaluated their Financial Proposals;
(2) The DPWH, PPA, PEA and NHA evaluated the Technical Proposals for the Housing
Construction and Reclamation;
(3) The DENR evaluated Technical Proposals on Waste Management and Disposal by
conducting the Environmental Impact Analysis; and
(4) The NHA and the City of Manila evaluated the socio-economic benefits presented by the
proposals.
On June 30, 1992, Fidel V. Ramos assumed the Office of the President (OP) of the Philippines.
On August 31, 1992, the TECHCOM submitted its recommendation to the EXECOM to approve
the R-II Builders, Inc. (RBI) proposal which garnered the highest score of 88.475%.
Subsequently, the EXECOM made a Project briefing to President Ramos. As a result, President
Ramos issued Proclamation No. 3915 on September 9, 1992, which reads:
WHEREAS, the National Housing Authority has presented a viable conceptual plan to convert
the Smokey Mountain dumpsite into a habitable housing project, inclusive of the reclamation of
the area across Road Radial 10 (R-10) adjacent to the Smokey Mountain as the enabling
component of the project;
xxxx
These parcels of land of public domain are hereby placed under the administration and
disposition of the National Housing Authority to develop, subdivide and dispose to qualified
beneficiaries, as well as its development for mix land use (commercial/industrial) to provide
employment opportunities to on-site families and additional areas for port-related activities.
In order to facilitate the early development of the area for disposition, the Department of
Environment and Natural Resources, through the Lands and Management Bureau, is hereby
directed to approve the boundary and subdivision survey and to issue a special patent and title in
the name of the National Housing Authority, subject to final survey and private rights, if any
there be. (Emphasis supplied.)
On October 7, 1992, President Ramos authorized NHA to enter into a Joint Venture Agreement
with RBI "[s]ubject to final review and approval of the Joint Venture Agreement by the Office of
the President."16
On March 19, 1993, the NHA and RBI entered into a Joint Venture Agreement17 (JVA) for the
development of the Smokey Mountain dumpsite and the reclamation of the area across R-10
based on Presidential Decree No. (PD) 75718 which mandated NHA "[t]o undertake the physical
and socio-economic upgrading and development of lands of the public domain identified for
housing," MO 161-A which required NHA to conduct the feasibility studies and develop a low-
cost housing project at the Smokey Mountain, and MO 415 as amended by MO 415-A which
approved the Conceptual Plan for Smokey Mountain and creation of the EXECOM and
TECHCOM. Under the JVA, the Project "involves the clearing of Smokey Mountain for
eventual development into a low cost medium rise housing complex and industrial/commercial
site with the reclamation of the area directly across [R-10] to act as the enabling component of
the Project."19 The JVA covered a lot in Tondo, Manila with an area of two hundred twelve
thousand two hundred thirty-four (212,234) square meters and another lot to be reclaimed also in
Tondo with an area of four hundred thousand (400,000) square meters.
The Scope of Work of RBI under Article II of the JVA is as follows:
a) To fully finance all aspects of development of Smokey Mountain and reclamation of no more
than 40 hectares of Manila Bay area across Radial Road 10.
b) To immediately commence on the preparation of feasibility report and detailed engineering

with emphasis to the expedient acquisition of the Environmental Clearance Certificate (ECC)
from the DENR.
c) The construction activities will only commence after the acquisition of the ECC, and
d) Final details of the contract, including construction, duration and delivery timetables, shall be
based on the approved feasibility report and detailed engineering.
Other obligations of RBI are as follows:
2.02 The [RBI] shall develop the PROJECT based on the Final Report and Detailed Engineering
as approved by the Office of the President. All costs and expenses for hiring technical personnel,
date gathering, permits, licenses, appraisals, clearances, testing and similar undertaking shall be
for the account of the [RBI].
2.03 The [RBI] shall undertake the construction of 3,500 temporary housing units complete with
basic amenities such as plumbing, electrical and sewerage facilities within the temporary housing
project as staging area to temporarily house the squatter families from the Smokey Mountain
while development is being undertaken. These temporary housing units shall be turned over to
the [NHA] for disposition.
2.04 The [RBI] shall construct 3,500 medium rise low cost permanent housing units on the
leveled Smokey Mountain complete with basic utilities and amenities, in accordance with the
plans and specifications set forth in the Final Report approved by the [NHA]. Completed units
ready for mortgage take out shall be turned over by the [RBI] to NHA on agreed schedule.
2.05 The [RBI] shall reclaim forty (40) hectares of Manila Bay area directly across [R-10] as
contained in Proclamation No. 39 as the enabling component of the project and payment to the
[RBI] as its asset share.
2.06 The [RBI] shall likewise furnish all labor materials and equipment necessary to complete all
herein development works to be undertaken on a phase to phase basis in accordance with the
work program stipulated therein.
The profit sharing shall be based on the approved pre-feasibility report submitted to the
EXECOM, viz:
For the developer (RBI):
1. To own the forty (40) hectares of reclaimed land.
2. To own the commercial area at the Smokey Mountain area composed of 1.3 hectares, and
3. To own all the constructed units of medium rise low cost permanent housing units beyond the
3,500 units share of the [NHA].
For the NHA:
1. To own the temporary housing consisting of 3,500 units.
2. To own the cleared and fenced incinerator site consisting of 5 hectares situated at the Smokey
Mountain area.
3. To own the 3,500 units of permanent housing to be constructed by [RBI] at the Smokey
Mountain area to be awarded to qualified on site residents.
4. To own the Industrial Area site consisting of 3.2 hectares, and
5. To own the open spaces, roads and facilities within the Smokey Mountain area.
In the event of "extraordinary increase in labor, materials, fuel and non-recoverability of total
project expenses,"20 the OP, upon recommendation of the NHA, may approve a corresponding
adjustment in the enabling component.
The functions and responsibilities of RBI and NHA are as follows:
For RBI:
4.01 Immediately commence on the preparation of the FINAL REPORT with emphasis to the
expedient acquisition, with the assistance of the [NHA] of Environmental Compliance Certificate
(ECC) from the Environmental Management Bureau (EMB) of the [DENR]. Construction shall
only commence after the acquisition of the ECC. The Environment Compliance Certificate
(ECC) shall form part of the FINAL REPORT.
The FINAL REPORT shall provide the necessary subdivision and housing plans, detailed
engineering and architectural drawings, technical specifications and other related and required
documents relative to the Smokey Mountain area.
With respect to the 40-hectare reclamation area, the [RBI] shall have the discretion to develop
the same in a manner that it deems necessary to recover the [RBI’s] investment, subject to
environmental and zoning rules.
4.02 Finance the total project cost for land development, housing construction and reclamation of
the PROJECT.
4.03 Warrant that all developments shall be in compliance with the requirements of the FINAL
REPORT.
4.04 Provide all administrative resources for the submission of project accomplishment reports to
the [NHA] for proper evaluation and supervision on the actual implementation.
4.05 Negotiate and secure, with the assistance of the [NHA] the grant of rights of way to the
PROJECT, from the owners of the adjacent lots for access road, water, electrical power
connections and drainage facilities.
4.06 Provide temporary field office and transportation vehicles (2 units), one (1) complete set of
computer and one (1) unit electric typewriter for the [NHA’s] field personnel to be charged to the
PROJECT.
For the NHA:
4.07 The [NHA] shall be responsible for the removal and relocation of all squatters within
Smokey Mountain to the Temporary Housing Complex or to other areas prepared as relocation
areas with the assistance of the [RBI]. The [RBI] shall be responsible in releasing the funds
allocated and committed for relocation as detailed in the FINAL REPORT.
4.08 Assist the [RBI] and shall endorse granting of exemption fees in the acquisition of all
necessary permits, licenses, appraisals, clearances and accreditations for the PROJECT subject to
existing laws, rules and regulations.
4.09 The [NHA] shall inspect, evaluate and monitor all works at the Smokey Mountain and
Reclamation Area while the land development and construction of housing units are in progress
to determine whether the development and construction works are undertaken in accordance with
the FINAL REPORT. If in its judgment, the PROJECT is not pursued in accordance with the
FINAL REPORT, the [NHA] shall require the [RBI] to undertake necessary remedial works. All
expenses, charges and penalties incurred for such remedial, if any, shall be for the account of the
[RBI].
4.10 The [NHA] shall assist the [RBI] in the complete electrification of the PROJECT. x x x
4.11 Handle the processing and documentation of all sales transactions related to its assets shares
from the venture such as the 3,500 units of permanent housing and the allotted industrial area of
3.2 hectares.
4.12 All advances outside of project costs made by the [RBI] to the [NHA] shall be deducted
from the proceeds due to the [NHA].
4.13 The [NHA] shall be responsible for the acquisition of the Mother Title for the Smokey
Mountain and Reclamation Area within 90 days upon submission of Survey returns to the Land
Management Sector. The land titles to the 40-hectare reclaimed land, the 1.3 hectare commercial
area at the Smokey Mountain area and the constructed units of medium-rise permanent housing
units beyond the 3,500 units share of the [NHA] shall be issued in the name of the [RBI] upon
completion of the project. However, the [RBI] shall have the authority to pre-sell its share as
indicated in this agreement.
The final details of the JVA, which will include the construction duration, costs, extent of
reclamation, and delivery timetables, shall be based on the FINAL REPORT which will be
contained in a Supplemental Agreement to be executed later by the parties.
The JVA may be modified or revised by written agreement between the NHA and RBI
specifying the clauses to be revised or modified and the corresponding amendments.
If the Project is 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 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 agreed
upon by both parties.
As a preliminary step in the project implementation, consultations and dialogues were conducted
with the settlers of the Smokey Mountain Dumpsite Area. At the same time, DENR started
processing the application for the Environmental Clearance Certificate (ECC) of the SMDRP. As
a result however of the consultative dialogues, public hearings, the report on the on-site field
conditions, the Environmental Impact Statement (EIS) published on April 29 and May 12, 1993
as required by the Environmental Management Bureau of DENR, the evaluation of the DENR,
and the recommendations from other government agencies, it was discovered that design
changes and additional work have to be undertaken to successfully implement the Project.21
Thus, on February 21, 1994, the parties entered into another agreement denominated as the
Amended and Restated Joint Venture Agreement22 (ARJVA) which delineated the different
phases of the Project. Phase I of the Project involves the construction of temporary housing units
for the current residents of the Smokey Mountain dumpsite, the clearing and leveling-off of the
dumpsite, and the construction of medium-rise low-cost housing units at the cleared and leveled
dumpsite.23 Phase II of the Project involves the construction of an incineration area for the on-
site disposal of the garbage at the dumpsite.24 The enabling component or consideration for
Phase I of the Project was increased from 40 hectares of reclaimed lands across R-10 to 79
hectares.25 The revision also provided for the enabling component for Phase II of 119 hectares
of reclaimed lands contiguous to the 79 hectares of reclaimed lands for Phase I.26 Furthermore,
the amended contract delineated the scope of works and the terms and conditions of Phases I and
II, thus:
The PROJECT shall consist of Phase I and Phase II.
Phase I shall involve the following:
a. the construction of 2,992 units of temporary housing for the affected residents while clearing
and development of Smokey Mountain [are] being undertaken
b. the clearing of Smokey Mountain and the subsequent construction of 3,520 units of medium
rise housing and the development of the industrial/commercial site within the Smokey Mountain
area
c. the reclamation and development of a 79 hectare area directly across Radial Road 10 to serve
as the enabling component of Phase I
Phase II shall involve the following:
a. the construction and operation of an incinerator plant that will conform to the emission
standards of the DENR
b. the reclamation and development of 119-hectare area contiguous to that to be reclaimed under
Phase I to serve as the enabling component of Phase II.
Under the ARJVA, RBI shall construct 2,992 temporary housing units, a reduction from 3,500
units under the JVA.27 However, it was required to construct 3,520 medium-rise low-cost
permanent housing units instead of 3,500 units under the JVA. There was a substantial change in
the design of the permanent housing units such that a "loft shall be incorporated in each unit so
as to increase the living space from 20 to 32 square meters. The additions and changes in the
Original Project Component are as follows:
ORIGINAL CHANGES/REVISIONS
1. TEMPORARY HOUSING
Wood/Plywood, ga. 31 G.I. Concrete/Steel Frame Structure Sheet usable life of 3 years, gauge
26 G.I. roofing sheets future 12 SM floor area. use as permanent structures for factory and
warehouses mixed 17 sm & 12 sm floor area.
2. MEDIUM RISE MASS

HOUSING
Box type precast Shelter Conventional and precast component 20 square meter concrete
structures, 32 square floor area with 2.4 meter meter floor area with loft floor height; bare type,
160 units/ (sleeping quarter) 3.6 m. floor building. height, painted and improved
architectural façade, 80 units/building.
3. MITIGATING MEASURES
3.1 For reclamation work Use of clean dredgefill material below the MLLW and SM material
mixed with dredgefill above MLLW.
a. 100% use of Smokey Mountain material as dredgefill Use of Steel Sheet Piles needed for
longer depth of embedment.
b. Concrete Sheet Piles short depth of embedment
c. Silt removal approximately Need to remove more than 3.0
1.0 meter only meters of silt after sub-soil investigation.28
These material and substantial modifications served as justifications for the increase in the share
of RBI from 40 hectares to 79 hectares of reclaimed land.
Under the JVA, the specific costs of the Project were not stipulated but under the ARJVA, the
stipulated cost for Phase I was pegged at six billion six hundred ninety-three million three
hundred eighty-seven thousand three hundred sixty-four pesos (PhP 6,693,387,364).
In his February 10, 1994 Memorandum, the Chairperson of the SMDRP EXECOM submitted the
ARJVA for approval by the OP. After review of said agreement, the OP directed that certain
terms and conditions of the ARJVA be further clarified or amended preparatory to its approval.
Pursuant to the President’s directive, the parties reached an agreement on the clarifications and
amendments required to be made on the ARJVA.
On August 11, 1994, the NHA and RBI executed an Amendment To the Amended and Restated
Joint Venture Agreement (AARJVA)29 clarifying certain terms and condition of the ARJVA,
which was submitted to President Ramos for approval, to wit:
Phase II shall involve the following:
a. the construction and operation of an incinerator plant that will conform to the emission
standards of the DENR
b. the reclamation and development of 119-hectare area contiguous to that to be reclaimed under
Phase I to serve as the enabling component of Phase II, the exact size and configuration of which
shall be approved by the SMDRP Committee30
Other substantial amendments are the following:
4. Paragraph 2.05 of Article II of the ARJVA is hereby amended to read as follows:
2.05. The DEVELOPER shall reclaim seventy nine (79) hectares of the Manila Bay area directly
across Radial Road 10 (R-10) to serve as payment to the DEVELOPER as its asset share for
Phase I and to develop such land into commercial area with port facilities; provided, that the port
plan shall be integrated with the Philippine Port Authority’s North Harbor plan for the Manila
Bay area and provided further, that the final reclamation and port plan for said reclaimed area
shall be submitted for approval by the Public Estates Authority and the Philippine Ports
Authority, respectively: provided finally, that subject to par. 2.02 above, actual reclamation work
may commence upon approval of the final reclamation plan by the Public Estates Authority.
xxxx
9. A new paragraph to be numbered 5.05 shall be added to Article V of the ARJVA, and shall
read as follows:
5.05. In the event this Agreement is revoked, cancelled or terminated by the AUTHORITY
through no fault of the DEVELOPER, the AUTHORITY shall compensate the DEVELOPER for
the value of the completed portions of, and actual expenditures on the PROJECT plus a
reasonable rate of return thereon, not exceeding that stated in the Cost Estimates of Items of
Work previously approved by the SMDRP Executive Committee and the AUTHORITY and
stated in this Agreement, as of the date of such revocation, cancellation, or termination, on a
schedule to be agreed upon by the parties, provided that said completed portions of Phase I are in
accordance with the approved FINAL REPORT.
Afterwards, President Ramos issued Proclamation No. 465 dated August 31, 199431 increasing
the proposed area for reclamation across R-10 from 40 hectares to 79 hectares,32 to wit:
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by

virtue of the powers vested in me by the law, and as recommended by the SMDRP Executive
Committee, do hereby authorize the increase of the area of foreshore or submerged lands of
Manila Bay to be reclaimed, as previously authorized under Proclamation No. 39 (s. 1992) and
Memorandum Order No. 415 (s. 1992), from Four Hundred Thousand (400,000) square meters,
more or less, to Seven Hundred Ninety Thousand (790,000) square meters, more or less.
On September 1, 1994, pursuant to Proclamation No. 39, the DENR issued Special Patent No.
3591 conveying in favor of NHA an area of 211,975 square meters covering the Smokey
Mountain Dumpsite.
In its September 7, 1994 letter to the EXECOM, the OP through then Executive Secretary
Teofisto T. Guingona, Jr., approved the ARJVA as amended by the AARJVA.
On September 8, 1994, the DENR issued Special Patent 3592 pursuant to Proclamation No. 39,
conveying in favor of NHA a 401,485-square meter area.
On September 26, 1994, the NHA, RBI, Home Insurance and Guaranty Corporation (HIGC),
now known as the Home Guaranty Corporation, and the Philippine National Bank (PNB)33
executed the Smokey Mountain Asset Pool Formation Trust Agreement (Asset Pool
Agreement).34 Thereafter, a Guaranty Contract was entered into by NHA, RBI, and HIGC.
On June 23, 1994, the Legislature passed the Clean Air Act.35 The Act made the establishment
of an incinerator illegal and effectively barred the implementation of the planned incinerator
project under Phase II. Thus, the off-site disposal of the garbage at the Smokey Mountain
became necessary.36
The land reclamation was completed in August 1996.37
Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR issued Special
Patent No. 3598 conveying in favor of NHA an additional 390,000 square meter area.
During the actual construction and implementation of Phase I of the SMDRP, the Inter-Agency
Technical Committee found and recommended to the EXECOM on December 17, 1997 that
additional works were necessary for the completion and viability of the Project. The EXECOM
approved the recommendation and so, NHA instructed RBI to implement the change orders or
necessary works.38
Such necessary works comprised more than 25% of the original contract price and as a result, the
Asset Pool incurred direct and indirect costs. Based on C1 12 A of the Implementing Rules and
Regulations of PD 1594, a supplemental agreement is required for "all change orders and extra
work orders, the total aggregate cost of which being more than twenty-five (25%) of the
escalated original contract price."
The EXECOM requested an opinion from the Department of Justice (DOJ) to determine whether
a bidding was required for the change orders and/or necessary works. The DOJ, through DOJ
Opinion Nos. 119 and 155 dated August 26, 1993 and November 12, 1993, opined that "a
rebidding, pursuant to the aforequoted provisions of the implementing rules (referring to PD
1594) would not be necessary where the change orders inseparable from the original scope of the
project, in which case, a negotiation with the incumbent contractor may be allowed."
Thus, on February 19, 1998, the EXECOM issued a resolution directing NHA to enter into a
supplemental agreement covering said necessary works.
On March 20, 1998, the NHA and RBI entered into a Supplemental Agreement covering the
aforementioned necessary works and submitted it to the President on March 24, 1998 for
approval.
Outgoing President Ramos decided to endorse the consideration of the Supplemental Agreement
to incoming President Joseph E. Estrada. On June 30, 1998, Estrada became the 13th Philippine
President.
However, the approval of the Supplemental Agreement was unacted upon for five months. As a
result, the utilities and the road networks were constructed to cover only the 79-hectare original
enabling component granted under the ARJVA. The 220-hectare extension of the 79-hectare area
was no longer technically feasible. Moreover, the financial crises and unreliable real estate
situation made it difficult to sell the remaining reclaimed lots. The devaluation of the peso and
the increase in interest cost led to the substantial increase in the cost of reclamation.
On August 1, 1998, the NHA granted RBI’s request to suspend work on the SMDRP due to "the
delay in the approval of the Supplemental Agreement, the consequent absence of an enabling
component to cover the cost of the necessary works for the project, and the resulting inability to
replenish the Asset Pool funds partially used for the completion of the necessary works."39
As of August 1, 1998 when the project was suspended, RBI had "already accomplished a portion
of the necessary works and change orders which resulted in [RBI] and the Asset Pool incurring
advances for direct and indirect cost which amount can no longer be covered by the 79-hectare
enabling component under the ARJVA."40
Repeated demands were made by RBI in its own capacity and on behalf of the asset pool on
NHA for payment for the advances for direct and indirect costs subject to NHA validation.
In November 1998, President Estrada issued Memorandum Order No. 33 reconstituting the
SMDRP EXECOM and further directed it to review the Supplemental Agreement and submit its
recommendation on the completion of the SMDRP.
The reconstituted EXECOM conducted a review of the project and recommended the
amendment of the March 20, 1998 Supplemental Agreement "to make it more feasible and to
identify and provide new sources of funds for the project and provide for a new enabling
component to cover the payment for the necessary works that cannot be covered by the 79-
hectare enabling component under the ARJVA."41
The EXECOM passed Resolution Nos. 99-16-01 and 99-16-0242 which approved the
modification of the Supplemental Agreement, to wit:
a) Approval of 150 hectares additional reclamation in order to make the reclamation feasible as
part of the enabling component.
b) The conveyance of the 15-hectare NHA Vitas property (actually 17 hectares based on surveys)
to the SMDRP Asset Pool.
c) The inclusion in the total development cost of other additional, necessary and indispensable
infrastructure works and the revision of the original cost stated in the Supplemental Agreement
dated March 20, 1998 from PhP 2,953,984,941.40 to PhP 2,969,134,053.13.
d) Revision in the sharing agreement between the parties.
In the March 23, 2000 OP Memorandum, the EXECOM was authorized to proceed and complete
the SMDRP subject to certain guidelines and directives.
After the parties in the case at bar had complied with the March 23, 2000 Memorandum, the
NHA November 9, 2000 Resolution No. 4323 approved "the conveyance of the 17-hectare Vitas
property in favor of the existing or a newly created Asset Pool of the project to be developed into
a mixed commercial-industrial area, subject to certain conditions."
On January 20, 2001, then President Estrada was considered resigned. On the same day,
President Gloria M. Arroyo took her oath as the 14th President of the Philippines.
As of February 28, 2001, "the estimated total project cost of the SMDRP has reached P8.65
billion comprising of P4.78 billion in direct cost and P3.87 billion in indirect cost,"43 subject to
validation by the NHA.
On August 28, 2001, NHA issued Resolution No. 4436 to pay for "the various necessary
works/change orders to SMDRP, to effect the corresponding enabling component consisting of
the conveyance of the NHA’s Vitas Property and an additional 150-hectare reclamation area"
and to authorize the release by NHA of PhP 480 million "as advance to the project to make the
Permanent Housing habitable, subject to reimbursement from the proceeds of the expanded
enabling component."44
On November 19, 2001, the Amended Supplemental Agreement (ASA) was signed by the
parties, and on February 28, 2002, the Housing and Urban Development Coordinating Council
(HUDCC) submitted the agreement to the OP for approval.
In the July 20, 2002 Cabinet Meeting, HUDCC was directed "to submit the works covered by the
PhP 480 million [advance to the Project] and the ASA to public bidding."45 On August 28,
2002, the HUDCC informed RBI of the decision of the Cabinet.
In its September 2, 2002 letter to the HUDCC Chairman, RBI lamented the decision of the
government "to bid out the remaining works under the ASA thereby unilaterally terminating the
Project with RBI and all the agreements related thereto." RBI demanded the payment of just
compensation "for all accomplishments and costs incurred in developing the SMDRP plus a
reasonable rate of return thereon pursuant to Section 5.05 of the ARJVA and Section 6.2 of the
ASA."46
Consequently, the parties negotiated the terms of the termination of the JVA and other
subsequent agreements.
On August 27, 2003, the NHA and RBI executed a Memorandum of Agreement (MOA) whereby
both parties agreed to terminate the JVA and other subsequent agreements, thus:
1. TERMINATION
1.1 In compliance with the Cabinet directive dated 30 July 2002 to submit the works covered by
the P480 Million and the ASA to public bidding, the following agreements executed by and
between the NHA and the DEVELOPER are hereby terminated, to wit:
a. Joint Venture Agreement (JVA) dated 19 March 1993
b. Amended and Restated Joint Venture Agreement (ARJVA) dated 21 February 1994
c. Amendment and Restated Joint Venture Agreement dated 11 August 1994
d. Supplemental Agreement dated 24 March 1998
e. Amended Supplemental Agreement (ASA) dated 19 November 2001.
xxxx
5. SETTLEMENT OF CLAIMS
5.1 Subject to the validation of the DEVELOPER’s claims, the NHA hereby agrees to initially
compensate the Developer for the abovementioned costs as follows:
a. Direct payment to DEVELOPER of the amounts herein listed in the following manner:
a.1 P250 Million in cash from the escrow account in accordance with Section 2 herewith;
a.2 Conveyance of a 3 hectare portion of the Vitas Industrial area immediately after joint
determination of the appraised value of the said property in accordance with the procedure herein
set forth in the last paragraph of Section 5.3. For purposes of all payments to be made through
conveyance of real properties, the parties shall secure from the NHA Board of Directors all
documents necessary and sufficient to effect the transfer of title over the properties to be
conveyed to RBI, which documents shall be issued within a reasonable period.
5.2 Any unpaid balance of the DEVELOPERS claims determined after the validation process
referred to in Section 4 hereof, may be paid in cash, bonds or through the conveyance of
properties or any combination thereof. The manner, terms and conditions of payment of the
balance shall be specified and agreed upon later within a period of three months from the time a
substantial amount representing the unpaid balance has been validated pursuant hereto including,
but not limited to the programming of quarterly cash payments to be sourced by the NHA from
its budget for debt servicing, from its income or from any other sources.
5.3 In any case the unpaid balance is agreed to be paid, either partially or totally through
conveyance of properties, the parties shall agree on which properties shall be subject to
conveyance. The NHA and DEVELOPER hereby agree to determine the valuation of the
properties to be conveyed by getting the average of the appraisals to be made by two (2)
mutually acceptable independent appraisers.
Meanwhile, respondent Harbour Centre Port Terminal, Inc. (HCPTI) entered into an agreement
with the asset pool for the development and operations of a port in the Smokey Mountain Area
which is a major component of SMDRP to provide a source of livelihood and employment for
Smokey Mountain residents and spur economic growth. A Subscription Agreement was executed
between the Asset Pool and HCPTI whereby the asset pool subscribed to 607 million common
shares and 1,143 million preferred shares of HCPTI. The HCPTI preferred shares had a premium
and penalty interest of 7.5% per annum and a mandatory redemption feature. The asset pool paid
the subscription by conveying to HCPTI a 10-hectare land which it acquired from the NHA
being a portion of the reclaimed land of the SMDRP. Corresponding certificates of titles were
issued to HCPTI, namely: TCT Nos. 251355, 251356, 251357, and 251358.
Due to HCPTI’s failure to obtain a license to handle foreign containerized cargo from PPA, it
suffered a net income loss of PhP 132,621,548 in 2002 and a net loss of PhP 15,540,063 in 2003.
The Project Governing Board of the Asset Pool later conveyed by way of dacion en pago a
number of HCPTI shares to RBI in lieu of cash payment for the latter’s work in SMDRP.
On August 5, 2004, former Solicitor General Francisco I. Chavez, filed the instant petition which
impleaded as respondents the NHA, RBI, R-II Holdings, Inc. (RHI), HCPTI, and Mr. Reghis
Romero II, raising constitutional issues.
The NHA reported that thirty-four (34) temporary housing structures and twenty-one (21)
permanent housing structures had been turned over by respondent RBI. It claimed that 2,510
beneficiary-families belonging to the poorest of the poor had been transferred to their permanent
homes and benefited from the Project.
The Issues
The grounds presented in the instant petition are:
Neither respondent NHA nor respondent R-II builders may validly reclaim foreshore and
submerged land because:
1. Respondent NHA and R-II builders were never granted any power and authority to reclaim
lands of the public domain as this power is vested exclusively with the PEA.
2. Even assuming that respondents NHA and R-II builders were given the power and authority to
reclaim foreshore and submerged land, they were never given the authority by the denr to do so.
II
Respondent R-II builders cannot acquire the reclaimed foreshore and submerged land areas
because:
1. The reclaimed foreshore and submerged parcels of land are inalienable public lands which are
beyond the commerce of man.
2. Assuming arguendo that the subject reclaimed foreshore and submerged parcels of land were
already declared alienable lands of the public domain, respondent R-II builders still could not
acquire the same because there was never any declaration that the said lands were no longer
needed for public use.
3. Even assuming that the subject reclaimed lands are alienable and no longer needed for public
use, respondent R-II builders still cannot acquire the same because there was never any law
authorizing the sale thereof.
4. There was never any public bidding awarding ownership of the subject land to respondent R-II
builders.
5. Assuming that all the requirements for a valid transfer of alienable public had been performed,
respondent R-II Builders, being private corporation is nonetheless expresslyprohibited by the
Philippine Constitution to acquire lands of the public domain.
III
Respondent harbour, being a private corporation whose majority stocks are owned and controlled
by respondent Romero’s Corporations – R-II builders and R-II Holdings – is disqualified from
being a transferee of public land.
IV
Respondents must be compelled to disclose all information related to the smokey mountain
development and reclamation project.
The Court’s Ruling
Before we delve into the substantive issues raised in this petition, we will first deal with several
procedural matters raised by respondents.
Whether petitioner has the requisite locus standi to file this case
Respondents argue that petitioner Chavez has no legal standing to file the petition.
Only a person who stands to be benefited or injured by the judgment in the suit or entitled to the
avails of the suit can file a complaint or petition.47 Respondents claim that petitioner is not a
proper party-in-interest as he was unable to show that "he has sustained or is in immediate or
imminent danger of sustaining some direct and personal injury as a result of the execution and
enforcement of the assailed contracts or agreements."48 Moreover, they assert that not all
government contracts can justify a taxpayer’s suit especially when no public funds were utilized
in contravention of the Constitution or a law.
We explicated in Chavez v. PCGG49 that in cases where issues of transcendental public

importance are presented, there is no necessity to show that petitioner has experienced or is in
actual danger of suffering direct and personal injury as the requisite injury is assumed. We find
our ruling in Chavez v. PEA50 as conclusive authority on locus standi in the case at bar since the
issues raised in this petition are averred to be in breach of the fair diffusion of the country’s
natural resources and the constitutional right of a citizen to information which have been
declared to be matters of transcendental public importance. Moreover, the pleadings especially
those of respondents readily reveal that public funds have been indirectly utilized in the Project
by means of Smokey Mountain Project Participation Certificates (SMPPCs) bought by some
government agencies.
Hence, petitioner, as a taxpayer, is a proper party to the instant petition before the court.
Whether petitioner’s direct recourse to this Court was proper
Respondents are one in asserting that petitioner circumvents the principle of hierarchy of courts
in his petition. Judicial hierarchy was made clear in the case of People v. Cuaresma, thus:
There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals,
and should also serve as a general determinant of the appropriate forum for petitions for the
extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that
petitions for the issuance of extraordinary writs against first level ("inferior") courts should be
filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A
direct invocation of the Supreme Court’s original jurisdiction to issue these writs should be
allowed only when there are special and important reasons therefor, clearly and specifically set
out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate
demands upon the Court’s time and attention which are better devoted to those matters within its
exclusive jurisdiction, and to prevent further over-crowding of the Court’s docket.51 x x x
The OSG claims that the jurisdiction over petitions for prohibition and mandamus is concurrent
with other lower courts like the Regional Trial Courts and the Court of Appeals. Respondent
NHA argues that the instant petition is misfiled because it does not introduce special and
important reasons or exceptional and compelling circumstances to warrant direct recourse to this
Court and that the lower courts are more equipped for factual issues since this Court is not a trier
of facts. Respondents RBI and RHI question the filing of the petition as this Court should not be
unduly burdened with "repetitions, invocation of jurisdiction over constitutional questions it had
previously resolved and settled."
In the light of existing jurisprudence, we find paucity of merit in respondents’ postulation.

While direct recourse to this Court is generally frowned upon and discouraged, we have however
ruled in Santiago v. Vasquez that such resort to us may be allowed in certain situations, wherein
this Court ruled that petitions for certiorari, prohibition, or mandamus, though cognizable by
other courts, may directly be filed with us if "the redress desired cannot be obtained in the
appropriate courts or where exceptional compelling circumstances justify availment of a remedy
within and calling for the exercise of [this Court’s] primary jurisdiction."521avvphi1
The instant petition challenges the constitutionality and legality of the SMDRP involving several
hectares of government land and hundreds of millions of funds of several government agencies.
Moreover, serious constitutional challenges are made on the different aspects of the Project
which allegedly affect the right of Filipinos to the distribution of natural resources in the country
and the right to information of a citizen—matters which have been considered to be of
extraordinary significance and grave consequence to the public in general. These concerns in the
instant action compel us to turn a blind eye to the judicial structure meant to provide an orderly
dispensation of justice and consider the instant petition as a justified deviation from an
established precept.
Core factual matters undisputed
Respondents next challenge the projected review by this Court of the alleged factual issues
intertwined in the issues propounded by petitioner. They listed a copious number of questions
seemingly factual in nature which would make this Court a trier of facts.53
We find the position of respondents bereft of merit.
For one, we already gave due course to the instant petition in our January 18, 2005 Resolution.54
In said issuance, the parties were required to make clear and concise statements of established
facts upon which our decision will be based.
Secondly, we agree with petitioner that there is no necessity for us to make any factual findings
since the facts needed to decide the instant petition are well established from the admissions of
the parties in their pleadings55 and those derived from the documents appended to said
submissions. Indeed, the core facts which are the subject matter of the numerous issues raised in
this petition are undisputed.
Now we will tackle the issues that prop up the instant petition.
Since petitioner has cited our decision in PEA as basis for his postulations in a number of issues,
we first resolve the query—is PEA applicable to the case at bar?
A juxtaposition of the facts in the two cases constrains the Court to rule in the negative.
The Court finds that PEA is not a binding precedent to the instant petition because the facts in
said case are substantially different from the facts and circumstances in the case at bar, thus:
(1) The reclamation project in PEA was undertaken through a JVA entered into between PEA
and AMARI. The reclamation project in the instant NHA case was undertaken by the NHA, a
national government agency in consultation with PEA and with the approval of two Philippine
Presidents;
(2) In PEA, AMARI and PEA executed a JVA to develop the Freedom Islands and reclaim
submerged areas without public bidding on April 25, 1995. In the instant NHA case, the NHA
and RBI executed a JVA after RBI was declared the winning bidder on August 31, 1992 as the
JVA partner of the NHA in the SMDRP after compliance with the requisite public bidding.
(3) In PEA, there was no law or presidential proclamation classifying the lands to be reclaimed
as alienable and disposal lands of public domain. In this RBI case, MO 415 of former President
Aquino and Proclamation No. 39 of then President Ramos, coupled with Special Patents Nos.
3591, 3592, and 3598, classified the reclaimed lands as alienable and disposable;
(4) In PEA, the Chavez petition was filed before the amended JVA was executed by PEA and
AMARI.1avvphi1 In this NHA case, the JVA and subsequent amendments were already
substantially implemented. Subsequently, the Project was terminated through a MOA signed on
August 27, 2003. Almost one year later on August 5, 2004, the Chavez petition was filed;
(5) In PEA, AMARI was considered to be in bad faith as it signed the amended JVA after the
Chavez petition was filed with the Court and after Senate Committee Report No. 560 was issued
finding that the subject lands are inalienable lands of public domain. In the instant petition, RBI
and other respondents are considered to have signed the agreements in good faith as the Project
was terminated even before the Chavez petition was filed;
(6) The PEA-AMARI JVA was executed as a result of direct negotiation between the parties and
not in accordance with the BOT Law. The NHA-RBI JVA and subsequent amendments
constitute a BOT contract governed by the BOT Law; and
(7) In PEA, the lands to be reclaimed or already reclaimed were transferred to PEA, a
government entity tasked to dispose of public lands under Executive Order No. (EO) 525.56 In
the NHA case, the reclaimed lands were transferred to NHA, a government entity NOT tasked to
dispose of public land and therefore said alienable lands were converted to patrimonial lands
upon their transfer to NHA.57
Thus the PEA Decision58 cannot be considered an authority or precedent to the instant case. The
principle of stare decisis59 has no application to the different factual setting of the instant case.
We will now dwell on the substantive issues raised by petitioner. After a perusal of the grounds
raised in this petition, we find that most of these issues are moored on our PEA Decision which,
as earlier discussed, has no application to the instant petition. For this reason alone, the petition
can already be rejected. Nevertheless, on the premise of the applicability of said decision to the
case at bar, we will proceed to resolve said issues.
First Issue: 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
Petitioner contends that neither respondent NHA nor respondent RBI may validly reclaim
foreshore and submerged land because they were not given any power and authority to reclaim
lands of the public domain as this power was delegated by law to PEA.
Asserting that existing laws did not empower the NHA and RBI to reclaim lands of public
domain, the Public Estates Authority (PEA), petitioner claims, is "the primary authority for the
reclamation of all foreshore and submerged lands of public domain," and relies on PEA where
this Court held:
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily
responsible for integrating, directing, and coordinating all reclamation projects for and on behalf
of the National Government." The same section also states that "[A]ll reclamation projects shall
be approved by the President upon recommendation of the PEA, and shall be undertaken by the
PEA or through a proper contract executed by it with any person or entity; x x x." Thus, under
EO No. 525, in relation to PD No. 3-A and PD No. 1084, PEA became the primary
implementing agency of the National Government to reclaim foreshore and submerged lands of
the public domain. EO No. 525 recognized PEA as the government entity "to undertake the
reclamation of lands and ensure their maximum utilization in promoting public welfare and
interests." Since large portions of these reclaimed lands would obviously be needed for public
service, there must be a formal declaration segregating reclaimed lands no longer needed for
public service from those still needed for public service.60
In the Smokey Mountain Project, petitioner clarifies that the reclamation was not done by PEA
or through a contract executed by PEA with another person or entity but by the NHA through an
agreement with respondent RBI. Therefore, he concludes that the reclamation is null and void.
Petitioner’s contention has no merit.
EO 525 reads:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the National
Government. All reclamation projects shall be approved by the President upon recommendation
of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with
any person or entity; Provided, that, reclamation projects of any national government agency or
entity authorized under its charter shall be undertaken in consultation with the PEA upon
approval of the President. (Emphasis supplied.)
The aforequoted provision points to three (3) requisites for a legal and valid reclamation project,
viz:
(1) approval by the President;

(2) favorable recommendation of PEA; and
(3) undertaken by any of the following:
a. by PEA
b. by any person or entity pursuant to a contract it executed with PEA
c. by the National Government agency or entity authorized under its charter to reclaim lands
subject to consultation with PEA
Without doubt, PEA under EO 525 was designated as the agency primarily responsible for
integrating, directing, and coordinating all reclamation projects. Primarily means "mainly,
principally, mostly, generally." Thus, not all reclamation projects fall under PEA’s authority of
supervision, integration, and coordination. The very charter of PEA, PD 1084,61 does not
mention that PEA has the exclusive and sole power and authority to reclaim lands of public
domain. EO 525 even reveals the exception—reclamation projects by a national government
agency or entity authorized by its charter to reclaim land. One example is EO 405 which
authorized the Philippine Ports Authority (PPA) to reclaim and develop submerged areas for port
related purposes. Under its charter, PD 857, PPA has the power "to reclaim, excavate, enclose or
raise any of the lands" vested in it.
Thus, while PEA under PD 1084 has the power to reclaim land and under EO 525 is primarily
responsible for integrating, directing and coordinating reclamation projects, such authority is
NOT exclusive and such power to reclaim may be granted or delegated to another government
agency or entity or may even be undertaken by the National Government itself, PEA being only
an agency and a part of the National Government.
Let us apply the legal parameters of Sec. 1, EO 525 to the reclamation phase of SMDRP. After a
scrutiny of the facts culled from the records, we find that the project met all the three (3)
requirements, thus:
1. There was ample approval by the President of the Philippines; as a matter of fact, two
Philippine Presidents approved the same, namely: Presidents Aquino and Ramos. President
Aquino sanctioned the reclamation of both the SMDRP housing and commercial-industrial sites
through MO 415 (s. 1992) which approved the SMDRP under Sec. 1 and directed NHA "x x x to
implement the Smokey Mountain Development Plan and Reclamation of the Area across R-10
through a private sector joint venture scheme at the least cost to government" under Section 3.
For his part, then President Ramos issued Proclamation No. 39 (s. 1992) which expressly
reserved the Smokey Mountain Area and the Reclamation Area for a housing project and related
commercial/industrial development.
Moreover, President Ramos issued Proclamation No. 465 (s. 1994) which authorized the increase
of the Reclamation Area from 40 hectares of foreshore and submerged land of the Manila Bay to
79 hectares. It speaks of the reclamation of 400,000 square meters, more or less, of the foreshore
and submerged lands of Manila Bay adjoining R-10 as an enabling component of the SMDRP.
As a result of Proclamations Nos. 39 and 465, Special Patent No. 3591 covering 211,975 square
meters of Smokey Mountain, Special Patent No. 3592 covering 401,485 square meters of
reclaimed land, and Special Patent No. 3598 covering another 390,000 square meters of
reclaimed land were issued by the DENR.
Thus, the first requirement of presidential imprimatur on the SMDRP has been satisfied.
2. The requisite favorable endorsement of the reclamation phase was impliedly granted by PEA.
President Aquino saw to it that there was coordination of the project with PEA by designating its
general manager as member of the EXECOM tasked to supervise the project implementation.
The assignment was made in Sec. 2 of MO 415 which provides:
Section 2. An Executive Committee is hereby created to oversee the implementation of the Plan,
chaired by the NCR-CORD, with the heads of the following agencies as members: The National
Housing Authority, the City of Manila, the Department of Public Works and Highways, the
Public Estates Authority, the Philippine Ports Authority, the Department of Environment and
Natural Resources and the Development Bank of the Philippines. (Emphasis supplied.)
The favorable recommendation by PEA of the JVA and subsequent amendments were
incorporated as part of the recommendations of the EXECOM created under MO 415. While
there was no specific recommendation on the SMDRP emanating solely from PEA, we find that
the approbation of the Project and the land reclamation as an essential component by the
EXECOM of which PEA is a member, and its submission of the SMDRP and the agreements on
the Project to the President for approval amply met the second requirement of EO 525.
3. The third element was also present—the reclamation was undertaken either by PEA or any
person or entity under contract with PEA or by the National Government agency or entity
authorized under its charter to reclaim lands subject to consultation with PEA. It cannot be
disputed that the reclamation phase was not done by PEA or any person or entity under contract
with PEA. However, the reclamation was implemented by the NHA, a national government
agency whose authority to reclaim lands under consultation with PEA is derived from its charter
—PD 727 and other pertinent laws—RA 727962 and RA 6957 as amended by RA 7718.
While the authority of NHA to reclaim lands is challenged by petitioner, we find that the NHA
had more than enough authority to do so under existing laws. While PD 757, the charter of NHA,
does not explicitly mention "reclamation" in any of the listed powers of the agency, we rule that
the NHA has an implied power to reclaim land as this is vital or incidental to effectively,
logically, and successfully implement an urban land reform and housing program enunciated in
Sec. 9 of Article XIII of the 1987 Constitution.
Basic in administrative law is the doctrine that a government agency or office has express and
implied powers based on its charter and other pertinent statutes. Express powers are those
powers granted, allocated, and delegated to a government agency or office by express provisions
of law. On the other hand, implied powers are those that can be inferred or are implicit in the
wordings of the law63 or conferred by necessary or fair implication in the enabling act.64 In
Angara v. Electoral Commission, the Court clarified and stressed that when a general grant of
power is conferred or duty enjoined, every particular power necessary for the exercise of the one
or the performance of the other is also conferred by necessary implication.65 It was also
explicated that when the statute does not specify the particular method to be followed or used by
a government agency in the exercise of the power vested in it by law, said agency has the
authority to adopt any reasonable method to carry out its functions.66
The power to reclaim on the part of the NHA is implicit from PD 757, RA 7279, MO 415, RA
6957, and PD 3-A,67 viz:
1. NHA’s power to reclaim derived from PD 757 provisions:
a. Sec. 3 of PD 757 implies that reclamation may be resorted to in order to attain the goals of
NHA:
Section 3. Progress and Objectives. The Authority shall have the following purposes and
objectives:
xxxx
b) To undertake housing, development, resettlement or other activities as would enhance the

