CONCEPT: Self-executing or non-self-executing provisions

CASE: Manila Prince Hotel v. GSIS

G.R. No 122156

Date: February 3, 1997

FACTS:  GSIS*, decided to sell through public bidding 30% to 51% of the issued and
outstanding shares of respondent MHC.
 Two (2) bidders participated: petitioner Manila Prince Hotel Corporation, a Filipino
corporation, which offered to buy 51% of the MHC or 15,300,000 shares at P41.58
per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel
operator, which bid for the same number of shares at P44.00 per share, or P2.42
more than the bid of petitioner. The bid price was later matched by the petitioner
but GSIS refused to accept.
 Petitioner submits that the Manila Hotel has been identified with the Filipino nation
and has practically become a historical monument; also argues that since 51% of the
shares of the MHC carries with it the ownership of the business of the hotel which is
owned by respondent GSIS, a government-owned and controlled corporation, the
hotel business of respondent GSIS being a part of the tourism industry is
unquestionably a part of the national economy.
 In the grant of rights, privileges, and concessions covering the national economy
and patrimony, the State shall give preference to qualified Filipinos. (Sec. 10,
second par., Art. XII, of the 1987 Constitution)
 The thesis of petitioner that since Manila Hotel is part of the national patrimony and
its business also unquestionably part of the national economy petitioner should be
preferred after being qualified**.
 Respondents firstly maintain that the Sec. 10, second par., Art. XII, of the 1987
Constitution is merely a statement of principle and policy since it is not a self-
executing provision and requires implementing legislation(s). Thus, for the said
provision to operate, there must be existing laws “to lay down conditions under
which business may be done.”

ISSUE: Is Sec. 10, second par., Art. XII, of the 1987 Constitution a non-self-executing provision?

RULING  No, Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive
command which is complete in itself and which needs no further guidelines or
implementing laws or rules for its enforcement. From its very words the provision
does not require any legislation to put it in operation. It is per se judicially
enforceable. When our Constitution mandates that [i]n the grant of rights, privileges,
and concessions covering national economy and patrimony, the State shall give

*Pursuant to the privatization program of the Philippine Government under Proclamation No. 50 dated 8 December
1986
** I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC –
1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November
3, 1995) or the Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the
Block of Shares to the other Qualified Bidders:
 preference to qualified Filipinos, it means just that - qualified Filipinos shall be
preferred.
 Clarified by Commissioner Nolledo: Paragraph 2 of Section 10 explicitly mandates
the “Pro-Filipino” bias in all economic concerns. It is better known as the FILIPINO
FIRST Policy. In the granting of economic rights, privileges, and concessions, when a
choice has to be made between a “qualified foreigner” and a “qualified Filipino,” the
latter shall be chosen over the former.”

*Pursuant to the privatization program of the Philippine Government under Proclamation No. 50 dated 8 December
1986
** I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC –
1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November
3, 1995) or the Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the
Block of Shares to the other Qualified Bidders: