Chavez vs. Public Estates Authority

VOL.
415, NOVEMBER 11, 2003 403

Chavez vs. Public Estates Authority
*
G.R. No. 133250. November 11, 2003.
FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC

ESTATES AUTHORITY and AMARI COASTAL BAY
DEVELOPMENT CORPORATION, respondents.
Natural Resources; Reclamation Projects; Public Officers;

Graft and Corruption; By any legal or moral yardstick, the P1.754
billion in commissions paid to various individuals for
“professional efforts and services in successfully negotiating and
securing” the reclamation contract obviously constitutes bribe
money.—The private entity that purchased the reclaimed lands
for P1.894 billion expressly admitted before the Senate
Committees that it spent P1.754 billion in commissions to pay
various individuals for “professional efforts and services in
successfully negotiating and securing” the contract. By any legal
or moral yardstick, the P1.754 billion in commissions obviously
constitutes bribe money. Nonetheless, there are those who insist
that the billions in investments of the private entity deserve
protection by this Court. Should this Court establish a new
doctrine by elevating grease money to the status of legitimate
investments deserving of protection by the law? Should this Court
reward the patently illegal and grossly unethical business
practice of the private entity in securing the contract? Should we
allow those with hands dripping with dirty money equitable relief
from this Court?
Same; Same; Submerged lands are owned by the State and
are inalienable; Submerged lands, like the waters (sea or bay)
above them, are part of the State’s inalienable natural resources.—
As Justice Bellosillo himself states in his supplement to his
dissent, the Ponce Cases admit that “submerged lands still belong
to the National Government.” The correct formulation, however, is
that submerged lands are owned by the State and are inalienable.
Section 2, Article XII of the 1987 Constitution provides: All lands
of the public domain, waters, minerals, coal, petroleum, and
_______________
* EN BANC.
404
404 SUPREME COURT REPORTS ANNOTATED
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. x x x. (Emphasis
supplied) Submerged lands, like the waters (sea or bay) above
them, are part of the State’s inalienable natural resources.
Submerged lands are property of public dominion, absolutely
inalienable and outside the commerce of man. This is also true
with respect to foreshore lands. Any sale of submerged or
foreshore lands is void being contrary to the Constitution.
Same; Same; Reclaimed lands are no longer foreshore or
submerged lands, and thus may qualify as alienable agricultural
lands of the public domain provided the requirements of public
land laws are met.—This is why the Cebu City ordinance merely
granted Essel, Inc. an “irrevocable option” to purchase the
foreshore lands after the reclamation and did not actually sell to
Essel, Inc. the still to be reclaimed foreshore lands. Clearly, in the
Ponce Cases the option to purchase referred to reclaimed lands,
and not to foreshore lands which are inalienable. Reclaimed lands
are no longer foreshore or submerged lands, and thus may qualify
as alienable agricultural lands of the public domain provided the
requirements of public land laws are met.
Same; Same; In the Ponce Cases Nos. L-21870 and L-22669,
the City of Cebu retained ownership of the reclaimed foreshore
lands and the private corporation only had an “irrevocable option”
to purchase portions of the foreshore lands once actually
reclaimed, while in the instant case, ownership of the reclamation
area, including the submerged lands, was immediately transferred
to the joint venture—Amari’s right to own the submerged lands is
immediately effective upon the approval of the Amended JVA and
not merely an option to be exercised in the future if and when the
reclamation is actually realized.—In the Ponce Cases, the City of
Cebu retained ownership of the reclaimed foreshore lands and
Essel, Inc. only had an “irrevocable option” to purchase portions of
the foreshore lands once actually reclaimed. In sharp contrast, in
the instant case ownership of the reclamation area, including the
submerged lands, was immediately transferred to the joint
venture. Amari immediately acquired the absolute right to own
70% percent of the reclamation area, with the deeds of transfer to
be documented and the certificates of title to be issued upon
actual reclamation. Amari’s right to own the submerged lands is
immediately effective upon the approval of the Amended JVA and
not merely an option to be exercised in the future if and when the
reclamation is actually realized. The submerged lands, being
inalienable and outside the commerce of man, could not be the
subject of the commercial transactions specified in the Amended
JVA.
405
VOL. 415, NOVEMBER 11, 2003 405
Same; Same; Bids and Bidding; Government Auditing Code

(P.D. No. 1445); With the enactment of the Government Auditing
Code on 11 June 1978, any sale of government land must be made
only through public bidding, thus, an “irrevocable option” to
purchase government land would now be void being contrary to the
requirement of public bidding; In the instant case, the Amended
JVA is a negotiated contract which clearly contravenes Section 79
of P.D. No. 1445.—In the Ponce Cases the Cebu City ordinance
granted Essel, Inc. an “irrevocable option” to purchase from Cebu
City not more than 70% of the reclaimed lands. The ownership of
the reclaimed lands remained with Cebu City until Essel, Inc.
exercised its option to purchase. With the subsequent enactment
of the Government Auditing Code (Presidential Decree No. 1445)
on 11 June 1978, any sale of government land must be made only
through public bidding. Thus, such an “irrevocable option” to
purchase government land would now be void being contrary to
the requirement of public bidding expressly required in Section 79
of P.D. No. 1445. This requirement of public bidding is reiterated
in Section 379 of the 1991 Local Government Code. Obviously, the
ingenious reclamation scheme adopted in the Cebu City ordinance
can no longer be followed in view of the requirement of public
bidding in the sale of government lands. In the instant case, the
Amended JVA is a negotiated contract which clearly contravenes
Section 79 of P.D. No. 1445.
Same; Same; Statutes; R.A. No. 1899 applies only to foreshore
lands, not to submerged lands.—As we held in the 1998 case of
Republic Real Estate Corporation v. Court of Appeals, citing the
Ponce Cases, R.A. No. 1899 applies only to foreshore lands, not to
submerged lands. In his concurring opinion in Republic Real
Estate Corporation, Justice Reynato S. Puno stated that under
Commonwealth Act No. 141, “foreshore and lands under water
were not to be alienated and sold to private parties,” and that
such lands “remained property of the State.” Justice Puno
emphasized that “Commonwealth Act No. 141 has remained in
effect at present.” The instant case involves principally
submerged lands within Manila Bay. On this score, the Ponce
Cases, which were decided based on R.A. No. 1899, are not
applicable to the instant case.
Same; Same; There is no dispute that a public corporation is
not covered by the constitutional ban on acquisition of alienable
public lands.—The Ponce Cases involve the authority of the City
of Cebu to reclaim foreshore areas pursuant to a general law, R.A.
No. 1899. The City of Cebu is a public corporation and is qualified,
under the 1935, 1973, and 1987 Constitutions, to hold alienable or
even inalienable lands of the public domain. There is no dispute
that a public corporation is not covered by the constitutional ban
on acquisition of alienable public lands. Both the 9 July 2002
Decision and the 6 May 2003 Resolution of this Court in the
instant case expressly recognize this.
406

VITUG, J., Separate Opinion:
Natural Resources; Buyers and Builders in Good Faith; The

contracts of individuals who, not being personally disqualified to
hold alienable lands of the public domain, may have been able to
acquire in good faith, reclaimed portions of the subject property
from AMARI Coastal Bay Development Corporation should be
duly respected and upheld; In instances where the successor-in-
interest is itself a corporate entity, the constitutional proscription
would stand, but if the corporation has introduced structures or
permanent improvements thereon, such structures or
improvements, when so viewed as having been made in good faith,
could very well be governed by the Civil Code.—Just the same, I
should like to make a statement on what could be a grave concern
on the part of individuals, who, not being personally disqualified
to hold alienable lands of the public domain, may have been able
to acquire in good faith, reclaimed portions of the subject property
from respondent AMARI Coastal Bay Development Corporation. I
believe that such contracts must be duly respected and upheld in
line with analogous and applicable jurisprudence, as well as
equitable considerations, in cases involving the conveyance to
disqualified aliens of real property that, subsequently, are
acquired by nationals qualified to own such property. In
instances, where the successor-in-interest is itself a corporate
entity, the constitutional proscription would stand, but if the
corporation has introduced structures or permanent
improvements thereon, such structures or improvements, when so
viewed as having been made in good faith, could well be governed
by the Civil Code effectively entitling the builder to pay to the
State a reasonable rent for the use of the land or to be reimbursed
the value of the structures or improvements.
QUISUMBING, J., Separate Opinion:
Natural Resources; Reclamation Projects; This much at this

time I would concede: state ownership of submerged lands, but
after reclamation, I could not concede total nullity of private efforts
and resources spent pursuant to prior law and executive policy.—I
find the cited cases in Justice Bellosillo’s separate opinion, L-
21870 Ponce v. Hon. A. Gomez (Res. of Feb. 3, 1965) and L-22669
(Res. of June 24, 1966) acceptable and instructive for the
resolution of the instant controversy before us. That the
submerged lands, under the sea or below baywater, should belong
to the National Government need not be debatable. Nor would the
proposition that their ownership should pass to the municipal
corporation when the city had successfully conducted the
reclamation project, through private initiative and financial
assistance, be a conceptual barrier to uphold probable rights of
the initiator and the financier that made the projects not only
feasible but indeed successful. This much at this time I would
concede: state ownership of submerged land. But after
reclamation, I could not concede total nullity of private efforts and
resources spent pursuant to prior law and
407
VOL. 415, NOVEMBER 11, 2003 407
executive policy. Nor would I neglect to appreciate Justice Vitug’s

reference to De Castro v. Tan, 129 SCRA 85, for an equitable
approach to what appears now a constitutional conundrum.
Same; Same; The reclamation projects like those contemplated
in the PEA-AMARI joint venture call for a greater public
appreciation of equitable investment regimes by policy-makers and
private entrepreneurs alike as they impact hugely on the economic
development concerns of the nation.—Subject to further reflection,
it does not appear to me pertinent to apply Sec. 79 on disposal or
sale of unserviceable property, contained in P.D. No. 1445, the
General Auditing Code, or Sec. 379 of the Local Government
Code. The requirement of bidding in regard to corporate projects
of PEA is obviously distinguishable, if not outright distinct, from
disposal of surplus/junk property. The reclamation projects like
those contemplated in the PEA-AMARI joint venture call for a
greater public appreciation of equitable investment regimes by
policy-makers and private entrepreneurs alike as they impact
hugely on the economic development concerns of the nation. Thus,
we are of the view that of more pertinence in this regard are the
BOT (Build, Operate, and Transfer) Law, R.A. 6957 as amended
and the Charter of PEA (P.D. No. 1084) and P.D. No. 1085
concerning reclaimed lands along Manila Bay.
SANDOVAL-GUTIERREZ, J., Dissenting Opinion:
Natural Resources; Reclamation Projects; Constitutional Law;

