Manila Prince Hotel v Gsis.docx

7/24/2019 Manila Prince Hotel v Gsis.docx

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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. 122156 February 3, 1997

MANIA PRINCE !OTE petitioner,

vs.

GO"ERNMENT SER"ICE INSURANCE S#STEM, MANIA !OTE CORPORATION, COMMITTEE ON PRI"ATI$ATION a%&

OFFICE OF T!E GO"ERNMENT CORPORATE COUNSE, respondents.

'EOSIO, J.:

The FiIipino First Policyenshrined in the 19! Constitution, i.e., in the grant of rights, privileges, and concessions covering the national

economy and patrimony, the State shall give preference to qualified Filipinos,1is in o"ed b# petitioner in its bid to ac$uire

%1& of the shares of the Manila 'otel Corporation (M'C) *hich o*ns the historic Manila 'otel. +pposin,

respondents -aintain that the provision is not selfe/ecutin but re$uires an i-ple-entin leislation for its

enforce-ent. Corollaril#, the# as" *hether the %1& shares for- part of the national econo-# and patri-on#

covered b# the protective -antle of the Constitution.

The controvers# arose *hen respondent 0overn-ent ervice 2nsurance #ste- (02), pursuant to the privati3ation prora- of the

Philippine 0overn-ent under Procla-ation No. %4 dated 5ece-ber 196, decided to sell throuh public biddin 74& to %1& of the

issued and outstandin shares of respondent M'C. The *innin bidder, or the eventual 8strateic partner,8 is to provide management

expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability and performance of

the Manila otel.22n a close biddin held on 1 epte-ber 199% onl# t*o () bidders participated: petitioner

Manila Prince 'otel Corporation, a ;ilipino corporation, *hich offered to bu# %1& of the M'C or 1%,744,444

shares at P


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*as then set for oral aru-ents *ith for-er Chief Iustice Enri$ue M. ;ernando and ;r. Ioa$uin 0. Bernas, .I., as amici curiae.

2n the -ain, petitioner invo"es ec. 14, second par., Art. >22, of the 19! Constitution and sub-its that the Manila 'otel has been

identified %ith the Filipino nation and has practically become a historical monument %hich reflects the vibrancy of Philippine heritage

and culture. It is a proud legacy of an earlier generation of Filipinos %ho believed in the nobility and sacredness of independence and its

po%er and capacity to release the full potential of the Filipino people . &o all intents and purposes, it has become a part of the national

patrimony.6Petitioner also arues that since %1& of the shares of the M'C carries *ith it the o*nership of the

business of the hotel *hich is o*ned b# respondent 02, a overn-ento*ned and controlled corporation,

the hotel business of respondent 02 bein a part of the touris- industr# is un$uestionabl# a part of the

national econo-#. Thus, an# transaction involvin %1& of the shares of stoc" of the M'C is clearl# covered

b# the ter- national economy, to *hich ec. 14, second par., Art. >22, 19! Constitution, applies. 7

2t is also the thesis of petitioner that since Manila 'otel is part of the national patri-on# and its business also un$uestionabl# part of the

national econo-# petitioner should be preferred after it has -atched the bid offer of the Mala#sian fir-. ;or the biddin rules -andate

that if for any reason, the ighest !idder cannot be a%arded the !lock of Shares, "SIS may offer this to the other 'uali fied !idders that

have validly submitted bids provided that these 'ualified !idders are %illing to match the highest bid in terms of price per share.)

Respondents e/cept. The# -aintain that: First, ec. 14, second par., Art. >22, of the 19! Constitution is -erel# a state-ent of principle

and polic# since it is not a self(executing provision and requires implementing legislation)s* + + + &hus, for the said provision to perate,

there must be existing la%s -to lay do%n conditions under %hich business may be done.89

Second, rantin that this provision is selfe/ecutin, Manila 'otel does not fall under the ter- national patri-on# *hich onl# refers to

lands of the public do-ain, *aters, -inerals, coal, petroleu- and other -ineral oils, all forces of potential ener#, fisheries, forests orti-ber, *ildlife, flora and fauna and all -arine *ealth in its territorial sea, and e/clusive -arine 3one as cited in the first and second

pararaphs of ec. , Art. >22, 19! Constitution. Accordin to respondents, *hile petitioner spea"s of the uests *ho have slept in the

hotel and the events that have transpired therein *hich -a"e the hotel historic, these alone do not -a"e the hotel fall under

thepatrimony of the nation. hat is -ore, the -andate of the Constitution is addressed to the tate, not to respondent 02 *hich

possesses a personalit# of its o*n separate and distinct fro- the Philippines as a tate.

&hird, rantin that the Manila 'otel for-s part of the national patrimony, the constitutional provision invo"ed is still inapplicable since

*hat is bein sold is onl# %1& of the outstandin shares of the corporation, not the hotel buildin nor the land upon *hich the buildin

stands. Certainl#, %1& of the e$uit# of the M'C cannot be considered part of the national patrimony. Moreover, if the disposition of the

shares of the M'C is reall# contrar# to the Constitution, petitioner should have $uestioned it riht fro- the beinnin and not after it had

lost in the biddin.

Fourth, the reliance b# petitioner on par. J., subpar. I. 1., of the biddin rules *hich provides that if for any reason, the ighest !idder

cannot be a%arded the !lock of Shares, "SIS may offer this to the other 'ualified !idders that have validly submitted bids providedthat these 'ualified !idders are %illing to match the highest bid in terms of price per share , is -isplaced. Respondents postulate that

the privilee of sub-ittin a -atchin bid has not #et arisen since it onl# ta"es place if for any reason, the ighest !idder cannot be

a%arded the !lock of Shares. Thus the sub-ission b# petitioner of a -atchin bid is pre-ature since Renon Berhad could still ver#

*ell be a*arded the bloc" of shares and the condition ivin rise to the e/ercise of the privilee to sub-it a -atchin bid had not #et

ta"en place.

Finally, the pra#er for prohibition rounded on rave abuse of discretion should fail since respondent 02 did not e/ercise i ts discretion

in a capricious, *hi-sical -anner, and if ever it did abuse its discretion it *as not so patent and ross as to a-ount to an evasion of a

positive dut# or a virtual refusal to perfor- a dut# enHoined b# la*. i-ilarl#, the petition for mandamusshould fail as petitioner has no

clear leal riht to *hat it de-ands and respondents do not have an i-perative dut# to perfor- the act re$uired of the- b# petitioner.

e no* resolve. A constitution is a s#ste- of funda-ental la*s for the overnance and ad-inistration of a nation. 2t is supre-e,

i-perious, absolute and unalterable e/cept b# the authorit# fro- *hich it e-anates. 2t has been defined as the fundamental and

paramount la% of the nation. 1*2t prescribes the per-anent fra-e*or" of a s#ste- of overn-ent, assins to the

different depart-ents their respective po*ers and duties, and establishes certain fi/ed principles on *hich

overn-ent is founded. The funda-ental conception in other *ords is that it is a supre-e la* to *hich all

other la*s -ust confor- and in accordance *ith *hich all private rihts -ust be deter-ined and all public

authorit# ad-inistered.11?nder the doctrine of constitutional supre-ac#, if a la* or contract violates an#

nor- of the constitution that la* or contract *hether pro-ulated b# the leislative or b# the e/ecutive

branch or entered into b# private persons for private purposes is null and void and *ithout an# force and

effect. Thus, since the .onstitution is the fundamental, paramount and supreme la% of the nation, it is

deemed %ritten in every statute and contract.

Ad-ittedl#, so-e constitutions are -erel# declarations of policies and principles. Their provisions co--and the leislature to enact la*s

and carr# out the purposes of the fra-ers *ho -erel# establish an outline of overn-ent providin for the different depart-ents of the

overn-ental -achiner# and securin certain funda-ental and inalienable rihts of citi3ens. 12A provision *hich la#s do*n aeneral principle, such as those found in Art. 22 of the 19! Constitution, is usuall# not selfe/ecutin. But a

provision *hich is co-plete in itself and beco-es operative *ithout the aid of supple-entar# or enablin


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leislation, or that *hich supplies sufficient rule b# -eans of *hich the riht it rants -a# be enHo#ed or

protected, is selfe/ecutin. Thus a constitutional provision is selfe/ecutin if the nature and e/tent of the

riht conferred and the liabilit# i-posed are fi/ed b# the constitution itself, so that the# can be deter-ined b#

an e/a-ination and construction of its ter-s, and there is no lanuae indicatin that the subHect is referred

to the leislature for action. 13

As aainst constitutions of the past, -odern constitutions have been enerall# draf ted upon a different principle and have often beco-e

in effect e/tensive codes of la*s intended to operate directl# upon the people in a -anner si-ilar to that of statutor# enact-ents, andthe function of constitutional conventions has evolved into one -ore li"e that of a leislative bod#. 'ence, unless it is e/pressl# provided

that a leislative act is necessar# to enforce a constitutional -andate, the presu-ption no* is that all provisions of the constitution are

selfe/ecutin 2f the constitutional provisions are treated as re$uirin leislation instead of selfe/ecutin, the leislature *ould have the

po*er to inore and practicall# nullif# the -andate of the funda-ental la*.1(This can be catacl#s-ic. That is *h# the

prevailin vie* is, as it has al*a#s been, that =

. . . in case of doubt, the Constitution should be considered selfe/ecutin rather than nonselfe/ecutin . . . .

?nless the contrar# is clearl# intended, the provisions of the Constitution should be considered selfe/ecutin, as a

contrar# rule *ould ive the leislature discretion to deter-ine *hen, or *hether, the# shall be effective. These

provisions *ould be subordinated to the *ill of the la*-a"in bod#, *hich could -a"e the- entirel# -eaninless b#

si-pl# refusin to pass the needed i-ple-entin statute. 15

Respondents arue that ec. 14, second par., Art. >22, of the 19! Constitution is clearl# not selfe/ecutin, as the# $uote fro-

discussions on the floor of the 196 Constitutional Co--ission =

MR. R+5R20+. Mada- President, 2 a- as"in this $uestion as the Chair-an of the Co--ittee

on t#le. 2f the *ordin of 8PRE;ERENCE8 is iven to ?A2;2E5 ;22P2N+,8 can it be

understood as a preference to $ualified ;ilipinos vis(a(vis ;ilipinos *ho are not $ualified. o,

*h# do *e not -a"e it clearK To $ualified ;ilipinos as aainst aliensK

T'E PRE25ENT. hat is the $uestion of Co--issioner RodrioK 2s it to re-ove the *ord

8?A2;2E5K8.

MR. R+5R20+. No, no, but sa# definitel# 8T+ ?A2;2E5 ;22P2N+8 as aainst *ho-K As

aainst aliens or over aliensK

MR. N+E5+. Mada- President, 2 thin" that is understood. e use the *ord 8?A2;2E58

because the existing la%s or prospective la%s %ill al%ays lay do%n conditions under %hich

business may be done. For example, qualifications on the setting up of other financialstructures, et cetera(e-phasis supplied b# respondents)

MR. R+5R20+. 2t is Hust a -atter of st#le.

MR. N+E5+ @es, 16

uite apparentl#, ec. 14, second par., of Art >22 is couched in such a *a# as not to -a"e it appear that it is nonselfe/ecutin but

si-pl# for purposes of st#le. But, certainl#, the leislature is not precluded fro- enactin other further la*s to enforce the constitutional

provision so lon as the conte-plated statute s$uares *ith the Constitution. Minor details -a# be left to the leislature *ithout i-pairin

the selfe/ecutin nature of constitutional provisions.

2n selfe/ecutin constitutional provisions, the leislature -a# still enact leislation to facilitate the e/ercise of po*ers directl# ranted b#

the constitution, further the operation of such a provision, prescribe a practice to be used for its enforce-ent, provide a convenient

re-ed# for the protection of the rihts secured or the deter-ination thereof, or place reasonable safeuards around the e/ercise of the

riht. The -ere fact that leislation -a# supple-ent and add to or prescribe a penalt# for the violation of a selfe/ecutin constitutional

provision does not render such a provision ineffective in the absence of such leislation. The o-ission fro- a constitution of an#

e/press provision for a re-ed# for enforcin a riht or liabilit# is not necessaril# an indication that it *as not intended to be self

e/ecutin. The rule is that a selfe/ecutin provision of the constitution does not necessaril# e/haust leislative po*er on the subHect,

but an# leislation -ust be in har-on# *ith the constitution, further the e/ercise of constitutional riht and -a"e it -ore

available. 17ubse$uent leislation ho*ever does not necessaril# -ean that the subHect constitutional

provision is not, b# itself, full# enforceable.

Respondents also arue that the nonselfe/ecutin nature of ec. 14, second par., of Art. >22 is i-plied fro- the tenor of the first and

third pararaphs of the sa-e section *hich undoubtedl# are not selfe/ecutin. 1)The aru-ent is fla*ed. 2f the first and

third pararaphs are not selfe/ecutin because Conress is still to enact -easures to encourae the

for-ation and operation of enterprises full# o*ned b# ;ilipinos, as in the first pararaph, and the tate still

needs leislation to reulate and e/ercise authorit# over forein invest-ents *ithin its national Hurisdiction, as

in the third pararaph, then a fortiori, b# the sa-e loic, the second pararaph can onl# be selfe/ecutin asit does not b# its lanuae re$uire an# leislation in order to ive preference to $ualified ;ilipinos in the rant

of rihts, privilees and concessions coverin the national econo-# and patri-on#. A constitutional provision


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-a# be selfe/ecutin in one part and nonselfe/ecutin in another. 19

Even the cases cited b# respondents holdin that certain constitutional provisions are -erel# state-ents of principles and policies,

*hich are basicall# not selfe/ecutin and onl# placed in the Constitution as -oral incentives to leislation, not as Hudiciall# enforceable

rihts = are si-pl# not in point. !asco v. Philippine musements and "aming .orporation2*spea"s of constitutional

provisions on personal dinit#, 21the sanctit# of fa-il# life, 22the vital role of the #outh in nation

buildin 23the pro-otion of social Hustice, 2(and the values of education. 25&olentino v. Secretary of

Finance 26refers to the constitutional provisions on social Hustice and hu-an rihts 27and oneducation. 2)astl#,0ilosbayan, Inc. v. Morato 29cites provisions on the pro-otion of eneral *elfare, 3*the

sanctit# of fa-il# life, 31the vital role of the #outh in nationbuildin 32and the pro-otion of total hu-an

liberation and develop-ent. 33A readin of these provisions indeed clearl# sho*s that the# are not Hudiciall#

enforceable constitutional rihts but -erel# uidelines for leislation. The ver# ter-s of the provisions

-anifest that the# are onl# principles upon *hich the leislations -ust be based.#es ipsa loquitur.

+n the other hand, ec. 14, second par., Art. >22 of the of the 19! Constitution is a -andator#, positive co--and *hich is co-plete in

itself and *hich needs no further uidelines or i-ple-entin la*s or rules for its enforce-ent. ;ro- its ver# *ords the provision does

not re$uire an# leislation to put it in operation. 2t isper seHudiciall# enforceable hen our Constitution -andates that 1i2n the grant of

rights, privileges, and concessions covering national economy and patrimony, the State shall give preference to qualified Filipinos , it

-eans Hust that = $ualified ;ilipinos shall be preferred. And *hen our Constitution declares that a riht e/ists in certain specified

circu-stances an action -a# be -aintained to enforce such riht not*ithstandin the absence of an# leislation on the subHectF

conse$uentl#, if there is no statute especiall# enacted to enforce such constitutional riht, such riht enforces itself b# its o*n inherent

potenc# and puissance, and fro- *hich all leislations -ust ta"e their bearins. here there is a riht there is a re-ed#. 3bi 4us ibi

remedium.

As reards our national patrimony, a -e-ber of the 196 Constitutional Co--ission 3(e/plains =

The patri-on# of the Nation that should be conserved and developed refers not onl# to out rich natural resources

but also to the cultural heritae of out race. 2t also refers to our intellience in arts, sciences and letters. Therefore,

*e should develop not onl# our lands, forests, -ines and other natural resources but also the -ental abilit# or

facult# of our people.

e aree. 2n its plain and ordinar# -eanin, the ter- patri-on# pertains to heritae. 35hen the Constitution spea"s of

national patri-on#, it refers not onl# to the natural resources of the Philippines, as the Constitution could

have ver# *ell used the ter- natural resources, but also to the cultural heritageof the ;ilipinos.

Manila 'otel has beco-e a land-ar" = a livin testi-onial of Philippine heritae. hile it *as restrictivel# an A-erican hotel *hen it

first opened in 191, it i--ediatel# evolved to be trul# ;ilipino, ;or-erl# a concourse for the elite, it has since then beco-e the venue of

various sinificant events *hich have shaped Philippine histor#. 2t *as called the .ultural .enter of the 56789s. 2t *as the site of the

festivities durin the inauuration of the Philippine Co--on*ealth. 5ubbed as the fficial "uest ouse of the Philippine "overnment. it

pla#s host to dinitaries and official visitors *ho are accorded the traditional Philippine hospitalit#. 36

The histor# of the hotel has been chronicled in the boo" &he Manila otel: &he eart and Memory of a .ity. 375urin orld ar 22

the hotel *as converted b# the Iapanese Militar# Ad-inistration into a -ilitar# head$uarters. hen the

A-erican forces returned to recapture Manila the hotel *as selected b# the Iapanese toether *ith

2ntra-uros as the t*o () places fro their final stand. Thereafter, in the 19%4Gs and 1964Gs, the hotel beca-e

the center of political activities, pla#in host to al-ost ever# political convention. 2n 19!4 the hotel reopened

after a renovation and reaped nu-erous international reconitions, an ac"no*led-ent of the ;ilipino talent

and inenuit#. 2n 196 the hotel *as the site of a failed coup d9 etat*here an aspirant for vicepresident *as

8proclai-ed8 President of the Philippine Republic.

;or -ore than eiht () decades Manila 'otel has bore -ute *itness to the triu-phs and failures, loves and frustrations of the ;ilipinosF

its e/istence is i-pressed *ith public interestF its o*n historicit# associated *ith our strule for sovereint#, independence and

nationhood. Jeril#, Manila 'otel has beco-e part of our national econo-# and patri-on#. ;or sure, %1& of the e$uit# of the M'C

co-es *ithin the purvie* of the constitutional shelter for it co-prises the -aHorit# and controllin stoc", so that an#one *ho ac$uires or

o*ns the %1& *ill have actual control and -anae-ent of the hotel. 2n this instance, %1& of the M'C cannot be disassociated fro- the

hotel and the land on *hich the hotel edifice stands. Conse$uentl#, *e cannot sustain respondentsG clai- that theFilipino First

Policyprovision is not applicable since %hat is being sold is only :5; of the outstanding shares of the corporation, not the otel

building nor the land upon %hich the building stands. 3)

The aru-ent is pure sophistr#. The ter- qualified Filipinosas used in +ur Constitution also includes corporations at least 64& of *hich

is o*ned b# ;ilipinos. This is ver# clear fro- the proceedins of the 196 Constitutional Co--ission

T'E PRE25ENT. Co--issioner 5avide is reconi3ed.

MR. 5AJ25E. 2 *ould li"e to introduce an a-end-ent to the Nolledo a-end-ent. And the


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a-end-ent *ould consist in substitutin the *ords 8?A2;2E5 ;22P2N+8 *ith the follo*in:

8C2T2LEN +; T'E P'22PP2NE +R C+RP+RAT2+N +R A+C2AT2+N '+E

CAP2TA +R C+NTR+2N0 T+CD 2 '+@ +NE5 B@ ?C' C2T2LEN.

/// /// ///

MR. M+N+5. Mada- President, apparentl# the proponent is areeable, but *e have to raise

a $uestion. uppose it is a corporation that is 4percent ;i lipino, do *e not ive it preferenceK

MR. 5AJ25E. The Nolledo a-end-ent *ould refer to an individual ;ilipino. hat about acorporation *holl# o*ned b# ;ilipino citi3ensK

MR. M+N+5. At least 64 percent, Mada- President.

MR. 5AJ25E. 2s that the intentionK

MR. M+N+5. @es, because, in fact, *e *ould be li-itin it if *e sa# that the preference

should onl# be 144percent ;ilipino.

MR: 5AJ25E. 2 *ant to et that -eanin clear because 8?A2;2E5 ;22P2N+8 -a# refer onl#

to individuals and not to Huridical personalities or entities.

MR. M+N+5. e aree, Mada- President. 39

/// /// ///

MR. R+5R20+. Before *e vote, -a# 2 re$uest that the a-end-ent be read aain.

MR. N+E5+. The a-end-ent *ill read: 82N T'E 0RANT +; R20'T, PR2J2E0E AN5

C+NCE2+N C+JER2N0 T'E NAT2+NA EC+N+M@ AN5 PATR2M+N@, T'E TATE

'A 02JE PRE;ERENCE T+ ?A2;2E5 ;22P2N+.8 And the *ord 8;ilipinos8 here, as

intended b# the proponents, *ill include not onl# individual ;ilipinos but also ;ilipinocontrolled

entities or entities full#controlled b# ;ilipinos. (*

The phrase preference to $ualified ;ilipinos *as e/plained thus =

MR. ;+L. Mada- President, 2 *ould li"e to re$uest Co--issioner Nolledo to please restate his

a-end-ent so that 2 can as" a $uestion.

MR. N+E5+. 82N T'E 0RANT +; R20'T, PR2J2E0E AN5 C+NCE2+N

C+JER2N0 T'E NAT2+NA EC+N+M@ AN5 PATR2M+N@, T'E TATE 'A 02JE

PRE;ERENCE T+ ?A2;2E5 ;22P2N+.8

MR ;+L. 2n connection *ith that a-end-ent, if a forein enterprise is $ualified and a ;ilipino

enterprise is also $ualified, *ill the ;ilipino enterprise still be iven a preferenceK

MR. N+E5+. +bviousl#.

MR. ;+L. 2f the foreiner is -ore $ualified in so-e aspects than the ;ilipino enterprise, *ill the

;ilipino still be preferredK

MR. N+E5+. The ans*er is 8#es.8

MR. ;+L. Than" #ou, (1

E/poundin further on the Filipino First Policyprovision Co--issioner Nolledo continues =

MR. N+E5+. @es, Mada- President. 2nstead of 8M?T,8 it *ill be 8'A = T'E TATE 'A 0lJE

PRE;ERENCE T+ ?A2;2E5 ;22P2N+. This e-bodies the socalled 8;ilipino ;irst8 polic#. That -eans that

;ilipinos should be iven preference in the rant of concessions, privilees and rihts coverin the national

patri-on#. (2

The e/chane of vie*s in the sessions of the Constitutional Co--ission reardin the subHect provision *as still further clarified b#

Co--issioner Nolledo (3+

Pararaph of ection 14 e/plicitl# -andates the 8Pro;ilipino8 bias in all econo-ic concerns. 2t is better "no*n as

the ;22P2N+ ;2RT Polic# . . . This provision *as never found in previous Constitutions . . . .

The ter- 8$ualified ;ilipinos8 si-pl# -eans that preference shall be iven to those citi3ens *ho can -a"e a viable

contribution to the co--on ood, because of credible co-petence and efficienc#. 2t certainl# does N+T -andate

the pa-perin and preferential treat-ent to ;ilipino citi3ens or orani3ations that are inco-petent or inefficient,

since such an indiscri-inate preference *ould be counter productive and ini-ical to the co--on ood.

2n the rantin of econo-ic rihts, privilees, and concessions, *hen a choice has to be -ade bet*een a 8$ualified

foreiner8 end a 8$ualified ;ilipino,8 the latter shall be chosen over the for-er.8

astl#, the *ord qualifiedis also deter-inable. Petitioner *as so considered b# respondent 02 and selected as one of


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the qualifiedbidders. 2t *as pre$ualified b# respondent 02 in accordance *ith its o*n uidelines so that the sole inference here is

that petitioner has been found to be possessed of proven -anae-ent e/pertise in the hotel industr#, or it has sinificant e$uit#

o*nership in another hotel co-pan#, or it has an overall -anae-ent and -ar"etin proficienc# to successfull# operate the Manila

'otel. ((

The penchant to tr# to *hittle a*a# the -andate of the Constitution b# aruin that the subHect provision is not selfe/ecutor# and

re$uires i-ple-entin leislation is $uite disturbin. The atte-pt to violate a clear constitutional provision = b# the overn-ent itself =

is onl# too distressin. To adopt such a line of reasonin is to renounce the dut# to ensure faithfulness to the Constitution. ;or, even

so-e of the provisions of the Constitution *hich evidentl# need i-ple-entin leislation have Huridical life of their o*n and can be thesource of a Hudicial re-ed#. e cannot si-pl# afford the overn-ent a defense that arises out of the failure to enact further enablin,

i-ple-entin or uidin leislation. 2n fine, the discourse of ;r. Ioa$uin 0. Bernas, .I., on constitutional overn-ent is apt =

The e/ecutive depart-ent has a constitutional dut# to i-ple-ent la*s, includin the Constitution, even before

Conress acts = provided that there are discoverable leal standards for e/ecutive action. hen the e/ecutive

acts, it -ust be uided b# its o*n understandin of the constitutional co--and and of applicable la*s. The

responsibilit# for readin and understandin the Constitution and the la*s is not the sole preroative of Conress. 2f

it *ere, the e/ecutive *ould have to as" Conress, or perhaps the Court, for an interpretation ever# ti-e the

e/ecutive is confronted b# a constitutional co--and. That is not ho* constitutional overn-ent operates. (5

Respondents further arue that the constitutional provision is addressed to the tate, not to respondent 02 *hich b# itself possesses

a separate and distinct personalit#. This aru-ent aain is at best specious. 2t is undisputed that the sale of %1& of the M'C could onl#

be carried out *ith the prior approval of the tate actin throuh respondent Co--ittee on Privati3ation. As correctl# pointed out b# ;r.

Ioa$uin 0. Bernas, .I., this fact alone -a"es the sale of the assets of respondents 02 and M'C a 8 state action.8 2n constitutional

Hurisprudence, the acts of persons distinct fro- the overn-ent are considered 8state action8 covered b# the Constitution (1) *hen the

activit# it enaes in is a -public functionF-() *hen the overn-ent is so sinificantl# involved *ith the private actor as to -a"e the

overn-ent responsible for his actionF and, (7) *hen the overn-ent has approved or authori3ed the action. 2t is evident that the act of

respondent 02 in sellin %1& of its share in respondent M'C co-es under the second and third cateories of 8 state action.8 ithout

doubt therefore the transaction. althouh entered into b# respondent 02, is in fact a transaction of the tate and therefore subHect to

the constitutional co--and. (6

hen the Constitution addresses the tate it refers not onl# to the people but also to the overn-ent as ele-ents of the tate. After all,

overn-ent is co-posed of three (7) divisions of po*er = leislative, e/ecutive and Hudicial. Accordinl#, a constitutional -andate

directed to the tate is correspondinl# directed to the three(7) branches of overn-ent. 2t is undeniable that in this case the subHect

constitutional inHunction is addressed a-on others to the E/ecutive 5epart-ent and respondent 02, a overn-ent instru-entalit#

derivin its authorit# fro- the tate.

2t should be stressed that *hile the Mala#sian fir- offered the hiher bid it is not #et the *innin bidder. The biddin rules e/pressl#

provide that the hihest bidder shall onl# be declared the *innin bidder after it has neotiated and e/ecuted the necessar# contracts,and secured the re$uisite approvals. ince the 8Filipino First Policyprovision of the Constitution besto*s preference on $ualified

;ilipinos the -ere tendin of the hihest bid is not an assurance that the hihest bidder *ill be declared the *innin bidder. Resultantl#,

respondents are not bound to -a"e the a*ard #et, nor are the# under obliation to enter into one *ith the hihest bidder. ;or in

choosin the a*ardee respondents are -andated to abide b# the dictates of the 19! Constitution the provisions of *hich are

presu-ed to be "no*n to all the bidders and other interested parties.

Adherin to the doctrine of constitutional supre-ac#, the subHect constitutional provision is, as it should be, i-pliedl# *ritten in the

biddin rules issued b# respondent 02, lest the biddin rules be nullified for bein violative of the Constitution. 2t is a basic principle in

constitutional la* that all la*s and contracts -ust confor- *ith the funda-ental la* of the land. Those *hich violate the Constitution

lose their reason for bein.

Pararaph J. I. 1 of the biddin rules provides that 1if2 for any reasonthe ighest !idder cannot be a%arded the !lock of Shares, "SIS

may offer this to other 'ualified !idders that have validly submitted bids provided that these 'ualified !idders are %illing to match the

highest bid in terms of price per

share. (7Certainl#, the constitutional -andate itself is reason enoughnot to a*ard the bloc" of shares

i--ediatel# to the forein bidder not*ithstandin its sub-ission of a hiher, or even the hihest, bid. 2n fact,

*e cannot conceive of a stroner reason than the constitutional inHunction itself.

2n the instant case, *here a forein fir- sub-its the hihest bid in a public biddin concernin the rant of rihts, privilees and

concessions coverin the national econo-# and patri-on#, thereb# e/ceedin the bid of a ;ilipino, there is no $uestion that the ;ilipino

*ill have to be allo*ed to -atch the bid of the forein entit#. And if the ;ilipino -atches the bid of a forein fir- the a*ard should o to

the ;ilipino. 2t -ust be so if *e are to ive life and -eanin to the Filipino First Policyprovision of the 19! Constitution. ;or, *hile this

-a# neither be e/pressl# stated nor conte-plated in the biddin rules, the constitutional fiat is, o-nipresent to be si-pl# disrearded.

To inore it *ould be to sanction a perilous s"ir tin of the basic la*.

This Court does not discount the apprehension that this polic# -a# discourae forein investors. But the Constitution and la*s of the

Philippines are understood to be al*a#s open to public scrutin#. These are iven factors *hich investors -ust consider *hen venturin

into business in a forein Hurisdiction. An# person therefore desirin to do business in the Philippines or *ith an# of its aencies orinstru-entalities is presu-ed to "no* his rihts and obliations under the Constitution and the la*s of the foru-.

The aru-ent of respondents that petitioner is no* estopped fro- $uestionin the sale to Renon Berhad since petitioner *as *ell

a*are fro- the beinnin that a foreiner could participate in the biddin is -eritless. ?ndoubtedl#, ;ilipinos and foreiners ali"e *ere


7/39

invited to the biddin. But foreiners -a# be a*arded the sale onl# if no ;ilipino $ualifies, or if the $ualified ;ilipino fails to -atch the

hihest bid tendered b# the forein entit#. 2n the case before us, *hile petitioner *as alread# preferred at the inception of the biddin

because of the constitutional -andate, petitioner had not #et -atched the bid offered b# Renon Berhad. Thus it did not have the riht

or personalit# then to co-pel respondent 02 to accept its earlier bid. Rihtl#, onl# after it had -atched the bid of the forein fir- and

the apparent disreard b# respondent 02 of petitionerGs -atchin bid did the latter have a cause of action.

Besides, there is no ti-e fra-e for invo"in the constitutional safeuard unless perhaps the a*ard has been finall# -ade. To insist on

sellin the Manila 'otel to foreiners *hen there is a ;ilipino roup *illin to -atch the bid of the forein roup is to insist that

overn-ent be treated as an# other ordinar# -ar"et pla#er, and bound b# its -ista"es or ross errors of Hud-ent, reardless of theconse$uences to the ;ilipino people. The -isco-prehension of the Constitution is rerettable. Thus *e *ould rather re-ed# the

indiscretion *hile there is still an opportunit# to do so than let the overn-ent develop the habit of forettin that the Constitution la#s

do*n the basic conditions and para-eters for its actions.

ince petitioner has alread# -atched the bid price tendered b# Renon Berhad pursuant to the biddin rules, respondent 02 is left

*ith no alternative but to a*ard to petitioner the bloc" of shares of M'C and to e/ecute the necessar# aree-ents and docu-ents to

effect the sale in accordance not onl# *ith the biddin uidelines and procedures but *ith the Constitution as *ell. The refusal of

respondent 02 to e/ecute the correspondin docu-ents *ith petitioner as provided in the biddin rules after the latter has -atched

the bid of the Mala#sian fir- clearl# constitutes rave abuse of discretion.

The Filipino First Policy is a product of Philippine nationalis-. 2t is e-bodied in the 19! Constitution not -erel# to be used as a

uideline for future leislation but pri-aril# to be enforcedF so -ust it be enforced. This Court as the ulti-ate uardian of the

Constitution *ill never shun, under an# reasonable circu-stance, the dut# of upholdin the -aHest# of the Constitution *hich it is tas"ed

to defend. 2t is *orth e-phasi3in that it is not the intention of this Court to i-pede and di-inish, -uch less under-ine, the influ/ of

forein invest-ents. ;ar fro- it, the Court encouraes and *elco-es -ore business opportunities but avo*edl# sanctions the

preference for ;ilipinos *henever such preference is ordained b# the Constitution. The position of the Court on this -atter could have

not been -ore appropriatel# articulated b# Chief Iustice Narvasa =

As scrupulousl# as it has tried to observe that it is not i ts function to substitute its Hud-ent for that of the leislature

or the e/ecutive about the *isdo- and feasibilit# of leislation econo-ic in nature, the upre-e Court has not been

spared criticis- for decisions perceived as obstacles to econo-ic proress and develop-ent . . . in connection *ith

a te-porar# inHunction issued b# the CourtGs ;irst 5ivision aainst the sale of the Manila 'otel to a Mala#sian ;ir-

and its partner, certain state-ents *ere published in a -aHor dail# to the effect that inHunction 8aain de-onstrates

that the Philippine leal s#ste- can be a -aHor obstacle to doin business here.

et it be stated for the record once aain that *hile it is no business of the Court to intervene in contracts of the "ind

referred to or set itself up as the Hude of *hether the# are viable or attainable, it is its bounden dut# to -a"e sure

that the# do not violate the Constitution or the la*s, or are not adopted or i-ple-ented *ith rave abuse of

discretion a-ountin to lac" or e/cess of Hurisdiction. 2t *ill never shir" that dut#, no -atter ho* buffeted b# *inds ofunfair and illinfor-ed criticis-. ()

Privati3ation of a business asset for purposes of enhancin its business viabilit# and preventin further losses, reardless of the

character of the asset, should not ta"e precedence over non-aterial values. A co--ercial, na# even a budetar#, obHective should not

be pursued at the e/pense of national pride and dinit#. ;or the Constitution enshrines hiher and nobler non-aterial values. 2ndeed,

the Court *ill al*a#s defer to the Constitution in the proper overnance of a free societ#F after all, there is nothin so sacrosanct in an#

econo-ic polic# as to dra* itself be#ond Hudicial revie* *hen the Constitution is involved. (9

Nationalis- is inherent, in the ver# concept of the Philippines bein a de-ocratic and republican state, *ith sovereint# residin in the

;ilipino people and fro- *ho- all overn-ent authorit# e-anates. 2n nationalis-, the happiness and *elfare of the people -ust be the

oal. The nationstate can have no hiher purpose. An# interpretation of an# constitutional provision -ust adhere to such basic concept.

Protection of forein invest-ents, *hile laudible, is -erel# a polic#. 2t cannot override the de-ands of nationalis-. 5*

The Manila 'otel or, for that -atter, %1& of the M'C, is not Hust an# co--odit# to be sold to the hihest bidder solel# for the sa"e of

privati3ation. e are not tal"in about an ordinar# piece of propert# in a co--ercial district. e are tal"in about a historic relic that hashosted -an# of the -ost i-portant events in the short histor# of the Philippines as a nation. e are tal"in about a hotel *here heads

of states *ould prefer to be housed as a stron -anifestation of their desire to cloa" the dinit# of the hihest state function to their

official visits to the Philippines. Thus the Manila 'otel has pla#ed and continues to pla# a sinificant role as an authentic repositor# of

t*entieth centur# Philippine histor# and culture. 2n this sense, it has beco-e trul# a reflection of the ;ilipino soul = a place %ith a

history of grandeur< a most historical setting that has played a part in the shaping of a country. 51

This Court cannot e/tract rh#-e nor reason fro- the deter-ined efforts of respondents to sell the historical land-ar" = this "rand ld

=ame of hotels in Asia = to a total straner. ;or, indeed, the conve#ance of this epic e/ponent of the ;ilipino ps#che to alien hands

cannot be less than -ephistophelian for it is, in *hatever -anner vie*ed, a veritable alienation of a nationGs soul for so-e pieces of

forein silver. And so *e as": hat advantae, *hich cannot be e$uall# dra*n fro- a $ualified ;ilipino, can be ained b# the ;ilipinos

Manila 'otel = and all that it stands for = is sold to a non;ilipinoK 'o* -uch of national pride *ill vanish if the nationGs cultural

heritae is entrusted to a forein entit#K +n the other hand, ho* -uch dinit# *ill be preserved and reali3ed if the national patri-on# is

safe"ept in the hands of a qualified, 3ealous and *ell-eanin ;ilipinoK This is the plain and si-ple -eanin of the Filipino First

Policyprovision of the Philippine Constitution. And this Court, heedin the clarion call of the Constitution and acceptin the dut# of beinthe elderl# *atch-an of the nation, *ill continue to respect and protect the sanctit# of the Constitution.

'ERE;+RE, respondents 0+JERNMENT ERJ2CE 2N?RANCE @TEM, MAN2A '+TE C+RP+RAT2+N, C+MM2TTEE +N


8/39

PR2JAT2LAT2+N and +;;2CE +; T'E 0+JERNMENT C+RP+RATE C+?NE are directed to CEAE and 5E2T fro- sellin %1&

of the shares of the Manila 'otel Corporation to REN+N0 BER'A5, and to ACCEPT the -atchin bid of petitioner MAN2A PR2NCE

'+TE C+RP+RAT2+N to purchase the subHect %1& of the shares of the Manila 'otel Corporation at Pr+, >>+, concur+

Seara-e O%o%/

PA0IA, J., concurrin:

2 concur *ith theponencia of Mr. Iustice Bellosillo. At the sa-e ti-e, 2 *ould li"e to e/pound a bit -ore on the concept of national

patri-on# as includin *ithin its scope and -eanin institutions such as the Manila 'otel.

2t is arued b# petitioner that the Manila 'otel co-es under 8national patri-on#8 over *hich $ualified ;ilipinos have the preference, ino*nership and operation. The Constitutional provision on point states:

/// /// ///

2n the rant of rihts, privilees, and concessions coverin the national econo-# and patri-on#, the tate shall 0ive

preference to $ualified ;ilipinos.1

PetitionerGs aru-ent, 2 believe, is *ell ta"en. ?nder the 19! Constitution, 8national patri-on#8 consists of the natural resources

provided b# Al-iht# 0od (Prea-ble) in our territor# (Article 2) consistin of land, sea, and air. 2stud# of the 197% Constitution,

*here the concept of 8national patri-on#8 oriinated, *ould sho* that its fra-ers decided to adopt the even

-ore co-prehensive e/pression 8Patri-on# of the Nation8 in the belief that the phrase encircles a concept

e-bracin not onl# their natural resources of the countr# but practicall# ever#thin that belons to the

;ilipino people, the tanible and the -aterial as *ell as the intanible and the spiritual assets and

possessions of the people. 2t is to be noted that the fra-ers did not stop *ith conservation. The# "ne* that

conservation alone does not spell proressF and that this -a# be achieved onl# throuh develop-ent as a

correlative factor to assure to the people not onl# the e/clusive o*nership, but also the e/clusive benefits of

their national patri-on#).3

Moreover, the concept of national patri-on# has been vie*ed as referrin not onl# to our rich natural resources but also to the cultural

heritae of our

race.(

There is no doubt in -# -ind that the Manila 'otel is ver# -uch a part of our national patri-on# and, as such, deserves constitutional

protection as to *ho shall o*n it and benefit fro- its operation. This institution has pla#ed an i-portant role in our nationGs histor#,

havin been the venue of -an# a historical event, and servin as it did, and as it does, as the Philippine 0uest 'ouse for visitin forein

heads of state, dinitaries, celebrities, and others.5

2t is therefore our dut# to protect and preserve it for future enerations of ;ilipinos. As President Manuel . ue3on once said, *e -ust

e/ploit the natural resources of our countr#, but *e should do so *ith. an e#e to the *elfare of the future enerations. 2n other *ords, the

leaders of toda# are the trustees of the patri-on# of our race. To preserve our national patri-on# and reserve it for ;ilipinos *as the

intent of the distinuished entle-en *ho first fra-ed our Constitution. Thus, in debatin the need for nationali3ation of our lands and

natural resources, one e/pounded that *e should 8put -ore teeth into our la*s, andF not -a"e the nationali3ation of our lands and

natural resources a subHect of ordinar# leislation but of constitutional enact-ent8 6To $uote further: 8et not our children be

-ere tenants and trespassers in their o*n countr#. et us preserve and be$ueath to the- *hat is rihtfull#

theirs, free fro- all forein liens and encu-brances8.7

No*, a *ord on preference. 2n -# vie* 8preference to $ualified ;ilipinos8, to be -eaninful, -ust refer not onl# to thins that are

peripheral, collateral, or tanential. 2t -ust touch and affect the ver# 8heart of the e/istin order.8 2n the field of public biddin in the

ac$uisition of thins that pertain to the national patri-on#, preference to $ualified ;ilipinos -ust allo* a $ualified ;ilipino to -atch or

e$ual the hiher bid of a non;ilipinoF the preference shall not operate onl# *hen the bids of the $ualified ;ilipino and the non;ilipino

are e$ual in *hich case, the a*ard should undisputedl# be -ade to the $ualified ;ilipino. The Constitutional preference should ive the

$ualified ;ilipino an opportunit# to -atch or e$ual the hiher bid of the non;ilipino bidder if the preference of the $ualified ;ilipino bidder

is to be sinificant at all.


9/39

2t is true that in this present ae of lobali3ation of attitude to*ards forein invest-ents in our countr#, stress is on the eli-ination of

barriers to forein trade and invest-ent in the countr#. hile overn-ent aencies, includin the courts should recondition their

thin"in to such a trend, and -a"e it eas# and even attractive for forein investors to co-e to our shores, #et *e should not preclude

ourselves fro- reservin to us ;ilipinos certain areas *here our national identit#, culture and heritae are involved. 2n the hotel industr#,

for instance, forein investors have established the-selves creditabl#, such as in the hanria, the Ni""o, the Peninsula, and

Mandarin 'otels. This should not stop us fro- retainin %1& of the capital stoc" of the Manila 'otel Corporation in the hands of

;ilipinos. This *ould be in "eepin *ith the intent of the ;ilipino people to preserve our national patri-on#, includin our historical and

cultural heritae in the hands of ;ilipinos.

"ITUG, J., concurrin:

2 aree *ith Mr. Iustice Iosue N. Bellosillo on his clearcut state-ents, shared b# Mr. Iustice Re#nato . Puno in a *ell *ritten separate

(dissentin) opinion, that:

First, the provision in our funda-ental la* *hich provides that 8(2)n the rant of rihts, privilees, and concessions coverin the national

econo-# and patri-on#, the tate shall ive preference to $ualified ;ilipinos8 1is selfe/ecutor#. The provision veril# does

not need, althouh it can obviousl# be a-plified or reulated b#, an enablin la* or a set of rules.

Second, the ter- 8patri-on#8 does not -erel# refer to the countr#Gs natural resources but also to its cultural heritae. A 8historical

land-ar",8 to use the *ords of Mr. Iustice Iusto P. Torres, Ir., Manila 'otel has no* indeed beco-e part of Philippine heritae.

&hird, the act of the 0overn-ent ervice 2nsurance #ste- (8028), a overn-ent entit# *hich derives its authorit# fro- the tate, in

sellin %1& of its share in M'C should be considered an act of the tate subHect to the Constitutional -andate.

+n the pivotal issue of the deree of 8preference to $ualified ;ilipinos,8 2 find it so-e*hat difficult to ta"e the sa-e path traversed b# the

forceful reasonin of Iustice Puno. 2n the particular case before us, the onl# -eaninful preference, it see-s, *ould reall# be to allo*

the $ualified ;ilipino to -atch the forein bid for, as a particular -atter, 2 cannot see an# bid that literall# calls for -illions of dollars to be

at par (to the last cent) *ith another. The -anitude of the -anitude of the bids is such that it beco-es hardl# possible for the

co-petin bids to stand e/actl# 8e$ual8 *hich alone, under the dissentin vie*, could trier the riht of preference.

2t is -ost unfortunate that Renon Berhad has not been spared this reat disappoint-ent, a letdo*n that it did not deserve, b# a si-ple

and ti-el# advise of the proper rules of biddin alon *ith the peculiar constitutional i-plications of the proposed transaction. 2t is also

rerettable that the Court at ti-e is seen, to instead, be the refue for bureaucratic inade$uate *hich create the perception that it even

ta"es on nonHusticiable controversies.

All told, 2 a- constrained to vote for rantin the petition.

MEN0O$A, J., concurrin in the Hud-ent:

2 ta"e the vie* that in the conte/t of the present controvers# the onl# *a# to enforce the constitutional -andate that 8in the rant of

rihts, privilees and concessions coverin the national patri-on# the tate shall ive preference to $ualified ;ilipinos8 1is to allo*

petitioner Philippine corporation to e$ual the bid of the Mala#sian fir- Renon Berhad for the purchase of the

controllin shares of stoc"s in the Manila 'otel Corporation. 2ndeed, it is the onl# *a# a $ualified ;ilipino of

Philippine corporation can be ivenpreferencein the enHo#-ent of a riht, privilee or concession iven b#

the tate, b# favorin it over a forein national corporation.

?nder the rules on public biddin of the 0overn-ent ervice and 2nsurance #ste-, if petitioner and the Mala#sian fir- had offered the

sa-e price per share, 8priorit# *ould be iven to the bidder see"in the larer o*nership interest in M'C,8 2so that petitioner bid

for -ore shares, it *ould be preferred to the Mala#sian corporation for that reason and not because it is a

Philippine corporation. Conse$uentl#, it is onl# in cases li"e the present one, *here an alien corporation is

the hihest bidder, that preferential treat-ent of the Philippine corporation is -andated not b# declarin it

*inner but b# allo*in it 8to -atch the hihest bid in ter-s of price per share8 before it is a*arded the shares

of stoc"s.3That, to -e, is *hat 8preference to $ualified ;ilipinos8 -eans in the conte/t of this case = b#

favorin ;ilipinos *henever the# are at a disadvantae vis(a(visforeiners.

This *as the -eanin iven in .o .hiong v. .uaderno(to a 19

lease of public -ar"et stalls.85This Court upheld the cancellation of e/istin leases coverin -ar"et stalls

occupied b# persons *ho *ere not ;ilipinos and the a*ard thereafter of the stalls to $ualified ;ilipino

vendors as ordered b# the 5epart-ent of ;inance. i-ilarl#, in ?da. de Salgado v. =e la Fuente,6this Court

sustained the validit# of a -unicipal ordinance passed pursuant to the statute (R.A. No. 7!), ter-inatin

e/istin leases of public -ar"et stalls and rantin preference to ;ilipino citi3ens in the issuance of ne*

licenses for the occupanc# of the stalls. 2n .hua @ao v. #aymundo,7the preference ranted under the statute

*as held to appl# to cases in *hich ;ilipino vendors souht the sa-e stalls occupied b# alien vendors in the

public -ar"ets even if there *ere available other stalls as ood as those occupied b# aliens. 8The la*,

apparentl#, is applicable *henever there is a conflict of interest bet*een ;ilipino applicants and aliens for


10/39

lease of stalls in public -ar"ets, in *hich situation the riht to preference i--ediatel# arises.8)

+ur leislation on the -atter thus antedated b# a $uarter of a centur# efforts bean onl# in the 19!4s in A-erica to reali3e the pro-ise

of e$ualit#, throuh affir-ative action and reverse discri-ination prora-s desined to re-ed# past discri-ination aainst colored

people in such areas as e-plo#-ent, contractin and licensin.92ndeed, in vital areas of our national econo-#, there are

situations in *hich the onl# *a# to place ;ilipinos in control of the national econo-# as conte-plated in the

Constitution 1*is to ive the- preferential treat-ent *here the# can at least stand on e$ual footin *ith

aliens.There need be no fear that thus preferrin ;ilipinos *ould either invite forein retaliation or deprive the countr# of the benefit of forein

capital or "no*ho*. e are dealin here not *ith co--on trades of co--on -eans of livelihood *hich are open to aliens in our

-idst, 11but *ith the sale of overn-ent propert#, *hich is li"e the rant of overn-ent laress of benefits

and concessions coverin the national econo-#8 and therefore no one should berude us if *e ive

preferential treat-ent to our citi3ens. That at an# rate is the co--and of the Constitution. ;or the Manila

'otel is a business o*ned b# the 0overn-ent. 2t is bein privati3ed. Privati3ation should result in the

relin$uish-ent of the business in favor of private individuals and roups *ho are ;ilipino citi3ens, not in favor

of aliens.

Nor should there be an# doubt that b# a*ardin the shares of stoc"s to petitioner *e *ould be tradin co-petence and capabilit# for

nationalis-. Both petitioner and the Mala#sian fir- are $ualified, havin hurdled the pre$ualification process. 122t is onl# the result

of the public biddin that is souht to be -odified b# enablin petitioner to up its bid to e$ual the hihest bid.

Nor, finall#, is there an# basis for the suestion that to allo* a ;ilipino bidder to -atch the hihest bid of an alien could encourae

speculation, since all that a ;ilipino entit# *ould then do *ould be not to -a"e a bid or -a"e onl# a to"en one and, after it is "no*n that

a forein bidder has sub-itted the hihest bid, -a"e an offer -atchin that of the forein fir-. This is not possible under the rules on

public biddin of the 02. ?nder these rules there is a -ini-u- bid re$uired (P76.! per share for a rane of 9 to 1% -illion

shares). 13Bids belo* the -ini-u- *ill not be considered. +n the other hand, if the ;ilipino entit#, after

passin the pre$ualification process, does not sub-it a bid, he *ill not be allo*ed to -atch the hihest bid of

the forein fir- because this is a privilee allo*ed onl# to those *ho have 8validl# sub-itted bids.8 1(The

suestion is, to sa# the least, fanciful and has no basis in fact.

;or the foreoin reasons, 2 vote to rant the petition.

TORRES, R., J., separate opinion:

Constanc# in la* is not an attribute of a Hudicious -ind. 2 sa# this as *e are not confronted in the case at bar *ith leal and

constitutional issues = and #et 2 a- driven so to spea" on the side of histor#. The reason perhaps is due to the belief that in the *ords

of Iustice +liver endell 'ol-es, Ir., a 8pae of histor# is *orth a volu-e of loic.8

2 *ill, ho*ever, atte-pt to share -# thouhts on *hether the Manila 'otel has a historical and cultural aspect *ithin the -eanin of the

constitution and thus, for-in part of the 8patri-on# of the nation8.

ection 14, Article >22 of the 19! Constitution provides:

/// /// ///

2n the rant of rihts, privilees, and concessions coverin the national econo-# and patri-on#, the tate shall ive

preference to $ualified ;ilipinos.

The tate shall reulate and e/ercise authorit# over forein invest-ents *ithin i ts national oals and priorities.

The foreoin provisions should be read in conHunction *ith Article 22 of the sa-e Constitution pertainin to 85eclaration of Principles

and tate Policies8 *hich ordain =

The tate shall develop a selfreliant and independent national econo-# effectivel# b# ;ilipinos. (ec. 19).

2nterestinl#, the -atter of ivin preference to 8$ualified ;ilipinos8 *as one of the hihlihts in the 19! Constitution Co--ission

proceedins thus:

/// /// ///

MR. N+E5+. The A-end-ent *ill read: 82N T'E 0RANT +; R20'T,

PR2J2E0E AN5 C+NCE2+N C+JER2N0 T'E NAT2+NA

EC+N+M@ AN5 PATR2M+N@, T'E TATE 'A 02JE PRE;ERENCE

T+ ?A2;2E5 ;22P2N+8. And the *ord 8;ilipinos8 here, as intended b#

the proponents, *ill include not onl# individual ;ilipinos but also ;ilipinoControlled entities full# controlled b# ;ilipinos (Jol. 222, Records of the

Constitutional Co--ission, p. 64).

MR. M+N+5. e also *anted to add, as Co--issioner Jilleas said, this


11/39

co--ittee and this bod# alread# approved *hat is "no*n as the ;ilipino

;irst polic# *hich *as suested b# Co--issioner de Castro. o that it is

no* in our Constitution (Jol. 2J, Records of the Constitutional Co--ission,

p. %).

Co--issioner Iose Nolledo e/plainin the provision adverted to above, said:

MR. N+E5+. 2n the rant of rihts, privilees and concessions coverin

the national econo-# and patri-on#, the tate shall ive preference to

$ualified ;ilipinos.

MR. ;+L. 2n connection *ith that a-end-ent, if a forein enterprise is

$ualified and the ;ilipinos enterprise is also $ualified, *ill the ;ilipino

enterprise still be iven a preferenceK

MR. N+E5+. +bviousl#.

MR. ;+L. 2f the foreiner is -ore $ualified in so-e aspects than the ;ilipino

enterprise, *ill the ;ilipino still be preferred:K

MR. N+E5+. The ans*er is 8#es8. (Jol. 222, p. 616, Records of the

Constitutional Co--ission).

The nationalistic provisions of the 19! Constitution reflect the histor# and spirit of the Malolos Constitution of 19, the 197%

Constitution and the 19!7 Constitutions. That *e have no reneed on this nationalist polic# is articulated in one of the earliest case, this

Court said =

The nationalistic tendenc# is -anifested in various provisions of the Constitution. . . . 2t cannot therefore be said that

a la* i-bued *ith the sa-e purpose and spirit underl#in -an# of the provisions of the Constitution is

unreasonable, invalid or unconstitutional (2chon, et al. vs. 'ernande3, et al., 141 Phil. 11%%).

2 subscribe to the vie* that histor#, culture, heritae, and traditions are not leislated and is the product of events, custo-s, usaes and

practices. 2t is actuall# a product of ro*th and acceptance b# the collective moresof a race. 2t is the spiri t and soul of a people.

The Manila 'otel is part of our histor#, culture and heritae. Ever# inch of the Manila 'otel is *itness to historic events (too nu-erous to

-ention) *hich shaped our histor# for al-ost < #ears.

As 2 inti-ated earlier, it is not -# position in this opinion, to e/a-ine the sinle instances of the leal larese *hich have iven r ise to

this controvers#. As 2 believe that has been e/haustivel# discussed in the ponencia. uffice it to sa# at this point that the histor# of the

Manila 'otel should not be placed in the auction bloc" of a purel# business transaction, *here profits subverts the cherished historical

values of our people.

As a historical land-ar" in this 8Pearl of the +rient eas8, it has its enviable tradition *hich, in the *ords of the philosopher alvador de

Madarriaa tradition is 8-ore of a river than a stone, it "eeps flo*in, and one -ust vie* the flo*in , and one -ust vie* the flo* of

both directions. 2f #ou loo" to*ards the hill fro- *hich the river flo*s, #ou see tradition in the for- of forceful currents that push the river

or people to*ards the future, and if #ou loo" the other *a#, #ou proress.8

2ndeed, tradition and proress are the sa-e, for proress depends on the "ind of tradition. et us not Hettison the tradition of the Manila

'otel and thereb# repeat our colonial histor#.

2 rant, of course the -en of the la* can see the sa-e subHect in different lihts.

2 re-e-ber, ho*ever, a panish proverb *hich sa#s = 8'e is al*a#s riht *ho suspects that he -a"es -ista"es8. +n this note, 2 sa#

that if 2 have to -a"e a -ista"e, 2 *ould rather err upholdin the belief that the ;ilipino be first under his Constitution and in his o*n

land.

2 vote 0RANT the petition.

PUNO, J., dissentin:

This is a. petition for prohibition and mandamus filed b# the Manila Prince 'otel Corporation, a do-estic corporation, to stop the

0overn-ent ervice 2nsurance #ste- (02) fro- sellin the controllin shares of the Manila 'otel Corporation to a forein

corporation. Alleedl#, the sale violates the second pararaph of section 14, Article >22 of the Constitution.

Respondent 02 is a overn-ento*ned and controlled corporation. 2t is the sole o*ner of the Manila 'otel *hich it operates throuh

its subsidiar#, the Manila 'otel Corporation. Manila 'otel *as included in the privati3ation prora- of the overn-ent. 2n 199%, 02

proposed to sell to interested bu#ers 74& to %1& of its shares, ranin fro- 9,444,444 to 1%,744,444 shares, in the Manila 'otel

Corporation. After the absence of bids at the first public biddin, the bloc" of shares offered for sale *as increased fro- a -a/i-u- of

74& to %1&. Also, the *innin bidder, or the eventual 8strateic partner8 of the 02 *as re$uired to 8provide -anae-ent e/pertise

andor an international -ar"etinreservation s#ste-, and financial support to strenthen the profitabilit# and perfor-ance of the Manila

'otel81The proposal *as approved b# respondent Co--ittee on Privati3ation.

2n Iul# 199%, a conference *as held *here pre$ualification docu-ents and the biddin rules *ere furnished interested parties.


12/39

Petitioner Manila Prince 'otel, a do-estic corporation, and Renon Berhad, Mala#sian fir- *ith 2TT heraton as operator,

pre$ualified.2

The biddin rules and procedures entitled 80uidelines and Procedures: econd Pre$ualification and Public Biddin of the M'C

Privati3ation8 provide:

2 2NTR+5?CT2+N AN5 '20'20'T

5ETERM2N2N0 T'E 2NN2N0 B255ERTRATE02C PARTNER

The part# that acco-plishes the steps set forth belo* *ill be declared the innin Biddertrateic Partner and *ill

be a*arded the Bloc" of hares:

;irst = Pass the pre$ualification processF

econd = ub-it the hihest bid on aprice per share basis for the Bloc" of haresF

Third = Neotiate and e/ecute the necessar# contracts *ith 02M'C not later than +ctober 7, 199%F

/// /// ///

2J 0?25E2NE ;+R PRE?A2;2CAT2+N

A. PART2E '+ MAP APP@ ;+R PRE?A2;2CAT2+N

The innin Biddertrateic Partner *ill be e/pected to provide -anae-ent e/pertise andor

an international -ar"etin reservation s#ste-, and financial support to strenthen the

profitabilit# and perfor-ance of The Manila 'otel. 2n this conte/t, the 02 is invitin to the

pre$ualification process an# local andor forein corporation, consortiu-Hoint venture or Huridical

entit# *ith at least one of the follo*in $ualifications:

a. Proven -anae-ent .e/pertise in the hotel industr#F or

b. inificant e$uit# o*nership ( i.e. board representation) in another hotel

co-pan#F or

c. +verall -anae-ent and -ar"etin e/pertise to successfull# operate the

Manila 'otel.

Parties interested in biddin for M'C should be able to provide access to the re$uisite

-anae-ent e/pertise andor international -ar"etinreservation s#ste- for The Manila 'otel.

/// /// ///

5. PRE?A2;2CAT2+N 5+C?MENT

/// /// ///

E. APP2CAT2+N PR+CE5?RE

1. =.3M$A&S ?I@!@$ & &$ #$"IS&IA FFI.$

The pre$ualification docu-ents can be secured at the Reistration +ffice bet*een 9:44 AM to


13/39

1. The Applicant *ill be evaluated b# the PBAC *ith the assistance of the

TEC based on the 2nfor-ation Pac"ae and other infor-ation available to

the PBAC.

. 2f the Applicant is a Consortiu-Ioint Jenture, the evaluation *ill consider

the overall $ualifications of the roup, ta"in into account the contribution of

each -e-ber to the venture.

7. The decision of the PBAC *ith respect to the results of the PBAC

evaluation *ill be final.


14/39

separate envelop -ar"ed 8?PP+RT2N0 5+C?MENT8:

1. B#I&&$A 3I&C & !I= )3A=$# &*.

2f the ualified Bidder is a corporation, the representative of the ualified Bidder should sub-it

a Board resolution *hich ade$uatel# authori3es such representative to bid for and in behalf of

the corporation *ith full authorit# to perfor- such acts necessar# or re$uisite to bind the

ualified Bidder.

2f the ualified Bidder is a Consortiu-Ioint Jenture, each -e-ber of the Consortiu-Iointventure should sub-it a Board resolution authori3in one of its -e-bers and such -e-berGs

representative to -a"e the bid on behalf of the roup *ith full authorit# to perfor- such acts

necessar# or re$uisite to bind the ualified Bidder.

. !I= S$.3#I&C

a. The ualified Bidder should deposit Thirt#Three Million Pesos (P77,444,44), in Philippine

currenc# as Bid ecurit# in the for- of:

i. ManaerGs chec" or unconditional de-and draft pa#able to the

80overn-ent ervice 2nsurance #ste-8 and issued b# a reputable ban"in

institution dul# licensed to do business in the Philippines and acceptable to

02F or

ii. tandb#b# letter of credit issued b# a reputable ban"in institution

acceptable to the 02.

b. The 02 *ill reHect a bid i f:

i. The bid does not have Bid ecurit#F or

ii. The Bid ecurit# acco-pan#in the bid is for less than the re$uired

a-ount.

c. 2f the Bid ecurit# is in the for- of a -anaerGs chec" or unconditional de-and draft, the

interest earned on the Bid ecurit# *ill be for the account of 02.

d. 2f the ualified Bidder beco-es the *innin Biddertrateic Partner, the Bid ecurit# *ill be

applied as the do*npa#-ent on the ualified BidderGs offered purchase price.

e. The Bid ecurit# of the ualified Bidder *ill be returned i--ediatel# after the Public Biddin

if the ualified Bidder is not declared the 'ihest Bidder.

f. The Bid ecurit# *ill be returned b# +ctober 7, 199% if the 'ihest Bidder is unable to

neotiate and e/ecute *ith 02M'C the Manae-ent Contract, 2nternational

Mar"etinReservation #ste- Contract or other t#pes of contract specified b# the 'ihest

Bidder in its strateic plan for The Manila 'otel.

. The Bid ecurit# of the 'ihest Bidder *ill be forfeited in favor of 02 if the 'ihest Bidder,

after neotiatin and e/ecutin the Manae-ent Contract, 2nternational Mar"etinReservation

#ste- Contract specified b# the 'ihest Bidder or other t#pes of contract in its strateic plan

for The Manila 'otel, fails or refuses to:

i. E/ecute the toc" Purchase and ale Aree-ent *ith 02 not later than

+ctober 7, 199%F or

ii. Pa# the full a-ount of the offered purchase price not later than +ctober7, 199%F or

iii. Consu--ate the sale of the Bloc" of hares for an# other reason.

0. ?BM22+N +; B25

1. The Public Biddin *ill be held on epte-ber !, 199% at the follo*in location:

Ne* 02 'ead$uarters Buildin

;inancial Center, Recla-ation Area

Ro/as Boulevard, Pasa# Cit#, Metro Manila.

. The ecretariat of the PBAC *ill be stationed at the Public Biddin to accept an# and all bids

and supportin re$uire-ents. Representatives fro- the Co--ission on Audit and C+P *ill be

invited to *itness the proceedins.

7. The ualified Bidder should sub-it its bid usin the +fficial Bid ;or-. The acco-plished

+fficial Bid ;or- should be sub-itted in a sealed envelope -ar"ed 8+;;2C2A B25.8


15/39

-ar"ed 8?PP+RT2N0 B25 5+C?MENT8

a. ritten Authorit# Bid

b. Bid ecurit#

%. The t*o sealed envelopes -ar"ed 8+;;2C2A B258 and 8?PP+RT2N0 B25 5+C?MENT8

-ust be sub-itted si-ultaneousl# to the ecretariat bet*een 9:44 AM and :44 PM, Philippine

tandard Ti-e, on the date of the Public Biddin. No bid shall be accepted after the closin

ti-e. +pened or ta-pered bids shall not be accepted.

6. The ecretariat *ill lo and record the actual ti-e of sub-ission of the t*o sealed envelopes.

The actual ti-e of sub-ission *ill also be indicated b# the ecretariat on the face of the t*o

envelopes.

!. After tep No. 6, the t*o sealed envelopes *ill be dropped in the correspondin bid bo/es

provided for the purpose. These bo/es *ill be in full v ie* of the invited public.

'. +PEN2N0 AN5 REA52N0 +; B25

1. After the closin ti-e of :44 PM on the date of the Public Biddin, the PBAC *ill open all

sealed envelopes -ar"ed 8?PP+RT2N0 B25 5+C?MENT8 for screenin, evaluation and

acceptance. Those *ho sub-itted inco-pleteinsufficient docu-ents or docu-ents *hich

isare not substantiall# in the for- re$uired b# PBAC *ill be dis$ualified. The envelope

containin their +fficial Bid ;or- *ill be i--ediatel# returned to the dis$ualified bidders.

. The sealed envelopes -ar"ed 8+;;2C2A B258 *ill be opened at 7:44 PM. The na-e of the

bidder and the a-ount of its bid price *ill be read publicl# as the envelopes are opened.

7. 2--ediatel# follo*in the readin of the bids, the PBAC *ill for-all# announce the hihest

bid and the 'ihest Bidder.


16/39

Public Biddin.

A ualified Bidder envisionin a Manae-ent Contract for The Manila 'otel should deter-ine

*hether or not the -anae-ent fee structure above is acceptable before sub-ittin their

pre$ualification docu-ents to 02.

I. B+CD AE T+ T'E +T'ER ?A2;2E5 B255ER

1. 2f for an# reason, the 'ihest Bidder cannot be a*arded the Bloc" of hares, 02 -a# offer

this to the other ualified Bidders that have validl# sub-itted bids provided that these ualifiedare *illin to -atch the hihest bid in ter-s of price per share.

. The order of priorit# a-on the interested ualified Bidders *ill be in accordance *it the

e$uivalentprice per shareof their respective bids in their public Biddin, i.e., first and second

priorit# *ill be iven to the ualified Bidders that sub-itted the second and third hihest bids on

theprice per sharebasis, respectivel#, and so on.

D. 5ECARAT2+N +; T'E 2NN2N0 B255ERTRATE02C PARTNER

The 'ihest Bidder *ill be declared the innin Biddertrateic Partner after the follo*in

conditions are -et:

a. E/ecution of the necessar# contract *ith 02M'C not later than

+ctober 7, 199%F and

b. Re$uisite approvals fro- the 02M'C and C+P+0CC are obtained.

2. ;? PA@MENT ;+R T'E B+CD +; 'ARE

1. ?pon e/ecution of the necessar# contracts *ith 02M'C, the innin Biddertrateic

Partner -ust full# pa#, not later than +ctober 7, 199%, the offered purchase price for the Bloc"

of hares after deductin the Bid ecurit# applied as do*npa#-ent.

. All pa#-ents should be -ade in the for- of a ManaerGs Chec" or unconditional 5e-and

5raft, pa#able to the 80overn-ent ervice 2nsurance #ste-,8 issued b# a reputable ban"in

institution licensed to do business in the Phil ippines and acceptable to 02.

M. 0ENERA C+N52T2+N

1. The 02 unconditionall# reserves the riht to reHect an# or all applications, *aive an#

for-alit# therein, or accept such application as -a#be considered -ost advantaeous to the

02. The 02 si-ilarl# reserves the riht to re$uire the sub-ission of an# additional

infor-ation fro- the Applicant as the PBAC -a# dee- necessar#.

. The 02 further reserves the riht to call off the Public Biddin prior to acceptance of the

bids and call for a ne* public biddin under a-ended rules, and *ithout an# liabilit# *hatsoever

to an# or all the ualified Bidders, e/cept the obliation to return the Bid ecurit#.

7. The 02 reserves the riht to reset the date of the pre$ualificationbiddin conference, the

deadline for the sub-ission of the pre$ualification docu-ents, the date of the Public Biddin or

other pertinent activities at least three (7) calendar da#s prior to the respective deadlinestaret

dates.


17/39

'ence, petitioner filed the present petition. e issued a te-porar# restrainin order on +ctober 1, 199%.

Petitioner anchors its plea on the second pararaph of Article >22, ection 14 of the Constitution (on the 8National Econo-# and

Patri-on#8 *hich provides:

/// /// ///

2n the rant of rihts, privilees, and concessions coverin the national econo-# and patri-on#, the tate shall ive

preference to $ualified ;ilipinos.

/// /// ///

The vital issues can be su--ed up as follo*s:

(1) hether section 14, pararaph of Article >22 of the Constitution is a selfe/ecutin provision and does not need

i-ple-entin leislation to carr# it into effectF

() Assu-in section 14 pararaph of Article >22 is selfe/ecutin *hether the controllin shares of the Manila

'otel Corporation for- part of our patri-on# as a nationF

(7) hether 02 is included in the ter- 8tate,8 hence, -andated to i-ple-ent section 14, pararaph of Article

>22 of the ConstitutionF

(2J on 8Education

cience and Technolo#, Arts, Culture end ports8 22cannot be the basis of Hudiciall# enforceable rihts.

Their enforce-ent is addressed to the discretion of Conress thouh the# provide the fra-e*or" for

leislation 23to effectuate their polic# content. 2(

0uided b# this -ap of settled Hurisprudence, *e no* consider *hether ection 14, Article >22 of the 19! Constitution is selfe/ecutin

or not. 2t reads:

ec. 14. The Conress shall, upon reco--endation of the econo-ic and plannin aenc#, *hen the national

interest dictates, reserve to citi3ens of the Philippines or to corporations or associations at least si/t# per centumof

*hose capital is o*ned b# such citi3ens, or such hiher percentae as Conress -a# prescribe, certain areas of


18/39


19/39

it fro- our national patri-on#. Republic Act No.


20/39

>22 of the Constitution is proPilipino but not antialien. 2t is pro;ilipino for it ives preference to ;ilipinos. 2t is not, ho*ever, anti

alienper se for it does not absolutel# bar aliens in the rant of rihts, privilees and concessions coverin the national econo-# and

patri-on#. 2ndeed, in the absence of $ualified ;il ipinos, the tate is not prohibited fro- rantin these rihts, privilees and concessions

to foreiners if the act *ill pro-ote the *eal of the nation.

2n i-ple-entin the polic# articulated in section 14, Article >22 of the Constitution, the stellar tas" of our tate polic#-a"ers is to

-aintain a creative tension bet*een t*o desiderata = first, the need to develop our econo-# and patri-on# *ith the help of foreiners

if necessar#, and, second, the need to "eep our econo-# controlled b# ;ilipinos. Rihtfull#, the fra-ers of the Constitution did not define

the deree of the riht of preference to be iven to $ualified ;ilipinos. The# "ne* that for the riht to serve the eneral *elfare, it -usthave a -alleable content that can be adHusted b# our polic#-a"ers to -eet the chanin needs of our people. 2n fine, the riht of

preference of $ualified ;ilipinos is to be deter-ined b# deree as ti-e dictates and circu-stances *arrant. The lesser the need for alien

assistance, the reater the deree of the riht of preference can be iven to ;ilip inos and vice verse.

Aain, it should be stressed that the riht and the dut# to deter-ine the deree of this privilee at an# iven ti-e is addressed to the

entire tate. hile under our constitutional sche-e, the riht pri-aril# belons to Conress as the la*-a"in depart-ent of our

overn-ent, other branches of overn-ent, and all their aencies and instru-entalities, share the po*er to enforce this state polic#.

ithin the li-its of their authorit#, the# can act or pro-ulate rules and reulations definin the deree of this riht of preference in

cases *here the# have to -a"e rants involvin the national econo-# and Hudicial dut#. +n the other hand, our dut# is to stri"e do*n

acts of the state that violate the polic#.

To date, Conress has not enacted a la* definin the deree of the preferential riht. Conse$uentl#, *e -ust turn to the rules and

reulations of on respondents Co--ittee Privati3ation and 02 to deter-ine the deree of preference that petitioner is entitled to as a

$ualified ;ilipino in the subHect sale. A tearless loo" at the rules and reulations *ill sho* that the# are silent on the deree of

preferential riht to be accorded $ualified ;ilipino bidder. 5espite their silence, ho*ever, the# cannot be read to -ean that the# do not

rant an# deree of preference to petitioner for pararaph , section 14, Article >22 of the Constitution is dee-ed part of said rules and

reulations. Pursuant to leal her-eneutics *hich de-and that *e interpret rules to save the- fro- unconstitutionalit#, 2 sub-it that the

riht of preference of petitioner arises onl# if it tied the bid of Benon Berhad. 2n that instance, all thins stand e$ual, and bidder, as a

$ualified Pilipino bidder, should be preferred.

2t is *ith deep reret that 2 cannot subscribe to the vie* that petitioner has a riht to -atch the bid of Renon Berhad. PetitionerGs

sub-ission -ust be supported b# the rules but even if *e e/a-ine the rules insideout .thousand ti-es, the# can not Hustif# the clai-ed

riht. ?nder the rules, the riht to -atch the hihest bid arises onl# 8if for an# reason, the hihest bidder cannot be a*arded bloc" of

shares . . .8 No reason has arisen that *ill prevent the a*ard to Renon Berhad. 2t $ualified as bidder. 2t co-plied *ith the procedure of

biddin. 2t tendered the hihest bid. 2t *as declared as the hihest bidder b# the 02 and the rules sa# this decision is final. 2t deserves

the a*ard as a -atter of riht for the rules clearl# did not ive to the petitioner as a $ualified ;ilipino privilee to -atch the hiher bid of

a foreiner. hat the rules did not rant, petitioner cannot de-and. +ur s#-phaties -a# be *ith petitioner but the court has no po*er to

e/tend the latitude and lontitude of the riht of preference as defined b# the rules. The para-eters of the riht of preference depend on

ala/# of facts and factors *hose deter-ination belons to the province of the polic#-a"in branches and aencies of the tate. e

are dut#bound to respect that deter-ination even if *e differ *ith the *isdo- of their Hud-ent. The riht the# rant -a# be little but *e

-ust uphold the rant for as lon as the riht of preference is not denied. 2t is onl# *hen a tate action a-ounts to a denial of the riht

that the Court can co-e in and stri"e do*n the denial as unconstitutional.

;inall#, 2 sub-it that petitioner is estopped fro- assailin the *innin bid of Renon Berhad. Petitioner *as a*are of the rules and

reulations of the biddin. 2t "ne* that the rules and reulations do not provide that a $ualified ;ilipino bidder can -atch the *innin bid

sub-ittin an inferior bid. 2t "ne* that the bid *as open to foreiners and that foreiners $ualified even durin the first biddin. Petitioner

cannot be allo*ed to repudiate the rules *hich it areed to respect. 2t cannot be allo*ed to obe# the rules *hen it *ins and disreard

the- *hen it loses. 2f sustained, petitionersG stance *ill *rea" havoc on he essence of biddin. +ur la*s, rules and reulations re$uire

hihest biddin to raise as -uch funds as possible for the overn-ent to -a/i-i3e its capacit# to deliver essential services to our

people. This is a dut# that -ust be dischared b# ;ilipinos and foreiners participatin in a biddin contest and the rules are carefull#

*ritten to attain this obHective. A-on others, bidders are pre$ualified to insure their financial capabilit#. The biddin is secret and the

bids are sealed to prevent collusion a-on the parties. This obHective *ill be under-ined if *e rant petitioner that privilee to "no* the

*innin bid and a chance to -atch it. ;or plainl#, a second chance to bid *ill encourae a bidder not to strive to ive the hihest bid in

the first biddin.

e support the ;ilipino ;irst polic# *ithout an# reservation. The visionar# nationalist 5on Claro M. Recto has *arned us that the

reatest traed# that can befall a ;ilipino is to be an alien in his o*n land. The Constitution has e-bodied RectoGs counsel as a state

polic#. But *hile the ;ilipino ;irst polic# re$uires that *e incline to a ;ilipino, it does not de-and that *e *ron an alien. +ur polic#

-a"ers can *rite la*s and rules ivin favored treat-ent to the ;ilipino but *e are not free to be unfair to a foreiner after *ritin the

la*s and the rules. After the la*s are *ritten, the# -ust be obe#ed as *ritten, b# ;ilipinos and foreiners ali"e. The e$ual protection

clause of the Constitution protects all aainst unfairness. e can be pro;ilipino *ithout unfairness to foreiner.

2 vote to dis-iss the petition.

Aarvasa, .+>+, and Melo, >+, concur+

PANGANI'AN, J., dissentin:

2 reret 2 cannot Hoin the -aHorit#. To the incisive 5issentin +pinion of Mr. Iustice Re#nato . Puno, -a# 2 Hust add


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1. The -aHorit# contends the Constitution should be interpreted to -ean that, after a biddin process is concluded, the losin ;ilipino

bidder should be iven the riht to e$ual the hihest forein bid, and thus to *in. 'o*ever, the Constitution ec. 14 (), Art. >22 si-pl#

states that 8in the rant of rihts . . . coverin the national econo-# and patri-on#, the tate shall ive preference to $ualified ;ilipinos.8

The -aHorit# concedes that there is no la* defining the extent or degreeof such preference. Specifically, no statute empo%ers a losing

Filipino bidder to increase his bid and equal that of the %inning foreigner. 2n the absence of such e-po*erin la*, the -aHorit#Gs strained

interpretation, 2 respectfull# sub-it constitutes unadulterated4udicial legislation, %hich makes bidding a ridiculous sham %here no

Filipino can lose and %here no foreigner can %in . +nl# in the PhilippinesO.

. Aside fro- bein prohibited b# the Constitution, such Hudicial is shortsihted and, vie*ed properl#, ravel# preHudicial to lonter-;ilipino interest. 2t encouraes other countries = in the uise of reverse co-it# or *orse, unabashed retaliation = to discri-inate

aainst us in their o*n Hurisdictions b# authori3in their o*n nationals to si-ilarl# e$ual and defeat the hiher bids of ;ilipino enterprises

solel#, *hile on the other hand, allo*in si-ilar bids of other foreiners to re-ain unchallened b# their nationals. &he ma4ority9s thesis

%ill thus marginaliDe Filipinos as pariahs in the global marketplace %ith absolute no chance of %inning any bidding outside our country .

Even authoritarian rei-es and her-it "indo-s have lon ao found out unfairness, reed and isolation are selfdefeatin and in the

lonter-, selfdestructin.

The -oral lesson here is si-ple: 5o not do unto other *hat #ou dont *ant other to do unto #ou.

7. 2n the absence of a la* specif#in the deree or e/tent of the 8;ilipino ;irst8 polic# of the Constitution, the constitutional preference

for the 8$ualified ;ilipinos8 -a# be allo*ed onl# *here all the bids are e$ual. 2n this -anner, *e put the ;ilipino ahead *ithout self

destructin hi- and *ithout bein unfair to the foreiner.

2n short, the Constitution -andates a victor# for the $ualified ;ilipino onl# *hen the scores are tied. But not *hen the balla-e is over

and the foreiner clearl# posted the hihest score.

Seara-e O%o%/

PA0IA, J., concurrin:

2 concur *ith theponencia of Mr. Iustice Bellosillo. At the sa-e ti-e, 2 *ould li"e to e/pound a bit -ore on the concept of national

patri-on# as includin *ithin its scope and -eanin institutions such as the Manila 'otel.

2t is arued b# petitioner that the Manila 'otel co-es under 8national patri-on#8 over *hich $ualified ;ilipinos have the preference, in

o*nership and operation. The Constitutional provision on point states:

/// /// ///

2n the rant of rihts, privilees, and concessions coverin the national econo-# and patri-on#, the tate shall 0ive

preference to $ualified ;ilipinos.1

PetitionerGs aru-ent, 2 believe, is *ell ta"en. ?nder the 19! Constitution, 8national patri-on#8 consists of the natural resources

provided b# Al-iht# 0od (Prea-ble) in our territor# (Article 2) consistin of land, sea, and air. 2stud# of the 197% Constitution,

*here the concept of 8national patri-on#8 oriinated, *ould sho* that its fra-ers decided to adopt the even

-ore co-prehensive e/pression 8Patri-on# of the Nation8 in the belief that the phrase encircles a concept

e-bracin not onl# their natural resources of the countr# but practicall# ever#thin that belons to the

;ilipino people, the tanible and the -aterial as *ell as the intanible and the spiritual assets and

possessions of the people. 2t is to be noted that the fra-ers did not stop *ith conservation. The# "ne* that

conservation alone does not spell proressF and that this -a# be achieved onl# throuh develop-ent as a

correlative factor to assure to the people not onl# the e/clusive o*nership, but also the e/clusive benefits of

their national patri-on#).3

Moreover, the concept of national patri-on# has been vie*ed as referrin not onl# to our rich natural resources but also to the cultural

heritae of our

race.(

There is no doubt in -# -ind that the Manila 'otel is ver# -uch a part of our national patri-on# and, as such, deserves constitutional

protection as to *ho shall o*n it and benefit fro- its operation. This institution has pla#ed an i-portant role in our nationGs histor#,

havin been the venue of -an# a historical event, and servin as it did, and as it does, as the Philippine 0uest 'ouse for visitin forein

heads of state, dinitaries, celebrities, and others.5

2t is therefore our dut# to protect and preserve it for future enerations of ;ilipinos. As President Manuel . ue3on once said, *e -ust

e/ploit the natural resources of our countr#, but *e should do so *ith. an e#e to the *elfare of the future enerations. 2n other *ords, the

leaders of toda# are the trustees of the patri-on# of our race. To preserve our national patri-on# and reserve it for ;ilipinos *as the

intent of the distinuished entle-en *ho first fra-ed our Constitution. Thus, in debatin the need for nationali3ation of our lands and

natural resources, one e/pounded that *e should 8put -ore teeth into our la*s, andF not -a"e the nationali3ation of our lands and

natural resources a subHect of ordinar# leislation but of constitutional enact-ent8 6To $uote further: 8et not our children be

-ere tenants and trespassers in their o*n countr#. et us preserve and be$ueath to the- *hat is rihtfull#


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theirs, free fro- all forein liens and encu-brances8.7

No*, a *ord on preference. 2n -# vie* 8preference to $ualified ;ilipinos8, to be -eaninful, -ust refer not onl# to thins that are

peripheral, collateral, or tanential. 2t -ust touch and affect the ver# 8heart of the e/istin order.8 2n the field of public biddin in the

ac$uisition of thins that pertain to the national patri-on#, preference to $ualified ;ilipinos -ust allo* a $ualified ;ilipino to -atch or

e$ual the hiher bid of a non;ilipinoF the preference shall not operate onl# *hen the bids of the $ualified ;ilipino and the non;ilipino

are e$ual in *hich case, the a*ard should undisputedl# be -ade to the $ualified ;ilipino. The Constitutional preference should ive the

$ualified ;ilipino an opportunit# to -atch or e$ual the hiher bid of the non;ilipino bidder if the preference of the $ualified ;ilipino bidder

is to be sinificant at all.

2t is true that in this present ae of lobali3ation of attitude to*ards forein invest-ents in our countr#, stress is on the eli-ination of

barriers to forein trade and invest-ent in the countr#. hile overn-ent aencies, includin the courts should recondition their

thin"in to such a trend, and -a"e it eas# and even attractive for forein investors to co-e to our shores, #et *e should not preclude

ourselves fro- reservin to us ;ilipinos certain areas *here our national identit#, culture and heritae are involved. 2n the hotel industr#,

for instance, forein investors have established the-selves creditabl#, such as in the hanria, the Ni""o, the Peninsula, and

Mandarin 'otels. This should not stop us fro- retainin %1& of the capital stoc" of the Manila 'otel Corporation in the hands of

;ilipinos. This *ould be in "eepin *ith the intent of the ;ilipino people to preserve our national patri-on#, includin our historical and

cultural heritae in the hands of ;ilipinos.

"ITUG, J., concurrin:

2 aree *ith Mr. Iustice Iosue N. Bellosillo on his clearcut state-ents, s

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