provision of housing to every Filipino;
c) To harness and promote private participation in housing ventures in terms of capital

expenditures, land, expertise, financing and other facilities for the sustained growth of the
housing industry. (Emphasis supplied.)
Land reclamation is an integral part of the development of resources for some of the housing
requirements of the NHA. Private participation in housing projects may also take the form of
land reclamation.
b. Sec. 5 of PD 757 serves as proof that the NHA, as successor of the Tondo Foreshore
Development Authority (TFDA), has the power to reclaim, thus:
Section 5. Dissolution of Existing Housing Agencies. The People's Homesite and Housing
Corporation (PHHC), the Presidential Assistant on Housing Resettlement Agency (PAHRA), the
Tondo Foreshore Development Authority (TFDA), the Central Institute for the Training and
Relocation of Urban Squatters (CITRUS), the Presidential Committee for Housing and Urban
Resettlement (PRECHUR), Sapang Palay Development Committee, Inter-Agency Task Force to
Undertake the Relocation of Families in Barrio Nabacaan, Villanueva, Misamis Oriental and all
other existing government housing and resettlement agencies, task forces and ad-hoc
committees, are hereby dissolved. Their powers and functions, balance of appropriations,
records, assets, rights, and choses in action, are transferred to, vested in, and assumed by the
Authority. x x x (Emphasis supplied.)
PD 570 dated October 30, 1974 created the TFDA, which defined its objectives, powers, and
functions. Sec. 2 provides:
Section 2. Objectives and Purposes. The Authority shall have the following purposes and
objectives:
a) To undertake all manner of activity, business or development projects for the establishment of
harmonious, comprehensive, integrated and healthy living community in the Tondo
Foreshoreland and its resettlement site;
b) To undertake and promote the physical and socio-economic amelioration of the Tondo
Foreshore residents in particular and the nation in general (Emphasis supplied.)
The powers and functions are contained in Sec. 3, to wit:
a) To develop and implement comprehensive and integrated urban renewal programs for the
Tondo Foreshore and Dagat-dagatan lagoon and/or any other additional/alternative resettlement
site and to formulate and enforce general and specific policies for its development which shall
ensure reasonable degree of compliance with environmental standards.
b) To prescribe guidelines and standards for the reservation, conservation and utilization of
public lands covering the Tondo Foreshore land and its resettlement sites;
c) To construct, acquire, own, lease, operate and maintain infrastructure facilities, housing
complex, sites and services;
d) To determine, regulate and supervise the establishment and operation of housing, sites,
services and commercial and industrial complexes and any other enterprises to be constructed or
established within the Tondo Foreshore and its resettlement sites;
e) To undertake and develop, by itself or through joint ventures with other public or private
entities, all or any of the different phases of development of the Tondo Foreshore land and its
resettlement sites;
f) To acquire and own property, property-rights and interests, and encumber or otherwise dispose
of the same as it may deem appropriate (Emphasis supplied.)
From the foregoing provisions, it is readily apparent that the TFDA has the explicit power to
develop public lands covering the Tondo foreshore land and any other additional and alternative
resettlement sites under letter b, Sec. 3 of PD 570. Since the additional and/or alternative sites
adjacent to Tondo foreshore land cover foreshore and submerged areas, the reclamation of said
areas is necessary in order to convert them into a comprehensive and integrated resettlement
housing project for the slum dwellers and squatters of Tondo. Since the powers of TFDA were
assumed by the NHA, then the NHA has the power to reclaim lands in the Tondo foreshore area
which covers the 79-hectare land subject of Proclamations Nos. 39 and 465 and Special Patents
Nos. 3592 and 3598.
c. Sec. 6 of PD 757 delineates the functions and powers of the NHA which embrace the authority
to reclaim land, thus:
Sec. 6. Powers and functions of the Authority.—The Authority shall have the following powers
and functions to be exercised by the Board in accordance with its established national human
settlements plan prepared by the Human Settlements Commission:
(a) Develop and implement the comprehensive and integrated housing program provided for in
Section hereof;
xxxx
(c) Prescribe guidelines and standards for the reservation, conservation and utilization of public
lands identified for housing and resettlement;
xxxx
(e) Develop and undertake housing development and/or resettlement projects through joint
ventures or other arrangements with public and private entities;
xxxx
(k) Enter into contracts whenever necessary under such terms and conditions as it may deem
proper and reasonable;
(l) Acquire property rights and interests and encumber or otherwise dispose the same as it may
deem appropriate;
xxxx
(s) Perform such other acts not inconsistent with this Decree, as may be necessary to effect the
policies and objectives herein declared. (Emphasis supplied.)
The NHA’s authority to reclaim land can be inferred from the aforequoted provisions. It can
make use of public lands under letter (c) of Sec. 6 which includes reclaimed land as site for its
comprehensive and integrated housing projects under letter (a) which can be undertaken through
joint ventures with private entities under letter (e). Taken together with letter (s) which
authorizes NHA to perform such other activities "necessary to effect the policies and objectives"
of PD 757, it is safe to conclude that the NHA’s power to reclaim lands is a power that is implied
from the exercise of its explicit powers under Sec. 6 in order to effectively accomplish its
policies and objectives under Sec. 3 of its charter. Thus, the reclamation of land is an
indispensable component for the development and construction of the SMDRP housing facilities.
2. NHA’s implied power to reclaim land is enhanced by RA 7279.
PD 757 identifies NHA’s mandate to "[d]evelop and undertake housing development and/or
resettlement projects through joint ventures or other arrangements with public and private
entities."
The power of the NHA to undertake reclamation of land can be inferred from Secs. 12 and 29 of
RA 7279, which provide:
Section 12. Disposition of Lands for Socialized Housing.—The National Housing Authority,
with respect to lands belonging to the National Government, and the local government units with
respect to other lands within their respective localities, shall coordinate with each other to
formulate and make available various alternative schemes for the disposition of lands to the
beneficiaries of the Program. These schemes shall not be limited to those involving transfer of
ownership in fee simple but shall include lease, with option to purchase, usufruct or such other
variations as the local government units or the National Housing Authority may deem most
expedient in carrying out the purposes of this Act.
xxxx
Section 29. Resettlement.—With two (2) years from the effectivity of this Act, the local
government units, in coordination with the National Housing Authority, shall implement the
relocation and resettlement of persons living in danger areas such as esteros, railroad tracks,
garbage dumps, riverbanks, shorelines, waterways, and in other public places as sidewalks,
roads, parks, and playgrounds. The local government unit, in coordination with the National
Housing Authority, shall provide relocation or resettlement sites with basic services and facilities
and access to employment and livelihood opportunities sufficient to meet the basic needs of the
affected families. (Emphasis supplied.)
Lands belonging to the National Government include foreshore and submerged lands which can
be reclaimed to undertake housing development and resettlement projects.
3. MO 415 explains the undertaking of the NHA in SMDRP:
WHEREAS, Memorandum Order No. 161-A mandated the National Housing Authority to
conduct feasibility studies and develop low-cost housing projects at the dumpsites of Metro
Manila;
WHEREAS, the National Housing Authority has presented a viable Conceptual Plan to convert
the Smokey Mountain dumpsite into a habitable housing project inclusive of the reclamation area
across R-10 as enabling component of the Project;
WHEREAS, the said Plan requires the coordinated and synchronized efforts of the City of
Manila and other government agencies and instrumentalities to ensure effective and efficient
implementation;
WHEREAS, the government encourages private sector initiative in the implementation of its
projects. (Emphasis supplied.)
Proceeding from these "whereas" clauses, it is unequivocal that reclamation of land in the
Smokey Mountain area is an essential and vital power of the NHA to effectively implement its
avowed goal of developing low-cost housing units at the Smokey Mountain dumpsites. The
interpretation made by no less than the President of the Philippines as Chief of the Executive
Branch, of which the NHA is a part, must necessarily command respect and much weight and
credit.
4. RA 6957 as amended by RA 7718—the BOT Law—serves as an exception to PD 1084 and