Statutory Construction; The Constitution is a flexible and dynamic
document which must be interpreted to meet its objectives under
the complex necessities of the changing times.—While I joined in
the initial grant of the petition, I realized, however, that the tenor
of our interpretation of the Constitutional prohibition on the
acquisition of reclaimed lands by private corporations is so
absolute and circumscribed as to defeat the basic objectives of its
provisions on “The National Economy and Patrimony.” The
Constitution is a flexible and dynamic document. It must be
interpreted to meet its objectives under the complex necessities of
the changing times. Provisions intended to promote social and
economic goals are capable of varying interpretations. My view
happens to differ from that of the majority. I am confident,
however, that the demands of the nation’s economy and the needs
of the majority of our people will bring the majority Decision and
this Dissenting Opinion to a common understanding. Always, the
goals of the Constitution must be upheld, not defeated nor
diminished.
Same; Same; Courts; Investments on the scale of reclamation
projects entail huge amounts of money, consequently our
government should not take arbitrary action against these
corporate developers; Obviously, the courts play a key role in all
disputes arising in this area of national development.—
Infrastructure building is a function of the government and
408

ideally should be financed exclusively by public funds. However,
present circumstances show that this cannot be done. Thus,
private corporations are encouraged to invest in income
generating national construction ventures. Investments on the
scale of reclamation projects entail huge amounts of money. It is a
reality that only private corporations can raise such amounts. In
the process, they assist this country in its economic development.
Consequently, our government should not take arbitrary action
against these corporate developers. Obviously, the courts play a
key role in all disputes arising in this area of national
development.
Same; Same; Reclaimed lands, especially those under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP),
are governed by P.D. 1084 and P.D. 1085 enacted in 1976 and
1977, respectively, or more than half a century after the enactment
of the Public Lands Acts of 1919 and 1936.—I dissent from the
foregoing conclusions which are based on general laws mainly of
ancient vintage. Reclaimed lands, especially those under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP),
are governed by P.D. 1084 and P.D. 1085 enacted in 1976 and
1977, respectively, or more than half a century after the
enactment of the Public Lands Acts of 1919 and 1936.
Same; Same; Public Estates Authority; Property in the hands
of the PEA, not being of public dominion, is held in a patrimonial
capacity—it may sell this property to private corporations without
violating the Constitution.—Does the Constitution restrain PEA
from effecting such transfer to a private corporation? Under
Article 421 of the Civil Code, all property of the State which is not
of public dominion is patrimonial. PEA does not exercise sovereign
functions of government. It handles business activities for the
government. Thus, the property in its hands, not being of public
dominion, is held in a patrimonial capacity. PEA, therefore, may
sell this property to private corporations without violating the
Constitution. It is relevant to state that there is no constitutional
obstacle to the sale of real estate held by government owned
corporations, like the National Development Corporation, the
Philippine National Railways, the National Power Corporation,
etc. to private corporations. Similarly, why should PEA, being a
government owned corporation, be prohibited to sell its reclaimed
lands to private corporations?
Same; Same; When the government decides to reclaim a land,
such as the area comprising and surrounding the Cultural Center
Complex and other parts of Manila Bay, it reserves title only to the
roads, bridges, and spaces allotted for government buildings, the
rest being designed, as early as the drawing board stage, for sale
and use as commercial, industrial, entertainment or services-
oriented ventures.—I take exception to the view of the majority
that after the enactment of the 1935 Constitution, Section 58 of
Act 2874 continues to be applicable up to the present and that the
409
VOL. 415, NOVEMBER 11, 2003 409
long established state policy is to retain for the government title

and ownership of government reclaimed land. This simply is an
inaccurate statement of current government policy. When a
government decides to reclaim the land, such as the area
comprising and surrounding the Cultural Center Complex and
other parts of Manila Bay, it reserves title only to the roads,
bridges, and spaces allotted for government buildings. The rest is
designed, as early as the drawing board stage, for sale and use as
commercial, industrial, entertainment or services-oriented
ventures. The idea of selling lots and earning money for the
government is the motive why the reclamation was planned and
implemented in the first place.
CORONA, J., Dissenting Opinion:
Public Lands; Patrimonial Property; In Ignacio vs. Director of

Lands, the manifestation of intention is through a formal
declaration on the part of the government, through the executive or
the legislative department that the land in question is no longer
needed for “public use” or “public service.”—In Ignacio vs. Director
of Lands, the manifestation of intention is through a formal
declaration on the part of the government, through the executive
or the legislative department, that the land in question is no
longer needed for “public use” or “public service.” It is not for the
courts to establish such fact.
Same; Same; Approval of the contracts clearly and
unambiguously attested to the fact that the lands in question were
no longer intended for “public use” or “public service.”—The
contracts being assailed passed the scrutiny of three Philippine
Presidents (Corazon C. Aquino, Fidel V. Ramos and Joseph E.
Estrada) and were upheld by them. Their approval of the
contracts clearly and unambiguously attested to the fact that the
lands in question were no longer intended for “public use” or
“public ser-vice.”
Same; Same; The reclaimed lands may be validly and
constitutionally alienated to a Filipino corporation which in this
case is respondent AMARI.—I submit that the 77.34 hectares of
reclaimed lands comprising a portion of the Freedom Islands to be
conveyed to AMARI (covered by certificates of title in the name of
PEA) as well as the 290.156 hectares of reclaimed land after
reclamation by PEA and AMARI (to be transferred also to
AMARI) should be deemed patrimonial properties of PEA prior to
the titling thereof to AMARI. Hence, they are not covered by the
proscription in Sec. 3, Article XII of the Constitution that
“[p]rivate corporations or associations may not hold such alienable
lands of the public domain except by lease x x x.” Hence, these
reclaimed lands may be validly and constitutionally alienated to a
Filipino corporation which in this case is respondent AMARI.
410

TINGA, J., Dissenting Opinion:
Natural Resources; Words and Phrases; The common

characteristics of natural resources are that they are still in their
original, raw state—they are material objects of economic value
and utility to man produced by nature.—Obviously, the common
characteristics of natural resources are that they are still in their
original, raw state. Natural resources are material objects of
economic value and utility to man produced by nature. In other
words, they refer to property and materials in their original and
native state, not to those which have been produced through the
intervention of man.
Same; When the conversion activity such as co-production,
joint venture or production-sharing agreements is authorized by
the Government through a law, the qualified party to the
agreement may own the converted product or part of it, when so
provided in the agreement.—Natural resources are capable of
conversion or, in the words of the Constitution, “[e]xploration,
development and utilization.” But the conversion is, again
pursuant to the Constitution, “under the full control and
supervision of the State.” When the conversion activity such as co-
production, joint venture or production-sharing agreements is
authorized by the Government through a law, the qualified party
to the agreement may own the converted product or part of it,
when so provided in the agreement. The rationale is that the
converted product is not the same as the original natural
resource. Thus, the timber concessionaire may own the logs cut
from the timber concession; the miner may dispose of the gold
produced from the gold ores taken from the mine; the developer
may market the energy harnessed from a geothermal field.
Same; Reclamation Projects; Reclaimed land does not fall
under the category of natural resources which under the
Constitution are inalienable; It is statutory law which determines
the status of reclaimed land.—Significantly, the reclamation
contract is not an outright sale. Reclamation is essentially a
construction and infrastructure contract. This is also clear from
the BOT Laws. Specifically, the contract subject of this case is a
joint venture agreement. Reclaimed land does not fall under the
category of natural resources which under the Constitution are
inalienable. This is so because its development from the seabed
entails human intervention. It is unlike land per se, which having
become such on account of the forces of nature, is considered a
natural resource. That being the case, it is statutory law which
determines the status of reclaimed land. In other words, the
matter of categorization of reclaimed land is a legislative function.
Same; Same; The payment in the form of reclaimed land in
the case of land reclamation projects completes the essence of
privatization which is the underlying economic philosophy of the
BOT laws.—The challenged
411
VOL. 415, NOVEMBER 11, 2003 411
Joint Venture Agreement was undertaken under the aegis of

Presidential Decree No. 1084, Presidential Decree No. 1085 and
the so-called Build Operate and Transfer (BOT) laws, Republic
Act No. 6957, as amended by Republic Act No. 7718. The latter
BOT law enumerates the infrastructure or development projects
which may be implemented by the private sector, among which
are land reclamation projects. According to the same law, the
proponent in land reclamation projects may be repaid by way of
“grant of a portion or percentage of the reclaimed land.” The
payment in the form of reclaimed land in the case of land
reclamation projects completes the essence of privatization which is
the underlying economic philosophy of the BOT laws. In the
beginning, the private sector is tapped to undertake grant
infrastructure and development project and in the end it is paid in
the form of land which naturally is thenceforth classified as
private property.
Same; Same; Whenever land reclamation authorized by law is
undertaken by a private individual or entity, the reclaimed lands
which the developer secures by way of payment is classified as
private property—there is no need for another special law
declaring the lands alienable as the reclamation law itself
provides the legal basis that renders them alienable.—In sum,
whenever land reclamation authorized by law is undertaken by a
private individual or entity, the reclaimed lands which the
developer secures by way of payment is classified as private
property. There is no need for another special law declaring the
lands alienable as the reclamation law itself provides the legal
basis that renders them alienable, unless of course there is a
contrary provision in the law. The laws ordaining that reclaimed
lands become lands of the public domain are the exception rather
than the rule.
Same; Same; The Public Land Acts (Act No. 2874 and C.A.
No. 141) typify the few laws which provide that reclaimed lands
are not alienable, but the categorization applies only to lands
reclaimed by the National Government, not those reclaimed by
private individuals or entities.—The Public Land Acts (Act No.
2874 and Commonwealth Act No. 141) typify the few laws which
provide that reclaimed lands are not alienable. But the
categorization applies only to lands reclaimed by the National
Government. It does not cover lands reclaimed by private
individuals or entities, including local government units,
authorized by law. In other words, Commonwealth Act No. 141,
being a general law, is not applicable to lands reclaimed pursuant
to special laws, such as the reclaimed land subject of this case.
Same; Same; Contracts; If there is any doubt as to the object of
the prestation in this case, that interpretation which would render
the contract valid is to be favored.—I have no quarrel with the
majority’s ruling that “submerged areas [of the Manila Bay] are,
under the Constitution, ‘waters
412
x x x owned by the State,’ forming part of the public domain and

consequently inalienable.” I take exception, however, to the
holding that the subject JVA is invalid since it covers such
submerged areas. I do not think that the parties contemplated the
transfer of the submerged lands per se but, rather, the conveyance
of the reclaimed lands which shall stand on the submerged lands.
If there is any doubt as to the object of the prestation in this case,
that interpretation which would render the contract valid is to be
favored. Where the instrument is susceptible of two
interpretations, one which will make it invalid and illegal, and
another which will make it valid and legal, the latter
interpretation should be adopted.
Same; Same; I submit that this case should be resolved in
terms of the long range development of the country; The
fundamental law vests the State with the concomitant authority to
draw on the resources of the private sector, to aid it in such an
awesome endeavor as land reclamation.—I submit that this case
should be resolved in terms of the long range development of the
country. However rich our country may be in natural resources,
these riches are not inexhaustible, land being among the most
finite. The total area of Philippine agricultural lands is estimated
to be 10.4 million hectares; the total area of mountainous lands,
about 9.4 million hectares. Such a limited land area could hardly
sustain a population, which, as of October 2000, stood at 76.5
million Filipinos (projected to be 81.1 million by the end of 2003)
and growing at a rate of 2.36% per annum. Moreover, the
Philippine economy is expanding at a rate of 3.5% (2000-2001) to
4.5% (2001-2002). There is no single solution to address these
developments but the extension of our coastlines consisting of
36,289 kilometers may be one of them. It is with this end in mind
that the Government pursues policies established or recognized
by the Constitution, one of which is land reclamation. No less
than the Constitution, under the general welfare clause,
empowers and obliges the State to execute such a policy. The
State, though, need not go at it alone. Indeed, the Constitution
itself acknowledges that the State cannot perform this task by
itself. Thus, the fundamental law, under the Article on National
Economy and Patrimony, vests the State with the concomitant
authority to draw on the resources of the private sector, whose
role is aptly described elsewhere as “indispensable,” to aid it in
such an awesome endeavor. To deny the motions for
reconsideration in this case would be to turn a blind eye to this
stark reality and, ultimately, to defeat State policy.
MOTIONS FOR RECONSIDERATION of the decision of

the Supreme Court.
The facts are stated in the resolution of the Court.

