Section 10 of Article 12

of the Philippine
Constitution

Section 10, Article 12, Philippine

Constitution

Section 10, The Congress shall, upon recommendation of the economic and planning
agency, when the national interest dictates, reserve to citizen of the Philippines or to
corporation or associations at least sixty per centum of whose Capital is owned by
such citizen, or such higher percentage as Congress may prescribe, certain areas of
investments. The Congress shall enact measures that will encourage the formation
and operation of enterprises whose capital is wholly owned by Filipinos.

In the grants of rights, privileges, and concessions covering the national economy
and patrimony, the State shall given preference to qualified Filipinos

The State

Shall regulate and exercise authority over foreign investments within its national
jurisdiction and in accordance with its national goals and priorities

Section 10, Article 12, Philippine

Constitution
National

Economy and Patrimony Plain meaning

Patrimony means Heritage refers not only to the
national resources of the Philippines but also the
Cultural Heritage (Manila Prince Hotel vs GSIS)

Qualified

Filipinos Means preference shall be given

to those citizens who can make a viable contribution
to the common good because of credible competence
and efficiency (Ibid)

Section 10, Article 12, Philippine

Constitution
Some

of the Laws, Congress has reserved certain areas of

investments to Filipino Citizens (60%) or higher percentage as
Congress has prescribed.

RA 5183 Regulation of Award of Government Contracts

Philippine Inventors incentive acts, RA 3850

Magna Carta for Micro, Small and Medium Interprise or RA 6977

Philippine Overseas Shipping Development Act or RA 7471

Domestic Shipping Development Act of 2004 or RA 9295

Philippine Technology Transfer Act of 2009 RA 10055

Ship Mortgage Decree or PD 1521

Section 10, Article 12, Philippine

Constitution

Declarations and state policies are not self

Executing and requires the legislative actions,
they must pass a policy to reserve certain areas of
investments upon recommendation of NEDA when
the national interest requires

Section 10, Article 12, Philippine

Constitution
Term Capital refers to shares of stock entitled to
vote in the election of directors, and thus refers to
common shares, and not to the total outstanding
capital stock (common and non-voting preferred
shares)
(Gamboa vs Finance Sec. Teves)

Section 10, Article 12, Philippine

Constitution
Manila Prince Hotel vs. GSIS, 1997
Facts:
GSIS want to sell its 51% stake in Manila Prince Hotel through Public Bidding, which to
provide management expertise and international marketing system and financial support to
strengthen the profitability and performance of the Manila Hotel,
Two Bidders bid for the stake, the Manila Prince Corporation and Renong Berhard a
Malaysian Firm, the later bid more than the bid of Manila Prince Corp. pending the
declaration of Renong Berhard as a winning bidder, the Manila prince hotel sent a Bid
security of P30M to match the bid made by Renong Berhard which eventually refused by
GSIS to accept, by means it refusal, the petitioner filed a case for prohibition and
mandamus to enjoin the GSIS and Renong Berhard from consummating the sale.

Section 10, Article 12, Philippine

Constitution
Manila Prince Hotel vs. GSIS, 1997
Issue raised by the petitioner.
Whether or not the Manila hotel is part of the
National Patrimony and its business is
unquestionably part of the National Economy, and
therefore the petitioner should be preferred after it
has matched the offer of the Malaysian Firm.

Section 10, Article 12, Philippine

Constitution
Manila Prince Hotel vs. GSIS, 1997
Defenses raised by GSIS and private respondent.
1)

Sec 10 of Article 12 is not self executing provision and requires

implementing legislation

2)

Granting it is Self executing, Manila Hotel does not fall under national
patrimony which refers only to land of the public domain, waters,
minerals, coal,petroleum and other mineral resources.

3)

Furtherly assuming, that is part of the national patrimony, what is

being sold is the 51% stake not the hotel building, nor the land upon
the building stand and 51% stake is not part of the national patrimony.

Section 10, Article 12, Philippine

Constitution
Manila Prince Hotel vs. GSIS, 1997
Supreme Court Decisions.
1)

The first and third paragraph(sec 10, art. 12) is not self executing, which
requires legislation to regulate and exercise authority over foreign
investments, but on the second paragraph, can only be self executing, as it
does not by its language require any legislation in order to give preference
to qualified Filipinos in the grant of rights, privilege's and concessions
covering national economy and patrimony. A constitutional provision may be
self-executing in one part and non-self-executing in another.

Likewise mandatory, positive command which is complete in itself and which

needs no further guidelines or implementing laws or rules for its enforcement.

Section 10, Article 12, Philippine

Constitution
Manila Prince Hotel vs. GSIS, 1997
Supreme Court Decisions.
2) Manila hotel has become a landmark of a living testimony of
Philippine heritage, ever since it become the venue of various
significant events which have shaped Philippine history,
it bore mute witness to the triumphs and failures, love and
frustrations of the Filipinos, it existence is impressed with public
interest its own historicity associated with our struggle for
sovereignty, independence and nationhood and it has become part
of our national economy and patrimony.

Section 10, Article 12, Philippine

Constitution
Manila Prince Hotel vs. GSIS, 1997
Supreme Court Decisions.
3) 51% of the equity of Manila hotel comprises of
majority and controlling stock, and acquires actual
control and management of staff and therefore
cannot be disassociated from the hotel and the land
on which the hotel edifice stand.

Section 10, Article 12, Philippine

Constitution
Question,
Assuming, Manila Hotel is being sold and evaluating the bids between Sha
bu corporation a 100% Filipino owned corporation and Hilton Range of Hotel
Incorporation, with the same bid but Sha bu corporation is notorious
having illegal activities and have proven irregularities in government
bidding, the GSIS sold and awarded its share of 51% to Hilton range of
Hotel considered as a Qualified foreign investor having a history of
marketing proficiency and providing valuable contribution to the society.
Whether the sale of 51% share to Paris Range of Hotel violates
constitutional provision?