EO 525.
Based on the provisions of the BOT Law and Implementing Rules and Regulations, it is
unequivocal that all government infrastructure agencies like the NHA can undertake
infrastructure or development projects using the contractual arrangements prescribed by the law,
and land reclamation is one of the projects that can be resorted to in the BOT project
implementation under the February 10, 1992 Joint Resolution No. 3 of the 8th Congress.
From the foregoing considerations, we find that the NHA has ample implied authority to
undertake reclamation projects.
Even without an implied power to reclaim lands under NHA’s charter, we rule that the authority
granted to NHA, a national government agency, by the President under PD 3-A reinforced by EO
525 is more than sufficient statutory basis for the reclamation of lands under the SMDRP.
PD 3-A is a law issued by then President Ferdinand E. Marcos under his martial law powers on
September 23, 1972. It provided that "[t]he provisions of any law to the contrary
notwithstanding, the reclamation of areas, underwater, whether foreshore or inland, shall be
limited to the National Government or any person authorized by it under the proper contract." It
repealed, in effect, RA 1899 which previously delegated the right to reclaim lands to
municipalities and chartered cities and revested it to the National Government.68 Under PD 3-A,
"national government" can only mean the Executive Branch headed by the President. It cannot
refer to Congress as it was dissolved and abolished at the time of the issuance of PD 3-A on
September 23, 1972. Moreover, the Executive Branch is the only implementing arm in the
government with the equipment, manpower, expertise, and capability by the very nature of its
assigned powers and functions to undertake reclamation projects. Thus, under PD 3-A, the
Executive Branch through the President can implement reclamation of lands through any of its
departments, agencies, or offices.
Subsequently, on February 4, 1977, President Marcos issued PD 1084 creating the PEA, which
was granted, among others, the power "to reclaim land, including foreshore and submerged areas
by dredging, filling or other means or to acquire reclaimed lands." The PEA’s power to reclaim
is not however exclusive as can be gleaned from its charter, as the President retained his power
under PD 3-A to designate another agency to reclaim lands.
On February 14, 1979, EO 525 was issued. It granted PEA primary responsibility for integrating,
directing, and coordinating reclamation projects for and on behalf of the National Government
although other national government agencies can be designated by the President to reclaim lands
in coordination with the PEA. Despite the issuance of EO 525, PD 3-A remained valid and
subsisting. Thus, the National Government through the President still retained the power and
control over all reclamation projects in the country.
The power of the National Government through the President over reclamation of areas, that is,
underwater whether foreshore or inland, was made clear in EO 54369 which took effect on June
24, 2006. Under EO 543, PEA was renamed the Philippine Reclamation Authority (PRA) and
was granted the authority to approve reclamation projects, a power previously reposed in the
President under EO 525. EO 543 reads:
Section 1. The power of the President to approve reclamation projects is hereby delegated to the
Philippine Reclamation Authority [formerly PEA], through its governing board, subject to
compliance with existing laws and rules and subject to the condition that reclamation contracts to
be executed with any person or entity go through public bidding.
Section 2. Nothing in the Order shall be construed as diminishing the President’s authority to
modify, amend or nullify PRA’s action.
Section 3. All executive issuances inconsistent with this Executive Order are hereby repealed or
amended accordingly. (Emphasis supplied.)
Sec. 2 of EO 543 strengthened the power of control and supervision of the President over
reclamation of lands as s/he can modify, amend, or nullify the action of PEA (now PRA).
From the foregoing issuances, we conclude that the President’s delegation to NHA, a national
government agency, to reclaim lands under the SMDRP, is legal and valid, firmly anchored on
PD 3-A buttressed by EO 525 notwithstanding the absence of any specific grant of power under
its charter, PD 757.
Second Issue: Whether respondents NHA and RBI were given the
power and authority by DENR to reclaim foreshore and submerged
lands
Petitioner Chavez puts forth the view that even if the NHA and RBI were granted the authority to
reclaim, they were not authorized to do so by the DENR.
Again, reliance is made on our ruling in PEA where it was held that the DENR’s authority is
necessary in order for the government to validly reclaim foreshore and submerged lands. In PEA,
we expounded in this manner:
As manager, conservator and overseer of the natural resources of the State, DENR exercises
"supervision and control over alienable and disposable public lands." DENR also exercises
"exclusive jurisdiction on the management and disposition of all lands of the public domain."
Thus, DENR decides whether areas under water, like foreshore or submerged areas of Manila
Bay, should be reclaimed or not. This means that PEA needs authorization from DENR before
PEA can undertake reclamation projects in Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.
Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under
Sections 6 and 7 of CA No. 141. Once DENR decides that the reclaimed lands should be so
classified, it then recommends to the President the issuance of a proclamation classifying the
lands as alienable or disposable lands of the public domain open to disposition. We note that then
DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance
with the Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water, while
PEA is vested with the power to undertake the physical reclamation of areas under water,
whether directly or through private contractors. DENR is also empowered to classify lands of the
public domain into alienable or disposable lands subject to the approval of the President. On the
other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public
domain.70
Despite our finding that PEA is not a precedent to the case at bar, we find after all that under
existing laws, the NHA is still required to procure DENR’s authorization before a reclamation
project in Manila Bay or in any part of the Philippines can be undertaken. The requirement
applies to PEA, NHA, or any other government agency or office granted with such power under
the law.
Notwithstanding the need for DENR permission, we nevertheless find petitioner’s position bereft
of merit.
The DENR is deemed to have granted the authority to reclaim in the Smokey Mountain Project
for the following reasons:
1. Sec. 17, Art. VII of the Constitution provides that "the President shall have control of all
executive departments, bureaus and offices." The President is assigned the task of seeing to it
that all laws are faithfully executed. "Control," in administrative law, means "the power of an
officer to alter, modify, nullify or set aside what a subordinate officer has done in the
performance of his duties and to substitute the judgment of the former for that of the latter."71
As such, the President can exercise executive power motu proprio and can supplant the act or
decision of a subordinate with the President’s own. The DENR is a department in the executive
branch under the President, and it is only an alter ego of the latter. Ordinarily the proposed action
and the staff work are initially done by a department like the DENR and then submitted to the
President for approval. However, there is nothing infirm or unconstitutional if the President
decides on the implementation of a certain project or activity and requires said department to
implement it. Such is a presidential prerogative as long as it involves the department or office
authorized by law to supervise or execute the Project. Thus, as in this case, when the President
approved and ordered the development of a housing project with the corresponding reclamation
work, making DENR a member of the committee tasked to implement the project, the required
authorization from the DENR to reclaim land can be deemed satisfied. It cannot be disputed that
the ultimate power over alienable and disposable public lands is reposed in the President of the
Philippines and not the DENR Secretary. To still require a DENR authorization on the Smokey
Mountain when the President has already authorized and ordered the implementation of the
Project would be a derogation of the powers of the President as the head of the executive branch.
Otherwise, any department head can defy or oppose the implementation of a project approved by
the head of the executive branch, which is patently illegal and unconstitutional.
In Chavez v. Romulo, we stated that when a statute imposes a specific duty on the executive
department, the President may act directly or order the said department to undertake an activity,
thus:
[A]t the apex of the entire executive officialdom is the President. Section 17, Article VII of the
Constitution specifies [her] power as Chief executive departments, bureaus and offices. [She]
shall ensure that the laws be faithfully executed. As Chief Executive, President Arroyo holds the
steering wheel that controls the course of her government. She lays down policies in the
execution of her plans and programs. Whatever policy she chooses, she has her subordinates to
implement them. In short, she has the power of control. Whenever a specific function is entrusted
by law or regulation to her subordinate, she may act directly or merely direct the performance of
a duty x x x. Such act is well within the prerogative of her office (emphasis supplied).72
Moreover, the power to order the reclamation of lands of public domain is reposed first in the
Philippine President. The Revised Administrative Code of 1987 grants authority to the President
to reserve lands of public domain for settlement for any specific purpose, thus:
Section 14. Power to Reserve Lands of the Public and Private Domain of the Government.—(1)
The President shall have the power to reserve for settlement or public use, and for specific public
purposes, any of the lands of the public domain, the use of which is not otherwise directed by
law. The reserved land shall thereafter remain subject to the specific public purpose indicated
until otherwise provided by law or proclamation. (Emphasis supplied.)
President Aquino reserved the area of the Smokey Mountain dumpsite for settlement and issued
MO 415 authorizing the implementation of the Smokey Mountain Development Project plus the
reclamation of the area across R-10. Then President Ramos issued Proclamation No. 39 covering
the 21-hectare dumpsite and the 40-hectare commercial/industrial area, and Proclamation No.
465 and MO 415 increasing the area of foreshore and submerged lands of Manila Bay to be
reclaimed from 40 to 79 hectares. Having supervision and control over the DENR, both
Presidents directly assumed and exercised the power granted by the Revised Administrative
Code to the DENR Secretary to authorize the NHA to reclaim said lands. What can be done
indirectly by the DENR can be done directly by the President. It would be absurd if the power of
the President cannot be exercised simply because the head of a department in the executive
branch has not acted favorably on a project already approved by the President. If such
arrangement is allowed then the department head will become more powerful than the President.
2. Under Sec. 2 of MO 415, the DENR is one of the members of the EXECOM chaired by the
NCR-CORD to oversee the implementation of the Project. The EXECOM was the one which
recommended approval of the project plan and the joint venture agreements. Clearly, the DENR
retained its power of supervision and control over the laws affected by the Project since it was
tasked to "facilitate the titling of the Smokey Mountain and of the area to be reclaimed," which
shows that it had tacitly given its authority to the NHA to undertake the reclamation.
3. Former DENR Secretary Angel C. Alcala issued Special Patents Nos. 3591 and 3592 while
then Secretary Victor O. Ramos issued Special Patent No. 3598 that embraced the areas covered
by the reclamation. These patents conveyed the lands to be reclaimed to the NHA and granted to
said agency the administration and disposition of said lands for subdivision and disposition to
qualified beneficiaries and for development for mix land use (commercial/industrial) "to provide
employment opportunities to on-site families and additional areas for port related activities."
Such grant of authority to administer and dispose of lands of public domain under the SMDRP is
of course subject to the powers of the EXECOM of SMDRP, of which the DENR is a member.
4. The issuance of ECCs by the DENR for SMDRP is but an exercise of its power of supervision
and control over the lands of public domain covered by the Project.
Based on these reasons, it is clear that the DENR, through its acts and issuances, has ratified and
confirmed the reclamation of the subject lands for the purposes laid down in Proclamations Nos.
39 and 465.
Third Issue: Whether respondent RBI can acquire reclaimed
foreshore and submerged lands considered as inalienable and
outside the commerce of man
Petitioner postulates that respondent RBI cannot acquire the reclaimed foreshore and submerged
areas as these are inalienable public lands beyond the commerce of man based on Art. 1409 of
the Civil Code which provides:
Article 1409. The following contracts are inexistent and void from the beginning:
(1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order
or public policy;
xxxx
(7) Those expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right to set up the defense of illegality be
waived.
Secs. 2 and 3, Art. XII of the Constitution declare that all natural resources are owned by the
State and they cannot be alienated except for alienable agricultural lands of the public domain.
One of the State’s natural resources are lands of public domain which include reclaimed lands.
Petitioner contends that for these reclaimed lands to be alienable, there must be a law or
presidential proclamation officially classifying these reclaimed lands as alienable and disposable
and open to disposition or concession. Absent such law or proclamation, the reclaimed lands
cannot be the enabling component or consideration to be paid to RBI as these are beyond the
commerce of man.
We are not convinced of petitioner’s postulation.
The reclaimed lands across R-10 were classified alienable and disposable lands of public domain
of the State for the following reasons, viz:
First, there were three (3) presidential proclamations classifying the reclaimed lands across R-10
as alienable or disposable hence open to disposition or concession, to wit:
(1) MO 415 issued by President Aquino, of which Sec. 4 states that "[t]he land covered by the
Smokey Mountain Dumpsite is hereby conveyed to the National Housing Authority as well as
the area to be reclaimed across R-10."
The directive to transfer the lands once reclaimed to the NHA implicitly carries with it the
declaration that said lands are alienable and disposable. Otherwise, the NHA cannot effectively
use them in its housing and resettlement project.
(2) Proclamation No. 39 issued by then President Ramos by which the reclaimed lands were
conveyed to NHA for subdivision and disposition to qualified beneficiaries and for development
into a mixed land use (commercial/industrial) to provide employment opportunities to on-site
families and additional areas for port-related activities. Said directive carries with it the
pronouncement that said lands have been transformed to alienable and disposable lands.
Otherwise, there is no legal way to convey it to the beneficiaries.
(3) Proclamation No. 465 likewise issued by President Ramos enlarged the reclaimed area to 79
hectares to be developed and disposed of in the implementation of the SMDRP. The authority
put into the hands of the NHA to dispose of the reclaimed lands tacitly sustains the conversion to
alienable and disposable lands.
Secondly, Special Patents Nos. 3591, 3592, and 3598 issued by the DENR anchored on
Proclamations Nos. 39 and 465 issued by President Ramos, without doubt, classified the
reclaimed areas as alienable and disposable.
Admittedly, it cannot be said that MO 415, Proclamations Nos. 39 and 465 are explicit
declarations that the lands to be reclaimed are classified as alienable and disposable. We find
however that such conclusion is derived and implicit from the authority given to the NHA to
transfer the reclaimed lands to qualified beneficiaries.
The query is, when did the declaration take effect? It did so only after the special patents
covering the reclaimed areas were issued. It is only on such date that the reclaimed lands became
alienable and disposable lands of the public domain. This is in line with the ruling in PEA where
said issue was clarified and stressed:
PD No. 1085, coupled with President Aquino’s actual issuance of a special patent covering the
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain. PD No. 1085 and President Aquino’s
issuance of a land patent also constitute a declaration that the Freedom Islands are no longer
needed for public service. The Freedom Islands are thus alienable or disposable lands of the
public domain, open to disposition or concession to qualified parties.73 (Emphasis supplied.)
Thus, MO 415 and Proclamations Nos. 39 and 465 cumulatively and jointly taken together with
Special Patent Nos. 3591, 3592, and 3598 more than satisfy the requirement in PEA that "[t]here
must be a law or presidential proclamation officially classifying these reclaimed lands as
alienable or disposable and open to disposition or concession (emphasis supplied)."74
Apropos the requisite law categorizing reclaimed land as alienable or disposable, we find that
RA 6957 as amended by RA 7718 provides ample authority for the classification of reclaimed
land in the SMDRP for the repayment scheme of the BOT project as alienable and disposable
lands of public domain. Sec. 6 of RA 6957 as amended by RA 7718 provides:
For the financing, construction, operation and maintenance of any infrastructure projects
undertaken through the build-operate-and transfer arrangement or any of its variations pursuant
to the provisions of this Act, the project proponent x x x may likewise be repaid in the form of a
share in the revenue of the project or other non-monetary payments, such as, but not limited to,
the grant of a portion or percentage of the reclaimed land, subject to the constitutional
requirements with respect to the ownership of the land. (Emphasis supplied.)
While RA 6957 as modified by RA 7718 does not expressly declare that the reclaimed lands that
shall serve as payment to the project proponent have become alienable and disposable lands and
opened for disposition; nonetheless, this conclusion is necessarily implied, for how else can the
land be used as the enabling component for the Project if such classification is not deemed
made?
It may be argued that the grant of authority to sell public lands, pursuant to PEA, does not
convert alienable lands of public domain into private or patrimonial lands. We ruled in PEA that
"alienable lands of public domain must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands, before these lands can become private
or patrimonial lands (emphasis supplied)."75 To lands reclaimed by PEA or through a contract
with a private person or entity, such reclaimed lands still remain alienable lands of public domain
which can be transferred only to Filipino citizens but not to a private corporation. This is because
PEA under PD 1084 and EO 525 is tasked to hold and dispose of alienable lands of public
domain and it is only when it is transferred to Filipino citizens that it becomes patrimonial
property. On the other hand, the NHA is a government agency not tasked to dispose of public
lands under its charter—The Revised Administrative Code of 1987. The NHA is an "end-user
agency" authorized by law to administer and dispose of reclaimed lands. The moment titles over
reclaimed lands based on the special patents are transferred to the NHA by the Register of
Deeds, they are automatically converted to patrimonial properties of the State which can be sold
to Filipino citizens and private corporations, 60% of which are owned by Filipinos. The reason is
obvious: if the reclaimed land is not converted to patrimonial land once transferred to NHA, then
it would be useless to transfer it to the NHA since it cannot legally transfer or alienate lands of
public domain. More importantly, it cannot attain its avowed purposes and goals since it can only
transfer patrimonial lands to qualified beneficiaries and prospective buyers to raise funds for the
SMDRP.
From the foregoing considerations, we find that the 79-hectare reclaimed land has been declared
alienable and disposable land of the public domain; and in the hands of NHA, it has been
reclassified as patrimonial property.
Petitioner, however, contends that the reclaimed lands were inexistent prior to the three (3)
Presidential Acts (MO 415 and Proclamations Nos. 39 and 465) and hence, the declaration that
such areas are alienable and disposable land of the public domain, citing PEA, has no legal basis.
Petitioner’s contention is not well-taken.
Petitioner’s sole reliance on Proclamations Nos. 39 and 465 without taking into consideration the
special patents issued by the DENR demonstrates the inherent weakness of his proposition. As
was ruled in PEA cited by petitioner himself, "PD No. 1085, coupled with President Aquino’s
actual issuance of a special patent covering the Freedom Islands is equivalent to an official
proclamation classifying the Freedom islands as alienable or disposable lands of public domain."
In a similar vein, the combined and collective effect of Proclamations Nos. 39 and 465 with
Special Patents Nos. 3592 and 3598 is tantamount to and can be considered to be an official
declaration that the reclaimed lots are alienable or disposable lands of the public domain.
The reclaimed lands covered by Special Patents Nos. 3591, 3592, and 3598, which evidence
transfer of ownership of reclaimed lands to the NHA, are official acts of the DENR Secretary in
the exercise of his power of supervision and control over alienable and disposable public lands
and his exclusive jurisdiction over the management and disposition of all lands of public domain
under the Revised Administrative Code of 1987. Special Patent No. 3592 speaks of the transfer
of Lots 1 and 2, and RI-003901-000012-D with an area of 401,485 square meters based on the
survey and technical description approved by the Bureau of Lands. Lastly, Special Patent No.
3598 was issued in favor of the NHA transferring to said agency a tract of land described in Plan
RL-00-000013 with an area of 390,000 square meters based on the survey and technical
descriptions approved by the Bureau of Lands.
The conduct of the survey, the preparation of the survey plan, the computation of the technical
description, and the processing and preparation of the special patent are matters within the
technical area of expertise of administrative agencies like the DENR and the Land Management
Bureau and are generally accorded not only respect but at times even finality.76 Preparation of
special patents calls for technical examination and a specialized review of calculations and
specific details which the courts are ill-equipped to undertake; hence, the latter defer to the
administrative agency which is trained and knowledgeable on such matters.77
Subsequently, the special patents in the name of the NHA were submitted to the Register of
Deeds of the City of Manila for registration, and corresponding certificates of titles over the
reclaimed lots were issued based on said special patents. The issuance of certificates of titles in
NHA’s name automatically converts the reclaimed lands to patrimonial properties of the NHA.
Otherwise, the lots would not be of use to the NHA’s housing projects or as payment to the BOT
contractor as the enabling component of the BOT contract. The laws of the land have to be
applied and interpreted depending on the changing conditions and times. Tempora mutantur et
legis mutantur in illis (time changes and laws change with it). One such law that should be
treated differently is the BOT Law (RA 6957) which brought about a novel way of implementing
government contracts by allowing reclaimed land as part or full payment to the contractor of a
government project to satisfy the huge financial requirements of the undertaking. The NHA
holds the lands covered by Special Patents Nos. 3592 and 3598 solely for the purpose of the
SMDRP undertaken by authority of the BOT Law and for disposition in accordance with said
special law. The lands become alienable and disposable lands of public domain upon issuance of
the special patents and become patrimonial properties of the Government from the time the titles
are issued to the NHA.
As early as 1999, this Court in Baguio v. Republic laid down the jurisprudence that:
It is true that, once a patent is registered and the corresponding certificate of title is issued, the
land covered by them ceases to be part of the public domain and becomes private property, and
the Torrens Title issued pursuant to the patent becomes indefeasible upon the expiration of one
year from the date of issuance of such patent.78
The doctrine was reiterated in Republic v. Heirs of Felipe Alijaga, Sr.,79 Heirs of Carlos Alcaraz
v. Republic,80 and the more recent case of Doris Chiongbian-Oliva v. Republic of the
Philippines.81 Thus, the 79-hectare reclaimed land became patrimonial property after the
issuance of certificates of titles to the NHA based on Special Patents Nos. 3592 and 3598.
One last point. The ruling in PEA cannot even be applied retroactively to the lots covered by
Special Patents Nos. 3592 (40 hectare reclaimed land) and 3598 (39-hectare reclaimed land). The
reclamation of the land under SMDRP was completed in August 1996 while the PEA decision
was rendered on July 9, 2002. In the meantime, subdivided lots forming parts of the reclaimed
land were already sold to private corporations for value and separate titles issued to the buyers.
The Project was terminated through a Memorandum of Agreement signed on August 27, 2003.
The PEA decision became final through the November 11, 2003 Resolution. It is a settled
precept that decisions of the Supreme Court can only be applied prospectively as they may
prejudice vested rights if applied retroactively.
In Benzonan v. Court of Appeals, the Court trenchantly elucidated the prospective application of
its decisions based on considerations of equity and fair play, thus:
At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was
that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe
and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial
decisions applying or interpreting the laws of the Constitution shall form a part of the legal
system of the Philippines." But while our decisions form part of the law of the land, they are also
subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect
unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non
respicit, the law looks forward not backward. The rationale against retroactivity is easy to
perceive. The retroactive application of a law usually divests rights that have already become
vested or impairs the obligations of contract and hence, is unconstitutional.
The same consideration underlies our rulings giving only prospective effect to decisions
enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974] "x x
x when a doctrine of this Court is overruled and a different view is adopted, the new doctrine
should be applied prospectively and should not apply to parties who had relied on the old
doctrine and acted on the faith thereof.82
Fourth Issue: Whether respondent RBI can acquire reclaimed
lands when there was no declaration that said lands are no
longer needed for public use
Petitioner Chavez avers that despite the declaration that the reclaimed areas are alienable lands of
the public domain, still, the reclamation is flawed for there was never any declaration that said
lands are no longer needed for public use.
We are not moved by petitioner’s submission.
Even if it is conceded that there was no explicit declaration that the lands are no longer needed
for public use or public service, there was however an implicit executive declaration that the
reclaimed areas R-10 are not necessary anymore for public use or public service when President
Aquino through MO 415 conveyed the same to the NHA partly for housing project and related
commercial/industrial development intended for disposition to and enjoyment of certain
beneficiaries and not the public in general and partly as enabling component to finance the
project.
President Ramos, in issuing Proclamation No. 39, declared, though indirectly, that the reclaimed
lands of the Smokey Mountain project are no longer required for public use or service, thus:
These parcels of land of public domain are hereby placed under the administration and
disposition of the National Housing Authority to develop, subdivide and dispose to qualified
beneficiaries, as well as its development for mix land use (commercial/industrial) to provide
employment opportunities to on-site families and additional areas for port related activities.
(Emphasis supplied.)
While numerical count of the persons to be benefited is not the determinant whether the property
is to be devoted to public use, the declaration in Proclamation No. 39 undeniably identifies only
particular individuals as beneficiaries to whom the reclaimed lands can be sold, namely—the
Smokey Mountain dwellers. The rest of the Filipinos are not qualified; hence, said lands are no
longer essential for the use of the public in general.
In addition, President Ramos issued on August 31, 1994 Proclamation No. 465 increasing the
area to be reclaimed from forty (40) hectares to seventy-nine (79) hectares, elucidating that said
lands are undoubtedly set aside for the beneficiaries of SMDRP and not the public—declaring
the power of NHA to dispose of land to be reclaimed, thus: "The authority to administer,
develop, or dispose lands identified and reserved by this Proclamation and Proclamation No. 39
(s.1992), in accordance with the SMDRP, as enhance, is vested with the NHA, subject to the
provisions of existing laws." (Emphasis supplied.)
MO 415 and Proclamations Nos. 39 and 465 are declarations that proclaimed the non-use of the
reclaimed areas for public use or service as the Project cannot be successfully implemented
without the withdrawal of said lands from public use or service. Certainly, the devotion of the
reclaimed land to public use or service conflicts with the intended use of the Smokey Mountain
areas for housing and employment of the Smokey Mountain scavengers and for financing the
Project because the latter cannot be accomplished without abandoning the public use of the
subject land. Without doubt, the presidential proclamations on SMDRP together with the
issuance of the special patents had effectively removed the reclaimed lands from public use.
More decisive and not in so many words is the ruling in PEA which we earlier cited, that "PD
No. 1085 and President Aquino’s issuance of a land patent also constitute a declaration that the
Freedom Islands are no longer needed for public service." Consequently, we ruled in that case
that the reclaimed lands are "open to disposition or concession to qualified parties."83
In a similar vein, presidential Proclamations Nos. 39 and 465 jointly with the special patents
have classified the reclaimed lands as alienable and disposable and open to disposition or
concession as they would be devoted to units for Smokey Mountain beneficiaries. Hence, said
lands are no longer intended for public use or service and shall form part of the patrimonial
properties of the State under Art. 422 of the Civil Code.84 As discussed a priori, the lands were
classified as patrimonial properties of the NHA ready for disposition when the titles were
registered in its name by the Register of Deeds.
Moreover, reclaimed lands that are made the enabling components of a BOT infrastructure
project are necessarily reclassified as alienable and disposable lands under the BOT Law;
otherwise, absurd and illogical consequences would naturally result. Undoubtedly, the BOT
contract will not be accepted by the BOT contractor since there will be no consideration for its
contractual obligations. Since reclaimed land will be conveyed to the contractor pursuant to the
BOT Law, then there is an implied declaration that such land is no longer intended for public use
or public service and, hence, considered patrimonial property of the State.
Fifth Issue: Whether there is a law authorizing sale of
reclaimed lands
Petitioner next claims that RBI cannot acquire the reclaimed lands because there was no law
authorizing their sale. He argues that unlike PEA, no legislative authority was granted to the
NHA to sell reclaimed land.
This position is misplaced.
Petitioner relies on Sec. 60 of Commonwealth Act (CA) 141 to support his view that the NHA is
not empowered by any law to sell reclaimed land, thus:
Section 60. Any tract of land comprised under this title may be leased or sold, as the case may
be, to any person, corporation or association authorized to purchase or lease public lands for
agricultural purposes. The area of the land so leased or sold shall be such as shall, in the
judgment of the Secretary of Agriculture and Natural Resources, be reasonably necessary for the
purposes for which such sale or lease if requested and shall in no case exceed one hundred and
forty-four hectares: Provided, however, That this limitation shall not apply to grants, donations,
transfers, made to a province, municipality or branch or subdivision of the Government for the
purposes deemed by said entities conducive to the public interest; but the land so granted
donated or transferred to a province, municipality, or branch or subdivision of the Government
shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title,
except when authorized by Congress; Provided, further, That any person, corporation,
association or partnership disqualified from purchasing public land for agricultural purposes
under the provisions of this Act, may lease land included under this title suitable for industrial or
residential purposes, but the lease granted shall only be valid while such land is used for the
purposes referred to. (Emphasis supplied.)
Reliance on said provision is incorrect as the same applies only to "a province, municipality or
branch or subdivision of the Government." The NHA is not a government unit but a government
corporation performing governmental and proprietary functions.
In addition, PD 757 is clear that the NHA is empowered by law to transfer properties acquired by
it under the law to other parties, thus:
Section 6. Powers and functions of the Authority. The Authority shall have the following powers
and functions to be exercised by the Boards in accordance with the established national human
settlements plan prepared by the Human Settlements Commission:
xxxx
(k) Enter into contracts whenever necessary under such terms and conditions as it may deem
proper and reasonable;
(l) Acquire property rights and interests, and encumber or otherwise dispose the same as it may
deem appropriate (Emphasis supplied.)
Letter (l) is emphatic that the NHA can acquire property rights and interests and encumber or
otherwise dispose of them as it may deem appropriate. The transfer of the reclaimed lands by the
National Government to the NHA for housing, commercial, and industrial purposes transformed
them into patrimonial lands which are of course owned by the State in its private or proprietary
capacity. Perforce, the NHA can sell the reclaimed lands to any Filipino citizen or qualified
corporation.
Sixth Issue: Whether the transfer of reclaimed lands to RBI
was done by public bidding
Petitioner also contends that there was no public bidding but an awarding of ownership of said
reclaimed lands to RBI. Public bidding, he says, is required under Secs. 63 and 67 of CA 141
which read:
Section 63. Whenever it is decided that lands covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce for
authority to dispose of the same. Upon receipt of such authority, the Director of Lands shall give
notice by public advertisement in the same manner as in the case of leases or sales of agricultural
public land, that the Government will lease or sell, as the case may be, the lots or blocks
specified in the advertisement, for the purpose stated in the notice and subject to the conditions
specified in this chapter.
xxxx
Section 67. The lease or sale shall be made through oral bidding; and adjudication shall be made
to the highest bidder. However, where an applicant has made improvements on the land by virtue
of a permit issued to him by competent authority, the sale or lease shall be made by sealed
bidding as prescribed in section twenty-six of this Act, the provisions of which shall be applied
whenever applicable. If all or part of the lots remain unleased or unsold, the Director of Lands
shall from time to time announce in the Official Gazette or in any other newspapers of general
circulation, the lease of sale of those lots, if necessary.
He finds that the NHA and RBI violated Secs. 63 and 67 of CA 141, as the reclaimed lands were
conveyed to RBI by negotiated contract and not by public bidding as required by law.
This stand is devoid of merit.
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. Notices or Invitations to Bid were
published in the national dailies on January 23 and 26, 1992 and February 1, 14, 16, and 23,
1992. The bidding proper was done by the Bids and Awards Committee (BAC) on May 18,
1992. On August 31, 1992, the Inter-Agency Techcom made up of the NHA, PEA, DPWH, PPA,
DBP, and DENR opened the bids and evaluated them, resulting in the award of the contract to
respondent RBI on October 7, 1992.
On March 19, 1993, respondents NHA and RBI signed the JVA. On February 23, 1994, said
JVA was amended and restated into the ARJVA. On August 11, 1994, the ARJVA was again
amended. On September 7, 1994, the OP approved the ARJVA and the amendments to the
ARJVA. From these factual settings, it cannot be gainsaid that there was full compliance with
the laws and regulations governing public biddings involving a right, concession, or property of
the government.
Petitioner concedes that he does not question the public bidding on the right to be a joint venture
partner of the NHA, but the absence of bidding in the sale of alienable and disposable lands of
public domain pursuant to CA 141 as amended.
Petitioner’s theory is incorrect.
Secs. 63 and 67 of CA 141, as amended, are in point as they refer to government sale by the
Director of Lands of alienable and disposable lands of public domain. This is not present in the
case at bar. The lands reclaimed by and conveyed to the NHA are no longer lands of public
domain. These lands became proprietary lands or patrimonial properties of the State upon
transfer of the titles over the reclaimed lands to the NHA and hence outside the ambit of CA 141.
The NHA can therefore legally transfer patrimonial land to RBI or to any other interested
qualified buyer without any bidding conducted by the Director of Lands because the NHA,
unlike PEA, is a government agency not tasked to sell lands of public domain. Hence, it can only
hold patrimonial lands and can dispose of such lands by sale without need of public bidding.
Petitioner likewise relies on Sec. 79 of PD 1445 which requires public bidding "when
government property has become unserviceable for any cause or is no longer needed." It appears
from the Handbook on Property and Supply Management System, Chapter 6, that reclaimed
lands which have become patrimonial properties of the State, whose titles are conveyed to
government agencies like the NHA, which it will use for its projects or programs, are not within
the ambit of Sec. 79. We quote the determining factors in the Disposal of Unserviceable
Property, thus:
Determining Factors in the Disposal of Unserviceable Property
Property, which can no longer be repaired or reconditioned;
Property whose maintenance costs of repair more than outweigh the benefits and services that
will be derived from its continued use;
Property that has become obsolete or outmoded because of changes in technology;

Serviceable property that has been rendered unnecessary due to change in the agency’s function
or mandate;
Unused supplies, materials and spare parts that were procured in excess of requirements; and
Unused supplies and materials that [have] become dangerous to use because of long storage or
use of which is determined to be hazardous.85
Reclaimed lands cannot be considered unserviceable properties. The reclaimed lands in question
are very much needed by the NHA for the Smokey Mountain Project because without it, then the
projects will not be successfully implemented. Since the reclaimed lands are not unserviceable
properties and are very much needed by NHA, then Sec. 79 of PD 1445 does not apply.
More importantly, Sec. 79 of PD 1445 cannot be applied to patrimonial properties like reclaimed
lands transferred to a government agency like the NHA which has entered into a BOT contract
with a private firm. The reason is obvious. If the patrimonial property will be subject to public
bidding as the only way of disposing of said property, then Sec. 6 of RA 6957 on the repayment
scheme is almost impossible or extremely difficult to implement considering the uncertainty of a
winning bid during public auction. Moreover, the repayment scheme of a BOT contract may be
in the form of non-monetary payment like the grant of a portion or percentage of reclaimed land.
Even if the BOT partner participates in the public bidding, there is no assurance that he will win
the bid and therefore the payment in kind as agreed to by the parties cannot be performed or the
winning bid prize might be below the estimated valuation of the land. The only way to
harmonize Sec. 79 of PD 1445 with Sec. 6 of RA 6957 is to consider Sec. 79 of PD 1445 as
inapplicable to BOT contracts involving patrimonial lands. The law does not intend anything
impossible (lex non intendit aliquid impossibile).
Seventh Issue: Whether RBI, being a private corporation,

is barred by the Constitution to acquire lands of public domain
Petitioner maintains that RBI, being a private corporation, is expressly prohibited by the 1987
Constitution from acquiring lands of public domain.
Petitioner’s proposition has no legal mooring for the following reasons:
1. 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 corporations with at least 60% Filipino equity can acquire the same. It cannot be
denied that RBI is a private corporation, where Filipino citizens own at least 60% of the stocks.
Thus, the transfer to RBI is valid and constitutional.
2. When Proclamations Nos. 39 and 465 were issued, inalienable lands covered by said
proclamations were converted to alienable and disposable lands of public domain. When the
titles to the reclaimed lands were transferred to the NHA, said alienable and disposable lands of
public domain were automatically classified as lands of the private domain or patrimonial
properties of the State because the NHA is an agency NOT tasked to dispose of alienable or
disposable lands of public domain. The only way it can transfer the reclaimed land in
conjunction with its projects and to attain its goals is when it is automatically converted to
patrimonial properties of the State. Being patrimonial or private properties of the State, then it
has the power to sell the same to any qualified person—under the Constitution, Filipino citizens
as private corporations, 60% of which is owned by Filipino citizens like RBI.
3. The NHA is an end-user entity such that when alienable lands of public domain are transferred
to said agency, they are automatically classified as patrimonial properties. The NHA is similarly
situated as BCDA which was granted the authority to dispose of patrimonial lands of the
government under RA 7227. The nature of the property holdings conveyed to BCDA is
elucidated and stressed in the May 6, 2003 Resolution in Chavez v. PEA, thus:
BCDA is an entirely different government entity. BCDA is authorized by law to sell specific
government lands that have long been declared by presidential proclamations as military
reservations for use by the different services of the armed forces under the Department of
National Defense. BCDA’s mandate is specific and limited in area, while PEA’s mandate is
general and national. BCDA holds government lands that have been granted to end-user
government entities––the military services of the armed forces. In contrast, under Executive
Order No. 525, PEA holds the reclaimed public lands, not as an end-user entity, but as the
government agency "primarily responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National Government."
x x x Well-settled is the doctrine that public land granted to an end-user government agency for a
specific public use may subsequently be withdrawn by Congress from public use and declared
patrimonial property to be sold to private parties. R.A. No. 7227 creating the BCDA is a law that
declares specific military reservations no longer needed for defense or military purposes and
reclassifies such lands as patrimonial property for sale to private parties.
Government owned lands, as long as they are patrimonial property, can be sold to private parties,
whether Filipino citizens or qualified private corporations. Thus, the so-called Friar Lands
acquired by the government under Act No. 1120 are patrimonial property which even private
corporations can acquire by purchase. Likewise, reclaimed alienable lands of the public domain
if sold or transferred to a public or municipal corporation for a monetary consideration become
patrimonial property in the hands of the public or municipal corporation. Once converted to
patrimonial property, the land may be sold by the public or municipal corporation to private
parties, whether Filipino citizens or qualified private corporations.86 (Emphasis supplied.)
The foregoing Resolution makes it clear that the SMDRP was a program adopted by the
Government under Republic Act No. 6957 (An Act Authorizing the Financing, Construction,
Operation and Maintenance of Infrastructure Projects by the Private Sector, and For Other
Purposes), as amended by RA 7718, which is a special law similar to RA 7227. Moreover, since
the implementation was assigned to the NHA, an end-user agency under PD 757 and RA 7279,
the reclaimed lands registered under the NHA are automatically classified as patrimonial lands
ready for disposition to qualified beneficiaries.
The foregoing reasons likewise apply to the contention of petitioner that HCPTI, being a private
corporation, is disqualified from being a transferee of public land. What was transferred to
HCPTI is a 10-hectare lot which is already classified as patrimonial property in the hands of the
NHA. HCPTI, being a qualified corporation under the 1987 Constitution, the transfer of the
subject lot to it is valid and constitutional.
Eighth Issue: Whether respondents can be compelled to disclose
all information related to the SMDRP
Petitioner asserts his right to information on all documents such as contracts, reports,
memoranda, and the like relative to SMDRP.
Petitioner asserts that matters relative to the SMDRP have not been disclosed to the public like
the current stage of the Project, the present financial capacity of RBI, the complete list of
investors in the asset pool, the exact amount of investments in the asset pool and other similar
important information regarding the Project.
He prays that respondents be compelled to disclose all information regarding the SMDRP and
furnish him with originals or at least certified true copies of all relevant documents relating to the
said project including, but not limited to, the original JVA, ARJVA, AARJVA, and the Asset
Pool Agreement.
This relief must be granted.
The right of the Filipino people to information on matters of public concern is enshrined in the
1987 Constitution, thus:
ARTICLE II
xxxx
SEC. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a
policy of full public disclosure of all its transactions involving public interest.
ARTICLE III
SEC. 7. The right of the people to information on matters of public concern shall be recognized.
Access to official records, and to documents, and papers pertaining to official acts, transactions,
or decisions, as well as to government research data used as basis for policy development, shall
be afforded the citizen, subject to such limitations as may be provided by law.
In Valmonte v. Belmonte, Jr., this Court explicated this way:
[A]n essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive
and be responsive to the people’s will. Yet, this open dialogue can be effective only to the extent
that the citizenry is informed and thus able to formulate its will intelligently. Only when the
participants in the discussion are aware of the issues and have access to information relating
thereto can such bear fruit.87
In PEA, this Court elucidated the rationale behind the right to information:
These twin provisions of the Constitution seek to promote transparency in policy-making and in
the operations of the government, as well as provide the people sufficient information to exercise
effectively other constitutional rights. These twin provisions are essential to the exercise of
freedom of expression. If the government does not disclose its official acts, transactions and
decisions to citizens, whatever citizens say, even if expressed without any restraint, will be
speculative and amount to nothing. These twin provisions are also essential to hold public
officials "at all times x x x accountable to the people," for unless citizens have the proper
information, they cannot hold public officials accountable for anything. Armed with the right
information, citizens can participate in public discussions leading to the formulation of
government policies and their effective implementation. An informed citizenry is essential to the
existence and proper functioning of any democracy.88
Sec. 28, Art. II compels the State and its agencies to fully disclose "all of its transactions
involving public interest." Thus, the government agencies, without need of demand from anyone,
must bring into public view all the steps and negotiations leading to the consummation of the
transaction and the contents of the perfected contract.89 Such information must pertain to
"definite propositions of the government," meaning official recommendations or final positions
reached on the different matters subject of negotiation. The government agency, however, need
not disclose "intra-agency or inter-agency recommendations or communications during the stage
when common assertions are still in the process of being formulated or are in the exploratory
stage." The limitation also covers privileged communication like information on military and
diplomatic secrets; information affecting national security; information on investigations of
crimes by law enforcement agencies before the prosecution of the accused; information on
foreign relations, intelligence, and other classified information.
It is unfortunate, however, that after almost twenty (20) years from birth of the 1987
Constitution, there is still no enabling law that provides the mechanics for the compulsory duty
of government agencies to disclose information on government transactions. Hopefully, the
desired enabling law will finally see the light of day if and when Congress decides to approve the
proposed "Freedom of Access to Information Act." In the meantime, it would suffice that
government agencies post on their bulletin boards the documents incorporating the information
on the steps and negotiations that produced the agreements and the agreements themselves, and
if finances permit, to upload said information on their respective websites for easy access by
interested parties. Without any law or regulation governing the right to disclose information, the
NHA or any of the respondents cannot be faulted if they were not able to disclose information
relative to the SMDRP to the public in general.
The other aspect of the people’s right to know apart from the duty to disclose is the duty to allow
access to information on matters of public concern under Sec. 7, Art. III of the Constitution. The
gateway to information opens to the public the following: (1) official records; (2) documents and
papers pertaining to official acts, transactions, or decisions; and (3) government research data
used as a basis for policy development.
Thus, the duty to disclose information should be differentiated from the duty to permit access to
information. There is no need to demand from the government agency disclosure of information
as this is mandatory under the Constitution; failing that, legal remedies are available. On the
other hand, the interested party must first request or even demand that he be allowed access to
documents and papers in the particular agency. A request or demand is required; otherwise, the
government office or agency will not know of the desire of the interested party to gain access to
such papers and what papers are needed. The duty to disclose covers only transactions involving
public interest, while the duty to allow access has a broader scope of information which
embraces not only transactions involving public interest, but any matter contained in official
communications and public documents of the government agency.
We find that although petitioner did not make any demand on the NHA to allow access to
information, we treat the petition as a written request or demand. We order the NHA to allow
petitioner access to its official records, documents, and papers relating to official acts,
transactions, and decisions that are relevant to the said JVA and subsequent agreements relative
to the SMDRP.
Ninth Issue: Whether the operative fact doctrine applies to the instant petition
Petitioner postulates that the "operative fact" doctrine is inapplicable to the present case because
it is an equitable doctrine which could not be used to countenance an inequitable result that is
contrary to its proper office.
On the other hand, the petitioner Solicitor General argues that the existence of the various
agreements implementing the SMDRP is an operative fact that can no longer be disturbed or
simply ignored, citing Rieta v. People of the Philippines.90
The argument of the Solicitor General is meritorious.
The "operative fact" doctrine is embodied in De Agbayani v. Court of Appeals, wherein it is