Francisco I. Chavez for and in his behalf.
413
VOL. 415, NOVEMBER 11, 2003 413

Romulo, Mabanta, Buenaventura, Sayoc & Delos

Angeles for Central Bay Reclamation, etc.
Zaldy V. Trespeses for Intervenor Prime Orion Phil.,
Inc.
Sugay Law Office for movants R.S. Atienza, et al.
Abello, Concepcion, Regala and Cruz for movants
Foreign Investors Italian-Thai Development & Centasia,
etc.
RESOLUTION
CARPIO, J.:
This Court is asked to legitimize a government contract

that conveyed to a private entity 157.84 hectares of
reclaimed public lands along Roxas Boulevard, in Metro
Manila at the negotiated price of P1,200 per square meter.
However, published reports place the market price of land
near that
1
area at that time at a high of P90,000 per square
meter. The difference in price is a staggering P140.16
billion, equivalent to the budget of the entire Judiciary for
seventeen years and more than three times the Marcos
Swiss deposits that this Court forfeited in favor of the
government.
Many worry to death that the private investors will lose
their investments, at most not 2 more than one-half billion
pesos in legitimate expenses, if this Court voids the
contract. No one seems to worry about the more than tens
of billion pesos that the hapless Filipino people will lose if
the contract is allowed to stand. There are those who
question these figures, but the questions arise only because
the private entity somehow managed to inveigle the
government to sell the reclaimed lands without public
bidding in patent violation of the Government Auditing
Code.
Fortunately for the Filipino people, two Senate
Committees, the Senate Blue Ribbon Committee and the
Committee on Accountability of Public Officers, conducted
extensive public hearings to determine the actual market
value of the public lands sold to the private entity. The
Senate Committees established the clear, indis-
_______________
1 See “The Grandmother of All Scams” by Sheila S. Coronel and Ellen

Tordesillas, 18-20 March 1998, Philippine Center for Investigative
Journalism. This report won the 1st Prize in the 1998 JVO Investigative
Journalism Awards.
2 6 May 2003 Resolution, p. 13.
414

putable and unalterable fact that the sale of the public

lands is grossly and unconscionably undervalued based on
official documents submitted by the proper government
agencies during the Senate investigation. We quote the joint
report of these two Senate Committees, Senate Committee
Report No. 560, as approved3 by the Senate in plenary
session on 27 September 1997:
The Consideration for the Property
PEA, under the JVA, obligated itself to convey title and

possession over the Property, consisting of approximately One
Million Five Hundred Seventy Eight Thousand Four Hundred
Forty One (1,578,441) Square Meters for a total consideration of
One Billion Eight Hundred Ninety Four Million One Hundred
Twenty Nine Thousand Two Hundred (P1,894,129,200.00) Pesos,
or a price of One Thousand Two Hundred (P1,200.00) Pesos per
square meter.
According to the zonal valuation of the Bureau of
Internal Revenue, the value of the Property is Seven
Thousand Eight Hundred Pesos (P7,800.00) per square
meter. The Municipal Assessor of Parañaque, Metro
Manila, where the Property is located, pegs the market
value of the Property at Six Thousand Pesos (P6,000.00) per
square meter. Based on these alone, the price at which PEA
agreed to convey the property is a pittance. And PEA cannot claim
ignorance of these valuations, at least not those of the Municipal
Assessors’ office, since it has been trying to convince the Office of
the Municipal Assessor of Parañaque to reduce the valuation of
various reclaimed properties thereat in order for PEA to save on
accrued real property taxes.
PEA’s justification for the purchase price are various appraisal
reports, particularly the following:
(1) An appraisal by Vic T. Salinas Realty and Consultancy

Services concluding that the Property is worth P500.00
per square meter for the smallest island and P750.00 per
square meter for the two other, islands or a total of
P1,170,000.00 as of 22 February 1995;
(2) An appraisal by Valencia Appraisal Corporation
concluding that the Property is worth P850 per square
meter for Island I, P800 per square meter for Island II and
P600 per square meter for
_______________
3 PEA’s Memorandum dated 4 August 1999 quoted-extensively, in its statement

of Facts and the Case, the Statement of Facts in Senate Committee Report No. 560
dated 16 September 1997. Moreover, the existence of this report is a matter of
judicial notice pursuant to Section 1, Rule 129 of the Rules of Court which
provides, “A court shall take judicial notice, without the introduction of evidence,
of x x x the official acts of the legislature.”
415
VOL. 415, NOVEMBER 11, 2003 415

the smallest island, or a total of P1,289,732,000, also as of 22 February

1995; and
(3) An Appraisal by Asian Appraisal Company, Inc. (AACI), stating
that the Property is worth approximately P1,000 per square meter for
Island I, P950 per square meter for Island II and P600 per square meter
for Island III, or a total of P1,518,805,000 as of 27 February 1995.
The credibility of the foregoing appraisals, however, are [sic]

greatly impaired by a subsequent appraisal report of AACI
stating that the property is worth P4,500.00 per square meter as
of 26 March 1996. Such discrepancies in the appraised value as
appearing in two different reports by the same appraisal company
submitted within a span of one year render all such appraisal
reports unworthy of even the slightest consideration.
Furthermore, the appraisal report submitted by the
Commission on Audit estimates the value of the Property to
be approximately P33,673,000,000.00, or P21,333.07 per
square meter.
There were also other offers made for the property from other
parties which indicate that the Property has been undervalued by
PEA. For instance, on 06 March 1995, Mr. Young D. See,
President of Saeil Heavy Industries Co., Ltd., (South Korea),
offered to buy the property at P1,400.00 and expressed its
willingness to issue a stand-by letter of credit worth $10 million.
PEA did not consider this offer and instead finalized the JVA with
AMARI. Other offers were made on various dates by Aspac
Management and Development Group Inc. (for P1,600 per square
meter), Universal Dragon Corporation (for P1,600 per square
meter), Cleene Far East Manila Incorporated and Hyosan Prime
Construction Co. Ltd. which had prepared an Irrevocable Clean
Letter of Credit for P100,000,000.
In addition, AMARI agreed to pay huge commissions and
bonuses to various persons, amounting to P1,596,863,050.00
(P1,754,707,150.00 if the bonus is included), as will be discussed
fully below, which indicate that AMARI itself believed the market
value to be much higher than the agreed purchase price. If such
commissions are added to the purchase price, AMARI’s
acquisition cost for the Property will add-up to P3,490,992,250.00
(excluding the bonus). If AMARI was willing to pay such amount
for the Property, why was PEA willing to sell for only
P1,894,129,200.00, making the Government stand to lose
approximately P1,596,863,050.00?
xxx
Even if we simply assume that the market value of the
Property is half of the market value fixed by the Municipal
Assessors Office of Parañaque for lands along Roxas Boulevard, or
P3,000.00 per square meter, the Government now stands to lose
approximately P2,841,193,800.00. But an even better assumption
would be that the value of the Property is P4,500.00 per square
meter, as per the AACI appraisal report dated 26 March 1996,
since this is the valuation used to justify the
416

issuance of P4 billion worth of shares of stock of Centennial City

Inc. (CCI) in exchange for 4,800,000 AMARI shares with a total
par value of only P480,000,000.00. With such valuation, the
Government’s loss will amount to P5,208,855,300.00.
Clearly, the purchase price agreed to by PEA is way
below the actual value of the Property, thereby subjecting
the Government to grave injury and enabling AMARI to
enjoy tremendous benefit and advantage. (Emphasis
supplied)
The Senate Committee Report No. 560 attached the

following official documents from the Bureau of Internal
Revenue, the Municipal Assessor of Parañaque, Metro
Manila, and the Commission on Audit:
1. Annex “M,” Certified True Copy of BIR Zonal

Valuations as certified by Antonio F. Montemayor,
Revenue District Officer. This official document
fixed the market value of the 157.84 hectares at
P7,800 per square meter.
2. Annex “N,” Certification of Soledad S. Medina-Cue,
Municipal Assessor, Parañaque, dated 10
December 1996. This official document fixed, the
market value at P6,000 per square meter.
3. Exhibit “I-Engr. Santiago,” the Appraisal Report
of the Commission on Audit. This official
document fixed the market value at P21,333.07 per
square meter.
Whether based on the official appraisal of the BIR, the

Municipal Assessor or the Commission on Audit, the
P1,200 per square meter purchase price, or a total of
P1.894 billion for the 157.84 hectares of government lands,
is grossly and unconscionably undervalued. The
authoritative appraisal, of course, is that of the
Commission on Audit which valued the 157.84 hectares at
P21,333.07 per square meter or a total of P33.673 billion.
Thus, based on the official appraisal of the
Commission on Audit, the independent
constitutional body that safeguards government
assets, the actual loss to the Filipino people is a
shocking P31.779 billion.
This gargantuan monetary anomaly, 4
aptly earning the
epithet “Grandmother of All Scams,” is not the major
defect of this government contract. The major flaw is not
even the P1.754 billion in commissions the Senate
Committees discovered the private
_______________
4 9 July 2002 Decision, p. 4.
417
VOL. 415, NOVEMBER 11, 2003 417

5
entity paid to various persons to secure the contract,
described in Senate Report No. 560 as follows:
A Letter-Agreement dated 09 June 1995 signed by Messrs.

Premchai Karnasuta and Emmanuel Sy for and in behalf of
AMARI, on the one hand, and stockholders of AMARI namely, Mr.
Chin San Cordova (a.k.a. Benito Co) and Mr. Chua Hun Siong
(a.k.a. Frank Chua), on the other, sets forth various payments
AMARI paid or agreed to pay the aforesaid stockholders
by way of fees for “professional efforts and services in
successfully negotiating and securing for AMARI the Joint
Venture Agreement,” as follows:
Form of Paid/Payable On Amount
Payment
Manager’s 28 April 1995 P400,000,000.00
Checks
Manager’s Upon signing of letter 262,500,000.00
Checks
10 Post Dated 60 days from date of letter 127,000,000.00
Checks (PDCs)
24 PDCs 31 August ’95 to 31 Jan. ’98 150,000,000.00
48 PDCs Monthly, over a 12-month 357,363,050.00
pd. from date of letter
Cash Bonus When sale of land begins not exceeding
157,844,100.00
Developed land Upon completion of each Costing
from Project phase 300,000,000.00
TOTAL P1,754,707,150.00
Mr. Luis Benitez of SGV, the external auditors of

AMARI, testified that6 said Letter-Agreement was approved
by the AMARI Board. (Emphasis supplied)
_______________
5 Senate Committee-Report No. 560, p. 48.

6 A more detailed discussion on this matter in Senate Report No. 560
reads as follows:
The Commissions
A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai Karnasuta

and Emmanuel Sy for and in behalf of AMARI, on the one hand, and stockholders
of AMARI namely, Mr. Chin San Cordova (a.k.a. Benito Co) and Mr. Chua Hun
Siong (a.k.a. Frank Chua), on the other, sets forth various payments AMARI paid
or agreed to pay the aforesaid stockholders by way of fees for “professional efforts
and services in suc
418

The private entity that purchased the reclaimed lands for

P1.894 billion expressly admitted before the Senate
Committees
_______________
cessfully negotiating and securing for AMARI the Joint Venture
Agreement,” as follows:
Form of Payment Paid/Payable On Amount

Manager’s Checks 28 April 1995 P400,000,000.00
Manager’s Checks Upon signing of letter 262,500,000.00
10 Post Dated 60 days from date of letter 127,000,000.00
Checks (PDCs)
24 PDCs 31 August ’95 to 31 Jan. ‘98 150,000,000.00
48 PDCs Monthly, over a 12-month pd. 357,363,050.00
from date of letter
Cash Bonus When sale of land begins not exceeding
157,844,100.00
Developed land Upon completion of each phase Costing
from Project 300,000,000.00
TOTAL P1,754,707,150.00
Mr. Luis Benitez of SGV, the external auditors of AMARI, testified that said
Letter-Agreement was approved by the AMARI Board.
On the first payment of P400 million, records show that $300 million was paid
in manager’s checks of Citibank-Makati, while the balance of P100 million was
deposited to the account of the two Chinese in a Hongkong bank. On the basis of a
Memorandum Order dated April 28, 1995 issued by Messrs. Karnasuta and
Emmanuel Sy, and upon the instruction of Messrs. Chin San Cordova and Chua
Hun Siong, 31 manager’s checks in the total amount of P300 million were issued
by Citibank-Makati in favor of a Mr. George Triviño, a Dominican Republic
national, broken down as follows:
1) Twenty-nine (29) manager’s check at P10 million each;

2) One (1) manager’s check at P7 million; and
3) One (1) manager’s check at P3 million.
All these checks were indorsed by Mr. Triviño. Mr. Sy could not satisfactorily
answer why. Mr. Triviño was made payee of the Manager’s Checks when he had
nothing to do with the transactions. Neither could he provide information
regarding the said Mr. Triviño.
419
VOL. 415, NOVEMBER 11, 2003 419

that it spent P1.754 billion in commissions to pay various

individuals for “professional efforts and services in
successfully
_______________
Mr. Emmanuel Sy admitted signing several blank checks as special

request from Messrs. Co and Chua and issuing said checks as follows:
1) Ten (10) Manager’s checks dated 60 days from the June 9 letter
amounting to P127 million;
2) Twenty-four (24) blank checks amounting to P150 million dated
from 31 August 1995 up to 31 January 1998; and,
4) Forty (40) blank checks amounting to P357 million. In this regard,
the pertinent portion of the 9 June 1995 letter-agreement provides
as follows:
“3. Upon signing of this letter-agreement AMARI shall (a) pay to you
(in cash in the form of Bank Manager’s Checks) the sum of Two
Hundred Sixty Two Million Five Hundred Thousand Pesos
(Pesos 262,500,000) and (b) pay and deliver to you the following
checks:
“3.1 Ten (10) checks dated sixty (60) days from date of this letter
agreement in the total amount of One Hundred Twenty Seven
Million Pesos (Pesos 127,000,000);
“3.2 Twenty-Four (24) checks in the total amount of One Hundred
Fifty Million Pesos (Pesos 150,000,000) as follows:
DUE DATE OF CHECK AMOUNT

August 31, 1995 P 6,250,000
March 31, 1996 6,250,000
April 30, 1996 6,250,000
May 31, 1996 6,250,000
June 30, 1996 6,250,000
July 31, 1996 6,250,000
August 31, 1996 6,250,000
September 30, 1996 6,250,000
October 31, 1996 6,250,000
November 30, 1996 6,250,000
December 31, 1996 6,250,000
January 31, 1997 6,250,000
February 28, 1997 6,250,000
March 31, 1997 6,250,000
April 30, 1997 6,250,000
May 31, 1997 6,250,000
June 30, 1997 6,250,000
July 31, 1997 6,250,000
August 31, 1997 6,250,000
420

negotiating and securing” the contract. By any legal
or moral yardstick, the P1.754 billion in commissions
obvi-
_______________
September 30, 1997 6,250,000

October 31, 1997 6,250,000
November 30, 1997 6,250,000
December 31, 1997 6,250,000
January 31, 1998 6,250,000
Total P150,000,000
“3.3 Forty Eight (48) checks in the total amount of Three Hundred Fifty Seven
Million Three Hundred Sixty Three Thousand Fifty Pesos (Pesos
357,363,050) payable over a period of twelve (12) months as follows:
“Each monthly payment to consist of Four (4) checks, three (3) checks of which shall each
bear the amount of P7,250,000 and one (1) check of which shall bear the amount of
P8,000,000 for a total monthly amount of P29,750,000. These monthly payment of four (4)
checks each shall be dated the last date of the thirteen, fourteen, fifteen, sixteen, seventeen,
eighteen, nineteen, twenty, twenty-one, twenty-two, twenty-three, and twenty-four months
from the date of this letter agreement. The last issued check hereunder shall bear the sum
of P8,363,050.”
The Provisional Receipt shows that Mr. Chin San Cordova and Mr. Chua Hun
Siong received the amount of P896,863,050.00 as of 09 June 1995. Based on the
submitted photocopies of the returned checks issued by AMARI vis-a-vis item 3(b)
of the quoted Letter-Agreement, the following persons were made payees:
Emmanuel Sy, Manuel Sy, Sy Pio Lato, International Merchandising and
Development Corporation, Golden Star Industrial Corporation, Chin San Cordova,
EY, and Wee Te Lato. Other payments were made payable to Cash (bearer
instruments). Each person was thus named payee to the following amounts:
1. Emmanuel Sy:
Citibank Check No. 000019 dated 10/31/96 P 6,250,000
2. Manuel Sy:
Citibank Check No. 000007 dated 8/8/95 12,700,000
3. Sy Pio Lato:
000009 dated 8/8/95 12,700,000
000010 dated 8/8/95 12,700,000
4. International Merchandising and Development Corporation:
000014 dated 5/31/96 6,250,000
000015 dated 6/30/96 6,250,000
421
VOL. 415, NOVEMBER 11, 2003 421
ously constitutes bribe money. Nonetheless, there are

those who insist that the billions in investments of the
private entity
_______________
000016 dated 7/31/96 6,250,000

000045 dated 9/30/96 7,250,000
5. Golden Star Industrial Corporation:
6. Chin San Cordova:
000043 dated 9/30/96 7,250,000
7. EY:
000049 dated 10/31/96 7,250,000
8. Wee Te Lato:
9. Bearer Instruments: CASH:
000002 dated 8/8/95 12,700,000
000003 dated 8/8/95 12,700,000
000004 dated 8/8/95 12,700,000
000005 dated 8/8/95 12,700,000
000006 dated 8/8/95 12,700,000
000012 dated 3/31/96 6,250,000
000017 dated 8/31/96 6,250,000
000039 dated 8/31/96 7,250,000
000040 dated 8/31/96 7,250,000
000042 dated 8/31/95 8,000,000
000044 dated 9/30/96 7,250,000
000046 dated 9/30/96 7,250,000
000050 dated 10/31/96 8,000,000
10. Payee’s Name Not Legible:
On the other hand, Ms. Aurora Montano, a cousin of Mr. Justiniano

Montano IV, was asked by a Mr. Ben Cuevo if she knew anybody from
PEA, and she answered: “Yes, I know Mr. Justiniano Montano IV.” For
this answer, and for introducing the AMARI representative to Mr.
Montano, she received P10 million in cash and P20 million in postdated
manager’s checks in the office of Mr. Benito Co and in the presence of,
aside from Mr. Benito Co, Mr. Ben Cuevo and Mr. Frank Chua. Ms.
Montano, however, insisted that she actually received only P10 million.
Ms. Montano furthermore admitted that, through Mr. Ben Cuevo, she
met Messrs. Chin San Cordova and Chua Hun Siong in 1994 for this
transaction.
422

deserve protection by this Court. Should this Court

establish a new doctrine by elevating grease money to the
status of legitimate investments deserving of protection by
the law? Should this Court reward the patently illegal and
grossly unethical business practice of the private entity in
securing the contract? Should we allow those with hands
dripping with dirty money equitable relief from this Court?
Despite these revolting anomalies unearthed by the
Senate Committees, the fatal flaw of this contract is that
it glaringly violates provisions of the Constitution expressly
prohibiting the alienation of lands of the public domain.
Thus, we now come to the 7
resolution of the second
Motions for Reconsideration filed by public respondent
Public Estates Authority (“PEA”) and private respondent
Amari Coastal Bay Development Corporation (“Amari”). As
correctly pointed out by petitioner
8
Francisco I. Chavez in
his Consolidated Comment, the second Motions for
Reconsideration raise no new issues.
_______________
In Executive Session, Mr. Ben Cuevo admitted to having encashed two

checks at Pilipinas Bank, worth P12.5 million. According to him, the two
checks form part of the P150 million worth of postdated checks (PDCs),
with a face value of P6.25 million per check, described in the Letter-
Agreement. Of this P150 million, Mr. Cuevo actually received five (5)
PDCs worth P31 million, but he was only able to encash 2 checks at P12.5
million.
Still in Executive Session, Mr. Ben Cuevo also admitted receiving a
check worth P6.25 payable to his company, International Merchandising
and Development Corporation. This was deposited in his Current Account
No. 604010562-A, and the amount was transferred by credit memo to Mr.
Montano IV’s account at Pilipinas Bank.
Mr. Montano IV admitted that he has an account with Pilipinas Bank,
but invoked his constitutional right against self-incrimination when asked
if he received the amount of P6.25 million transferred to his account. The
Pilipinas Bank Credit Advice dated May 6, 1996, marked as Exhibit “I”—
Montano IV, indicating the transfer of the amount of P6.25 million was
presented by Senator Drilon. Once or twice, a certain Ms. Polly Tragico
accompanied Mr. Montano IV to withdraw funds from Pilipinas Bank-
Pavilion.
7 Both filed on 26 May 2003. On 6 June 2003 Amari filed a Supplement
to its second Motion, for Reconsideration.
8 Filed on 19 August 2003.
423
VOL. 415, NOVEMBER 11, 2003 423

However, the Supplement to “Separate Opinion,

Concurring and Dissenting” of Justice Josue N. Bellosillo
brings to the Court’s attention the Resolutions of this Court
on 3 February 1965 and 24 June 1966 in L-21870 entitled
“Manuel O. Ponce, et al. v. Hon. Amador Gomez, et al.” and
No. L-22669 entitled “Manuel O. Ponce, et al. v. The City of
Cebu, et al.” (“Ponce Cases”). In effect, the Supplement to
the Dissenting Opinion claims that these two
Resolutions serve as authority that a single private
corporation like Amari may acquire hundreds of
hectares of submerged lands, as well as reclaimed
submerged lands, within Manila Bay under the
Amended Joint Venture Agreement (“Amended JVA”).
We find the cited Ponce Cases inapplicable to the instant
case.
First, as Justice Bellosillo himself states in his
supplement to his dissent, the Ponce Cases admit that
“submerged lands 9
still belong to the National
Government.” The correct formulation, however, is that
submerged lands are owned by the State and are
inalienable. Section 2, Article XII of the 1987 Constitution
provides:
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. x x x. (Emphasis supplied)
Submerged lands, like the waters (sea or bay) above them,

are part of the State’s inalienable natural resources.
Submerged lands are property of public dominion, 10
absolutely inalienable and outside the commerce of man.
This is also true with respect to foreshore lands. Any sale of
submerged or11 foreshore lands is void being contrary to the
Constitution.
This is why the Cebu City ordinance merely granted
Essel, Inc. an “irrevocable option” to purchase the foreshore
lands after the reclamation and did not actually sell to
Essel, Inc. the still to be
_______________
9 Decision dated 17 January 1964 of Judge Amador E. Gomez. Also

quoted in Justice Josue N. Bellosillo’s Supplement to Separate Opinion,
Concurring and Dissenting.
10 Sections 2 and 3, Article XII of the 1987 Constitution.
11 Article 112, Civil Code of the Philippines.
424

reclaimed foreshore lands. Clearly, in the Ponce Cases the

option to purchase referred to reclaimed lands, and not to
foreshore lands which are inalienable. Reclaimed lands are
no longer foreshore or submerged lands, and thus may
qualify as alienable agricultural lands of the public domain
provided the requirements of public land laws are met.
In the instant case, the bulk of the lands subject of the
Amended JVA are still submerged lands even to this very
day, and therefore inalienable and outside the commerce of
man. Of the 750 hectares subject of the Amended JVA,
592.15 hectares or 78% of the total area are still
submerged, permanently under the waters of Manila
Bay. Under the Amended JVA, the PEA conveyed to Amari
the submerged lands even before their actual reclamation,
although the documentation of the deed of transfer and
issuance of the certificates of title would be made only after
actual reclamation.
The Amended JVA states that the PEA “hereby
contributes to the Joint Venture its rights and privileges to
perform Rawland Reclamation and Horizontal
12
Development as well as own the Reclamation Area.” The
Amended JVA further states that “the sharing of the Joint
Venture Proceeds shall be based on the ratio of thirty
percent (30%)
13
for PEA and seventy percent (70%) for
AMARI.” The Amended JVA also provides that the PEA
“hereby designates AMARI to perform PEA’s rights and
privileges
14
to reclaim, own and develop the Reclamation
Area.” In short, under the Amended JVA the PEA
contributed its rights, privileges and ownership over the
Reclamation Area to the Joint Venture which is 70% owned
by Amari. Moreover, the PEA delegated to Amari the right
and privilege to reclaim the submerged lands.
The Amended JVA mandates that the PEA had “the
duty to execute without delay the necessary deed of
transfer or conveyance of the title pertaining to AMARI’s
15
Land share based on the Land Allocation Plan.” The
Amended JVA also provides that “PEA, when requested in
writing by AMARI, shall then cause the issu-
_______________
12 Section 3.2 (a), Amended JVA.

13 Section 3.3 (a), Amended JVA.
14 Section 2.2, Amended JVA.
15 Section 5.2 (c), Amended JVA.
425
VOL. 415, NOVEMBER 11, 2003 425

ance and delivery of the proper certificates of title covering

16
AMARI’s Land Share in the name of AMARI, x x x.”
In the Ponce Cases, the City of Cebu retained ownership
of the reclaimed foreshore lands and Essel, Inc. only had an
“irrevocable option” to purchase portions of the foreshore
lands once actually reclaimed. In sharp contrast, in the
instant case ownership of the reclamation area, including
the submerged lands, was immediately transferred to the
joint venture. Amari immediately acquired the absolute
right to own 70% percent of the reclamation area, with the
deeds of transfer to be documented and the certificates of
title to be issued upon actual reclamation. Amari’s right to
own the submerged lands is immediately effective upon the
approval of the Amended JVA and not merely an option to
be exercised in the future if and when the reclamation is
actually realized. The submerged lands, being inalienable
and outside the commerce of man, could not be the subject
of the commercial transactions specified in the Amended
JVA.
Second, in the Ponce Cases the Cebu City ordinance
granted Essel, Inc. an “irrevocable option” to purchase from
Cebu City not more than 70% of the reclaimed lands. The
ownership of the reclaimed lands remained with Cebu City
until Essel, Inc. exercised its option to purchase. With the
subsequent enactment of the Government Auditing Code
(Presidential Decree No. 1445) on 11 June 1978, any sale of
government land must be made only through public
bidding. Thus, such an “irrevocable option” to purchase
government land would now be void being contrary to the
requirement
17
of public bidding expressly required in Section
79 of P.D.
_______________
16 Ibid.
17 SECTION 79. Destruction or sale of unserviceable property.—When
government property has become unserviceable for any cause, or is no
longer needed, it shall, upon application of the officer accountable
therefor, be inspected by the head of the agency or his duly authorized
representative in the presence of the auditor concerned and, if found to be
valueless or unsalable, it may be destroyed in their presence. If found to
be valuable, it may be sold at public auction to the highest bidder under
the supervision of the proper committee on awards or similar body in the
presence of the auditor concerned or other duly authorized representative
of the Commission, after advertising, by printed notice in the Official
Gazette, or for not less than three consecutive days in any newspaper of
general circulation, or where the value of the property does not warrant
the expense of publication, by notices posted for a like period in at least
426

No. 1445. This 18requirement of public bidding is reiterated

19
in Section 379 of the 1991 Local Government Code.
Obviously, the ingenious reclamation scheme adopted in
the Cebu City ordinance can no longer be followed in view
of the requirement of public bidding in the sale of
government lands. In the instant case, the Amended JVA is
a negotiated contract which clearly contravenes Section 79
of P.D. No. 1445.
Third, Republic Act No. 1899 authorized municipalities
and chartered cities to reclaim foreshore lands. The two
Resolutions in the Ponce Cases upheld the Cebu City
ordinance only with respect to foreshore areas, and
nullified the same with respect to submerged areas. Thus,
the 27 June 1965 Resolution made the injunction of the
trial court against the City of Cebu “permanent insofar
_______________
three public places in the locality where the property is to be sold. In

the event that the public auction fails, the property may be sold at a
private sale at such price as may be fixed by the same committee or body
concerned and approved by the Commission.
18 SECTION 379. Property Disposal.—When property of any local
government unit has become unserviceable for any cause or is no longer
needed, it shall upon application of the officer accountable therefor, be
inspected and appraised by the provincial, city or municipal auditor, as
the case may be, or his duly authorized representative or that of the
Commission on Audit and, if found valueless or unusable, shall be
destroyed in the presence of the inspecting officer. If found valuable, the
same shall be sold at public auction to the highest bidder under the
supervision of the committee on awards and in the presence of the
provincial, city or municipal auditor or his duly authorized representative.
Notice of the public auction shall be posted in at least three (3) publicly
accessible and conspicuous places, and if the acquisition cost exceeds One
hundred thousand pesos (P100,000.00) in the case of provinces and cities,
and Fifty thousand pesos (P50,000.00) in the case of municipalities, notice
of auction shall be published at least two (2) times within a reasonable
period in a newspaper of general circulation in the locality.
19 Under Section 380 of the 1991 Local Government Code, local
governments can sell real property through negotiated sale only with the
approval of the Commission on Audit. Under paragraph 2 (a) of COA
Circular No. 89-296, on “Sale Thru Negotiation,” a negotiated sale may be
resorted to only if “[T]here was a failure of public auction.” The
Commission on Audit enforces the express requirement in Section 79 of
the Government Auditing Code that a negotiated sale is possible only
after there is a failure of public auction.
427
VOL. 415, NOVEMBER 11, 2003 427

x x x as the area outside or beyond the foreshore land

proper is concerned.”
As we held in the 1998 case 20
of Republic Real Estate
Corporation v. Court of Appeals, citing the Ponce Cases,
R.A. No. 1899 applies only to foreshore lands, not to
submerged lands. In his concurring opinion in Republic
Real Estate Corporation, Justice Reynato S. Puno stated
that under Commonwealth Act No. 141, “foreshore and
lands under water were not to be alienated and sold to
private parties,” and that such lands “remained property of
the State.” Justice Puno emphasized that “Commonwealth
Act No. 141 has remained in effect at present.” The instant
case involves principally submerged lands within Manila
Bay. On this score, the Ponce Cases, which were decided
based on R.A. No. 1899, are not applicable to the instant
case.
Fourth, the Ponce Cases involve the authority of the
City of Cebu to reclaim foreshore areas pursuant to a
general law, RA No. 1899. The City of Cebu is a public
corporation and is qualified, under the 1935, 1973, and
1987 Constitutions, to hold alienable or even inalienable
lands of the public domain. There is no dispute that a
public corporation is not covered by the constitutional ban
on acquisition of alienable public lands. Both the 9 July
2002 Decision and the 6 May 2003 Resolution of this Court
in the instant case expressly recognize this.
Cebu City is an end user government agency, just like
the Bases Conversion and Development
21
Authority or the
Department of Foreign Affairs. Thus, Congress may by
law transfer public lands to the City of Cebu to be used for
municipal purposes, which may be public or patrimonial.
Lands thus acquired by the City of Cebu for a public
purpose may not be sold to private parties. However, lands
so acquired by the City of Cebu for a patrimonial purpose
may be sold to private parties, including private
corporations.
However, in the instant case the PEA is not an end user
agency with respect to the reclaimed lands under the
Amended JVA. As we explained in the 6 May 2003
Resolution:
PEA is the central implementing agency tasked to undertake

reclamation projects nationwide. PEA took the place of the
Department of
_______________
20 359 Phil. 530; 299 SCRA 199 (1998).

21 Laurel v. Garcia, G.R. No. 92013, 25 July 1990, 187 SCRA 797.
428

Environment and Natural Reserves (“DENR” for brevity) as the

government agency charged with leasing or selling all reclaimed
lands of the public domain. In the hands of PEA, which took over
the leasing and selling functions of DENR, reclaimed foreshore (or
submerged lands) lands are public lands in the same manner that
these same lands would have been public lands in the hands of
DENR. (Emphasis supplied)
Our 9 July 2002 Decision explained the rationale for

treating the PEA in the same manner as the DENR with
respect to reclaimed foreshore or submerged lands in this
wise:
To allow vast areas of reclaimed lands of the public domain to be

transferred to PEA as private lands will sanction a gross violation
of the constitutional ban on private corporations from acquiring
any kind of alienable land of the public domain. PEA will simply
turn around, as PEA has now done under the Amended JVA, and
transfer several hundreds of hectares of these reclaimed and still
to be reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the constitutional
ban in Section 3, Article XII of the 1987 Constitution which was
intended to diffuse equitably the ownership of alienable lands of
the public domain among Filipinos, now numbering over 80
million strong. (Emphasis supplied)
Finally, the Ponce Cases were decided under the 1935

Constitution which allowed private corporations to acquire
alienable lands of the public domain. However, the 1973
Constitution prohibited private corporations from acquiring
alienable lands of the public domain, and the 1987
Constitution reiterated this prohibition. Obviously, the
Ponce Cases cannot serve as authority for a private
corporation to acquire alienable public lands, much less
submerged lands, since under the present Constitution a
private corporation like Amari is barred from acquiring
alienable lands of the public domain.
Clearly, the facts in the Ponce Cases are different from
the facts in the instant case. Moreover, the governing
constitutional and statutory provisions have changed since
the Ponce Cases were disposed of in 1965 and 1966 through
minute Resolutions of a divided (6 to 5) Court.
This Resolution does not prejudice any innocent third
party purchaser of the reclaimed lands covered by the
Amended JVA. Neither the PEA nor Amari has sold any
portion of the reclaimed lands to third parties. Title to the
reclaimed lands remains with the PEA. As we stated in our
9 July 2002 Decision:
429
VOL. 415, NOVEMBER 11, 2003 429

In the instant case, the only patent and certificates of title issued
are those in the name of PEA, a wholly government owned
corporation performing public as well as proprietary functions. No
patent or certificate of title has been issued to any private party.
No one is asking the Director of Lands to cancel PEA’s patent or
certificates of title. In fact, the thrust of the instant petition is
that PEA’s certificates of title should remain with PEA, and the
land covered by these certificates, being alienable lands of the
public domain, should not be sold to a private corporation.
As we held in our 9 July 2002 Decision, the Amended JVA

“violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution.” In our 6 May 2003 Resolution, we DENIED
with FINALITY respondents’ Motions for Reconsideration.
Litigations must end some time. It is now time to write
finis to this “Grandmother of All Scams.”
WHEREFORE, the second Motions for Reconsideration
filed by Public Estates Authority and Amari Coastal Bay
Development Corporation are DENIED for being prohibited
pleadings. In any event, these Motions for Reconsideration
have no merit. No further pleadings shall be allowed from
any of the parties.
SO ORDERED.
Davide, Jr. (C.J.), Panganiban, Austria-Martinez,

Carpio-Morales and Callejo, Sr., JJ., concur.
Bellosillo, J., I vote to grant reconsideration; Please
see dissenting opinion.
Puno, J., I maintain my previous qualified opinion.
Vitug, J., Please see separate (concurring) opinion.
Quisumbing, J., I vote to allow reconsideration. See
separate opinion.
Ynares-Santiago, J., I maintain my previous
dissent.
Sandoval-Gutierrez, J., I maintain my dissent.
Corona, J., I maintain my dissent.
Azcuna, J., No part.
Tinga, J., See dissenting opinion.
430

SEPARATE OPINION
VITUG, J.:
I still maintain that the conclusion reached by the Court in

its main decision is correct, and while the reclaimed land
from the submerged areas of Manila Bay could perhaps be
aptly classed as being “agricultural lands,” respondent
AMARI Coastal Bay Development Corporation, being a
private corporation, is1 nevertheless disqualified under
Article XII, Section 3, of the 1987 Constitution from
directly acquiring, except by way of lease, land of the public
domain.
Relative to the pronouncements in Case No. L-21870,
entitled “Manuel O. Ponce, et al. v. Hon. Amador Gomez, et
al.,” and Case No. L-22669, entitled “Manuel O. Ponce, et
al. v. City of Cebu, et al.,” where this Court held to be valid
the assailed reclamation contracts, granting to a corporate
entity the option to buy a portion of reclaimed lands, suffice
it to say that the foregoing cases were decided on 03
February 1965 and 24 June 1966, respectively, when the
1935 Constitution was still in effect. Unlike the 1987
Charter, the 1935 Constitution did not contain any
proscription against2
corporations holding alienable lands of
the public domain.
_______________
1 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. 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.
2 Pertinent provisions in the 1935 Constitution provided—
431
VOL. 415, NOVEMBER 11, 2003 431

Just the same, I should like to make a statement on what

could be a grave concern on the part of individuals, who,
not being personally disqualified to hold alienable lands of
the public domain, may have been able to acquire in good
faith, reclaimed portions of the subject property from
respondent AMARI Coastal Bay Development Corporation.
I believe that such contracts must be duly, respected and
upheld in line with analogous and applicable
jurisprudence, as well as equitable considerations, in cases
involving the conveyance to disqualified aliens of real
property that, subsequently, 3are acquired by nationals
qualified to own such property.
_______________
Article XIII Conservation and Utilization of Natural Resources
Section 1. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy and
other natural resources of the Philippines belong to the State and their disposition,
exploitation, development, or utilization shall be limited to citizens of the
Philippines or to corporations or associations at least sixty per centum of the capital
of which is owned by such citizens, subject to any existing right, grant, lease, or
concession at the time of the inauguration of the Government established under
this Constitution. Natural resources, with the exception of public agricultural
land, shall not be alienated, and no license, concession, or lease for the
exploitation, development, or utilization of any of the natural resources shall be
granted for a period exceeding twenty-five years, renewable for another twenty-
five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases
beneficial use may be the measure and the limit of the grant.
Section 3. The Congress may determine by law the size of private agricultural
land which individuals, corporations, or associations may acquire and hold, subject
to rights existing prior to the enactment of such law.
Section 5. Save in cases of hereditary succession, no private agricultural land
shall be transferred or assigned except to individuals, corporations or associations
qualified to acquire or hold lands of the public domain in the Philippines.
3 In De Castro v. Tan (129 SCRA 85 [1984]), the petitioner, the vendor

in a contract of sale, sought to recover the subject parcel of land, which
she had sold to an alien vendee. The foreigner had, in the meantime,
ceded the property to a naturalized Filipino citizen. In denying the
petitioner the right to recover the land, the Court observed that while the
vendee was an alien at the time of the sale, the land had since become the
property of a
432

In instances, where the successor-in-interest is itself a

corporate entity, the constitutional proscription would
stand, but if the corporation has introduced structures or
permanent improvements thereon, such structures or
improvements,
4
when so viewed as having been made in
good faith, could well be governed by the Civil Code
effectively entitling the builder to pay
5
to the State a
reasonable rent for the use of the land or to6be reimbursed
the value of the structures or improvements.
The above exceptional instances are issues that, in my
view, could well be litigated by the proper parties in
separate proceedings.
_______________
naturalized Filipino citizen, who was constitutionally qualified to own

land. The Court was convinced that no public policy would be served if a
contrary rule were to be adopted. So also, in Republic v. IAC (175 SCRA
398 [1989]), the Court sustained the conveyance of a land to a foreigner
who later became a Filipino citizen.
4 “Good faith” is deemed to be attendant where the builder believes to
have a rightful claim of title to the property.
5 Article 448, New Civil Code provides—The owner of the land on which
anything has been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548, or to oblige
the one who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be obliged
to buy the land if its value is considerably more than that of the building
or trees. In such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case
of disagreement, the court shall fix the terms thereof.
6 Article 546 provides: Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the thing until
he has been reimbursed therefor. Useful expenses shall be refunded only
to the possessor in good faith with the same right of retention, the person
who has defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof.
433
VOL. 415, NOVEMBER 11, 2003 433

SEPARATE OPINION
QUISUMBING, J.:
Considering the crucial significance of the action to be

taken by the Court on the PEA motion, I vote to allow a
final reconsideration of the controversy.
Two points, in my view, require painstaking elucidation
and clarification:
*
(1) How should the parcels of land now above water —
regardless of actual size in hectares—but conveyed
already to private entities by PEA and/or its
partner in the joint venture, Amari Coastal Bay
Development Corporation, be treated as
aconsequence of the Court’s decision?
(2) May the Court at this time outlaw the long
standing practice of the executive department to
pay the private individual or corporate
reclaimer/developer by means of using a
proportionate share in the reclaimed land itself? If
so, shouldn’t the Court’s action be prospective in
nature, with adequate regard to rights and
expectations of the private parties
I find the cited cases in Justice Bellosillo’s separate

opinion, L-21870 Ponce v. Hon. A. Gomez (Res. of Feb. 3,
1965) and L-22669 (Res. of June 24, 1966) acceptable and
instructive for the resolution of the instant controversy
before us. That the submerged lands, under the sea or
below baywater, should belong to the National Government
need not be debatable. Nor would the proposition that their
ownership should pass to the municipal corporation when
the city had successfully conducted the reclamation project,
through private initiative and financial assistance, be a
conceptual barrier to uphold probable rights of the initiator
and the financier that made the projects not only feasible
but indeed successful. This much at this time I would
concede: state ownership of submerged land. But after
reclamation, I could not concede total nullity of private
efforts and resources spent pursuant to prior law and
executive policy. Nor would I neglect to appreciate Justice
Vitug’s
_______________
* It would appear from the ponencia (page 9 of the Resolution) that

some 167.85 hectares out of 750 hectares have already been reclaimed.
434
reference to De Castro v. Tan, 129 SCRA 85, for an

equitable approach to what appears now a constitutional
conundrum.
Subject to further reflection, it does not appear to me
pertinent to apply Sec. 79 on disposal or sale of
unserviceable property, contained in P.D. No. 1445, the
General Auditing Code, or Sec. 379 of the Local
Government Code. The requirement of bidding in regard to
corporate projects of PEA is obviously distinguishable, if
not outright distinct, from disposal of surplus/junk
property. The reclamation projects like those contemplated
in the PEA-AMARI joint venture call for a greater public
appreciation of equitable investment regimes by policy-
makers and private entrepreneurs alike as they impact
hugely on the economic development concerns of the
nation. Thus, we are of the view that of more pertinence in
this regard are the BOT (Build, Operate, and Transfer)
Law, R.A. 6957 as amended and the Charter of PEA (P.D.
No. 1084) and P.D. No. 1085 concerning reclaimed lands
along Manila Bay.
Lastly, we are informed that the possible criminal
responsibility, if any, of certain officers of PEA are
allegedly now before the Sandiganbayan. Be that as it may,
the merit of the question before us regarding the validity of
the PEA-AMARI joint venture is not necessarily foreclosed
by cases before the Sandiganbayan which of necessity
require the highest quantum of proof, beyond reasonable
doubt. Here we are not so constrained. For our principal
concern now is a thorough review of legal issues that might
have previously eluded close scrutiny. Hence the need to
grant leave for a second reconsideration.
DISSENTING OPINION
SANDOVAL-GUTIERREZ, J.:
It is after deep introspection that I am constrained to

dissent from the denial by the majority of the motions for
reconsideration filed by respondents PEA and AMARI.
Chief Justice Charles Evans Hughes of the United
States Supreme Court stated that a dissent is of value
because it is “an appeal to the brooding spirit of the law, to
the intelligence of a future day, when a later decision may
possibly correct the error into
435
VOL. 415, NOVEMBER 11, 2003 435

which the 1dissenting judge believes the court to have been

betrayed.”
While I joined in the initial grant of the petition, I
realized, however, that the tenor of our interpretation of
the Constitutional prohibition on the acquisition of
reclaimed lands by private corporations is so absolute and
circumscribed as to defeat the basic objectives of2 its
provisions on “The National Economy and Patrimony.”
The Constitution is a flexible and dynamic document. It
must be interpreted to meet its objectives under the
complex necessities of the changing times. Provisions
intended to promote social and economic goals are capable
of varying interpretations. My view happens to differ from
that of the majority. I am confident, however, that the
demands of the nation’s economy and the needs of the
majority of our people will bring the majority Decision and
this Dissenting Opinion to a common understanding.
Always, the goals of the Constitution must be upheld, not
defeated nor diminished.
Infrastructure building is a function of the government
and ideally should be financed exclusively by public funds.
However, present circumstances show that this cannot be
done. Thus, private corporations are encouraged to invest
in income generating national construction ventures.
Investments on the scale of reclamation projects entail
huge amounts of money. It is a reality that only private
corporations can raise such amounts. In the process, they
assist this country in its economic development.
Consequently, our government should not take arbitrary
action against these corporate developers. Obviously, the
courts play a key role in all disputes arising in this area of
national development.
This is the background behind my second hard look at
the issues and my resulting determination to dissent.
The basic issue before us is whether a private
corporation, such as respondent AMARI, can acquire
reclaimed lands.
The Decision being challenged invokes the Regalian
doctrine that the State owns all lands and waters of the
public domain. The
_______________
1 Hughes, The Supreme Court of the United States, p. 68; cited in Sinco,
Philippine Political Law, Eleventh Edition, 326.
2 Sections 1, 3 and 6, Article XII; Section 9, Article II, Constitution.
436

doctrine is the foundation of the principle of land

ownership that all lands that have not been acquired by
purchase or grant
3
from the Government belong to the
public domain. Property of public dominion is that devoted
to public use such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, riverbanks,
4
shores,
roadsteads and that of a similar character. Those which
belong to the State, not devoted to public use, and are
intended for some public service or for the development of
the national
5
wealth, are also classified as property of public
dominion. All other property of 6 the State which is not of
public dominion is patrimonial. Also, property of public
dominion, when no longer intended for public use or public
service,
7
shall form part of the patrimonial property of the
State. 8
In our Decision sought to be reconsidered, we held that
the following laws, among others, are applicable to the
particular reclamation project involved in this case: the
Spanish Law of Waters of 1866, the Civil Code of 1889, Act
No. 1654 enacted by the Philippine Commission in 1907,
Act No. 2874 (the Public Land Act of 1919), and
Commonwealth Act No. 141 of the Philippine National
Assembly, also known as the Public Land Act of 1936.
Certain dictums are emphasized. Reclaimed lands of the
government may be leased but not sold to private
corporations and private individuals. The government
retains title to lands it reclaims. Only lands which have
been officially delimited or classified as alienable shall be
declared open to disposition or concession.
Applying these laws and the Constitution, we then
concluded that the submerged areas of Manila Bay are
inalienable natural resources of the public domain, outside
the commerce of man. They have to be classified by law as
alienable or disposable agricultural lands of the public
domain and have to be declared open to disposition.
However, there can be no classification and declaration of
their alienable or disposable nature until after PEA has
reclaimed these submerged areas. Even after the
submerged areas have been reclaimed from the sea and
classified as alienable or disposable,
_______________
3 Cariño vs. Insular Government, 41 Phil. 935 (1909).

4 Article 420, Civil Code.
5 Id.
6 Article 421, id.
7 Article 422, id.
8 Pp. 27-28.
437
VOL. 415, NOVEMBER 11, 2003 437

private corporations such as respondent AMARI, are

disqualified from acquiring the reclaimed land in view of
Section 3, Article XII of the Constitution, quoted as follows:
“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.”
I dissent from the foregoing conclusions which are based on

general laws mainly of ancient vintage. Reclaimed lands,
especially those under the Manila-Cavite Coastal Road and9
Reclamation Project
10
(MCCRRP), are governed by PD 1084
and PD 1085 enacted in 1976 and 1977, respectively, or
more than half a century after the enactment of the Public
Lands Acts of 1919 and 1936.
PD 1084 and PD 1085 provide:
PD 1084—
“Section 4. Purposes.—The Authority is hereby created for the

following purposes:
a. To reclaim land, including foreshore and submerged areas,

by dredging, filling or other means, or to acquire reclaimed
land;
_______________
9 Creating the Public Estates Authority, defining its powers and

functions, providing funds therefor and for other purposes.
10 Conveying the land reclaimed in the foreshore and offshore of the
Manila Bay (The Manila-Cavite Coastal Road Project) as property of the
Public Estates Authority as well as rights and interest with assumption of
obligations in the reclamation contract covering areas of the Manila Bay
between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.
438

b. To develop, improve, acquire, administer, deal in,

subdivide, dispose, lease and sell any and all kinds of
lands, buildings, estates and other forms of real property,
owned, managed, controlled and/or operated by the
government;
c. To provide for, operate or administer such services as may
be necessary for the efficient, economical and beneficial
utilization of the above properties. (Emphasis ours)
PD 1085—
“The land reclaimed in the foreshore and offshore area of Manila

Bay pursuant to the contract for the reclamation and construction
of the Manila-Cavite Coastal Road Project between the Republic
of the Philippines and the Construction and Development
Corporation of the Philippines dated November 20, 1973 and/or
any other contract or reclamation covering the same area is
hereby transferred, conveyed and assigned to the ownership and
administration of the Public Estates Authority established
pursuant to P.D. No. 1084; Provided, however, that the rights and
interest of the Construction and Development Corporation of the
Philippines pursuant to the aforesaid contract shall be recognized
and respected.
x x x x x x x x x
“Special land patent/patents shall be issued by the Secretary of
Natural Resources in favor of the Public Estates Authority
without prejudice to the subsequent transfer to the contractor or
his assignees of such portion or portions of the land reclaimed or to
be reclaimed as provided for in the above-mentioned contract. On
the basis of such patents, the Land Registration Commission shall
issue the corresponding certificates of title.” (Emphasis Ours)
Pursuant to the above provisions, PEA is mandated inter

alia to reclaim land, including foreshore and submerged
areas, or to acquire reclaimed land. Likewise, PEA has the
power to sell any and all kinds of lands and other forms of
real property owned and managed by the government.
Significantly, PEA is authorized to transfer to the
contractor or its assignees portion or portions of the land
reclaimed or to be reclaimed.
It is a fundamental rule that if two or more laws govern
the same subject, every effort to reconcile and harmonize
them must be taken. Interpretare et concordare legibus est
optimus interpretandi. Statutes must be so construed and
harmonized with other11 statutes as to form a uniform
system of jurisprudence. However, if several
_______________
11 Valera vs. Tuazon, 80 Phil. 823 (1948).
439
VOL. 415, NOVEMBER 11, 2003 439

laws cannot be harmonized, the earlier statute must yield

to the later enactment. The 12later law is the latest
expression of the legislative will. Therefore, it is PD 1084
and PD 1085 which apply to the issues in this case.
Moreover, the laws cited in our Decision are general
laws which apply equally to all13the individuals or entities
embraced by their provisions. The provisions refer to
public lands in general.
Upon the other hand, PD 1084 and PD 1085 are special
laws which relate to particular economic activities, 14specific
kinds of land and a particular group of persons. Their
coverage is specific and limited. More specifically, these
special laws apply to land reclaimed from Manila Bay by
private corporations.
If harmonization and giving effect to the provisions of
both sets of laws is not possible, the special law should be
made to prevail over the general law, as it evinces the
legislative intent more clearly. The special law is a specific
enactment of the legislature
15
which constitutes an exception
to the general statute.
Our Decision cites the constitutional provision banning
private corporations from16acquiring any kind of alienable
land of the public domain.
Under the Constitution, lands of the public domain are
classified into agricultural,
17
forest or timber, mineral lands,
and natural parks. Land reclaimed from the sea cannot
fall under any of the last three categories because it is
neither forest or timber, mineral,
18
nor park land. It is,
therefore, agricultural land. Agricultural 19
land of the
public domain may be alienated. However, the
Constitution states that private corporations may not hold
such alienable land except by lease. It follows that AMARI,
being a private corporation, cannot hold any reclaimed
area. But let it be made clear that PD
_______________
12 Eraña vs. Vergel de Dios, 85 Phil. 17 (1947); City of Naga vs. Agna,
71 SCRA 176 (1976).
13 U.S. vs. Serapio, 23 Phil. 584 (1912); Tillegas vs. Subido, 41 SCRA
190 (1971); Bagatsing vs. Ramirez, 74 SCRA 306 (1976).
14 U.S. vs. Serapio, supra; Valera vs. Tuazon, supra.
15 Licauco & Co. vs. Apostol, 44 Phil. 138 (1922); De Jesus vs. People,
120 SCRA 760 (1983).
16 Section 3, Article XII, Constitution.
17 Id.
18 Krivenko vs. Register of Deeds, 79 Phil. 461 (1947).
19 Section 3, Article XII, Constitution.
440

1084 transfers the public agricultural land formed by

reclamation to the “ownership and administration” of PEA,
a government owned corporation. The transfer is not to
AMARI, a private corporation, hence, the constitutional
prohibition does not apply. Corollarily, under PD 1085,
PEA is empowered to subsequently transfer to the
contractor portion or portions of the land reclaimed or to be
reclaimed.
Does the Constitution restrain PEA from effecting such
transfer to a private corporation? Under Article 421 of the
Civil Code, all property of the State which is not of public
dominion is patrimonial. PEA does not exercise sovereign
functions of government. It handles business activities for
the government. Thus, the property in its hands, not being
of public dominion, is held in a patrimonial capacity. PEA,
therefore, may sell this property to private corporations
without violating the Constitution. It is relevant to state
that there is no constitutional obstacle to the sale of real
estate held by government owned corporations, like the
National Development Corporation, the Philippine
National Railways, the National Power Corporation, etc. to
private corporations. Similarly, why should PEA, being a
government owned corporation, be prohibited to sell its
reclaimed lands to private corporations?
I take exception to the view of the majority that after the
enactment of the 1935 Constitution, Section 58 of Act 2874
continues to be applicable up to the present and that the
long established state policy is to retain for the government
title and ownership of government reclaimed land. This
simply is an inaccurate statement of current government
policy. When a government decides to reclaim the land,
such as the area comprising and surrounding the Cultural
Center Complex and other parts of Manila Bay, it reserves
title only to the roads, bridges, and spaces allotted for
government buildings. The rest is designed, as early as the
drawing board stage, for sale and use as commercial,
industrial, entertainment or services-oriented ventures.
The idea of selling lots and earning money for the
government is the motive why the reclamation was
planned and implemented in the first place.
May I point out that there are other planned or on-going
reclamation projects in the Philippines. The majority
opinion does not only strike down the Joint Venture
Agreement (JVA) between AMARI and PEA but will also
adversely affect or nullify all other reclamation agreements
in the country. I doubt if government
441
VOL. 415, NOVEMBER 11, 2003 441

financial institutions, like the Development Bank of the

Philippines, the Government Service Insurance System,
the Social Security System or other agencies, would risk a
major portion of their funds in a problem-filled and highly
speculative venture, like reclamation of land still
submerged under the sea. Likewise, there certainly are no
private individuals, like business tycoons and similar
entrepreneurs, who would undertake a major reclamation
project without using the corporate device to raise and
disburse funds and to recover the amounts expended with a
certain margin of profits. And why should corporations part
with their money if there is no assurance of payment, such
as a share in the land reclaimed or to be reclaimed? It
would be most unfair20
and a violation of procedural and
substantive rights to encourage investors, both Filipino
and foreign, to form corporations, build infrastructures,
spend money and efforts only to be told that the invitation
to invest is unconstitutional or illegal with absolutely no
indication of how they could be compensated for their work.
It has to be stressed that the petition does not actually
assail the validity of the JVA between PEA and AMARI.
The petition mainly seeks to compel PEA to disclose all
facts on the then on-going negotiations with respondent
AMARI with respect to the reclamation of portions of
Manila Bay. Petitioner relies on the Constitutional
provision that the right of the people to information on
matters of public concern shall be recognized and that
access to papers pertaining
21
to official transactions shall be
afforded the citizen. I believe that PEA does not have to
reveal what was going on from the very start and during
the negotiations with a private party. As long as the parties
have the legal capacity to enter into a valid contract over
an appropriate subject matter, they do not have to make
public, especially to competitors, the initial bargaining, the
give-and-take arguments, the mutual concessions, the
moving from one position to another, and other preliminary
steps leading to the drafting and execution of the contract.
As in negotiations leading to a treaty or international
agreement, whether sovereign or commercial in nature, a
certain amount of secrecy is not only permissible but
compelling.
_______________
20 Section 1, Article III, id. on deprivation of property without due

process of law, Section 9 on eminent domain is also infringed.
21 Section 7, Article III, id.
442

At any rate, recent developments appear to have mooted
this issue, and anything in the Decision which apparently
approves publicity during on-going negotiations without
pinpointing the stage where the right to information
appears is obiter. The motions for reconsideration all treat
the JVA as a done thing, something already concrete, if not
finalized.
Indeed, it is hypothetical to identify exactly when the
right to information begins and what matters may be
disclosed during negotiations for the reclamation of land
from the sea.
Unfortunately for private respondent, its name,
“AMARI,” happens to retain lingering unpleasant
connotations. The phrase “grandmother of all scams,”
arising from the Senate investigation of the original
contract, has not been completely erased from the public
mind. However, any suspicion of anything corrupt or
improper during the initial negotiations which led to the
award of the reclamation to AMARI are completely
irrelevant to this petition. It bears stressing that the
Decision and this Dissenting Opinion center exclusively on
questions of constitutionality and legality earlier discussed.
To recapitulate, it is my opinion that there is nothing in
the Constitution or applicable statutes which impedes the
exercise by PEA of its right to sell or otherwise dispose of
its reclaimed land to private corporations, especially where,
as here, the purpose is to compensate respondent AMARI,
the corporate developer, for its expenses incurred in
reclaiming the subject areas. Pursuant to PD 1084 and PD
1085, PEA can transfer to the contractor, such as AMARI,
such portion or portions of the land reclaimed or to be
reclaimed.
WHEREFORE, I vote to GRANT the motions for
reconsideration and to DISMISS the petition for lack of
merit.
DISSENTING OPINION
CORONA, J.:
I dissent from Mr. Justice Carpio’s resolution declaring as

null and void the Joint Venture Agreement (JVA) between
the Public Estates Authority (PEA) and Amari Coastal Bay
Development Corporation (AMARI) for the following
reasons:
(1) I submit that the 77.34 hectares of reclaimed lands

comprising a portion of the Freedom Islands to be
conveyed to AMARI
443
VOL. 415, NOVEMBER 11, 2003 443

(covered by certificates of title in the name of PEA)

as well as the 290.156 hectares of reclaimed land
after reclamation by PEA and AMARI (to be
transferred also to AMARI) should be deemed
patrimonial properties of PEA prior to the titling
thereof to AMARI. Hence, they are not covered by
the proscription in Sec. 3, Article XII of the
Constitution that “[p]rivate corporations or
associations may not hold such alienable lands of
the public domain except by lease x x x.” Hence,
these reclaimed lands may be validly and
constitutionally alienated to a Filipino corporation
which in this case is respondent AMARI.
(2) Article 422 of the Civil Code states: “Property of
public dominion, when no longer intended for public
use or for public services, shall form part of the
patrimonial property1
of the State.” In Ignacio vs.
Director of Lands, the manifestation of intention is
through a formal declaration on the part of the
government, through the executive or the
legislative department, that the land in question is
no longer needed for “public use” or “public service.”
It is not for the courts to establish such fact.
(3) The contracts being assailed passed the scrutiny of
three Philippine Presidents (Corazon C. Aquino,
Fidel V. Ramos and Joseph E. Estrada) and were
upheld by them. Their approval of the contracts
clearly and unambiguously attested to the fact that
the lands in question were no longer intended for
“public use” or “public service.”
(4) The reclaimed properties were the subject of several
conveyances already. Under LOI 1390 (1984), to
accelerate the development of the First
Neighborhood Unit Project within the Manila-
Cavite Coastal Road Project, an excess of the
reclaimed land was ceded by PEA to the Marina
Properties Corporation. Likewise, AO 397 (1997)
settled the claims of various government agencies
against the Construction and Development
Corporation of the Philippines (CDCP) by offsetting
such indebtedness against CDCP’s receivables from
PEA emanating from the conveyance by CDCP of
its reclaimed lands to PEA. Would these
conveyances have been made if the properties were
still needed for some “public use” or “public
purpose?”
(5) Declaring the JVA as null and void sets a
dangerous precedent considering that the said JVA
already had the approval of the
_______________
1 108 Phil. 335 (1960).
444

appropriate agencies in the executive branch and

complied with the terms and requirements of the
governing statutes. This is detrimental to the
economic interests of the country because, aside
from the fact that private investors in good faith
will lose their investments, it will drive away
possible investors because of the uncertainty that
contracts and agreements entered into with our
government might only end up being declared as
null and void at some future time. This is not the
correct and rational posture of a country that is
perpetually short of funds for large-scale economic
projects.
Generally, the foregoing were the same reasons relied upon

by retired Justice Josue N. Bellosillo in his dissenting
opinion which was ordered attached to the records of the
case per the en banc resolution on November 25, 2003.
Accordingly, I vote to GRANT the second motion for
reconsideration.
DISSENTING OPINION
TINGA, J.:
With all due respect, I dissent from the majority.

Central to the adjudication of this case is the
determination of the status of reclaimed lands. Lands of
the State are either lands of the public domain or lands of
the private domain. Thus, Section 2, Article XII of the 1987
Constitution, incorporating the Regalian Doctrine, provides
that “[a]ll lands of the public domain . . . are owned by the
State.” Unwritten but implicit in this provision is that the
State may own lands of the private domain. In the same
vein, the New Civil Code classifies properties1
of the State
as either2 property of the public dominion or patrimonial
property.
_______________
1 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 for the development of the national
wealth.
2 Art. 421. All other property of the State, which is not of the character
stated in the preceding article, is patrimonial property.
445
VOL. 415, NOVEMBER 11, 2003 445

If reclaimed land is part of the public domain, it is covered

by the proscription
3
in Section 3, Article XII of the 1987
Constitution, which prohibits private corporations from
acquiring alienable lands of the public domain. On the
other hand, if it is patrimonial property, the constitutional
proscription does not apply.
First, the fundamentals. The Constitution ordains that
natural resources are not alienable. Then it gives examples
of natural resources: “[a]ll lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy,
4
fisheries, forests or timber,
wildlife, flora and fauna.”
Obviously, the common characteristics of natural
resources are that they are still in their original, raw state.
Natural resources are material objects of 5
economic value
and utility to man produced by nature. In other words,
they refer to property and materials in their original and
native state, not to those which have been produced
through the intervention of man.
Natural resources are 6capable of conversion or, in the
words of the Constitution, “[e]xploration, development and
utilization.” But
7
the conversion is, again pursuant to the
Constitution, “under the full control and supervision of the
State.” When the conversion activity such as co-production,
joint venture or production-sharing agreements is
authorized by the Government through a law, the qualified
party to the agreement may own the converted product or
part of it, when so provided in the agreement. The rationale
is that the converted product is not the same as the original
natural re-
_______________
3 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. 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.
. . . . [Emphasis supplied.]
4 Sec. 2, Art. XII, 1987 Constitution.
5 Peña, Philippine Law on Natural Resources, 1982 ed., p. 2.
6 Section 2, Art. XII, 1987 Constitution.
7 Ibid.
446

source. Thus, the timber concessionaire may own the logs

cut from the timber concession; the miner may dispose of
the gold produced from the gold ores taken from the mine;
the developer may market the energy harnessed from a
geothermal field.
Significantly, the reclamation contract is not an outright
sale. Reclamation is 8 essentially a construction and
infrastructure
9
contract. This is also clear from the BOT
Laws. Specifically, the contract subject of this case is a
joint venture agreement.
Reclaimed land does not fall under the category of
natural resources which under the Constitution are
inalienable. This is so because its development from the
seabed entails human intervention. It is unlike land per se,
which having become such on account of the forces of
nature, is considered a natural resource.
That being the case, it is statutory law which
determines the status of reclaimed land. In other words,
the matter of categorization of reclaimed land is a
legislative function.
From the advent of the Spanish Law of Waters of 1886
onwards, it is at least implicit if not express in the laws
authorizing reclamation that the resulting reclaimed lands
are private property of the Government.
Under the Spanish Law of Waters of 1866, reclaimed
land may be categorized even as private individual
property. Article 5 thereof provides:
Art. 5.—Lands reclaimed from the sea in consequence of works

constructed by the State, or by the provinces, pueblos, or private
persons, with proper permission shall become the property of the
party constructing such works, unless otherwise provided by the
terms of the grant of authority.
Following the trail blazed by the Spanish Law of Waters,

quite a number of local government units undertook, after
liberation,
10
reclamation work under the aegis of special
laws.
_______________
8 Malayan Integrated Industries Corp. v. Court of Appeals, G.R. No.

104169, September 4 1992, 213 SCRA 640; Gov. Garcia v. Hon. Burgos,
353 Phil. 740; 291 SCRA 546 (1998).
9 R.A. No. 6957 as amended by R.A. No. 7718.
10 Bacolod City pursuant to R.A. No. 161; Municipality of Catbalogan,
Samar, R.A. No. 287; Cebu City pursuant to R.A. No. 3857, as amended by
R.A. No. 4654; Tacloban City pursuant to R.A. No. 4776; General Santos
447
VOL. 415, NOVEMBER 11, 2003 447

Other local government units availed of a general

reclamation statute, specifically, Republic Act No. 1899,
entitled “An Act to Authorize the Reclamation of Foreshore
Lands by Chartered Cities and Municipalities,” which was
enacted in 1957. It provides inter alia:
SEC. 2. Any and all lands reclaimed, as herein provided, shall be

the property of the respective municipalities or chartered cities:
Provided, however, That the new foreshore along the reclaimed
areas shall continue to be the property of the National
Government.
Of more recent vintage is Republic Act No. 7160, otherwise

known as the Local Government Code of 1991. It empowers
local government units to undertake reclamation projects
by themselves or through contractors. Section 302 thereof
provides that “(t)he contractor shall be entitled to a
reasonable return of its investment in accordance with its
bid proposal as accepted by the local government unit
concerned . . . . In case of land reclamation or construction
of industrial estates, the repayment plan may consist of the
grant of the portion or percentage of the reclaimed lands or
the industrial estate concerned.”
The lands reclaimed under the auspices of the
aforementioned special laws, Republic Acts No. 1899 and
7601 included, are patrimonial property of the local
government units concerned or private property of the
developer, as the case may be. Nevertheless, the
reclamation law or the local government may reserve
certain portions of the reclaimed area for public use such as
for plazas, schools or hospitals, in which case, the
reclaimed
11
land is characterized as land of the public
domain.
Hence, portions of the reclaimed land may be classified
as property of public ownership while other portions may
be categorized as patrimonial or private 12 property,
depending on the text of the reclamation statute.
_______________
City pursuant to R.A. No. 5412; Oroquieta City pursuant to R.A. No.
5518; and Mandaue City pursuant to R.A. No. 5519.
11 See Act No. 2360; Manila Lodge No. 761 vs. Court of Appeals, G.R.
No. L-41001, Sept. 30, 1976, 73 SCRA 162.
12 E.g., R.A. No. 1899; Resolution dated 3 February 1965 and 24 June
1966 in L-21870 and L-22669, referred to as the Ponce cases.
448

Clearly, the characterization of reclaimed land as

patrimonial or public property emanates from the laws
themselves and becomes complete following the
accomplishment of the reclamation project. The challenged
Joint Venture Agreement was undertaken under the aegis
13
of Presidential Decree No. 1084, Presidential Decree No.
13
of Presidential
14
Decree No. 1084, Presidential Decree No.
1085 and the so-called Build Operate and Transfer (BOT)
laws, Republic Act No. 6957, as amended 15
by Republic Act
No. 7718. The latter BOT law enumerates the
infrastructure or development projects which may be
implemented by the private sector, among which are16 land
reclamation projects. According to the same law, the
proponent in land reclamation projects may be repaid by
way of “grant of a portion or percentage of the reclaimed
land.” The payment in the form of reclaimed land in the
case of land reclamation projects completes the essence of
privatization which is the underlying economic philosophy
of the BOT laws. In the beginning, the private sector is
tapped to undertake grant infrastructure and development
project and in the end it is paid in the form of land which
naturally is thenceforth classified as private property.
In sum, whenever land reclamation authorized by law is
undertaken by a private individual or entity, the reclaimed
lands which the developer secures by way of payment is
classified as private property. There is no need for another
special law declaring the lands alienable as the reclamation
law itself provides the legal basis that renders them
alienable, unless of course there is a contrary provision in
the law. The laws ordaining that reclaimed lands become
lands of the public domain are the exception rather than
the rule.
The Public Land Acts (Act No. 2874 and Commonwealth
Act No. 141) typify the few laws which provide that
reclaimed lands are not alienable. But the categorization
applies only to lands reclaimed by
_______________
13 Creating the Public Estates Authority, Defining its Powers and

Functions, Providing Funds therefor and for other purposes.
14 Conveying the Land Reclaimed in the Foreshore and Offshore of the
Manila Bay (The Manila-Cavite Coastal Road Project) as Property of the
Public Estates Authority as well as Rights and Interest with Assumption
of Obligations in the Reclamation Contract Covering Areas of the Manila
Bay between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.
15 Sec. 2.
16 Sec. 8.
449
VOL. 415, NOVEMBER 11, 2003 449

the National Government. It does not cover lands
reclaimed by private individuals or entities, including local
government units, authorized by law. In other words,
Commonwealth Act No. 141, being a general law, is not
applicable to lands reclaimed pursuant to special laws,
such as the reclaimed land subject of this case.
I have no quarrel with the majority’s ruling that
“submerged areas [of the Manila Bay] are, under the
Constitution, ‘waters x x x owned by the State,’ forming 17
part of the public domain and consequently inalienable.” I
take exception, however, to the holding that the subject
JVA is invalid since it covers such submerged areas. I do
not think that the parties contemplated the transfer of the
submerged lands per se but, rather, the conveyance of the
reclaimed lands which shall stand on the submerged lands.
If there is any doubt as to the object of the prestation in
this case, that interpretation which would render the
contract valid is to be favored. Where the instrument is
susceptible of two interpretations, one which will make it
invalid and illegal, and another which will make it valid 18
and legal, the latter interpretation should be adopted.
Thus, the New Civil Code states:
Art. 1373. If some stipulation of any contract should admit of

several meanings, it shall be understood as bearing that import
which is most adequate to render it effectual.
19
The Constitution specifically mentions joint venture
agreements as among the contracts that the State may
enter into with the private sector for the development of
natural resources. Consequently, there is nothing aberrant
for the respondents in this case to secure reconveyance in
the form of reclaimed land.
Finally, I submit that this case should be resolved in
terms of the long range development of the country.
However rich our country may be in natural resources,
these riches are not inexhaustible, land being among the
most finite. The total area of Philippine agricultural lands
is estimated to be 10.4 million hectares; the total area of
mountainous lands, about 9.4 million hectares. Such a
limited land area could hardly sustain a population, which,
as of
_______________
17 Decision, p. 52.
18 Luna v. Linatoc, 74 Phil. 15 (1942).
19 Sec. 2, Art. XII, 1987 Constitution.
450

October 2000, stood at 76.5 million Filipinos (projected to

be 81.1 million by the end of 2003) and growing at a rate of
2.36% per annum. Moreover, the Philippine economy is
expanding at a rate of 3.5% (2000-2001) to 4.5% (2001-
2002). There is no single solution to address these
developments but the extension of our coastlines consisting
of 36,289 kilometers may be one of them.
It is with this end in mind that the Government pursues
policies established or recognized by the Constitution, one
of which is land reclamation. No less20
than the Constitution,
under the general welfare clause, empowers and obliges
the State to execute such a policy. The State, though, need
not go at it alone. Indeed, the Constitution itself
acknowledges that the State cannot perform this task by
itself. Thus, the fundamental law,21 under the Article on
National Economy and Patrimony, vests the State with
the concomitant authority to draw on the resources of the
private sector, whose
22
role is aptly described elsewhere as
“indispensable,” to aid it in such an awesome endeavor. To
deny the motions for reconsideration in this case would be
to turn a blind eye to this stark reality and, ultimately, to
defeat State policy.
Accordingly, I vote to GRANT respondents’ second
motions for reconsideration.
Motions for reconsideration denied for being prohibited
pleadings and for lack of merit.
Notes.—The reclamation of foreshore and submerged

lands for the purpose of developing the reclaimed area into
an industrial and trading center with a modern harbor and
port facilities for both domestic and international
commerce is an infrastructure project as contemplated
under P.D. 1818. (Garcia vs. Burgos, 291 SCRA 546 [1998])
_______________
20 Sec. 5, Art. II, 1987 Constitution. Sec 9 of the same Article likewise
provides, “The State shall promote a just and dynamic social order that
will ensure the prosperity and independence of the nation and free the
people from poverty through policies that provide adequate social services,
promote full employment, a rising standard of living, and an improved
quality of life for all.”
21 Sec. 2, Art XII, 1987 Constitution.
22 Sec. 20, Art II, 1987 Constitution.
451
VOL. 415, NOVEMBER 11, 2003 451

Heirs of Antonio Pael vs. Court of Appeals
That Congress did not include submerged areas could only

signify the exclusion of submerged areas from the term
“foreshore lands.” The term “foreshore” refers to “that part
of the land adjacent to the sea which is alternately covered
and left dry by the ordinary flow of the tides.” (Republic vs.
Court of Appeals, 299 SCRA 199 [1998])
——o0o——
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Chavez vs. Public Estates Authority

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VOL.

415, NOVEMBER 11, 2003 403

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC

Natural Resources; Reclamation Projects; Public Officers;

404 SUPREME COURT REPORTS ANNOTATED