stated that a legislative or executive act, prior to its being declared as unconstitutional by the
courts, is valid and must be complied with, thus:
As the new Civil Code puts it: "When the courts declare a law to be inconsistent with the
Constitution, the former shall be void and the latter shall govern. Administrative or executive
acts, orders and regulations shall be valid only when they are not contrary to the laws of the
Constitution." It is understandable why it should be so, the Constitution being supreme and
paramount. Any legislative or executive act contrary to its terms cannot survive.
Such a view has support in logic and possesses the merit of simplicity. It may not however be
sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force and had to be complied with. This
is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to
obedience and respect. Parties may have acted under it and may have changed their positions.
What could be more fitting than that in a subsequent litigation regard be had to what has been
done while such legislative or executive act was in operation and presumed to be valid in all
respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact
must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is
the governmental organ which has the final say on whether or not a legislative or executive
measure is valid, a period of time may have elapsed before it can exercise the power of judicial
review that may lead to a declaration of nullity. It would be to deprive the law of its quality of
fairness and justice then, if there be no recognition of what had transpired prior to such
adjudication.
In the language of an American Supreme Court decision: "The actual existence of a statute, prior
to such a determination [of unconstitutionality], is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always be erased by a new judicial declaration.
The effect of the subsequent ruling as to invalidity may have to be considered in various aspects,
with respect to particular relations, individual and corporate, and particular conduct, private and
official." This language has been quoted with approval in a resolution in Araneta v. Hill and the
decision in Manila Motor Co., Inc. v. Flores. An even more recent instance is the opinion of
Justice Zaldivar speaking for the Court in Fernandez v. Cuerva and Co.91 (Emphasis supplied.)
This doctrine was reiterated in the more recent case of City of Makati v. Civil Service
Commission, wherein we ruled that:
Moreover, we certainly cannot nullify the City Government’s order of suspension, as we have no
reason to do so, much less retroactively apply such nullification to deprive private respondent of
a compelling and valid reason for not filing the leave application. For as we have held, a void act
though in law a mere scrap of paper nonetheless confers legitimacy upon past acts or omissions
done in reliance thereof. Consequently, the existence of a statute or executive order prior to its
being adjudged void is an operative fact to which legal consequences are attached. It would
indeed be ghastly unfair to prevent private respondent from relying upon the order of suspension
in lieu of a formal leave application.92 (Emphasis supplied.)
The principle was further explicated in the case of Rieta v. People of the Philippines, thus:
In similar situations in the past this Court had taken the pragmatic and realistic course set forth in
Chicot County Drainage District vs. Baxter Bank to wit:
The courts below have proceeded on the theory that the Act of Congress, having been found to
be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no
duties, and hence affording no basis for the challenged decree. x x x It is quite clear, however,
that such broad statements as to the effect of a determination of unconstitutionality must be taken
with qualifications. The actual existence of a statute, prior to [the determination of its invalidity],
is an operative fact and may have consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects –with respect to particular conduct,
private and official. Questions of rights claimed to have become vested, of status, of prior
determinations deemed to have finality and acted upon accordingly, of public policy in the light
of the nature both of the statute and of its previous application, demand examination. These
questions are among the most difficult of those which have engaged the attention of courts, state
and federal, and it is manifest from numerous decisions that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified.
In the May 6, 2003 Resolution in Chavez v. PEA,93 we ruled that De Agbayani94 is not
applicable to the case considering that the prevailing law did not authorize private corporations
from owning land. The prevailing law at the time was the 1935 Constitution as no statute dealt
with the same issue.
In the instant case, RA 6957 was the prevailing law at the time that the joint venture agreement
was signed. RA 6957, entitled "An Act Authorizing The Financing, Construction, Operation And
Maintenance Of Infrastructure Projects By The Private Sector And For Other Purposes," which
was passed by Congress on July 24, 1989, allows repayment to the private contractor of
reclaimed lands.95 Such law was relied upon by respondents, along with the above-mentioned
executive issuances in pushing through with the Project. The existence of such law and issuances
is an "operative fact" to which legal consequences have attached. This Court is constrained to
give legal effect to the acts done in consonance with such executive and legislative acts; to do
otherwise would work patent injustice on respondents.
Further, in the May 6, 2003 Resolution in Chavez v. PEA, we ruled that in certain cases, the
transfer of land, although illegal or unconstitutional, will not be invalidated on considerations of
equity and social justice. However, in that case, we did not apply the same considering that PEA,
respondent in said case, was not entitled to equity principles there being bad faith on its part,
thus:
There are, moreover, special circumstances that disqualify Amari from invoking equity
principles. Amari cannot claim good faith because even before Amari signed the Amended JVA
on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning
precisely the qualification of Amari to acquire the Freedom Islands. Even before the filing of this
petition, two Senate Committees had already approved on September 16, 1997 Senate
Committee Report No. 560. This Report concluded, after a well-publicized investigation into
PEA’s sale of the Freedom Islands to Amari, that the Freedom Islands are inalienable lands of
the public domain. Thus, Amari signed the Amended JVA knowing and assuming all the
attendant risks, including the annulment of the Amended JVA.96
Such indicia of bad faith are not present in the instant case. When the ruling in PEA was
rendered by this Court on July 9, 2002, the JVAs were all executed. Furthermore, when
petitioner filed the instant case against respondents on August 5, 2004, the JVAs were already
terminated by virtue of the MOA between the NHA and RBI. The respondents had no reason to
think that their agreements were unconstitutional or even questionable, as in fact, the concurrent
acts of the executive department lent validity to the implementation of the Project. The SMDRP
agreements have produced vested rights in favor of the slum dwellers, the buyers of reclaimed
land who were issued titles over said land, and the agencies and investors who made investments
in the project or who bought SMPPCs. These properties and rights cannot be disturbed or
questioned after the passage of around ten (10) years from the start of the SMDRP
implementation. Evidently, the "operative fact" principle has set in. The titles to the lands in the
hands of the buyers can no longer be invalidated.
The Court’s Dispositions
Based on the issues raised in this petition, we find that the March 19, 1993 JVA between NHA
and RBI and the SMDRP embodied in the JVA, the subsequent amendments to the JVA and all
other agreements signed and executed in relation to it, including, but not limited to, the
September 26, 1994 Smokey Mountain Asset Pool Agreement and the agreement on Phase I of
the Project as well as all other transactions which emanated from the Project, have been shown to
be valid, legal, and constitutional. Phase II has been struck down by the Clean Air Act.
With regard to the prayer for prohibition, enjoining respondents particularly respondent NHA
from further implementing and/or enforcing the said Project and other agreements related to it,
and from further deriving and/or enjoying any rights, privileges and interest from the Project, we
find the same prayer meritless.
Sec. 2 of Rule 65 of the 1997 Rules of Civil Procedure provides:
Sec. 2. Petition for prohibition.—When the proceedings of any tribunal, corporation, board,
officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without
or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that judgment be rendered commanding the
respondent to desist from further proceedings in the action or matter specified therein, or
otherwise granting such incidental reliefs as law and justice may require.
It has not been shown that the NHA exercised judicial or quasi-judicial functions in relation to
the SMDRP and the agreements relative to it. Likewise, it has not been shown what ministerial
functions the NHA has with regard to the SMDRP.
A ministerial duty is one which is so clear and specific as to leave no room for the exercise of
discretion in its performance. It is a duty which an officer performs in a given state of facts in a
prescribed manner in obedience to the mandate of legal authority, without regard to the exercise
of his/her own judgment upon the propriety of the act done.97
Whatever is left to be done in relation to the August 27, 2003 MOA, terminating the JVA and
other related agreements, certainly does not involve ministerial functions of the NHA but instead
requires exercise of judgment. In fact, Item No. 4 of the MOA terminating the JVAs provides for
validation of the developer’s (RBI’s) claims arising from the termination of the SMDRP through
the various government agencies.98 Such validation requires the exercise of discretion.
In addition, prohibition does not lie against the NHA in view of petitioner’s failure to avail and
exhaust all administrative remedies. Clear is the rule that prohibition is only available when there
is no adequate remedy in the ordinary course of law.
More importantly, prohibition does not lie to restrain an act which is already a fait accompli. The
"operative fact" doctrine protecting vested rights bars the grant of the writ of prohibition to the
case at bar. It should be remembered that petitioner was the Solicitor General at the time
SMDRP was formulated and implemented. He had the opportunity to question the SMDRP and
the agreements on it, but he did not. The moment to challenge the Project had passed.
On the prayer for a writ of mandamus, petitioner asks the Court to compel respondents to
disclose all documents and information relating to the project, including, but not limited to, any
subsequent agreements with respect to the different phases of the Project, the revisions of the
original plan, the additional works incurred on the Project, the current financial condition of
respondent RBI, and the transactions made with respect to the project. We earlier ruled that
petitioner will be allowed access to official records relative to the SMDRP. That would be
adequate relief to satisfy petitioner’s right to the information gateway.
WHEREFORE, the petition is partially granted.
The prayer for a writ of prohibition is DENIED for lack of merit.
The prayer for a writ of mandamus is GRANTED. Respondent NHA is ordered to allow access
to petitioner to all public documents and official records relative to the SMDRP—including, but
not limited to, the March 19, 1993 JVA between the NHA and RBI and subsequent agreements
related to the JVA, the revisions over the original plan, and the additional works incurred on and
the transactions made with respect to the Project.
No costs.
SO ORDERED.
Article 423. The property of provinces, cities, and municipalities is divided into property for
public use and patrimonial property. (343)
Article 424. Property for public use, in the provinces, cities, and municipalities, consist of the
provincial roads, city streets, municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said provinces, cities, or
municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this Code,
without prejudice to the provisions of special laws. (344a)
-under the Civil Code- the basis for classifying properties of public dominion is the use.
State property for public service= public dominion; Local government unit property for
public service= patrimonial property
-but law on Municipal corporation provides that as long as it is for public service, it is
property of public dominion (special law prevails)
-Power of the State over properties of political subdivisions: The State through the
National Government has residual power over patrimonial properties of political
subdivisions except if properties bought by the political subdivision using its own funds
-patrimonial properties of political subdivision may be attached on execution
Article 425. Property of private ownership, besides the patrimonial property of the State,
provinces, cities, and municipalities, consists of all property belonging to private persons, either
individually or collectively. (345a)
-all other properties that do not belong to the State or its political subdivision
-improvements made by Japanese government on private lands remain to be properties of
the State
-For lands, apply the regalian doctrine. All lands, as a general rule, belong to the State.
Application by private individual for confirmation of title over a parcel of land must show that:1.
Land forms part of the alienable and disposable agricultural land of the public domain, 2)
applicant must have been in open and continuous, exclusive and notorious possession and
occupation of the land under a bona fide claim of ownership since time immemorial or since
June 12, 1945
Provisions Common to the Three Preceding Chapters
Article 426. Whenever by provision of the law, or an individual declaration, the expression

"immovable things or property," or "movable things or property," is used, it shall be deemed to
include, respectively, the things enumerated in Chapter 1 and Chapter 2.
Whenever the word "muebles," or "furniture," is used alone, it shall not be deemed to include
money, credits, commercial securities, stocks and bonds, jewelry, scientific or artistic
collections, books, medals, arms, clothing, horses or carriages and their accessories, grains,
liquids and merchandise, or other things which do not have as their principal object the
furnishing or ornamenting of a building, except where from the context of the law, or the
individual declaration, the contrary clearly appears. (346a)
-Muebles- principal object is the furnishing or ornamenting of a building,
(7) Legal concepts related to Movable Properties and to Immovable Properties

Rules of Court – nature of action to be filed, venue of the action, manner of execution of
court decisions
Registration of Mortgage – chattel mortgage or real estate mortgage
Tax- imposition of real property tax
Applicability of the Statute of Frauds - Article 1403. The following contracts are unenforceable,
unless they are ratified:
(1) Those entered into in the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases an agreement hereafter made shall be unenforceable by action, unless the
same, or some note or memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement cannot be received
without the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the
making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;
(c) An agreement made in consideration of marriage, other than a mutual promise
to marry;
(d) An agreement for the sale of goods, chattels or things in action, at a price not
less than five hundred pesos, unless the buyer accept and receive part of such
goods and chattels, or the evidences, or some of them, of such things in action or
pay at the time some part of the purchase money; but when a sale is made by
auction and entry is made by the auctioneer in his sales book, at the time of the
sale, of the amount and kind of property sold, terms of sale, price, names of the
purchasers and person on whose account the sale is made, it is a sufficient
memorandum;
(e) An agreement for the leasing for a longer period than one year, or for the sale
of real property or of an interest therein;
( f ) A representation as to the credit of a third person.
(3) Those where both parties are incapable of giving consent to a contract.
Crime – theft, robbery, usurpation of property
(8) Legal concepts related to Properties of Public Dominion and Properties of Private
Ownership
-validity of contracts over the property
-registrability
-capacity of private individuals to exercise ownership

Module 1. Title I. Classification of Property

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MODULE NO.

2. Definition of Property. Distinguish from ‘Thing’

 Characteristics of a Property: utility for the satisfaction of moral or economic wants,

 Thing includes appropriable and non-appropriable objects (planets, stars, moon).

Be it enacted by the Senate and House of Representatives of the Philippines in

4. Distinguish Movable and Immovable Properties

- ‘breaking’ entails substantial destruction or deterioration

c. MANILA ELECTRIC COMPANY, Petitioner, v. THE CITY ASSESSOR AND CITY

(7) Fertilizer actually used on a piece of land;

Article 417. The following are also considered as personal property:

(6) Identify Properties of Public Dominion and Properties of Private Ownership

Article 420. The following things are property of public dominion:

- Commonwealth Act 141. Public Land Act-November 7, 1936

-1987 Constitution of the Philippines. Article XII. NATIONAL ECONOMY AND

Notes: (September 9, 2020)

The CA Decision narrates the antecedents as follows:

The Court's Ruling

The Petition is impressed with merit.

The CA sustained the RTC Amended Decision in this wise:

ART. 420. The following things are property of public dominion:

As noted by Justice Edgardo L. Paras:

b. REPUBLIC OF THE PHILIPPINES, PETITIONER, v. NATIONAL COMMISSION ON

The Antecedent Facts

Consequently, the petitioners as represented by Isaias M. Abanag and Marion T. Pool

The Resolutions of the NCIP

In its Resolution No. 107-2010-AL9 and Resolution No. 108-2010-AL10 dated 10

The dispositive portion of Resolution No. 107-2010-AL provides:

WHEREFORE, premises considered, Petition is hereby GRANTED and the Ancestral

WHEREFORE, premises considered, Petition is hereby GRANTED and the Ancestral

The Ruling of the Court of Appeals

In its Decision16 promulgated on 15 January 2013, the Court of Appeals "agrees with

A. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR

2. THE NCIP HAS NO JURISDICTION TO ISSUE CALTS OVER LANDS

B. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE

C. ASSUMING ARGUENDO THAT THE SUBJECT CERTIFICATES OF

The Ruling of this Court

We grant the petition.

Under the facts, the NCIP has

SECTION 78. Special Provision. — The City of Baguio shall remain to be governed

MR. ZAPATA: The Committee accepts subject to style, Mr. Speaker.

Art. 420. The following things are property of public dominion:

On 1 September 1909, Baguio City was incorporated by the Philippine Assembly. On 12

This case is about the registration of lots located within the Baguio Townsite

Moreover, Annex I of the petition for certiorari shows that the previous attempts of

Name Date Filed Date Dismissed

SO ORDERED. 27 (Boldfacing supplied, italicization in the original)

WHEREFORE, the Court GRANTS the petition. The Court REVERSES the Decision and

CALT NO. CAR-BAG-1110-000268 for Parcel Lot 1

a. Francisco I. Chavez, Petitioner, Vs.National Housing Authority, et al. G.R. No. 164527

G.R. No. 164527 August 15, 2007

FRANCISCO I. CHAVEZ, Petitioner,

VELASCO, JR., J.:

to enjoin respondents—particularly respondent NHA—from further implementing and/or

RA 6957 defined "build-and-transfer" scheme as "[a] contractual arrangement whereby the

(k) Land reclamation, dredging and other related development facilities;

(q) Development of new townsites and communities and related facilities.

In conformity with Sec. 5 of MO 415, an inter-agency technical committee (TECHCOM) was

The Scope of Work of RBI under Article II of the JVA is as follows:

b) To immediately commence on the preparation of feasibility report and detailed engineering

Other obligations of RBI are as follows:

For the developer (RBI):

1. To own the forty (40) hectares of reclaimed land.

For the NHA: