Professional Documents
Culture Documents
BANC
[G.R.
No.
L-2855.
July
30,
1949.]
BORIS
MEJOFF,
petitioner,
vs.
DIRECTOR
OF
PRISONS,
respondent.
The
petitioner
in
his
own
behalf.
First
Assistant
Solicitor
General
Roberto
A.
Gianzon
and
Solicitor
Lucas
Lacson
for
respondent.
SYLLABUS
1.
ALIEN;
DEPORTATION;
HABEAS
CORPUS;
UNLESS
ALIEN
CANNOT
BE
DEPORTED
OR
IS
BEING
INDEFINITELY
IMPRISONED,
WRIT
WILL
NOT
ISSUE;
DOCTRINE
REITERATED
(BOROVSKY
vs.
COMMISSIONER
IMMIGRATION
ET
AL.,
G.R.
No.
L-2852).
Unless
it
is
shown
that
deportee
is
being
indefinitely
imprisoned
under
the
pretense
of
awaiting
a
chance
for
deportation
or
unless
the
Government
admits
that
it
can
not
deport
him
or
unless
the
detainee
is
being
held
for
too
long
a
period
our
courts
will
not
interfere.
2.
ID.;
ID.;
ID.;
DELAY
OF
TWENTY
MONTHS
IN
CARRYING
OUT
ORDER
OF
DEPORTATION
DOES
NOT
JUSTIFY
ISSUANCE
OF
WRIT.
A
delay
of
twenty
months
in
carrying
out
an
order
of
deportation
has
not
been
held
sufficient
to
justify
the
issuance
of
the
writ
of
habeas
corpus.
D
E
C
I
S
I
O
N
BENGZON,
J
p:
The
petitioner
Boris
Mejoff
is
an
alien
of
Russian
descent
who
was
brought
to
this
country
from
Shanghai
as
a
secret
operative
by
the
Japanese
forces
during
the
latter's
regime
in
these
Islands.
Upon
liberation
he
was
arrested
as
a
Japanese
spy,
by
U.
S.
Army
Counter
Intelligence
Corps.
Later
he
was
handed
to
the
Commonwealth
Government
for
disposition
in
accordance
with
Commonwealth
Act
No.
682.
Thereafter
the
People's
Court
ordered
his
release.
But
the
deportation
board
taking
his
case
up,
found
that
having
no
travel
documents
Mejoff
was
illegally
in
this
country,
and
consequently
referred
the
matter
to
the
immigration
authorities.
After
the
corresponding
investigation,
the
Board
of
Commissioners
of
Immigration
on
April
5,
1948,
declared
that
Mejoff
had
entered
the
Philippines
illegally
in
1944,
without
inspection
and
admission
by
the
immigration
officials
at
a
designated
port
of
entry
and,
therefore,
it
ordered
that
he
be
deported
on
the
first
available
transportation
to
Russia.
The
petitioner
was
then
under
custody,
he
having
been
arrested
on
March
18,
1948.
In
May,
1948,
he
was
transferred
to
the
Cebu
Provincial
Jail
together
with
three
other
Russians
to
await
the
arrival
of
some
Russian
vessels.
In
July
and
August
of
that
year
two
boats
of
Russian
nationality
called
at
the
Cebu
Port.
But
their
masters
refused
to
take
petitioner
and
his
companions
alleging
lack
of
authority
to
do
so.
In
October,
1948,
after
repeated
failures
to
ship
this
deportee
abroad,
the
authorities
removed
him
to
Bilibid
Prison
at
Muntinglupa
where
he
has
been
confined
up
to
the
present
time,
inasmuch
as
the
Commissioner
of
Immigration
believes
it
is
for
the
best
interests
of
the
country
to
keep
him
under
detention
while
arrangements
for
his
deportation
are
being
made.
It
is
contended
on
behalf
of
petitioner
that
having
been
brought
to
the
Philippines
legally
by
the
Japanese
forces,
he
may
not
now
be
deported.
It
is
enough
to
say
that
the
argument
would
deny
to
this
Government
the
power
and
the
authority
to
eject
from
the
Islands
any
and
all
of
the
members
of
the
Nipponese
Army
of
occupation
who
may
still
be
found
hiding
in
remote
places.
Which
is
absurd.
Petitioner
likewise
contends
that
he
may
not
be
deported,
because
the
statutory
period
to
do
that
under
the
laws
has
long
expired.
The
proposition
has
no
basis.
Under
section
37
of
the
Philippine
Immigration
Act
of
1940
any
alien
who
enters
this
country
"without
inspection
and
admission
by
the
immigration
authorities
at
a
designated
port
of
entry"
is
subject
to
deportation
within
five
years.
In
a
recent
decision
of
a
similar
litigation
(Borovsky
vs.
Commissioner
of
Immigration)
we
denied
the
request
for
habeas
corpus,
saying:
"It
must
be
admitted
that
temporary
detention
is
a
necessary
step
in
the
process
of
exclusion
or
expulsion
of
undesirable
aliens
and
that
pending
arrangements
for
his
deportation,
the
Government
has
the
right
to
hold
the
undesirable
alien
under
confinement
for
a
reasonable
length
of
time.
However,
under
established
precedents,
too
long
a
detention
may
justify
the
issuance
of
a
writ
of
habeas
corpus.
1
"The
meaning
of
'reasonable
time'
depends
upon
the
circumstances,
specially
the
difficulties
of
obtaining
a
passport,
the
availability
of
transportation,
the
diplomatic
arrangements
with
the
governments
concerned
and
the
efforts
displayed
to
send
the
deportee
away.
2
Considering
that
this
Government
desires
to
expel
the
alien,
and
does
not
relish
keeping
him
at
the
people's
expense,
we
must
presume
it
is
making
efforts
to
carry
out
the
decree
of
exclusion
by
the
highest
officer
of
the
land.
On
top
of
this
presumption
assurances
were
made
during
the
oral
argument
that
the
Government
is
really
trying
to
expedite
the
expulsion
of
this
petitioner.
On
the
other
hand,
the
record
fails
to
show
how
long
he
has
been
under
confinement
since
the
last
time
he
was
apprehended.
Neither
does
he
indicate
neglected
opportunities
to
send
him
abroad.
And
unless
it
is
shown
that
the
deportee
is
being
indefinitely
imprisoned
under
the
pretense
of
awaiting
a
chance
for
deportation
3
or
unless
the
Government
admits
that
it
can
not
deport
him
4
or
unless
the
detainee
is
being
held
for
too
long
a
period
our
courts
will
not
interfere.
"In
the
United
States
there
were
at
least
two
instances
in
which
courts
fixed
a
time
limit
within
which
the
imprisoned
aliens
should
be
deported
5otherwise
their
release
would
be
ordered
by
writ
of
habeas
corpus.
Nevertheless,
supposing
such
precedents
apply
in
this
jurisdiction,
still
we
have
no
sufficient
data
fairly
to
fix
a
definite
deadline."
The
difference
between
this
and
the
Borovsky
case
lies
in
the
fact
that
the
record
shows
this
petitioner
has
been
detained
since
March,
1948.
However,
considering
that
in
the
United
States
(where
transportation
facilities
are
much
greater
and
diplomatic
arrangements
are
easier
to
make)
a
delay
of
twenty
months
in
carrying
out
an
order
of
deportation
has
not
been
held
sufficient
to
justify
the
issuance
of
the
writ
of
habeas
corpus,
6
this
petition
must
be,
and
it
is
hereby
denied.
So
ordered.
Moran,
C.J.,
Ozaeta,
Padilla,
Montemayor
and
Reyes,
JJ.,
concur.
Separate
Opinions
PARAS,
J.:
I
dissent
for
the
same
reasons
stated
in
my
dissenting
opinion
in
case
No.
L-2852.
FERIA,
J.:
I
dissent
on
the
same
ground
stated
in
my
dissent
in
case
G.R.
No.
L-2852.
PERFECTO,
J.,
dissenting:
To
continue
keeping
petitioner
under
confinement
is
a
thing
that
shocks
conscience.
Under
the
circumstances,
petitioner
is
entitled
to
be
released
from
confinement.
He
has
not
been
convicted
for
any
offense
for
which
he
may
be
imprisoned.
Government's
inability
to
deport
him
is
no
pretext
to
keep
him
imprisoned
for
an
indefinite
length
of
time.
The
constitutional
guarantee
that
no
person
shall
be
deprived
of
liberty
without
due
process
of
law
has
been
intended
to
protect
all
inhabitants
or
residents
who
may
happen
to
be
under
the
shadows
of
the
Philippine
flag.
Our
vote
is
the
same
as
the
one
we
cast
when
the
case
of
Borovsky
vs.
Commissioner
of
Immigration,
L-2852,
was
submitted
for
decision
although,
for
some
misunderstanding,
our
vote
was
overlooked
at
the
time
the
decision
was
promulgated.
Our
vote
is
to
grant
the
petition
and
to
order
the
immediate
release
of
petitioner,
without
prejudice
for
the
government
to
deport
him
as
soon
as
the
government
could
have
the
means
to
do
so.
In
the
meantime,
petitioner
is
entitled
to
live
a
normal
life
in
a
peaceful
country,
ruled
by
the
principles
of
law
and
justice.
TUASON,
J.:
I
dissent
on
the
same
ground
stated
in
my
dissent
in
case
No.
L-2852.
Footnotes
1.Wong
Wing
vs.
U.
S.,
163
U.
S.,
228;
Administrative
Control
of
Aliens
by
Van
Vleck
p.
184,
citing
Chumura
vs.
Smith,
29
Fed.
(2d),
287,
and
Ex
parte
Mathews,
277
Fed.,
857.
2.Cf.
Clark,
Deportation
of
Aliens
p.
423;
Van
Vleck
op.
cit.
p.
183
et
seq.,
Rose
vs.
Wallis,
279
Fed.,
401.
3.Rose
vs.
Wallis,
supra.
4.Bonder
vs.
Johnson,
5
Fed.
(2d),
238.
5.Two
months,
Caranica
vs.
Nagle,
28
Fed.
(2d),
955;
four
months,
Rose
vs.
Wallis,
supra.
6.Rose
vs.
Wallis,
279
Fed.,
401.
May
1920
to
January
1922.
|||
(Mejoff
v.
Director
of
Prisons,
G.R.
No.
L-2855,
[July
30,
1949])
EN
BANC
[G.R.
No.
L-4254.
September
26,
1951.]
BORIS
MEJOFF,
petitioner,
vs.
THE
DIRECTOR
OF
PRISONS,
respondent.
Ambrosio
T.
Dollete,
for
petitioner.
First
Assistant
Solicitor
General
Roberto
A.
Gianzon
and
Solicitor
Florencio
Villamor,
for
respondents.
SYLLABUS
1.
ALIENS;
DEPORTATION;
HABEAS
CORPUS.
A
foreign
national,
not
enemy,
against
whom
no
criminal
charges
have
been
formally
made
ore
judicial
order
issued,
may
not
indefinitely
be
kept
in
detention.
He
also
has
the
right
to
life
and
liberty
and
all
other
fundamental
rights
as
applied
to
human
beings,
as
proclaimed
in
the
"Universal
Declaration
of
Human
Rights"
approved
by
the
General
Assembly
of
the
United
Nations,
which
the
Philippines
is
a
member.
The
theory
on
which
the
court
is
given
power
to
act
is
that
the
warrant
for
his
deportation,
which
was
not
executed,
is
functus
officio
and
the
alien
is
being
held
without
any
authority
of
law
(U.S.
vs.
Nichols,
47
Fed.
Sup.,
201).
The
possibility
that
he
might
join
or
aid
disloyal
elements
if
turned
out
at
large
does
not
justify
prolonged
detention,
the
remedy
in
that
case
being
to
impose
conditions
in
the
order
of
release
and
exact
bail
in
a
reasonable
amount
with
sufficient
sureties.
D
E
C
I
S
I
O
N
TUASON,
J
p:
This
is
a
second
petition
for
habeas
corpus
by
Boris
Mejoff,
the
first
having
been
denied
in
a
decision
of
this
Court
of
July
30,
1949.
The
history
of
the
petitioner's
detention
was
thus
briefly
set
forth
in
that
decision,
written
by
Mr.
Justice
Bengzon:
"The
petitioner
Boris
Mejoff
is
an
alien
of
Russian
descent
who
was
brought
to
this
country
from
Shanghai
as
a
secret
operative
by
the
Japanese
forces
during
the
latter's
regime
in
these
Islands.
Upon
liberation
he
was
arrested
as
a
Japanese
spy,
by
U.
S.
Army
Counter
Intelligence
Corps.
Later
he
was
handed
to
the
Commonwealth
Government
for
disposition
in
accordance
with
Commonwealth
Act
No.
682.
Thereafter
the
People's
Court
ordered
his
release.
But
the
Deportation
Board
taking
his
case
up,
found
that
having
no
travel
documents
Mejoff
was
illegally
in
this
country,
and
consequently
referred
the
matter
to
the
immigration
authorities.
After
the
corresponding
investigation,
the
Board
of
Commissioners
of
Immigration
on
April
5,
1948,
declared
that
Mejoff
had
entered
the
Philippines
illegally
in
1944,
without
inspection
and
admission
by
the
immigration
officials
at
a
designation
port
of
entry
and,
therefore,
it
ordered
that
he
be
deported
on
the
first
available
transportation
to
Russia.
The
petitioner
was
then
under
custody,
he
having
been
arrested
on
March
18,
1948.
In
May
1948
he
was
transferred
to
the
Cebu
Provincial
Jail
together
with
three
other
Russians
to
await
the
arrival
of
some
Russian
vessels.
In
July
and
August
of
that
year
two
boats
of
Russian
nationality
called
at
the
Cebu
Port.
But
their
masters
refused
to
take
petitioner
and
his
companions
alleging
lack
of
authority
to
do
so.
In
October
1948
after
repeated
failures
to
ship
this
deportee
abroad,
the
authorities
removed
him
to
Bilibid
Prison
at
Muntinglupa
where
he
has
been
confined
up
to
the
present
time,
inasmuch
as
the
Commissioner
of
Immigration
believes
it
is
for
the
best
interests
of
the
country
to
keep
him
under
detention
while
arrangements
for
his
departure
are
being
made."
The
Court
held
the
petitioner's
detention
temporary
and
said
that
"temporary
detention
is
a
necessary
step
in
the
process
of
exclusion
or
expulsion
of
undersirable
aliens
and
that
pending
arrangements
for
his
deportation,
the
Government
has
the
right
to
hold
the
undersirable
alien
under
confinement
for
a
reasonable
length
of
time."
It
took
note
of
the
fact,
manifested
by
the
Solicitor
General's
representative
in
the
course
of
the
oral
argument,
that
"this
Government
desires
to
expel
the
alien,
and
does
not
relish
keeping
him
at
the
people's
expense
.
.
.
making
efforts
to
carry
out
the
decree
of
exclusion
by
the
highest
officer
of
the
land."
No
period
was
fixed
within
which
the
immigration
authorities
should
carry
out
the
contemplated
deportation
beyond
the
statement
that
"The
meaning
of
'reasonable
time'
depends
upon
the
circumstances,
specially
the
difficulties
of
obtaining
a
passport,
the
availability
of
transportation,
the
diplomatic
arrangements
with
the
governments
concerned
and
the
efforts
displayed
to
send
the
deportee
away;"
but
the
Court
warned
that
"under
established
precedents,
too
long
a
detention
may
justify
the
issuance
of
a
writ
of
habeas
corpus."
Mr.
Justice
Paras,
now
Chief
Justice,
Mr.
Justice
Feria,
Mr.
Justice
Perfecto,
and
the
writer
of
this
decision
dissented.
Mr.
Justice
Feria
and
Mr.
Justice
Perfecto
voted
for
outright
discharge
of
the
prisoner
from
custody.
Mr.
Justice
Paras
qualified
his
dissent
by
stating
that
he
might
agree
"to
a
further
detention
of
the
herein
petitioner,
provided
that
he
be
released
if
after
six
months,
the
Government
is
still
unable
to
deport
him."
This
writer
joined
in
the
latter
dissent
but
thought
that
two
months
constituted
reasonable
time.
Over
two
years
having
elapsed
since
the
decision
aforesaid
was
promulgated,
the
Government
has
not
found
ways
and
means
of
removing
the
petitioner
out
of
the
country,
and
none
are
in
sight,
although,
it
should
be
said
in
justice
to
the
deportation
authorities,
it
was
through
no
fault
of
theirs
that
no
ship
or
country
would
take
the
petitioner.
Aliens
illegally
staying
in
the
Philippines
have
no
right
of
asylum
therein
(Soewapadji
vs.
Wixon,
Sept.
18,
1946,
157
F.
ed.,
289,
290),
even
if
they
are
"stateless,"
which
the
petitioner
claims
to
be.
It
is
no
less
true
however,
as
impliedly
stated
in
this
Court's
decision,
supra,
that
foreign
nationals,
not
enemy,
against
whom
no
charge
has
been
made
other
than
that
their
permission
to
stay
has
expired,
may
not
indefinitely
be
kept
in
detention.
The
protection
against
deprivation
of
liberty
without
due
process
of
law
and
except
for
crimes
committed
against
the
laws
of
the
land
is
not
limited
to
Philippine
citizens
but
extends
to
all
residents,
except
enemy
aliens,
regardless
of
nationality.
Whether
an
alien
who
entered
the
country
in
violation
of
its
immigration
laws
may
be
detained
for
as
long
as
the
Government
is
unable
to
deport
him,
is
a
point
we
need
not
decide.
The
petitioner's
entry
into
the
Philippines
was
not
unlawful;
he
was
brought
by
the
armed
and
belligerent
forces
of
a
de
facto
government
whose
decrees
were
law
during
the
occupation.
Moreover,
by
its
Constitution
(Art.
II,
Sec.
3)
the
Philippines
"adopts
the
generally
accepted
principles
of
international
law
as
part
of
the
law
of
Nation."
And
in
a
resolution
entitled
"Universal
Declaration
Of
Human
Rights"
and
approved
by
the
General
Assembly
of
the
United
Nations
of
which
the
Philippines
is
a
member,
at
its
plenary
meeting
on
December
10,
1948,
the
right
to
life
and
liberty
and
all
other
fundamental
rights
as
applied
to
all
human
beings
were
proclaimed.
It
was
there
resolved
that
"All
human
beings
are
born
free
and
equal
in
degree
and
rights"
(Art.
1);
that
"Everyone
is
entitled
to
all
the
rights
and
freedom
set
forth
in
this
Declaration,
without
distinction
of
any
kind,
such
as
race,
colour,
sex,
language,
religion,
political
or
other
opinion,
nationality
or
social
origin,
property,
birth,
or
other
status"
(Art.
2);
that
"Every
one
has
the
right
to
an
effective
remedy
by
the
competent
national
tribunals
for
acts
violating
the
fundamental
rights
granted
him
by
the
Constitution
or
by
law"
(Art.
8);
that
"No
one
shall
be
subjected
to
arbitrary
arrest,
detention
or
exile"
(Art.
9
);
etc.
In
U.
S.
vs.
Nichols,
47
Fed.
Supp.,
201,
it
was
said
that
the
court
"has
the
power
to
release
from
custody
an
alien
who
has
been
detained
an
unreasonably
long
period
of
time
by
the
Department
of
Justice
after
it
has
become
apparent
that
although
a
warrant
for
his
deportation
has
been
issued,
the
warrant
can
not
be
effectuated;"
that
"the
theory
on
which
the
court
is
given
the
power
to
act
is
that
the
warrant
of
deportation,
not
having
been
able
to
be
executed,
is
functus
officio
and
the
alien
is
being
held
without
any
authority
of
law."
The
decision
cited
several
cases
which,
it
said,
settled
the
matter
definitely
in
that
jurisdiction,
adding
that
the
same
result
had
been
reached
in
innumerable
cases
elsewhere.
The
cases
referred
to
were
United
States
ex
rel.
Ross
vs.
Wallis,
2
Cir.
279
F.
401,
404;
Caranica
vs.
Nagle,
9
Cir.,
28
F.
2d
955;
Saksagansky
vs.
Weedin,
9
Cir.,
53
F.
2d
13,
16
last
paragraph;
Ex
parte
Matthews,
D.C.W.D.
Wash.,
277
F.
857;
Moraitis
vs.
Delany,
D.C.
Md.
Aug.
28,
1942,
46
F.
Supp.
425.
The
most
recent
case,
as
far
as
we
have
been
able
to
find,
was
that
of
Staniszewski
vs.
Watkins
(1948),
80
Fed.
Supp.,
132,
which
is
nearly
foursquare
with
the
case
at
hand.
In
that
case
a
stateless
person,
formerly
a
Polish
national,
resident
in
the
United
States
since
1911
and
many
times
serving
as
a
seaman
on
American
vessels
both
in
peace
and
in
war,
was
ordered
excluded
from
the
United
States
and
detained
at
Ellis
Island
at
the
expense
of
the
steamship
company,
when
he
returned
from
a
voyage
on
which
he
had
shipped
from
New
York
for
one
or
more
European
ports
and
return
to
the
United
States.
The
grounds
for
his
exclusion
were
that
he
had
no
passport
or
immigration
visa,
and
that
in
1937
had
been
convicted
of
perjury
because
in
certain
documents
he
represented
himself
to
be
an
American
citizen.
Upon
his
application
for
release
on
habeas
corpus,
the
Court
released
him
upon
his
own
recognizance.
Judge
Leibell,
of
the
United
States
District
Court
for
the
Southern
District
of
New
York,
said
in
part:
"When
the
return
to
the
writ
of
habeas
corpus
came
before
this
court,
I
suggested
that
all
interested
parties
.
.
.
make
an
effort
to
arrange
to
have
the
petitioner
ship
out
of
some
country
that
would
receive
him
as
a
resident.
He
is
a
native-born
Pole
but
the
Polish
Consul
has
advised
him
in
writing
that
he
is
no
longer
a
Polish
subject.
This
Government
does
not
claim
that
he
is
a
Polish
citizen.
This
attorney
says
he
is
stateless.
The
Government
is
willing
that
he
go
back
to
the
ship,
but
if
he
were
sent
back
aboard
ship
and
sailed
to
the
Port
(Cherbourg,
France)
from
which
he
last
sailed
to
the
United
States,
he
would
probably
be
denied
permission
to
land.
There
is
no
other
country
that
would
take
him,
without
proper
documents.
"It
seems
to
me
that
this
is
a
genuine
hardship
case
and
that
the
petitioner
should
be
released
from
custody
on
proper
terms
.
.
..
"What
is
to
be
done
with
the
petitioner?
The
government
has
had
him
in
custody
almost
seven
months
and
practically
admits
it
has
no
place
to
send
him
out
of
this
country.
The
steamship
company,
which
employed
him
as
one
of
a
group
sent
to
the
ship
by
the
Union,
with
proper
seaman's
papers
issued
by
the
United
States
Coast
Guard,
is
paying
$3
a
day
for
petitioner's
board
at
Ellis
Island.
It
is
no
fault
of
the
steamship
company
that
petitioner
is
an
inadmissible
alien
as
the
immigration
officials
describe
him
.
.
..
"I
intend
to
sustain
the
writ
of
habeas
corpus
and
order
the
release
of
the
petitioner
on
his
own
recognizance.
He
will
be
required
to
inform
the
immigration
officials
at
Ellis
Island
by
mail
on
the
15th
of
each
month,
stating
where
he
is
employed
and
where
he
can
be
reached
by
mail.
If
the
government
does
succeed
in
arranging
for
petitioner's
deportation
to
a
country
that
will
be
ready
to
receive
him
as
a
resident,
it
may
then
advise
the
petitioner
to
that
effect
and
arrange
for
his
deportation
in
the
manner
provided
by
law."
Although
not
binding
upon
this
Court
as
a
precedent,
the
case
aforecited
affords
a
happy
solution
to
the
quandary
in
which
the
parties
here
find
themselves,
solution
which
we
think
is
sensible,
sound
and
compatible
with
law
and
the
Constitution.
For
this
reason,
and
since
the
Philippine
law
on
immigration
was
patterned
after
or
copied
from
the
American
law
and
practice,
we
choose
to
follow
and
adopt
the
reasoning
and
conclusions
in
the
Staniszewski
decision
with
some
modifications
which,
it
is
believed,
are
in
consonance
with
the
prevailing
conditions
of
peace
and
order
in
the
Philippines.
It
was
said
or
insinuated
at
the
hearing
of
the
petition
at
bar,
but
not
alleged
in
the
return,
that
the
petitioner
was
engaged
in
subversive
activities,
and
fear
was
expressed
that
he
might
join
or
aid
the
disloyal
elements
if
allowed
to
be
at
large.
Bearing
in
mind
the
Government's
allegation
in
its
answer
that
"the
herein
petitioner
was
brought
to
the
Philippines
by
the
Japanese
forces,"
and
the
fact
that
Japan
is
no
longer
at
war
with
the
United
States
or
the
Philippines
nor
identified
with
the
countries
allied
against
these
nations,
the
possibility
of
the
petitioner's
entertaining
or
committing
hostile
acts
prejudicial
to
the
interest
and
security
of
this
country
seems
remote.
If
we
grant,
for
the
sake
of
argument,
that
such
a
possibility
exists,
still
the
petitioner's
unduly
prolonged
detention
would
be
unwarranted
by
law
and
the
Constitution,
if
the
only
purpose
of
the
detention
be
to
eliminate
a
danger
that
is
by
no
means
actual,
present,
or
uncontrolable.
After
all,
the
Government
is
not
impotent
to
deal
with
or
prevent
any
threat
by
such
measure
as
that
just
outlined.
The
thought
eloquently
expressed
by
Mr.
Justice
Jackson
of
the
United
States
Supreme
Court
in
connection
with
the
application
for
bail
of
ten
Communists
convicted
by
a
lower
court
of
advocacy
of
violent
overthrow
of
the
United
States
Government
is,
in
principle,
pertinent
and
may
be
availed
of
at
this
juncture.
Said
the
learned
Jurist:
"The
Government's
alternative
contention
is
that
defendants,
by
misbehavior
after
conviction,
have
forfeited
their
claim
to
bail.
Grave
public
danger
is
said
to
result
from
what
they
may
be
expected
to
do,
in
addition
to
what
they
have
done
since
their
conviction.
If
I
assume
that
defendants
are
disposed
to
commit
every
opportune
disloyal
act
helpful
to
Communist
countries,
it
is
still
difficult
to
reconcile
with
traditional
American
law
the
jailing
of
persons
by
the
courts
because
of
anticipated
but
as
yet
uncommitted
crimes.
Imprisonment
to
protect
society
from
predicted
but
unconsummated
offenses
is
so
unprecedented
in
this
country
and
so
fraught
with
danger
of
excesses
and
injustice
that
I
am
loath
to
resort
to
it,
even
as
a
discretionary
judicial
technique
to
supplement
conviction
of
such
offenses
as
those
of
which
defendants
stand
convicted.
xxx
xxx
xxx
"But
the
right
of
every
American
to
equal
treatment
before
the
law
is
wrapped
up
in
the
same
constitutional
bundle
with
those
of
these
Communists.
If
in
anger
or
disgust
with
these
defendants
we
throw
out
the
bundle,
we
also
cast
aside
protection
for
the
liberties
of
more
worthy
critics
who
may
be
in
opposition
to
the
government
of
some
future
day.
xxx
xxx
xxx
"If,
however,
I
were
to
be
wrong
on
all
of
these
abstract
or
theoretical
matters
of
principle,
there
is
a
very
practical
aspect
of
this
application
which
must
not
be
overlooked
or
underestimated
that
is
the
disastrous
effect
on
the
reputation
of
American
justice
if
I
should
now
send
these
men
to
jail
and
the
full
Court
later
decide
that
their
conviction
is
invalid.
All
experience
with
litigation
teaches
that
existence
of
a
substantial
question
about
a
conviction
implies
a
more
than
negligible
risk
of
reversal.
Indeed
this
experience
lies
hack
of
our
rule
permitting
and
practice
of
allowing
bail
where
such
questions
exist,
to
avoid
the
hazard
of
unjustifiably
imprisoning
persons
with
consequent
reproach
to
our
system
of
justice.
If
that
is
prudent
judicial
practice
in
the
ordinary
case,
how
much
more
important
to
avoid
every
chance
of
handing
to
the
Communist
world
such
an
ideological
weapon
as
it
would
have
if
this
country
should
imprison
this
handful
of
Communist
leaders
on
a
conviction
that
our
own
highest
Court
would
confess
to
be
illegal.
Risks,
of
course,
are
involved
in
either
granting
or
refusing
bail.
I
am
not
naive
enough
to
underestimate
the
troublemaking
propensities
of
the
defendants.
But,
with
the
Department
of
Justice
alert
to
the
dangers,
the
worst
they
can
accomplish
in
the
short
time
it
will
take
to
end
the
litigation
is
preferable
to
the
possibility
of
national
embarrassment
from
a
celebrated
case
of
unjustified
imprisonment
of
Communist
leaders.
Under
no
circumstances
must
we
permit
their
symbolization
of
an
evil
force
in
the
world
to
be
hallowed
and
glorified
by
any
semblance
of
martyrdom.
The
way
to
avoid
that
risk
is
not
to
jail
these
men
until
it
is
finally
decided
that
they
should
stay
jailed."
If
that
case
is
not
comparable
with
ours
on
the
issues
presented,
its
underlying
principle
is
of
universal
application.
In
fact,
its
ratio
decidendiapplies
with
greater
force
to
the
present
petition,
since
the
right
of
accused
to
bail
pending
appeal
of
his
case,
as
in
the
case
of
the
ten
Communists,
depends
upon
the
discretion
of
the
court,
whereas
the
right
to
be
enlarged
before
formal
charges
are
instituted
is
absolute.
As
already
noted,
not
only
are
there
no
charges
pending
against
the
petitioner,
but
the
prospects
of
bringing
any
against
him
are
slim
and
remote.
Premises
considered,
the
writ
will
issue
commanding
the
respondents
to
release
the
petitioner
from
custody
upon
these
terms:
The
petitioner
shall
be
placed
under
the
surveillance
of
the
immigration
authorities
or
their
agents
in
such
form
and
manner
as
may
be
deemed
adequate
to
insure
that
he
keep
peace
and
be
available
when
the
Government
is
ready
to
deport
him.
The
surveillance
shall
be
reasonable
and
the
question
of
reasonableness
shall
be
submitted
to
this
Court
or
to
the
Court
of
First
Instance
of
Manila
for
decision
in
case
of
abuse.
He
shall
also
put
up
a
bond
for
the
above
purpose
in
the
amount
of
P5,000
with
sufficient
surety
or
sureties,
which
bond
the
Commissioner
of
Immigration
is
authorized
to
exact
by
section
40
of
Commonwealth
Act
No.
613.
No
costs
will
be
charged.
Paras,
C.J.,
Feria,
Bengzon,
Padilla,
Reyes
and
Jugo,
JJ.,
concur.
Separate
Opinions
PABLO,
M.,
disidente:
|||
(Mejoff
v.
Director
of
Prisons,
G.R.
No.
L-4254,
[September
26,
1951],
90
PHIL
70-83)
EN
BANC
[G.R.
No.
118295.
May
2,
1997.]
WIGBERTO
E.
TAADA
and
ANNA
DOMINIQUE
COSETENG,
as
members
of
the
Philippine
Senate
and
as
taxpayers;
GREGORIO
ANDOLANA
and
JOKER
ARROYO
as
members
of
the
House
of
Representatives
and
as
taxpayers;
NICANOR
P.
PERLAS
and
HORACIO
R.
MORALES,
both
as
taxpayers:
CIVIL
LIBERTIES
UNION,
NATIONAL
ECONOMIC
PROTECTIONISM
ASSOCIATION,
CENTER
FOR
ALTERNATIVE
DEVELOPMENT
INITIATIVES,
LIKAS-KAYANG
KAUNLARAN
FOUNDATION,
INC.,
PHILIPPINE
RURAL
RECONSTRUCTION
MOVEMENT,
DEMOKRATIKONG
KILUSAN
NG
MAGBUBUKID
NG
PILIPINAS,
INC.,
and
PHILIPPINE
PEASANT
INSTITUTE,
in
representation
of
various
taxpayers
and
as
non-governmental
organizations,
petitioners,
vs.
EDGARDO
ANGARA,
ALBERTO
ROMULO,
LETICIA
RAMOS-SHAHANI,
HEHERSON
ALVAREZ,
AGAPITO
AQUINO,
RODOLFO
BIAZON,
NEPTALI
GONZALES,
ERNESTO
HERRERA,
JOSE
LINA,
GLORIA
MACAPAGAL-ARROYO,
ORLANDO
MERCADO,
BLAS
OPLE,
JOHN
OSMEA,
SANTANINA
RASUL,
RAMON
REVILLA,
RAUL
ROCO,
FRANCISCO
TATAD
and
FREDDIE
WEBB,
in
their
respective
capacities
as
members
of
the
Philippine
Senate
who
concurred
in
the
ratification
by
the
President
of
the
Philippines
of
the
Agreement
Establishing
the
World
Trade
Organization;
SALVADOR
ENRIQUEZ,
in
his
capacity
as
Secretary
of
Budget
and
Management;
CARIDAD
VALDEHUESA,
in
her
capacity
as
National
Treasurer;
RIZALINO
NAVARRO,
in
his
capacity
as
Secretary
of
Trade
and
Industry;
ROBERTO
SEBASTIAN,
in
his
capacity
as
Secretary
of
Agriculture;
ROBERTO
DE
OCAMPO,
in
his
capacity
as
Secretary
of
Finance;
ROBERTO
ROMULO,
in
his
capacity
as
Secretary
of
Foreign
Affairs;
and
TEOFISTO
T.
GUINGONA,
in
his
capacity
as
Executive
Secretary,
respondents.
Abelardo
T
.
Domondon
for
petitioners.
The
Solicitor
General
for
respondents.
SYLLABUS
1.REMEDIAL
LAW;
ACTIONS;
ESTOPPEL,
SUBJECT
TO
WAIVER.
The
matter
of
estoppel
will
not
be
taken
up
because
this
defense
is
waivable
and
the
respondents
have
effectively,
waived
it
by
not
pursuing
it
in
any
of
their
pleadings;
in
any
event,
this
issue,
even
if
ruled
in
respondents'
favor,
will
not
cause
the
petition's
dismissal
as
there
are
petitioners
other
than
the
two
senators,
who
are
not
vulnerable
to
the
defense
of
estoppel.
2.ID.;
ID.;
PARTIES;
LOCUS
STANDI;
SUBJECT
TO
WAIVER.
During
its
deliberations
on
the
case,
the
Court
noted
that
the
respondents
did
not
question
thelocus
standi
of
petitioners.
Hence,
they
are
also
deemed
to
have
waived
the
benefit
of
such
issue.
They
probably
realized
that
grave
constitutional
issues,
expenditures
of
public
funds
and
serious
international
commitments
of
the
nation
are
involved
here,
and
that
transcendental
public
interest
requires
that
the
substantive
issues
be
met
head
on
and
decided
on
the
merits,
rather
than
skirted
or
deflected
by
procedural
matters.
3.ID.;
ID.;
PETITION
SEEKING
TO
NULLIFY
ACT
OF
SENATE
ON
GROUND
THAT
IT
CONTRAVENES
THE
CONSTITUTION,
A
JUSTICIABLE
QUESTION.
In
seeking
to
nullify
an
act
of
the
Philippine
Senate
on
the
ground
that
it
contravenes
the
Constitution,
the
petition
no
doubt
raises
a
justiciable
controversy.
Where
an
action
of
the
legislative
branch
is
seriously
alleged
to
have
infringed
the
Constitution,
it
becomes
not
only
the
right
but
in
fact
the
duty
of
the
judiciary
to
settle
the
dispute.
"The
question
thus
posed
is
judicial
rather
than
political.
The
duty
(to
adjudicate)
remains
to
assure
that
the
supremacy
of
theConstitution
is
upheld."
Once
a
"controversy
as
to
the
application
or
interpretation
of
a
constitutional
provision
is
raised
before
this
Court
(as
in
the
instant
case),
it
becomes
a
legal
issue
which
the
Court
is
bound
by
constitutional
mandate
to
decide."
4.ID.;
SUPREME
COURT;
JUDICIAL
POWER;
SCOPE.
The
jurisdiction
of
this
Court
to
adjudicate
the
matters
raised
in
the
petition
is
clearly
set
out
in
the
1987Constitution,
as
follows:
"Judicial
power
includes
the
duty
of
the
courts
of
justice
to
settle
actual
controversies
involving
rights
which
are
legally
demandable
and
enforceable,
and
to
determine
whether
or
not
there
has
been
a
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction
on
the
part
of
any
branch
or
instrumentality,
of
the
government."
The
foregoing
text
emphasizes
the
judicial
department's
duty
and
power
to
strike
down
grave
abuse
of
discretion
on
the
part
of
any
branch
or
instrumentality,
of
government
including
Congress.
It
is
an
innovation
in
our
political
law.
As
explained
by
former
Chief
Justice
Roberto
Concepcion,
"the
judiciary
is
the
final
arbiter
on
the
question
of
whether
or
not
a
branch
of
government
or
any
of
its
officials
has
acted
without
jurisdiction
or
in
excess
of
jurisdiction
or
so
capriciously,
as
to
constitute
an
abuse
of
discretion
amounting
to
excess
of
jurisdiction.
This
is
not
only
a
judicial
power
but
a
duty
to
pass
judgment
on
matters
of
this
nature."
As
this
Court
has
repeatedly
and
firmly
emphasized
in
many
cases,
it
will
not
shirk,
digress
from
or
abandon
its
sacred
duty
and
authority
to
uphold
the
Constitution
in
matters
that
involve
grave
abuse
of
discretion
brought
before
it
in
appropriate
cases,
committed
by
any
officer,
agency,
instrumentality
or
department
of
the
government.
5.ID.;
SPECIAL
CIVIL
ACTIONS;
CERTIORARI,
PROHIBITION
AND
MANDAMUS;
APPROPRIATE
REMEDIES
TO
REVIEW
ACTS
OF
LEGISLATIVE
AND
EXECUTIVE
OFFICIALS.
Certiorari,
prohibition
and
mandamus
are
appropriate
remedies
to
raise
constitutional
issues
and
to
review
and/or
prohibit/nullify,
when
proper,
acts
of
legislative
and
executive
officials.
6.POLITICAL
LAW;
CONSTITUTION;
DECLARATION
OF
PRINCIPLES
AND
STATE
POLICIES;
AIDS
OR
GUIDES
IN
THE
EXERCISE
OF
JUDICIAL
AND
LEGISLATIVE
POWERS.
By
its
very
title,
Article
II
of
the
Constitution
is
a
"declaration
of
principles
and
state
policies."
The
counterpart
of
this
article
in
the
1935Constitution
is
called
the
"basic
political
creed
of
the
nation"
by
Dean
Vicente
Sinco.
These
principles
in
Article
II
are
not
intended
to
be
self-executing
principles
ready
for
enforcement
through
the
courts.
They
are
used
by
the
judiciary
as
aids
or
as
guides
in
the
exercise
of
its
power
of
judicial
review,
and
by
the
legislature
in
its
enactment
of
laws.
As
held
in
the
leading
case
of
Kilosbayan,
Incorporated
vs.
Morato,
the
principles
and
state
policies
enumerated
in
Article
II
and
some
sections
of
Article
XII
are
not
"self-executing
provisions,
the
disregard
of
which
can
give
rise
to
a
cause
of
action
in
the
courts.
They
do
not
embody
judicially
enforceable
constitutional
rights
but
guidelines
for
legislation."
7.ID.;
ID.;
THOUGH
IT
MANDATES
A
BIAS
IN
FAVOR
OF
FILIPINO
GOODS,
SERVICES,
LABOR
AND
ENTERPRISES,
IT
RECOGNIZES
THE
NEED
FOR
BUSINESS
EXCHANGE
WITH
THE
REST
OF
THE
WORLD.
While
the
Constitution
indeed
mandates
a
bias
in
favor
of
Filipino
goods,
services,
labor
and
enterprises,
at
the
same
time,
it
recognizes
the
need
for
business
exchange
with
the
rest
of
the
world
on
the
bases
of
equality
and
reciprocity
and
limits
protection
of
Filipino
enterprises
only
against
foreign
competition
and
trade
practices
that
are
unfair.
In
other
words,
the
Constitution
did
not
intend
to
pursue
an
isolationist
policy.
It
did
not
shut
out
foreign
investments,
goods
and
services
in
the
development
of
the
Philippine
economy.
While
the
Constitution
does
not
encourage
the
unlimited
entry
of
foreign
goods,
services
and
investments
into
the
country,
it
does
not
prohibit
them
either.
In
fact,
it
allows
an
exchange
on
the
basis
of
equality
and
reciprocity,
frowning
only
on
foreign
competition
that
is
unfair.
8.REMEDIAL
LAW;
SPECIAL
CIVIL
ACTIONS;
CERTIORARI;
JOINING
THE
WORLD
TRADE
ORGANIZATION,
NOT
A
GRAVE
ABUSE
OF
DISCRETION.
The
basic
principles
underlying
the
WTO
Agreement
recognize
the
need
of
developing
countries
like
the
Philippines
to
"share
in
the
growth
in
international
tradecommensurate
with
the
needs
of
their
economic
development."
GATT
has
provided
built-in
protection
from
unfair
foreign
competition
and
trade
practices
including
anti-dumping
measures,
countervailing
measures
and
safeguards
against
import
surges.
Where
local
businesses
are
jeopardized
by
unfair
foreign
competition,
the
Philippines
can
avail
of
these
measures.
There
is
hardly
therefore
any
basis
for
the
statement
that
under
the
WTO,
local
industries
and
enterprises
will
all
be
wiped
out
and
that
Filipinos
will
be
deprived
of
control
of
the
economy.
Quite
the
contrary,
the
weaker
situations
of
developing
nations
like
the
Philippines
have
been
taken
into
account;
thus,
there
would
be
no
basis
to
say
that
in
joining
the
WTO,
the
respondents
have
gravely
abused
their
discretion.
True,
they
have
made
a
bold
decision
to
steer
the
ship
of
state
into
the
yet
uncharted
sea
of
economic
liberalization.
But
such
decision
cannot
be
set
aside
on
the
ground
of
grave
abuse
of
discretion
simply
because
we
disagree
with
it
or
simply
because
we
believe
only
in
other
economic
policies.
As
earlier
stated,
the
Court
in
taking
jurisdiction
of
this
case
will
not
pass
upon
the
advantages
and
disadvantages
of
trade
liberalization
as
an
economic
policy.
It
will
only,
perform
its
constitutional
duty
of
determining
whether
the
Senate
committed
grave
abuse
of
discretion.
9.POLITICAL
LAW;
CONSTITUTION;
DECLARATION
OF
PRINCIPLES
AND
STATE
POLICIES;
POLICY
OF
"SELF-RELIANT
AND
INDEPENDENT
NATIONAL
ECONOMY"
DOES
NOT
RULE
OUT
ENTRY
OF
FOREIGN
INVESTMENTS,
GOODS
AND
SERVICES.
The
constitutional
policy
of
a
"self-reliant
and
independent
national
economy"
does
not
necessarily
rule
out
the
entry,
of
foreign
investments,
goods
and
services.
It
contemplates
neither
"economic
seclusion"
nor
"mendicancy
in
the
international
community."
10.POLITICAL
LAW;
INTERNATIONAL
LAW;
WORLD
TRADE
LAW
ORGANIZATION/GENERAL
AGREEMENT
ON
TARIFFS
AND
TRADE;
RELIANCE
ON
"MOST
FAVORED
NATIONS",
CONSTITUTIONAL.
The
WTO
reliance
on
"most
favored
nation",
"national
treatment",
and
"trade
without
discrimination"
cannot
be
struck
down
as
unconstitutional
as
in
fact
they
are
rules
of
equality
and
reciprocity,
that
apply
to
all
WTO
members.
Aside
from
envisioning
a
trade
policy
based
on
"equality
and
reciprocal",
the
fundamental
law
encourages
industries
that
are
"competitive
in
both
domestic
and
foreign
markets,"
thereby
demonstrating
a
clear
policy
against
a
sheltered
domestic
trade
environment,
but
one
in
favor
of
the
gradual
development
of
robust
industries
that
can
compete
with
the
best
in
the
foreign
markets.
Indeed,
Filipino
managers
and
Filipino
enterprises
have
shown
capability
and
tenacity
to
compete
internationally.
And
given
a
free
trade
environment,
Filipino
entrepreneurs
and
managers
in
Hongkong
have
demonstrated
the
Filipino
capacity
to
grow
and
to
prosper
against
the
best
offered
under
a
policy
of
laissez
faire.
11.REMEDIAL
LAW;
ACTIONS;
QUESTIONS
INVOLVING
"JUDGMENT
CALLS",
NOT
SUBJECT
TO
JUDICIAL
REVIEW.
Will
adherence
to
the
WTO
treaty
bring
this
ideal
(of
favoring
the
general
welfare)
to
reality?
Will
WTO/GATT
succeed
in
promoting
the
Filipinos'
general
welfare
because
it
will
as
promised
by
its
promoters
expand
the
country's
exports
and
generate
more
employment?
Will
it
bring
more
prosperity,
employment,
purchasing
power
and
quality
products
at
the
most
reasonable
rates
to
the
Filipino
public?
The
responses
to
these
questions
involve
"judgment
calls"
by
our
policy
makers,
for
which
they
are
answerable
to
our
people
during
appropriate
electoral
exercises.
Such
questions
and
the
answers
thereto
are
not
subject
to
judicial
pronouncements
based
on
grave
abuse
of
discretion.
12.POLITICAL
LAW;
SOVEREIGNTY;
SUBJECT
TO
RESTRICTIONS
AND
LIMITATIONS
VOLUNTARILY
AGREED
TO
BY
THE
STATE;
CASE
AT
BAR.
While
sovereignty
has
traditionally
been
deemed
absolute
and
all-encompassing
on
the
domestic
level,
it
is
however
subject
to
restrictions
and
limitations
voluntarily
agreed
to
by
the
Philippines,
expressly
or
impliedly,
as
a
member
of
the
family
of
nations.
In
its
Declaration
of
Principles
and
State
Policies,
theConstitution
"adopts
the
generally
accepted
principles
of
international
law
as
part
of
the
law
of
the
land,
and
adheres
to
the
policy
of
peace,
equality,
justice,
freedom,
cooperation
and
amity,
with
all
nations."
By
the
doctrine
of
incorporation,
the
country
is
bound
by
generally
accepted
principles
of
international
law,
which
are
considered
to
be
automatically
part
of
our
own
laws.
One
of
the
oldest
and
most
fundamental
rules
in
international
law
is
pacta
sunt
servanda
international
agreements
must
be
performed
in
good
faith.
"A
treaty
engagement
is
not
a
mere
moral
obligation
but
creates
a
legally
binding
obligation
on
the
parties
.
.
.
A
state
which
has
contracted
valid
international
obligations
is
bound
to
make
in
its
legislations
such
modifications
as
may
be
necessary
to
ensure
the
fulfillment
of
the
obligations
undertaken."
13.ID.;
ID.;
ID.;
ID.
When
the
Philippines
joined
the
United
Nations
as
one
of
its
51
charter
members,
it
consented
to
restrict
its
sovereign
rights
under
the
"concept
of
sovereignty
as
auto-limitation."
Under
Article
2
of
the
UN
Charter,
"(a)ll
members
shall
give
the
United
Nations
every
assistance
in
any
action
it
takes
in
accordance
with
the
present
Charter,
and
shall
refrain
from
giving
assistance
to
any
state
against
which
the
United
Nations
is
taking
preventive
or
enforcement
action."
Apart
from
the
UN
Treaty,
the
Philippines
has
entered
into
many
other
international
pacts
both
bilateral
and
multilateral
that
involve
limitations
on
Philippine
sovereignty
the
Philippines
has
effectively
agreed
to
limit
the
exercise
of
its
sovereign
powers
of
taxation,
eminent
domain
and
police
power.
The
underlying
consideration
in
this
partial
surrender
of
sovereignty
is
the
reciprocal
commitment
of
the
other
contracting
states
in
granting
the
same
privilege
and
immunities
to
the
Philippines,
its
officials
and
its
citizens.
The
same
reciprocity
characterizes
the
Philippine
commitments
under
WTO-GATT.
The
point
is
that,
as
shown
by
the
foregoing
treaties,
a
portion
of
sovereignty
may
be
waived
without
violating
the
Constitution,
based
on
the
rationale
that
the
Philippines
"adopts
the
generally
accepted
principles
of
international
law
as
part
of
the
law
of
the
land
and
adheres
to
the
policy
of
.
.
.
cooperation
and
amity
with
all
nations."
14.ID.;
ID.;
ID.;
WORLD
TRADE
ORGANIZATION;
PARAGRAPH
1,
ARTICLE
34
OF
THE
GENERAL
PROVISIONS
AND
BASIC
PRINCIPLES
OF
THE
AGREEMENT
ON
TRADE-RELATED
ASPECTS
OF
INTELLECTUAL
PROPERTY
RIGHTS
(TRIPS);
DOES
NOT
INTRUDE
ON
THE
POWER
OF
THE
SUPREME
COURT
TO
PROMULGATE
RULES
ON
PLEADING,
PRACTICE
AND
PROCEDURES.
Petitioners
aver
that
paragraph
1,
Article
34
(Process
Patents:
Burden
of
Proof)
of
the
General
Provisions
and
Basic
Principles
of
the
Agreement
on
Trade-Related
Aspects
of
Intellectual
Property
Rights
(TRIPS)
intrudes
on
the
power
of
the
Supreme
Court
to
promulgate
rules
concerning
pleading,
practice
and
procedures.
A
WTO
Member
is
required
to
provide
a
rule
of
disputable
(note
the
words
"in
the
absence
of
proof
to
the
contrary")
presumption
that
a
product
shown
to
be
identical
to
one
produced
with
the
use
of
a
patented
process
shall
be
deemed
to
have
been
obtained
by
the
(illegal)
use
of
the
said
patented
process,
(1)
where
such
product
obtained
by
the
patented
product
is
new,
or
(2)
where
there
is
"substantial
likelihood"
that
the
identical
product
was
made
with
the
use
of
the
said
patented
process
but
the
owner
of
the
patent
could
not
determine
the
exact
process
used
in
obtaining
such
identical
product.
Hence,
the
"burden
of
proof"
contemplated
by
Article
34
should
actually
be
understood
as
the
duty
of
the
alleged
patent
infringer
to
overthrow
such
presumption.
Such
burden,
properly
understood,
actually
refers
to
the
"burden
of
evidence"
(burden
of
going
forward)
placed
on
the
producer
of
the
identical
(or
fake)
product
to
show
that
his
product
was
produced
without
the
use
of
the
patented
process.
The
foregoing
notwithstanding,
the
patent
owner
still
has
the
"burden
of
proof"
since,
regardless
of
the
presumption
provided
under
paragraph
1
of
Article
34,
such
owner
still
has
to
introduce
evidence
of
the
existence
of
the
alleged
identical
product,
the
fact
that
it
is
"identical"
to
the
genuine
one
produced
by
the
patented
process
and
the
fact
of
"newness"
of
the
genuine
product
was
made
by
the
patented
process.
Moreover,
it
should
be
noted
that
the
requirement
of
Article
34
to
provide
a
disputable
presumption
applies
only
if
(1)
the
product
obtained
by
the
patented
process
is
NEW
or
(2)
there
is
a
substantial
likelihood
that
the
identical
product
was
made
by
the
process
and
the
process
owner
has
not
been
able
through
reasonable
effort
to
determine
the
process
used.
Where
either
of
these
two
provisos
does
not
obtain,
members
shall
be
free
to
determine
the
appropriate
method
of
implementing
the
provisions
of
TRIPS
within
their
own
internal
systems
and
processes.
By
and
large,
the
arguments
adduced
in
connection
with
our
disposition
of
the
third
issue
derogation
of
a
legislative
power
will
apply
to
this
fourth
issue
also.
Suffice
it
to
say
that
the
reciprocity
clause
more
than
justifies
such
intrusion,
if
any
actually
exists.
Besides,
Article
34
does
not
contain
an
unreasonable
burden,
consistent
as
it
is
with
due
process
and
the
concept
of
adversarial
dispute
settlement
inherent
in
our
judicial
system.
So
too,
since
the
Philippine
is
a
signatory
to
most
international
conventions
on
patents,
trademarks
and
copyrights,
the
adjustments
in
legislation
and
rules
of
procedure
will
not
be
substantial.
15.ID.;
ID.;
ID.;
ID.;
MINISTERIAL
DECLARATION
AND
DECISIONS
AND
THE
UNDERSTANDING
ON
COMMITMENTS
IN
FINANCIAL
SERVICES,
NOT
SUBJECT
TO
CONCURRENCE
BY
THE
SENATE.
"A
final
act,
sometimes
called
protocol
de
cloture,
is
an
instrument
which
records
the
winding
up
of
the
proceedings
of
a
diplomatic
conference
and
usually
includes
a
reproduction
of
the
texts
of
treaties,
conventions,
recommendations
and
other
acts
agreed
upon
and
signed
by
the
plenipotentiaries
attending
the
conference."
It
is
not
the
treaty
itself.
It
is
rather
a
summary
of
the
proceedings
of
a
protracted
conference
which
may
have
taken
place
over
several
years.
The
assailed
Senate
Resolution
No.
97
expressed
concurrence
in
exactly
what
the
Final
Act
required
from
its
signatories,
namely,
concurrence
of
the
Senate
in
the
WTO
Agreement.
The
Ministerial
Declarations
and
Decisions
were
deemed
adopted
without
need
for
ratification.
They
were
approved
by
the
ministers
by
virtue
of
Article
XXV:
1
of
GATT
which
provides
that
representatives
of
the
members
can
meet
"to
give
effect
to
those
provision
of
this
Agreement
which
invoke
joint
action,
and
generally
with
a
view
to
facilitating
the
operation
and
furthering
the
objectives
of
this
Agreement."
The
Understanding
on
Commitments
in
Financial
Services
also
approved
in
Marrakesh
does
not
apply
to
the
Philippines.
It
applies
only
to
those
27
Members
which
"have
indicated
in
their
respective
schedules
of
commitments
on
standstill,
elimination
of
monopoly,
expansion
of
operation
of
existing
financial
service
suppliers,
temporary
entry
of
personnel,
free
transfer
and
processing
of
information,
and
national
treatment
with
respect
to
access
to
payment,
clearing
systems
and
refinancing
available
in
the
normal
course
of
business."
16.REMEDIAL
LAW;
SPECIAL
CIVIL
ACTIONS;
CERTIORARI;
RESORT
THERETO
ON
GROUND
OF
GRAVE
ABUSE
OF
DISCRETION
AVAILABLE
ONLY
WHERE
THERE
IS
NO
PLAIN,
SPEEDY
AND
ADEQUATE
REMEDY
IN
THE
ORDINARY
COURSE
OF
LAW.
Procedurally.
a
writ
of
certiorari
grounded
on
grave
abuse
of
discretion
may
be
issued
by
the
Court
under
Rule
65
of
the
Rules
of
Court
when
it
is
amply
shown
that
petitioners
have
no
other
plain,
speedy
and
adequate
remedy
in
the
ordinary
course
of
law.
17.ID.;
ID.;
ID.;
GRAVE
ABUSE
OF
DISCRETION,
CONSTRUED.
By
grave
abuse
of
discretion
is
meant
such
capricious
and
whimsical
exercise
of
judgment
as
is
equivalent
to
lack
of
jurisdiction.
Mere
abuse
of
discretion
is
not
enough.
It
must
be
grave
abuse
of
discretion
as
when
the
power
is
exercised
in
an
arbitrary
or
despotic
manner
by
reason
of
passion
or
personal
hostility,
and
must
be
so
patent
and
so
gross
as
to
amount
to
an
evasion
of
a
positive
duty
or
to
a
virtual
refusal
to
perform
the
duty,
enjoined
or
to
act
at
all
in
contemplation
of
law.
Failure
on
the
part
of
the
petitioner
to
show
grave
abuse
of
discretion
will
result
in
the
dismissal
of
the
petition.
18.ID.;
ID.;
ID.;
CONCURRENCE
BY
THE
SENATE
IN
THE
WORLD
TRADE
ORGANIZATION,
NOT
A
GRAVE
ABUSE
OF
DISCRETION.
In
rendering
this
Decision,
this
Court
never
forgets
that
the
Senate,
whose
act
is
under
review,
is
one
of
two
sovereign
houses
of
Congress
and
is
thus
entitled
to
great
respect
in
its
actions.
It
is
itself
a
constitutional
body
independent
and
coordinate,
and
thus
its
actions
are
presumed
regular
and
done
in
good
faith.
Unless
convincing
proof
and
persuasive
arguments
are
presented
to
overthrow
such
presumptions,
this
Court
will
resolve
every
doubt
in
its
favor.
Using
the
foregoing
well-accepted
definition
of
grave
abuse
of
discretion
and
the
presumption
of
regularity
in
the
Senate's
processes,
this
Court
cannot
find
any
cogent
reason
to
impute
grave
abuse
of
discretion
to
the
Senate's
exercise
of
its
power
of
concurrence
in
the
WTO
Agreement
granted
it
by
Sec.
21
of
Article
VII
of
theConstitution.
That
the
Senate,
after
deliberation
and
voting,
voluntarily
and
overwhelmingly
gave
its
consent
to
the
WTO
Agreement
thereby
making
it
"a
part
of
the
law
of
the
land"
is
a
legitimate
exercise
of
its
sovereign
duty
and
power.
We
find
no
"patent
and
gross"
arbitrariness
or
despotism
"by
reason
of
passion
or
personal
hostility"
in
such
exercise.
It
is
not
impossible
to
surmise
that
this
Court,
or
at
least
some
of
its
members,
may
even
agree
with
petitioners
that
it
is
more
advantageous
to
the
national
interest
to
strike
down
Senate
Resolution
No.
97.
But
that
is
not
a
legal
reason
to
attribute
grave
abuse
of
discretion
to
the
Senate
and
to
nullify
its
decision.
To
do
so
would
constitute
grave
abuse
in
the
exercise
of
our
own
judicial
power
and
duty.
Ineludably,
what
the
Senate
did
was
a
valid
exercise
of
its
authority.
As
to
whether
such
exercise
was
wise,
beneficial
or
viable
is
outside
the
realm
of
judicial
inquiry
and
review.
That
is
a
matter
between
the
elected
policy
makers
and
the
people.
As
to
whether
the
nation
should
join
the
worldwide
march
toward
trade
liberalization
and
economic
globalization
is
a
matter
that
our
people
should
determine
in
electing
their
policy
makers.
After
all,
the
WTO
Agreement
allows
withdrawal
of
membership,
should
this
be
the
political
desire
of
a
member.
D
E
C
I
S
I
O
N
PANGANIBAN,
J
p:
The
emergence
on
January
1,
1995
of
the
World
Trade
Organization,
abetted
by
the
membership
thereto
of
the
vast
majority
of
countries,
has
revolutionized
international
business
and
economic
relations
amongst
states.
It
has
irreversibly
propelled
the
world
towards
trade
liberalization
and
economic
globalization.
Liberalization,
globalization,
deregulation
and
privatization,
the
third-millennium
buzz
words,
are
ushering
in
a
new
borderless
world
of
business
by
sweeping
away
as
mere
historical
relics
the
heretofore
traditional
modes
of
promoting
and
protecting
national
economies
like
tariffs,
export
subsidies,
import
quotas,
quantitative
restrictions,
tax
exemptions
and
currency
controls.
Finding
market
niches
and
becoming
the
best
in
specific
industries
in
a
market-driven
and
export-oriented
global
scenario
are
replacing
age-old
"beggar-thy-neighbor"
policies
that
unilaterally
protect
weak
and
inefficient
domestic
producers
of
goods
and
services.
In
the
words
of
Peter
Drucker,
the
well-known
management
guru,
"Increased
participation
in
the
world
economy
has
become
the
key
to
domestic
economic
growth
and
prosperity."
prll
Brief
Historical
Background
To
hasten
worldwide
recovery
from
the
devastation
wrought
by
the
Second
World
War,
plans
for
the
establishment
of
three
multilateral
institutions
inspired
by
that
grand
political
body,
the
United
Nations
were
discussed
at
Dumbarton
Oaks
and
Bretton
Woods.
The
first
was
the
World
Bank
(WB)
which
was
to
address
the
rehabilitation
and
reconstruction
of
war-ravaged
and
later
developing
countries;
the
second,
the
International
Monetary
Fund
(IMF)
which
was
to
deal
with
currency
problems;
and
the
third,
the
International
Trade
Organization
(ITO),
which
was
to
foster
order
and
predictability
in
world
trade
and
to
minimize
unilateral
protectionist
policies
that
invite
challenge,
even
retaliation,
from
other
states.
However,
for
a
variety
of
reasons,
including
its
non-ratification
by
the
United
States,
the
ITO,
unlike
the
IMF
and
WB,
never
took
off.
What
remained
was
only
GATT
the
General
Agreement
on
Tariffs
and
Trade.
GATT
was
a
collection
of
treaties
governing
access
to
the
economies
of
treaty
adherents
with
no
institutionalized
body
administering
the
agreements
or
dependable
system
of
dispute
settlement.
After
half
a
century
and
several
dizzying
rounds
of
negotiations,
principally
the
Kennedy
Round,
the
Tokyo
Round
and
the
Uruguay
Round,
the
world
finally
gave
birth
to
that
administering
body
the
World
Trade
Organization
with
the
signing
of
the
"Final
Act"
in
Marrakesh,
Morocco
and
the
ratification
of
the
WTO
Agreement
by
its
members.
1
1a
1b
1c
Like
many
other
developing
countries,
the
Philippines
joined
WTO
as
a
founding
member
with
the
goal,
as
articulated
by
President
Fidel
V.
Ramos
in
two
letters
to
the
Senate
(infra),
of
improving
"Philippine
access
to
foreign
markets,
especially
its
major
trading
partners,
through
the
reduction
of
tariffs
on
its
exports,
particularly
agricultural
and
industrial
products."
The
President
also
saw
in
the
WTO
the
opening
of
"new
opportunities
for
the
services
sector
.
.
.,
(the
reduction
of)
costs
and
uncertainty
associated
with
exporting
.
.
.,
and
(the
attraction
of)
more
investments
into
the
country."
Although
the
Chief
Executive
did
not
expressly
mention
it
in
his
letter,
the
Philippines
and
this
is
of
special
interest
to
the
legal
profession
will
benefit
from
the
WTO
system
of
dispute
settlement
by
judicial
adjudication
through
the
independent
WTO
settlement
bodies
called
(1)
Dispute
Settlement
Panels
and
(2)
Appellate
Tribunal.
Heretofore,
trade
disputes
were
settled
mainly
through
negotiations
where
solutions
were
arrived
at
frequently
on
the
basis
of
relative
bargaining
strengths,
and
where
naturally,
weak
and
underdeveloped
countries
were
at
a
disadvantage.
The
Petition
in
Brief
Arguing
mainly
(1)
that
the
WTO
requires
the
Philippines
"to
place
nationals
and
products
of
member-countries
on
the
same
footing
as
Filipinos
and
local
products"
and
(2)
that
the
WTO
"intrudes,
limits
and/or
impairs"
the
constitutional
powers
of
both
Congress
and
the
Supreme
Court,
the
instant
petition
before
this
Court
assails
the
WTO
Agreement
for
violating
the
mandate
of
the
1987
Constitution
to
"develop
a
self-reliant
and
independent
national
economy
effectively
controlled
by
Filipinos
.
.
.
(to)
give
preference
to
qualified
Filipinos
(and
to)
promote
the
preferential
use
of
Filipino
labor,
domestic
materials
and
locally
produced
goods."
Simply
stated,
does
the
Philippine
Constitution
prohibit
Philippine
participation
in
worldwide
trade
liberalization
and
economic
globalization?
Does
it
proscribe
Philippine
integration
into
a
global
economy
that
is
liberalized,
deregulated
and
privatized?
These
are
the
main
questions
raised
in
this
petition
for
certiorari,
prohibition
and
mandamus
under
Rule
65
of
the
Rules
of
Court
praying
(1)
for
the
nullification,
on
constitutional
grounds,
of
the
concurrence
of
the
Philippine
Senate
in
the
ratification
by
the
President
of
the
Philippines
of
the
Agreement
Establishing
the
World
Trade
Organization
(WTO
Agreement,
for
brevity)
and
(2)
for
the
prohibition
of
its
implementation
and
enforcement
through
the
release
and
utilization
of
public
funds,
the
assignment
of
public
officials
and
employees,
as
well
as
the
use
of
government
properties
and
resources
by
respondent-heads
of
various
executive
offices
concerned
therewith.
This
concurrence
is
embodied
in
Senate
Resolution
No.
97,
dated
December
14,
1994.
The
Facts
On
April
15,
1994,
Respondent
Rizalino
Navarro,
then
Secretary
of
the
Department
of
Trade
and
Industry
(Secretary
Navarro,
for
brevity),
representing
the
Government
of
the
Republic
of
the
Philippines,
signed
in
Marrakesh,
Morocco,
the
Final
Act
Embodying
the
Results
of
the
Uruguay
Round
of
Multilateral
Negotiations
(Final
Act,
for
brevity).
By
signing
the
Final
Act,
2
Secretary
Navarro
on
behalf
of
the
Republic
of
the
Philippines,
agreed:
"(a)to
submit,
as
appropriate,
the
WTO
Agreement
for
the
consideration
of
their
respective
competent
authorities,
with
a
view
to
seeking
approval
of
the
Agreement
in
accordance
with
their
procedures;
and
(b)to
adopt
the
Ministerial
Declarations
and
Decisions."
On
August
12,
1994,
the
members
of
the
Philippine
Senate
received
a
letter
dated
August
11,
1994
from
the
President
of
the
Philippines,
3
stating
among
others
that
"the
Uruguay
Round
Final
Act
is
hereby
submitted
to
the
Senate
for
its
concurrence
pursuant
to
Section
21,
Article
VII
of
the
Constitution."
cdta
On
August
13,
1994,
the
members
of
the
Philippine
Senate
received
another
letter
from
the
President
of
the
Philippines
4
likewise
dated
August
11,
1994,
which
stated
among
others
that
"the
Uruguay
Round
Final
Act,
the
Agreement
Establishing
the
World
Trade
Organization,
the
Ministerial
Declarations
and
Decisions,
and
the
Understanding
on
Commitments
in
Financial
Services
are
hereby
submitted
to
the
Senate
for
its
concurrence
pursuant
to
Section
21,
Article
VII
of
the
Constitution."
On
December
9,
1994,
the
President
of
the
Philippines
certified
the
necessity
of
the
immediate
adoption
of
P.S.
1083,
a
resolution
entitled
"Concurring
in
the
Ratification
of
the
Agreement
Establishing
the
World
Trade
Organization."
5
On
December
14,
1994,
the
Philippine
Senate
adopted
Resolution
No.
97
which
"Resolved,
as
it
is
hereby
resolved,
that
the
Senate
concur,
as
it
hereby
concurs,
in
the
ratification
by
the
President
of
the
Philippines
of
the
Agreement
Establishing
the
World
Trade
Organization."
6
The
text
of
the
WTO
Agreement
is
written
on
pages
137
et
seq.
of
Volume
I
of
the
36-volume
Uruguay
Round
of
Multilateral
Trade
Negotiations
and
includes
various
agreements
and
associated
legal
instruments
(identified
in
the
said
Agreement
as
Annexes
1,
2
and
3
thereto
and
collectively
referred
to
as
Multilateral
Trade
Agreements,
for
brevity)
as
follows:
"ANNEX
I
Annex
1A:Multilateral
Agreement
on
Trade
in
Goods
General
Agreement
on
Tariffs
and
Trade
1994
Agreement
on
Agriculture
Agreement
on
the
Application
of
Sanitary
and
Phytosanitary
Measures
Agreement
on
Textiles
and
Clothing
Agreement
on
Technical
Barriers
to
Trade
Agreement
on
Trade-Related
Investment
Measures
Agreement
on
Implementation
of
Article
VI
of
the
General
Agreement
on
Tariffs
and
Trade
1994
Agreement
on
Implementation
of
Article
VII
of
the
General
on
Tariffs
and
Trade
1994
Agreement
on
Pre-Shipment
Inspection
Agreement
on
Rules
of
Origin
Agreement
on
Imports
Licensing
Procedures
Agreement
on
Subsidies
and
Coordinating
Measures
Agreement
on
Safeguards
Annex
1B:General
Agreement
on
Trade
in
Services
and
Annexes
Annex
1C:Agreement
on
Trade-Related
Aspects
of
Intellectual
Property
Rights
ANNEX
2
Understanding
on
Rules
and
Procedures
Governing
the
Settlement
of
Disputes
ANNEX
3
Trade
Policy
Review
Mechanism"
On
December
16,
1994,
the
President
of
the
Philippines
signed
7
the
Instrument
of
Ratification,
declaring:
"NOW
THEREFORE,
be
it
known
that
I,
FIDEL
V.
RAMOS,
President
of
the
Republic
of
the
Philippines,
after
having
seen
and
considered
the
aforementioned
Agreement
Establishing
the
World
Trade
Organization
and
the
agreements
and
associated
legal
instruments
included
in
Annexes
one
(1),
two
(2)
and
three
(3)
of
that
Agreement
which
are
integral
parts
thereof,
signed
at
Marrakesh,
Morocco
on
15
April
1994,
do
hereby
ratify
and
confirm
the
same
and
every
Article
and
Clause
thereof."
To
emphasize,
the
WTO
Agreement
ratified
by
the
President
of
the
Philippines
is
composed
of
the
Agreement
Proper
and
"the
associated
legal
instruments
included
in
Annexes
one
(1),
two
(2)
and
three
(3)
of
that
Agreement
which
are
integral
parts
thereof."
On
the
other
hand,
the
Final
Act
signed
by
Secretary
Navarro
embodies
not
only
the
WTO
Agreement
(and
its
integral
annexes
aforementioned)
but
also
(1)
the
Ministerial
Declarations
and
Decisions
and
(2)
the
Understanding
on
Commitments
in
Financial
Services.
In
his
Memorandum
dated
May
13,
1996,
8
the
Solicitor
General
describes
these
two
latter
documents
as
follows:
"The
Ministerial
Decisions
and
Declarations
are
twenty-five
declarations
and
decisions
on
a
wide
range
of
matters,
such
as
measures
in
favor
of
least
developed
countries,
notification
procedures,
relationship
of
WTO
with
the
International
Monetary
Fund
(IMF),
and
agreements
on
technical
barriers
to
trade
and
on
dispute
settlement.
The
Understanding
on
Commitments
in
Financial
Services
dwell
on,
among
other
things,
standstill
or
limitations
and
qualifications
of
commitments
to
existing
non-conforming
measures,
market
access,
national
treatment,
and
definitions
of
non-resident
supplier
of
financial
services,
commercial
presence
and
new
financial
service."
cdti
On
December
29,
1994,
the
present
petition
was
filed.
After
careful
deliberation
on
respondents'
comment
and
petitioners'
reply
thereto,
the
Court
resolved
on
December
12,
1995,
to
give
due
course
to
the
petition,
and
the
parties
thereafter
filed
their
respective
memoranda.
The
Court
also
requested
the
Honorable
Lilia
R.
Bautista,
the
Philippine
Ambassador
to
the
United
Nations
stationed
in
Geneva,
Switzerland,
to
submit
a
paper,
hereafter
referred
to
as
"Bautista
Paper,"
9
for
brevity,
(1)
providing
a
historical
background
of
and
(2)
summarizing
the
said
agreements.
During
the
Oral
Argument
held
on
August
27,
1996,
the
Court
directed:
"(a)the
petitioners
to
submit
the
(1)
Senate
Committee
Report
on
the
matter
in
controversy
and
(2)
the
transcript
of
proceedings/hearings
in
the
Senate;
and
(b)the
Solicitor
General,
as
counsel
for
respondents,
to
file
(1)
a
list
of
Philippine
treaties
signed
prior
to
the
Philippine
adherence
to
the
WTO
Agreement,
which
derogate
from
Philippine
sovereignty
and
(2)
copies
of
the
multi-volume
WTO
Agreement
and
other
documents
mentioned
in
the
Final
Act,
as
soon
as
possible."
After
receipt
of
the
foregoing
documents,
the
Court
said
it
would
consider
the
case
submitted
for
resolution.
In
a
Compliance
dated
September
16,
1996,
the
Solicitor
General
submitted
a
printed
copy
of
the
36-volume
Uruguay
Round
of
Multilateral
Trade
Negotiations,
and
in
another
Compliance
dated
October
24,
1996,
he
listed
the
various
"bilateral
or
multilateral
treaties
or
international
instruments
involving
derogation
of
Philippine
sovereignty."
Petitioners,
on
the
other
hand,
submitted
their
Compliance
dated
January
28,
1997,
on
January
30,
1997.
The
Issues
In
their
Memorandum
dated
March
11,
1996,
petitioners
summarized
the
issues
as
follows:
"A.Whether
the
petition
presents
a
political
question
or
is
otherwise
not
justiciable.
B.Whether
the
petitioner
members
of
the
Senate
who
participated
in
the
deliberations
and
voting
leading
to
the
concurrence
are
estopped
from
impugning
the
validity
of
the
Agreement
Establishing
the
World
Trade
Organization
or
of
the
validity
or
of
the
concurrence.
C.Whether
the
provisions
of
the
Agreement
Establishing
the
World
Trade
Organization
contravene
the
provisions
of
Sec.
19,
Article
II,
and
Secs.
10
and
12,
Article
XII,
all
of
the
1987
Philippine
Constitution.
D.Whether
provisions
of
the
Agreement
Establishing
the
World
Trade
Organization
unduly
limit,
restrict
and
impair
Philippine
sovereignty
specifically
the
legislative
power
which,
under
Sec.
2,
Article
VI,
1987
Philippine
Constitution
is
'vested
in
the
Congress
of
the
Philippines';
E.Whether
provisions
of
the
Agreement
Establishing
the
World
Trade
Organization
interfere
with
the
exercise
of
judicial
power.
F.Whether
the
respondent
members
of
the
Senate
acted
in
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction
when
they
voted
for
concurrence
in
the
ratification
of
the
constitutionally-infirm
Agreement
Establishing
the
World
Trade
Organization.
G.Whether
the
respondent
members
of
the
Senate
acted
in
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction
when
they
concurred
only
in
the
ratification
of
the
Agreement
Establishing
the
World
Trade
Organization,
and
not
with
the
Presidential
submission
which
included
the
Final
Act,
Ministerial
Declaration
and
Decisions,
and
the
Understanding
on
Commitments
in
Financial
Services."
On
the
other
hand,
the
Solicitor
General
as
counsel
for
respondents
"synthesized
the
several
issues
raised
by
petitioners
into
the
following":
10
"1.Whether
or
not
the
provisions
of
the
'Agreement
Establishing
the
World
Trade
Organization
and
the
Agreements
and
Associated
Legal
Instruments
included
in
Annexes
one
(1),
two
(2)
and
three
(3)
of
that
agreement'
cited
by
petitioners
directly
contravene
or
undermine
the
letter,
spirit
and
intent
ofSection
19,
Article
II
and
Sections
10
and
12,
Article
XII
of
the
1987
Constitution.
2.Whether
or
not
certain
provisions
of
the
Agreement
unduly
limit,
restrict
or
impair
the
exercise
of
legislative
power
by
Congress.
3.Whether
or
not
certain
provisions
of
the
Agreement
impair
the
exercise
of
judicial
power
by
this
Honorable
Court
in
promulgating
the
rules
of
evidence.
4.Whether
or
not
the
concurrence
of
the
Senate
'in
the
ratification
by
the
President
of
the
Philippines
of
the
Agreement
establishing
the
World
Trade
Organization'
implied
rejection
of
the
treaty
embodied
in
the
Final
Act."
By
raising
and
arguing
only
four
issues
against
the
seven
presented
by
petitioners,
the
Solicitor
General
has
effectively
ignored
three,
namely:
(1)
whether
the
petition
presents
a
political
question
or
is
otherwise
not
justiciable;
(2)
whether
petitioner-members
of
the
Senate
(Wigberto
E.
Taada
and
Anna
Dominique
Coseteng)
are
estopped
from
joining
this
suit;
and
(3)
whether
the
respondent-members
of
the
Senate
acted
in
grave
abuse
of
discretion
when
they
voted
for
concurrence
in
the
ratification
of
the
WTO
Agreement.
The
foregoing
notwithstanding,
this
Court
resolved
to
deal
with
these
three
issues
thus:
cdt
(1)The
"political
question"
issue
being
very
fundamental
and
vital,
and
being
a
matter
that
probes
into
the
very
jurisdiction
of
this
Court
to
hear
and
decide
this
case
was
deliberated
upon
by
the
Court
and
will
thus
be
ruled
upon
as
the
first
issue;
(2)The
matter
of
estoppel
will
not
be
taken
up
because
this
defense
is
waivable
and
the
respondents
have
effectively
waived
it
by
not
pursuing
it
in
any
of
their
pleadings;
in
any
event,
this
issue,
even
if
ruled
in
respondents'
favor,
will
not
cause
the
petition's
dismissal
as
there
are
petitioners
other
than
the
two
senators,
who
are
not
vulnerable
to
the
defense
of
estoppel;
and
(3)The
issue
of
alleged
grave
abuse
of
discretion
on
the
part
of
the
respondent
senators
will
be
taken
up
as
an
integral
part
of
the
disposition
of
the
four
issues
raised
by
the
Solicitor
General.
During
its
deliberations
on
the
case,
the
Court
noted
that
the
respondents
did
not
question
the
locus
standi
of
petitioners.
Hence,
they
are
also
deemed
to
have
waived
the
benefit
of
such
issue.
They
probably
realized
that
grave
constitutional
issues,
expenditures
of
public
funds
and
serious
international
commitments
of
the
nation
are
involved
here,
and
that
transcendental
public
interest
requires
that
the
substantive
issues
be
met
head
on
and
decided
on
the
merits,
rather
than
skirted
or
deflected
by
procedural
matters.
11
To
recapitulate,
the
issues
that
will
be
ruled
upon
shortly
are:
(1)DOES
THE
PETITION
PRESENT
A
JUSTICIABLE
CONTROVERSY?
OTHERWISE
STATED,
DOES
THE
PETITION
INVOLVE
A
POLITICAL
QUESTION
OVER
WHICH
THIS
COURT
HAS
NO
JURISDICTION?
(2)DO
THE
PROVISIONS
OF
THE
WTO
AGREEMENT
AND
ITS
THREE
ANNEXES
CONTRAVENE
SEC.
19,
ARTICLE
II,
AND
SECS.
10
AND
12,
ARTICLE
XII,
OF
THE
PHILIPPINE
CONSTITUTION?
(3)DO
THE
PROVISIONS
OF
SAID
AGREEMENT
AND
ITS
ANNEXES
LIMIT,
RESTRICT,
OR
IMPAIR
THE
EXERCISE
OF
LEGISLATIVE
POWER
BY
CONGRESS?
(4)DO
SAID
PROVISIONS
UNDULY
IMPAIR
OR
INTERFERE
WITH
THE
EXERCISE
OF
JUDICIAL
POWER
BY
THIS
COURT
IN
PROMULGATING
RULES
ON
EVIDENCE?
(5)WAS
THE
CONCURRENCE
OF
THE
SENATE
IN
THE
WTO
AGREEMENT
AND
ITS
ANNEXES
SUFFICIENT
AND/OR
VALID,
CONSIDERING
THAT
IT
DID
NOT
INCLUDE
THE
FINAL
ACT,
MINISTERIAL
DECLARATIONS
AND
DECISIONS,
AND
THE
UNDERSTANDING
ON
COMMITMENTS
IN
FINANCIAL
SERVICES?
The
First
Issue:
Does
the
Court
Have
Jurisdiction
Over
the
Controversy?
In
seeking
to
nullify
an
act
of
the
Philippine
Senate
on
the
ground
that
it
contravenes
the
Constitution,
the
petition
no
doubt
raises
a
justiciable
controversy.
Where
an
action
of
the
legislative
branch
is
seriously
alleged
to
have
infringed
the
Constitution,
it
becomes
not
only
the
right
but
in
fact
the
duty
of
the
judiciary
to
settle
the
dispute.
"The
question
thus
posed
is
judicial
rather
than
political.
The
duty
(to
adjudicate)
remains
to
assure
that
the
supremacy
of
theConstitution
is
upheld."
12
Once
a
"controversy
as
to
the
application
or
interpretation
of
a
constitutional
provision
is
raised
before
this
Court
(as
in
the
instant
case),
it
becomes
a
legal
issue
which
the
Court
is
bound
by
constitutional
mandate
to
decide."
13
The
jurisdiction
of
this
Court
to
adjudicate
the
matters
14
raised
in
the
petition
is
clearly
set
out
in
the
1987
Constitution,
15
as
follows:
"Judicial
power
includes
the
duty
of
the
courts
of
justice
to
settle
actual
controversies
involving
rights
which
are
legally
demandable
and
enforceable,
and
to
determine
whether
or
not
there
has
been
a
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction
on
the
part
of
any
branch
or
instrumentality
of
the
government."
The
foregoing
text
emphasizes
the
judicial
department's
duty
and
power
to
strike
down
grave
abuse
of
discretion
on
the
part
of
any
branch
or
instrumentality
of
government
including
Congress.
It
is
an
innovation
in
our
political
law.
16
As
explained
by
former
Chief
Justice
Roberto
Concepcion,
17
"the
judiciary
is
the
final
arbiter
on
the
question
of
whether
or
not
a
branch
of
government
or
any
of
its
officials
has
acted
without
jurisdiction
or
in
excess
of
jurisdiction
or
so
capriciously
as
to
constitute
an
abuse
of
discretion
amounting
to
excess
of
jurisdiction.
This
is
not
only
a
judicial
power
but
a
duty
to
pass
judgment
on
matters
of
this
nature."
As
this
Court
has
repeatedly
and
firmly
emphasized
in
many
cases,
18
it
will
not
shirk,
digress
from
or
abandon
its
sacred
duty
and
authority
to
uphold
theConstitution
in
matters
that
involve
grave
abuse
of
discretion
brought
before
it
in
appropriate
cases,
committed
by
any
officer,
agency,
instrumentality
or
department
of
the
government.
LibLex
As
the
petition
alleges
grave
abuse
of
discretion
and
as
there
is
no
other
plain,
speedy
or
adequate
remedy
in
the
ordinary
course
of
law,
we
have
no
hesitation
at
all
in
holding
that
this
petition
should
be
given
due
course
and
the
vital
questions
raised
therein
ruled
upon
under
Rule
65
of
the
Rules
of
Court.
Indeed,
certiorari,
prohibition
and
mandamus
are
appropriate
remedies
to
raise
constitutional
issues
and
to
review
and/or
prohibit/nullify,
when
proper,
acts
of
legislative
and
executive
officials.
On
this,
we
have
no
equivocation.
We
should
stress
that,
in
deciding
to
take
jurisdiction
over
this
petition,
this
Court
will
not
review
the
wisdom
of
the
decision
of
the
President
and
the
Senate
in
enlisting
the
country
into
the
WTO,
or
pass
upon
the
merits
of
trade
liberalization
as
a
policy
espoused
by
said
international
body.
Neither
will
it
rule
on
the
propriety
of
the
government's
economic
policy
of
reducing/removing
tariffs,
taxes,
subsidies,
quantitative
restrictions,
and
other
import/trade
barriers.
Rather,
it
will
only
exercise
its
constitutional
duty
"to
determine
whether
or
not
there
had
been
a
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction"
on
the
part
of
the
Senate
in
ratifying
the
WTO
Agreement
and
its
three
annexes.
Second
Issue:
The
WTO
Agreement
and
Economic
Nationalism
This
is
the
lis
mota,
the
main
issue,
raised
by
the
petition.
Petitioners
vigorously
argue
that
the
"letter,
spirit
and
intent"
of
the
Constitution
mandating
"economic
nationalism"
are
violated
by
the
so-called
"parity
provisions"
and
"national
treatment"
clauses
scattered
in
various
parts
not
only
of
the
WTO
Agreement
and
its
annexes
but
also
in
the
Ministerial
Decisions
and
Declarations
and
in
the
Understanding
on
Commitments
in
Financial
Services.
Specifically,
the
"flagship"
constitutional
provisions
referred
to
are
Sec.
19,
Article
II,
and
Secs.
10
and
12,
Article
XII,
of
the
Constitution,
which
are
worded
as
follows:
"Article
II
DECLARATION
OF
PRINCIPLES
AND
STATE
POLICIES
xxx
xxx
xxx
Sec.
19.The
State
shall
develop
a
self-reliant
and
independent
national
economy
effectively
controlled
by
Filipinos.
xxx
xxx
xxx
Article
XII
NATIONAL
ECONOMY
AND
PATRIMONY
xxx
xxx
xxx
Sec.
10.
.
.
The
Congress
shall
enact
measures
that
will
encourage
the
formation
and
operation
of
enterprises
whose
capital
is
wholly
owned
by
Filipinos.
In
the
grant
of
rights,
privileges,
and
concessions
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos.
xxx
xxx
xxx
Sec.
12.The
State
shall
promote
the
preferential
use
of
Filipino
labor,
domestic
materials
and
locally
produced
goods,
and
adopt
measures
that
help
make
them
competitive."
Petitioners
aver
that
these
sacred
constitutional
principles
are
desecrated
by
the
following
WTO
provisions
quoted
in
their
memorandum:
19
"a)In
the
area
of
investment
measures
related
to
trade
in
goods
(TRIMS,
for
brevity):
"Article
2
National
Treatment
and
Quantitative
Restrictions.
1.Without
prejudice
to
other
rights
and
obligations
under
GATT
1994.
No
Member
shall
apply
any
TRIM
that
is
inconsistent
with
the
provisions
of
Article
III
or
Article
XI
of
GATT
1994.
2.An
Illustrative
list
of
TRIMS
that
are
inconsistent
with
the
obligations
of
general
elimination
of
quantitative
restrictions
provided
for
in
paragraph
I
of
Article
XI
of
GATT
1994
is
contained
in
the
Annex
to
this
Agreement."
(Agreement
on
Trade-Related
Investment
Measures,
Vol.
27,
Uruguay
Round,
Legal
Instruments,
p.
22121,
emphasis
supplied).
The
Annex
referred
to
reads
as
follows:
"ANNEX
Illustrative
List
1.TRIMS
that
are
inconsistent
with
the
obligation
of
national
treatment
provided
for
in
paragraph
4
of
Article
III
of
GATT
1994
include
those
which
are
mandatory
or
enforceable
under
domestic
law
or
under
administrative
rulings,
or
compliance
with
which
is
necessary
to
obtain
an
advantage,
and
which
require:
(a)the
purchase
or
use
by
an
enterprise
of
products
of
domestic
origin
or
from
any
domestic
source,
whether
specified
in
terms
of
particular
products,
in
terms
of
volume
or
value
of
products,
or
in
terms
of
proportion
of
volume
or
value
of
its
local
production;
or
(b)that
an
enterprise's
purchases
or
use
of
imported
products
be
limited
to
an
amount
related
to
the
volume
or
value
of
local
products
that
it
exports.
LLjur
2.TRIMS
that
are
inconsistent
with
the
obligations
of
general
elimination
of
quantitative
restrictions
provided
for
in
paragraph
1
of
Article
XI
of
GATT
1994
include
those
which
are
mandatory
or
enforceable
under
domestic
laws
or
under
administrative
rulings,
or
compliance
with
which
is
necessary
to
obtain
an
advantage,
and
which
restrict:
(a)the
importation
by
an
enterprise
of
products
used
in
or
related
to
the
local
production
that
it
exports;
(b)the
importation
by
an
enterprise
of
products
used
in
or
related
to
its
local
production
by
restricting
its
access
to
foreign
exchange
inflows
attributable
to
the
enterprise;
or
(c)the
exportation
or
sale
for
export
specified
in
terms
of
particular
products,
in
terms
of
volume
or
value
of
products,
or
in
terms
of
a
preparation
of
volume
or
value
of
its
local
production."
(Annex
to
the
Agreement
on
Trade-Related
Investment
Measures,
Vol.
27,
Uruguay
Round
Legal
Documents,
p.
22125,
emphasis
supplied).
The
paragraph
4
of
Article
III
of
GATT
1994
referred
to
is
quoted
as
follows:
The
products
of
the
territory
of
any
contracting
party
imported
into
the
territory
of
any
other
contracting
party
shall
be
accorded
treatment
no
less
favorable
than
that
accorded
to
like
products
of
national
origin
in
respect
of
laws,
regulations
and
requirements
affecting
their
internal
sale,
offering
for
sale,
purchase,
transportation,
distribution
or
use.
The
provisions
of
this
paragraph
shall
not
prevent
the
application
of
differential
internal
transportation
charges
which
are
based
exclusively
on
the
economic
operation
of
the
means
of
transport
and
not
on
the
nationality
of
the
product."
(Article
III,
GATT
1947,
as
amended
by
the
Protocol
Modifying
Part
II,
and
Article
XXVI
of
GATT,
14
September
1948,
62
UMTS
82-84
in
relation
to
paragraph
1
(a)
of
the
General
Agreement
on
Tariffs
and
Trade
1994,
Vol.
1,
Uruguay
Round,
Legal
Instruments
p.
177,
emphasis
supplied).
"b)In
the
area
of
trade-related
aspects
of
intellectual
property
rights
(TRIPS,
for
brevity):
Each
Member
shall
accord
to
the
nationals
of
other
Members
treatment
no
less
favourable
than
that
it
accords
to
its
own
nationals
with
regard
to
the
protection
of
intellectual
property
.
.
.
(par.
1,
Article
3,
Agreement
on
Trade-Related
Aspect
of
Intellectual
Property
rights,
Vol.
31,
Uruguay
Round,
Legal
Instruments,
p.
25432
(emphasis
supplied)
"(c)In
the
area
of
the
General
Agreement
on
Trade
in
Services:
National
Treatment
1.In
the
sectors
inscribed
in
its
schedule,
and
subject
to
any
conditions
and
qualifications
set
out
therein,
each
Member
shall
accord
to
services
and
service
suppliers
of
any
other
Member,
in
respect
of
all
measures
affecting
the
supply
of
services,
treatment
no
less
favourable
than
it
accords
to
its
own
like
services
and
service
suppliers.
2.A
Member
may
meet
the
requirement
of
paragraph
I
by
according
to
services
and
service
suppliers
of
any
other
Member,
either
formally
identical
treatment
or
formally
different
treatment
to
that
it
accords
to
its
own
like
services
and
service
suppliers.
3.Formally
identical
or
formally
different
treatment
shall
be
considered
to
be
less
favourable
if
it
modifies
the
conditions
of
completion
in
favour
of
services
or
service
suppliers
of
the
Member
compared
to
like
services
or
service
suppliers
of
any
other
Member.
(Article
XVII,
General
Agreement
on
Trade
in
Services,
Vol.
28,
Uruguay
Round
Legal
Instruments,
p.
22610
emphasis
supplied)."
It
is
petitioners'
position
that
the
foregoing
"national
treatment"
and
"parity
provisions"
of
the
WTO
Agreement
"place
nationals
and
products
of
member
countries
on
the
same
footing
as
Filipinos
and
local
products,"
in
contravention
of
the
"Filipino
First"
policy
of
the
Constitution.
They
allegedly
render
meaningless
the
phrase
"effectively
controlled
by
Filipinos."
The
constitutional
conflict
becomes
more
manifest
when
viewed
in
the
context
of
the
clear
duty
imposed
on
the
Philippines
as
a
WTO
member
to
ensure
the
conformity
of
its
laws,
regulations
and
administrative
procedures
with
its
obligations
as
provided
in
the
annexed
agreements.
20
Petitioners
further
argue
that
these
provisions
contravene
constitutional
limitations
on
the
role
exports
play
in
national
development
and
negate
the
preferential
treatment
accorded
to
Filipino
labor,
domestic
materials
and
locally
produced
goods.
On
the
other
hand,
respondents
through
the
Solicitor
General
counter
(1)
that
such
Charter
provisions
are
not
self-
executing
and
merely
set
out
general
policies;
(2)
that
these
nationalistic
portions
of
the
Constitution
invoked
by
petitioners
should
not
be
read
in
isolation
but
should
be
related
to
other
relevant
provisions
of
Art.
XII,
particularly
Secs.
1
and
13
thereof;
(3)
that
read
properly,
the
cited
WTO
clauses
do
not
conflict
with
the
Constitution;
and
(4)
that
the
WTO
Agreement
contains
sufficient
provisions
to
protect
developing
countries
like
the
Philippines
from
the
harshness
of
sudden
trade
liberalization.
LLphil
We
shall
now
discuss
and
rule
on
these
arguments.
Declaration
of
Principles
Not
Self-Executing
By
its
very
title,
Article
II
of
the
Constitution
is
a
"declaration
of
principles
and
state
policies."
The
counterpart
of
this
article
in
the
1935
Constitution
21
is
called
the
"basic
political
creed
of
the
nation"
by
Dean
Vicente
Sinco.
22
These
principles
in
Article
II
are
not
intended
to
be
self-executing
principles
ready
for
enforcement
through
the
courts.
23
They
are
used
by
the
judiciary
as
aids
or
as
guides
in
the
exercise
of
its
power
of
judicial
review,
and
by
the
legislature
in
its
enactment
of
laws.
As
held
in
the
leading
case
of
Kilosbayan,
Incorporated
vs.
Morato,
24
the
principles
and
state
policies
enumerated
in
Article
II
and
some
sections
of
Article
XII
are
not
"self-executing
provisions,
the
disregard
of
which
can
give
rise
to
a
cause
of
action
in
the
courts.
They
do
not
embody
judicially
enforceable
constitutional
rights
but
guidelines
for
legislation."
In
the
same
light,
we
held
in
Basco
vs.
Pagcor
25
that
broad
constitutional
principles
need
legislative
enactments
to
implement
them,
thus:
"On
petitioners'
allegation
that
P.D.
1869
violates
Sections
11
(Personal
Dignity)
12
(Family)
and
13
(Role
of
Youth)
of
Article
II;
Section
13
(Social
Justice)
of
Article
XIII
and
Section
2
(Educational
Values)
of
Article
XIV
of
the
1987
Constitution,
suffice
it
to
state
also
that
these
are
merely
statements
of
principles
and
policies.
As
such,
they
are
basically
not
self-executing,
meaning
a
law
should
be
passed
by
Congress
to
clearly
define
and
effectuate
such
principles.
'In
general,
therefore,
the
1935
provisions
were
not
intended
to
be
self-executing
principles
ready
for
enforcement
through
the
courts.
They
were
rather
directives
addressed
to
the
executive
and
to
the
legislature.
If
the
executive
and
the
legislature
failed
to
heed
the
directives
of
the
article,
the
available
remedy
was
not
judicial
but
political.
The
electorate
could
express
their
displeasure
with
the
failure
of
the
executive
and
the
legislature
through
the
language
of
the
ballot.
(Bernas,
Vol.
II,
p.
2)."
The
reasons
for
denying
a
cause
of
action
to
an
alleged
infringement
of
broad
constitutional
principles
are
sourced
from
basic
considerations
of
due
process
and
the
lack
of
judicial
authority
to
wade
"into
the
uncharted
ocean
of
social
and
economic
policy
making."
Mr.
Justice
Florentino
P.
Feliciano
in
his
concurring
opinion
in
Oposa
vs.
Factoran,
Jr.,
26
explained
these
reasons
as
follows:
"My
suggestion
is
simply
that
petitioners
must,
before
the
trial
court,
show
a
more
specific
legal
right
a
right
cast
in
language
of
a
significantly
lower
order
of
generality
than
Article
II
(15)
of
the
Constitution
that
is
or
may
be
violated
by
the
actions,
or
failures
to
act,
imputed
to
the
public
respondent
by
petitioners
so
that
the
trial
court
can
validly
render
judgment
granting
all
or
part
of
the
relief
prayed
for.
To
my
mind,
the
court
should
be
understood
as
simply
saying
that
such
a
more
specific
legal
right
or
rights
may
well
exist
in
our
corpus
of
law,
considering
the
general
policy
principles
found
in
theConstitution
and
the
existence
of
the
Philippine
Environment
Code,
and
that
the
trial
court
should
have
given
petitioners
an
effective
opportunity
so
to
demonstrate,
instead
of
aborting
the
proceedings
on
a
motion
to
dismiss.
It
seems
to
me
important
that
the
legal
right
which
is
an
essential
component
of
a
cause
of
action
be
a
specific,
operable
legal
right,
rather
than
a
constitutional
or
statutory
policy,
for
at
least
two
(2)
reasons.
One
is
that
unless
the
legal
right
claimed
to
have
been
violated
or
disregarded
is
given
specification
in
operational
terms,
defendants
may
well
be
unable
to
defend
themselves
intelligently
and
effectively;
in
other
words,
there
are
due
process
dimensions
to
this
matter.
The
second
is
a
broader-gauge
consideration
where
a
specific
violation
of
law
or
applicable
regulation
is
not
alleged
or
proved,
petitioners
can
be
expected
to
fall
back
on
the
expanded
conception
of
judicial
power
in
the
second
paragraph
of
Section
1
of
Article
VIII
of
the
Constitution
which
reads:
'Section
1..
.
.
Judicial
power
includes
the
duty
of
the
courts
of
justice
to
settle
actual
controversies
involving
rights
which
are
legally
demandable
and
enforceable,
and
to
determine
whether
or
not
there
has
been
a
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction
on
the
part
of
any
branch
or
instrumentality
of
the
Government.'
(Emphases
supplied)
When
substantive
standards
as
general
as
'the
right
to
a
balanced
and
healthy
ecology'
and
'the
right
to
health'
are
combined
with
remedial
standards
as
broad
ranging
as
'a
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction,'
the
result
will
be,
it
is
respectfully
submitted,
to
propel
courts
into
the
uncharted
ocean
of
social
and
economic
policy
making.
At
least
in
respect
of
the
vast
area
of
environmental
protection
and
management,
our
courts
have
no
claim
to
special
technical
competence
and
experience
and
professional
qualification.
Where
no
specific,
operable
norms
and
standards
are
shown
to
exist,
then
the
policy
making
departments
the
legislative
and
executive
departments
must
be
given
a
real
and
effective
opportunity
to
fashion
and
promulgate
those
norms
and
standards,
and
to
implement
them
before
the
courts
should
intervene."
cdasia
Economic
Nationalism
Should
Be
Read
with
Other
Constitutional
Mandates
to
Attain
Balanced
Development
of
Economy
On
the
other
hand,
Secs.
10
and
12
of
Article
XII,
apart
from
merely
laying
down
general
principles
relating
to
the
national
economy
and
patrimony,
should
be
read
and
understood
in
relation
to
the
other
sections
in
said
article,
especially
Secs.
1
and
13
thereof
which
read:
"Section
1.The
goals
of
the
national
economy
are
a
more
equitable
distribution
of
opportunities,
income,
and
wealth;
a
sustained
increase
in
the
amount
of
goods
and
services
produced
by
the
nation
for
the
benefit
of
the
people;
and
an
expanding
productivity
as
the
key
to
raising
the
quality
of
life
for
all,
especially
the
underprivileged.
The
State
shall
promote
industrialization
and
full
employment
based
on
sound
agricultural
development
and
agrarian
reform,
through
industries
that
make
full
and
efficient
use
of
human
and
natural
resources,
and
which
are
competitive
in
both
domestic
and
foreign
markets.
However,
the
State
shall
protect
Filipino
enterprises
against
unfair
foreign
competition
and
trade
practices.
In
the
pursuit
of
these
goals,
all
sectors
of
the
economy
and
all
regions
of
the
country
shall
be
given
optimum
opportunity
to
develop.
.
.
xxx
xxx
xxx
Sec.
13.The
State
shall
pursue
a
trade
policy
that
serves
the
general
welfare
and
utilizes
all
forms
and
arrangements
of
exchange
on
the
basis
of
equality
and
reciprocity."
As
pointed
out
by
the
Solicitor
General,
Sec.
1
lays
down
the
basic
goals
of
national
economic
development,
as
follows:
1.A
more
equitable
distribution
of
opportunities,
income
and
wealth;
2.A
sustained
increase
in
the
amount
of
goods
and
services
provided
by
the
nation
for
the
benefit
of
the
people;
and
3.An
expanding
productivity
as
the
key
to
raising
the
quality
of
life
for
all
especially
the
underprivileged.
With
these
goals
in
context,
the
Constitution
then
ordains
the
ideals
of
economic
nationalism
(1)
by
expressing
preference
in
favor
of
qualified
Filipinos
"in
the
grant
of
rights,
privileges
and
concessions
covering
the
national
economy
and
patrimony"
27
and
in
the
use
of
"Filipino
labor,
domestic
materials
and
locally-produced
goods";
(2)
by
mandating
the
State
to
"adopt
measures
that
help
make
them
competitive;
28
and
(3)
by
requiring
the
State
to
"develop
a
self-reliant
and
independent
national
economy
effectively
controlled
by
Filipinos."
29
In
similar
language,
the
Constitution
takes
into
account
the
realities
of
the
outside
world
as
it
requires
the
pursuit
of
"a
trade
policy
that
serves
the
general
welfare
and
utilizes
all
forms
and
arrangements
of
exchange
on
the
basis
of
equality
and
reciprocity";
30
and
speaks
of
industries
"which
are
competitive
in
both
domestic
and
foreign
markets"
as
well
as
of
the
protection
of
"Filipino
enterprises
against
unfair
foreign
competition
and
trade
practices."
It
is
true
that
in
the
recent
case
of
Manila
Prince
Hotel
vs.
Government
Service
Insurance
System,
et
al.,
31
this
Court
held
that
"Sec.
10,
second
par.,
Art.
XII
of
the
1987
Constitution
is
a
mandatory,
positive
command
which
is
complete
in
itself
and
which
needs
no
further
guidelines
or
implementing
laws
or
rules
for
its
enforcement.
From
its
very
words
the
provision
does
not
require
any
legislation
to
put
it
in
operation.
It
is
per
se
judicially
enforceable."
However,
as
the
constitutional
provision
itself
states,
it
is
enforceable
only
in
regard
to
"the
grants
of
rights,
privileges
and
concessions
covering
national
economy
and
patrimony"
and
not
to
every
aspect
of
trade
and
commerce.
It
refers
to
exceptions
rather
than
the
rule.
The
issue
here
is
not
whether
this
paragraph
of
Sec.
10
of
Art.
XII
is
self-executing
or
not.
Rather,
the
issue
is
whether,
as
a
rule,
there
are
enough
balancing
provisions
in
the
Constitution
to
allow
the
Senate
to
ratify
the
Philippine
concurrence
in
the
WTO
Agreement.
And
we
hold
that
there
are.
All
told,
while
the
Constitution
indeed
mandates
a
bias
in
favor
of
Filipino
goods,
services,
labor
and
enterprises,
at
the
same
time,
it
recognizes
the
need
for
business
exchange
with
the
rest
of
the
world
on
the
bases
of
equality
and
reciprocity
and
limits
protection
of
Filipino
enterprises
only
against
foreign
competition
and
trade
practices
that
are
unfair.
32
In
other
words,
the
Constitution
did
not
intend
to
pursue
an
isolationist
policy.
It
did
not
shut
out
foreign
investments,
goods
and
services
in
the
development
of
the
Philippine
economy.
While
the
Constitution
does
not
encourage
the
unlimited
entry
of
foreign
goods,
services
and
investments
into
the
country,
it
does
not
prohibit
them
either.
In
fact,
it
allows
an
exchange
on
the
basis
of
equality
and
reciprocity,
frowning
only
on
foreign
competition
that
is
unfair.
WTO
Recognizes
Need
to
Protect
Weak
Economies
Upon
the
other
hand,
respondents
maintain
that
the
WTO
itself
has
some
built-in
advantages
to
protect
weak
and
developing
economies,
which
comprise
the
vast
majority
of
its
members.
Unlike
in
the
UN
where
major
states
have
permanent
seats
and
veto
powers
in
the
Security
Council,
in
the
WTO,
decisions
are
made
on
the
basis
of
sovereign
equality,
with
each
member's
vote
equal
in
weight
to
that
of
any
other.
There
is
no
WTO
equivalent
of
the
UN
Security
Council.
aisadc
"WTO
decides
by
consensus
whenever
possible,
otherwise,
decisions
of
the
Ministerial
Conference
and
the
General
Council
shall
be
taken
by
the
majority
of
the
votes
cast,
except
in
cases
of
interpretation
of
the
Agreement
or
waiver
of
the
obligation
of
a
member
which
would
require
three
fourths
vote.
Amendments
would
require
two
thirds
vote
in
general.
Amendments
to
MFN
provisions
and
the
Amendments
provision
will
require
assent
of
all
members.
Any
member
may
withdraw
from
the
Agreement
upon
the
expiration
of
six
months
from
the
date
of
notice
of
withdrawals."
33
Hence,
poor
countries
can
protect
their
common
interests
more
effectively
through
the
WTO
than
through
one-on-one
negotiations
with
developed
countries.
Within
the
WTO,
developing
countries
can
form
powerful
blocs
to
push
their
economic
agenda
more
decisively
than
outside
the
Organization.
This
is
not
merely
a
matter
of
practical
alliances
but
a
negotiating
strategy
rooted
in
law.
Thus,
the
basic
principles
underlying
the
WTO
Agreement
recognize
the
need
of
developing
countries
like
the
Philippines
to
"share
in
the
growth
in
international
trade
commensurate
with
the
needs
of
their
economic
development."
These
basic
principles
are
found
in
the
preamble
34
of
the
WTO
Agreement
as
follows:
"The
Parties
to
this
Agreement,
Recognizing
that
their
relations
in
the
field
of
trade
and
economic
endeavour
should
be
conducted
with
a
view
to
raising
standards
of
living,
ensuring
full
employment
and
a
large
and
steadily
growing
volume
of
real
income
and
effective
demand,
and
expanding
the
production
of
and
trade
in
goods
and
services,
while
allowing
for
the
optimal
use
of
the
world's
resources
in
accordance
with
the
objective
of
sustainable
development,
seeking
both
to
protect
and
preserve
the
environment
and
to
enhance
the
means
for
doing
so
in
a
manner
consistent
with
their
respective
needs
and
concerns
at
different
levels
of
economic
development,
Recognizing
further
that
there
is
need
for
positive
efforts
designed
to
ensure
that
developing
countries,
and
especially
the
least
developed
among
them,
secure
a
share
in
the
growth
in
international
trade
commensurate
with
the
needs
of
their
economic
development,
Being
desirous
of
contributing
to
these
objectives
by
entering
into
reciprocal
and
mutually
advantageous
arrangements
directed
to
the
substantial
reduction
of
tariffs
and
other
barriers
to
trade
and
to
the
elimination
of
discriminatory
treatment
in
international
trade
relations,
Resolved,
therefore,
to
develop
an
integrated,
more
viable
and
durable
multilateral
trading
system
encompassing
the
General
Agreement
on
Tariffs
and
Trade,
the
results
of
past
trade
liberalization
efforts,
and
all
of
the
results
of
the
Uruguay
Round
of
Multilateral
Trade
Negotiations,
Determined
to
preserve
the
basic
principles
and
to
further
the
objectives
underlying
this
multilateral
trading
system,
.
.
."
(emphasis
supplied.)
Specific
WTO
Provisos
Protect
Developing
Countries
So
too,
the
Solicitor
General
points
out
that
pursuant
to
and
consistent
with
the
foregoing
basic
principles,
the
WTO
Agreement
grants
developing
countries
a
more
lenient
treatment,
giving
their
domestic
industries
some
protection
from
the
rush
of
foreign
competition.
Thus,
with
respect
to
tariffs
in
general,
preferential
treatment
is
given
to
developing
countries
in
terms
of
the
amount
of
tariff
reduction
and
the
period
within
which
the
reduction
is
to
be
spread
out.
Specifically,
GATT
requires
an
average
tariff
reduction
rate
of
36%
for
developed
countries
to
be
effected
within
a
period
of
six
(6)
years
while
developing
countries
including
the
Philippines
are
required
to
effect
an
average
tariff
reduction
of
only
24%
within
ten
(10)
years.
In
respect
to
domestic
subsidy,
GATT
requires
developed
countries
to
reduce
domestic
support
to
agricultural
products
by
20%
over
six
(6)
years,
as
compared
to
only
13%
for
developing
countries
to
be
effected
within
ten
(10)
years.
In
regard
to
export
subsidy
for
agricultural
products,
GATT
requires
developed
countries
to
reduce
their
budgetary
outlays
for
export
subsidy
by
36%
and
export
volumes
receiving
export
subsidy
by
21%
within
a
period
of
six
(6)
years.
For
developing
countries,
however,
the
reduction
rate
is
only
two-thirds
of
that
prescribed
for
developed
countries
and
a
longer
period
of
ten
(10)
years
within
which
to
effect
such
reduction.
Moreover,
GATT
itself
has
provided
built-in
protection
from
unfair
foreign
competition
and
trade
practices
including
anti-dumping
measures,
countervailing
measures
and
safeguards
against
import
surges.
Where
local
businesses
are
jeopardized
by
unfair
foreign
competition,
the
Philippines
can
avail
of
these
measures.
There
is
hardly
therefore
any
basis
for
the
statement
that
under
the
WTO,
local
industries
and
enterprises
will
all
be
wiped
out
and
that
Filipinos
will
be
deprived
of
control
of
the
economy.
Quite
the
contrary,
the
weaker
situations
of
developing
nations
like
the
Philippines
have
been
taken
into
account;
thus,
there
would
be
no
basis
to
say
that
in
joining
the
WTO,
the
respondents
have
gravely
abused
their
discretion.
True,
they
have
made
a
bold
decision
to
steer
the
ship
of
state
into
the
yet
uncharted
sea
of
economic
liberalization.
But
such
decision
cannot
be
set
aside
on
the
ground
of
grave
abuse
of
discretion,
simply
because
we
disagree
with
it
or
simply
because
we
believe
only
in
other
economic
policies.
As
earlier
stated,
the
Court
in
taking
jurisdiction
of
this
case
will
not
pass
upon
the
advantages
and
disadvantages
of
trade
liberalization
as
an
economic
policy.
It
will
only
perform
its
constitutional
duty
of
determining
whether
the
Senate
committed
grave
abuse
of
discretion.
cdtai
Constitution
Does
Not
Rule
Out
Foreign
Competition
Furthermore,
the
constitutional
policy
of
a
"self-reliant
and
independent
national
economy"
35
does
not
necessarily
rule
out
the
entry
of
foreign
investments,
goods
and
services.
It
contemplates
neither
"economic
seclusion"
nor
"mendicancy
in
the
international
community."
As
explained
by
Constitutional
Commissioner
Bernardo
Villegas,
sponsor
of
this
constitutional
policy:
"Economic
self
reliance
is
a
primary
objective
of
a
developing
country
that
is
keenly
aware
of
overdependence
on
external
assistance
for
even
its
most
basic
needs.
It
does
not
mean
autarky
or
economic
seclusion;
rather,
it
means
avoiding
mendicancy
in
the
international
community.
Independence
refers
to
the
freedom
from
undue
foreign
control
of
the
national
economy,
especially
in
such
strategic
industries
as
in
the
development
of
natural
resources
and
public
utilities."
36
The
WTO
reliance
on
"most
favored
nation,"
"national
treatment,"
and
"trade
without
discrimination"
cannot
be
struck
down
as
unconstitutional
as
in
fact
they
are
rules
of
equality
and
reciprocity
that
apply
to
all
WTO
members.
Aside
from
envisioning
a
trade
policy
based
on
"equality
and
reciprocity,"
37
the
fundamental
law
encourages
industries
that
are
"competitive
in
both
domestic
and
foreign
markets,"
thereby
demonstrating
a
clear
policy
against
a
sheltered
domestic
trade
environment,
but
one
in
favor
of
the
gradual
development
of
robust
industries
that
can
compete
with
the
best
in
the
foreign
markets.
Indeed,
Filipino
managers
and
Filipino
enterprises
have
shown
capability
and
tenacity
to
compete
internationally.
And
given
a
free
trade
environment,
Filipino
entrepreneurs
and
managers
in
Hongkong
have
demonstrated
the
Filipino
capacity
to
grow
and
to
prosper
against
the
best
offered
under
a
policy
of
laissez
faire.
Constitution
Favors
Consumers,
Not
Industries
or
Enterprises
The
Constitution
has
not
really
shown
any
unbalanced
bias
in
favor
of
any
business
or
enterprise,
nor
does
it
contain
any
specific
pronouncement
that
Filipino
companies
should
be
pampered
with
a
total
proscription
of
foreign
competition.
On
the
other
hand,
respondents
claim
that
WTO/GATT
aims
to
make
available
to
the
Filipino
consumer
the
best
goods
and
services
obtainable
anywhere
in
the
world
at
the
most
reasonable
prices.
Consequently,
the
question
boils
down
to
whether
WTO/GATT
will
favor
the
general
welfare
of
the
public
at
large.
Will
adherence
to
the
WTO
treaty
bring
this
ideal
(of
favoring
the
general
welfare)
to
reality?
Will
WTO/GATT
succeed
in
promoting
the
Filipinos'
general
welfare
because
it
will
as
promised
by
its
promoters
expand
the
country's
exports
and
generate
more
employment?
Will
it
bring
more
prosperity,
employment,
purchasing
power
and
quality
products
at
the
most
reasonable
rates
to
the
Filipino
public?
The
responses
to
these
questions
involve
"judgment
calls"
by
our
policy
makers,
for
which
they
are
answerable
to
our
people
during
appropriate
electoral
exercises.
Such
questions
and
the
answers
thereto
are
not
subject
to
judicial
pronouncements
based
on
grave
abuse
of
discretion.
Constitution
Designed
to
Meet
Future
Events
and
Contingencies
No
doubt,
the
WTO
Agreement
was
not
yet
in
existence
when
the
Constitution
was
drafted
and
ratified
in
1987.
That
does
not
mean
however
that
the
Charter
is
necessarily
flawed
in
the
sense
that
its
framers
might
not
have
anticipated
the
advent
of
a
borderless
world
of
business.
By
the
same
token,
the
United
Nations
was
not
yet
in
existence
when
the
1935
Constitution
became
effective.
Did
that
necessarily
mean
that
the
then
Constitution
might
not
have
contemplated
a
diminution
of
the
absoluteness
of
sovereignty
when
the
Philippines
signed
the
UN
Charter,
thereby
effectively
surrendering
part
of
its
control
over
its
foreign
relations
to
the
decisions
of
various
UN
organs
like
the
Security
Council?
It
is
not
difficult
to
answer
this
question.
Constitutions
are
designed
to
meet
not
only
the
vagaries
of
contemporary
events.
They
should
be
interpreted
to
cover
even
future
and
unknown
circumstances.
It
is
to
the
credit
of
its
drafters
that
a
Constitution
can
withstand
the
assaults
of
bigots
and
infidels
but
at
the
same
time
bend
with
the
refreshing
winds
of
change
necessitated
by
unfolding
events.
As
one
eminent
political
law
writer
and
respected
jurist
38
explains:
"The
Constitution
must
be
quintessential
rather
than
superficial,
the
root
and
not
the
blossom,
the
base
and
framework
only
of
the
edifice
that
is
yet
to
rise.
It
is
but
the
core
of
the
dream
that
must
take
shape,
not
in
a
twinkling
by
mandate
of
our
delegates,
but
slowly
'in
the
crucible
of
Filipino
minds
and
hearts,'
where
it
will
in
time
develop
its
sinews
and
gradually
gather
its
strength
and
finally
achieve
its
substance.
In
fine,
the
Constitution
cannot,
like
the
goddess
Athena,
rise
full-grown
from
the
brow
of
the
Constitutional
Convention,
nor
can
it
conjure
by
mere
fiat
an
instant
Utopia.
It
must
grow
with
the
society
it
seeks
to
re-structure
and
march
apace
with
the
progress
of
the
race,
drawing
from
the
vicissitudes
of
history
the
dynamism
and
vitality
that
will
keep
it,
far
from
becoming
a
petrified
rule,
a
pulsing,
living
law
attuned
to
the
heartbeat
of
the
nation."
cdtech
Third
Issue:
The
WTO
Agreement
and
Legislative
Power
The
WTO
Agreement
provides
that
"(e)ach
Member
shall
ensure
the
conformity
of
its
laws,
regulations
and
administrative
procedures
with
its
obligations
as
provided
in
the
annexed
Agreements."
39
Petitioners
maintain
that
this
undertaking
"unduly
limits,
restricts
and
impairs
Philippine
sovereignty,
specifically
the
legislative
power
which
under
Sec.
2,
Article
VI
of
the
1987
Philippine
Constitution
is
vested
in
the
Congress
of
the
Philippines.
It
is
an
assault
on
the
sovereign
powers
of
the
Philippines
because
this
means
that
Congress
could
not
pass
legislation
that
will
be
good
for
our
national
interest
and
general
welfare
if
such
legislation
will
not
conform
with
the
WTO
Agreement,
which
not
only
relates
to
the
trade
in
goods
.
.
.
but
also
to
the
flow
of
investments
and
money
.
.
.
as
well
as
to
a
whole
slew
of
agreements
on
socio-cultural
matters
.
.
."
40
More
specifically,
petitioners
claim
that
said
WTO
proviso
derogates
from
the
power
to
tax,
which
is
lodged
in
the
Congress.
41
And
while
the
Constitutionallows
Congress
to
authorize
the
President
to
fix
tariff
rates,
import
and
export
quotas,
tonnage
and
wharfage
dues,
and
other
duties
or
imposts,
such
authority
is
subject
to
"specified
limits
and
.
.
.
such
limitations
and
restrictions"
as
Congress
may
provide,
42
as
in
fact
it
did
under
Sec.
401
of
the
Tariff
and
Customs
Code.
Sovereignty
Limited
by
International
Law
and
Treaties
This
Court
notes
and
appreciates
the
ferocity
and
passion
by
which
petitioners
stressed
their
arguments
on
this
issue.
However,
while
sovereignty
has
traditionally
been
deemed
absolute
and
all-encompassing
on
the
domestic
level,
it
is
however
subject
to
restrictions
and
limitations
voluntarily
agreed
to
by
the
Philippines,
expressly
or
impliedly,
as
a
member
of
the
family
of
nations.
Unquestionably,
the
Constitution
did
not
envision
a
hermit-type
isolation
of
the
country
from
the
rest
of
the
world.
In
its
Declaration
of
Principles
and
State
Policies,
the
Constitution
"adopts
the
generally
accepted
principles
of
international
law
as
part
of
the
law
of
the
land,
and
adheres
to
the
policy
of
peace,
equality,
justice,
freedom,
cooperation
and
amity,
with
all
nations."
43
By
the
doctrine
of
incorporation,
the
country
is
bound
by
generally
accepted
principles
of
international
law,
which
are
considered
to
be
automatically
part
of
our
own
laws.
44
One
of
the
oldest
and
most
fundamental
rules
in
international
law
is
pacta
sunt
servanda
international
agreements
must
be
performed
in
good
faith.
"A
treaty
engagement
is
not
a
mere
moral
obligation
but
creates
a
legally
binding
obligation
on
the
parties
.
.
.
A
state
which
has
contracted
valid
international
obligations
is
bound
to
make
in
its
legislations
such
modifications
as
may
be
necessary
to
ensure
the
fulfillment
of
the
obligations
undertaken."
45
By
their
inherent
nature,
treaties
really
limit
or
restrict
the
absoluteness
of
sovereignty.
By
their
voluntary
act,
nations
may
surrender
some
aspects
of
their
state
power
in
exchange
for
greater
benefits
granted
by
or
derived
from
a
convention
or
pact.
After
all,
states,
like
individuals,
live
with
coequals,
and
in
pursuit
of
mutually
covenanted
objectives
and
benefits,
they
also
commonly
agree
to
limit
the
exercise
of
their
otherwise
absolute
rights.
Thus,
treaties
have
been
used
to
record
agreements
between
States
concerning
such
widely
diverse
matters
as,
for
example,
the
lease
of
naval
bases,
the
sale
or
cession
of
territory,
the
termination
of
war,
the
regulation
of
conduct
of
hostilities,
the
formation
of
alliances,
the
regulation
of
commercial
relations,
the
settling
of
claims,
the
laying
down
of
rules
governing
conduct
in
peace
and
the
establishment
of
international
organizations.
46
The
sovereignty
of
a
state
therefore
cannot
in
fact
and
in
reality
be
considered
absolute.
Certain
restrictions
enter
into
the
picture:
(1)
limitations
imposed
by
the
very
nature
of
membership
in
the
family
of
nations
and
(2)
limitations
imposed
by
treaty
stipulations.
As
aptly
put
by
John
F.
Kennedy,
"Today,
no
nation
can
build
its
destiny
alone.
The
age
of
self-sufficient
nationalism
is
over.
The
age
of
interdependence
is
here."
47
UN
Charter
and
Other
Treaties
Limit
Sovereignty
Thus,
when
the
Philippines
joined
the
United
Nations
as
one
of
its
51
charter
members,
it
consented
to
restrict
its
sovereign
rights
under
the
"concept
of
sovereignty
as
auto-limitation."
47-A
Under
Article
2
of
the
UN
Charter,
"(a)ll
members
shall
give
the
United
Nations
every
assistance
in
any
action
it
takes
in
accordance
with
the
present
Charter,
and
shall
refrain
from
giving
assistance
to
any
state
against
which
the
United
Nations
is
taking
preventive
or
enforcement
action."
Such
assistance
includes
payment
of
its
corresponding
share
not
merely
in
administrative
expenses
but
also
in
expenditures
for
the
peace-keeping
operations
of
the
organization.
In
its
advisory
opinion
of
July
20,
1961,
the
International
Court
of
Justice
held
that
money
used
by
the
United
Nations
Emergency
Force
in
the
Middle
East
and
in
the
Congo
were
"expenses
of
the
United
Nations"
under
Article
17,
paragraph
2,
of
the
UN
Charter.
Hence,
all
its
members
must
bear
their
corresponding
share
in
such
expenses.
In
this
sense,
the
Philippine
Congress
is
restricted
in
its
power
to
appropriate.
It
is
compelled
to
appropriate
funds
whether
it
agrees
with
such
peace-keeping
expenses
or
not.
So
too,
under
Article
105
of
the
said
Charter,
the
UN
and
its
representatives
enjoy
diplomatic
privileges
and
immunities,
thereby
limiting
again
the
exercise
of
sovereignty
of
members
within
their
own
territory.
Another
example:
although
"sovereign
equality"
and
"domestic
jurisdiction"
of
all
members
are
set
forth
as
underlying
principles
in
the
UN
Charter,
such
provisos
are
however
subject
to
enforcement
measures
decided
by
the
Security
Council
for
the
maintenance
of
international
peace
and
security
under
Chapter
VII
of
the
Charter.
A
final
example:
under
Article
103,
"(i)n
the
event
of
a
conflict
between
the
obligations
of
the
Members
of
the
United
Nations
under
the
present
Charter
and
their
obligations
under
any
other
international
agreement,
their
obligation
under
the
present
charter
shall
prevail,"
thus
unquestionably
denying
the
Philippines
as
a
member
the
sovereign
power
to
make
a
choice
as
to
which
of
conflicting
obligations,
if
any,
to
honor.
cda
Apart
from
the
UN
Treaty,
the
Philippines
has
entered
into
many
other
international
pacts
both
bilateral
and
multilateral
that
involve
limitations
on
Philippine
sovereignty.
These
are
enumerated
by
the
Solicitor
General
in
his
Compliance
dated
October
24,
1996,
as
follows:
"(a)Bilateral
convention
with
the
United
States
regarding
taxes
on
income,
where
the
Philippines
agreed,
among
others,
to
exempt
from
tax,
income
received
in
the
Philippines
by,
among
others,
the
Federal
Reserve
Bank
of
the
United
States,
the
Export/Import
Bank
of
the
United
States,
the
Overseas
Private
Investment
Corporation
of
the
United
States.
Likewise,
in
said
convention,
wages,
salaries
and
similar
remunerations
paid
by
the
United
States
to
its
citizens
for
labor
and
personal
services
performed
by
them
as
employees
or
officials
of
the
United
States
are
exempt
from
income
tax
by
the
Philippines.
(b)Bilateral
agreement
with
Belgium,
providing,
among
others,
for
the
avoidance
of
double
taxation
with
respect
to
taxes
on
income.
(c)Bilateral
convention
with
the
Kingdom
of
Sweden
for
the
avoidance
of
double
taxation.
(d)Bilateral
convention
with
the
French
Republic
for
the
avoidance
of
double
taxation.
(e)Bilateral
air
transport
agreement
with
Korea
where
the
Philippines
agreed
to
exempt
from
all
customs
duties,
inspection
fees
and
other
duties
or
taxes
aircrafts
of
South
Korea
and
the
regular
equipment,
spare
parts
and
supplies
arriving
with
said
aircrafts.
(f)Bilateral
air
service
agreement
with
Japan,
where
the
Philippines
agreed
to
exempt
from
customs
duties,
excise
taxes,
inspection
fees
and
other
similar
duties,
taxes
or
charges
fuel,
lubricating
oils,
spare
parts,
regular
equipment,
stores
on
board
Japanese
aircrafts
while
on
Philippine
soil.
(g)Bilateral
air
service
agreement
with
Belgium
where
the
Philippines
granted
Belgian
air
carriers
the
same
privileges
as
those
granted
to
Japanese
and
Korean
air
carriers
under
separate
air
service
agreements.
(h)Bilateral
notes
with
Israel
for
the
abolition
of
transit
and
visitor
visas
where
the
Philippines
exempted
Israeli
nationals
from
the
requirement
of
obtaining
transit
or
visitor
visas
for
a
sojourn
in
the
Philippines
not
exceeding
59
days.
(i)Bilateral
agreement
with
France
exempting
French
nationals
from
the
requirement
of
obtaining
transit
and
visitor
visa
for
a
sojourn
not
exceeding
59
days.
(j)Multilateral
Convention
on
Special
Missions,
where
the
Philippines
agreed
that
premises
of
Special
Missions
in
the
Philippines
are
inviolable
and
its
agents
can
not
enter
said
premises
without
consent
of
the
Head
of
Mission
concerned.
Special
Missions
are
also
exempted
from
customs
duties,
taxes
and
related
charges.
(k)Multilateral
Convention
on
the
Law
of
Treaties.
In
this
convention,
the
Philippines
agreed
to
be
governed
by
the
Vienna
Convention
on
the
Law
of
Treaties.
(l)Declaration
of
the
President
of
the
Philippines
accepting
compulsory
jurisdiction
of
the
International
Court
of
Justice.
The
International
Court
of
Justice
has
jurisdiction
in
all
legal
disputes
concerning
the
interpretation
of
a
treaty,
any
question
of
international
law,
the
existence
of
any
fact
which,
if
established,
would
constitute
a
breach
of
international
obligation."
In
the
foregoing
treaties,
the
Philippines
has
effectively
agreed
to
limit
the
exercise
of
its
sovereign
powers
of
taxation,
eminent
domain
and
police
power.
The
underlying
consideration
in
this
partial
surrender
of
sovereignty
is
the
reciprocal
commitment
of
the
other
contracting
states
in
granting
the
same
privilege
and
immunities
to
the
Philippines,
its
officials
and
its
citizens.
The
same
reciprocity
characterizes
the
Philippine
commitments
under
WTO-GATT.
"International
treaties,
whether
relating
to
nuclear
disarmament,
human
rights,
the
environment,
the
law
of
the
sea,
or
trade,
constrain
domestic
political
sovereignty
through
the
assumption
of
external
obligations.
But
unless
anarchy
in
international
relations
is
preferred
as
an
alternative,
in
most
cases
we
accept
that
the
benefits
of
the
reciprocal
obligations
involved
outweigh
the
costs
associated
with
any
loss
of
political
sovereignty.
(T)rade
treaties
that
structure
relations
by
reference
to
durable,
well-defined
substantive
norms
and
objective
dispute
resolution
procedures
reduce
the
risks
of
larger
countries
exploiting
raw
economic
power
to
bully
smaller
countries,
by
subjecting
power
relations
to
some
form
of
legal
ordering.
In
addition,
smaller
countries
typically
stand
to
gain
disproportionately
from
trade
liberalization.
This
is
due
to
the
simple
fact
that
liberalization
will
provide
access
to
a
larger
set
of
potential
new
trading
relationship
than
in
case
of
the
larger
country
gaining
enhanced
success
to
the
smaller
country's
market."
48
The
point
is
that,
as
shown
by
the
foregoing
treaties,
a
portion
of
sovereignty
may
be
waived
without
violating
the
Constitution,
based
on
the
rationale
that
the
Philippines
"adopts
the
generally
accepted
principles
of
international
law
as
part
of
the
law
of
the
land
and
adheres
to
the
policy
of
.
.
.
cooperation
and
amity
with
all
nations."
casia
Fourth
Issue:
The
WTO
Agreement
and
Judicial
Power
Petitioners
aver
that
paragraph
1,
Article
34
of
the
General
Provisions
and
Basic
Principles
of
the
Agreement
on
Trade-
Related
Aspects
of
Intellectual
Property
Rights
(TRIPS)
49
intrudes
on
the
power
of
the
Supreme
Court
to
promulgate
rules
concerning
pleading,
practice
and
procedures.
50
To
understand
the
scope
and
meaning
of
Article
34,
TRIPS,
51
it
will
be
fruitful
to
restate
its
full
text
as
follows:
"Article
34
Process
Patents:
Burden
of
Proof
1.For
the
purposes
of
civil
proceedings
in
respect
of
the
infringement
of
the
rights
of
the
owner
referred
to
in
paragraph
1
(b)
of
Article
28,
if
the
subject
matter
of
a
patent
is
a
process
for
obtaining
a
product,
the
judicial
authorities
shall
have
the
authority
to
order
the
defendant
to
prove
that
the
process
to
obtain
an
identical
product
is
different
from
the
patented
process.
Therefore,
Members
shall
provide,
in
at
least
one
of
the
following
circumstances,
that
any
identical
product
when
produced
without
the
consent
of
the
patent
owner
shall,
in
the
absence
of
proof
to
the
contrary,
be
deemed
to
have
been
obtained
by
the
patented
process:
(a)if
the
product
obtained
by
the
patented
process
is
new;
(b)if
there
is
a
substantial
likelihood
that
the
identical
product
was
made
by
the
process
and
the
owner
of
the
patent
has
been
unable
through
reasonable
efforts
to
determine
the
process
actually
used.
2.Any
Member
shall
be
free
to
provide
that
the
burden
of
proof
indicated
in
paragraph
1
shall
be
on
the
alleged
infringer
only
if
the
condition
referred
to
in
subparagraph
(a)
is
fulfilled
or
only
if
the
condition
referred
to
in
subparagraph
(b)
is
fulfilled.
3.In
the
adduction
of
proof
to
the
contrary,
the
legitimate
interests
of
defendants
in
protecting
their
manufacturing
and
business
secrets
shall
be
taken
into
account."
From
the
above,
a
WTO
Member
is
required
to
provide
a
rule
of
disputable
(note
the
words
"in
the
absence
of
proof
to
the
contrary")
presumption
that
a
product
shown
to
be
identical
to
one
produced
with
the
use
of
a
patented
process
shall
be
deemed
to
have
been
obtained
by
the
(illegal)
use
of
the
said
patented
process,
(1)
where
such
product
obtained
by
the
patented
product
is
new,
or
(2)
where
there
is
"substantial
likelihood"
that
the
identical
product
was
made
with
the
use
of
the
said
patented
process
but
the
owner
of
the
patent
could
not
determine
the
exact
process
used
in
obtaining
such
identical
product.
Hence,
the
"burden
of
proof"
contemplated
by
Article
34
should
actually
be
understood
as
the
duty
of
the
alleged
patent
infringer
to
overthrow
such
presumption.
Such
burden,
properly
understood,
actually
refers
to
the
"burden
of
evidence"
(burden
of
going
forward)
placed
on
the
producer
of
the
identical
(or
fake)
product
to
show
that
his
product
was
produced
without
the
use
of
the
patented
process.
The
foregoing
notwithstanding,
the
patent
owner
still
has
the
"burden
of
proof"
since,
regardless
of
the
presumption
provided
under
paragraph
1
of
Article
34,
such
owner
still
has
to
introduce
evidence
of
the
existence
of
the
alleged
identical
product,
the
fact
that
it
is
"identical"
to
the
genuine
one
produced
by
the
patented
process
and
the
fact
of
"newness"
of
the
genuine
product
or
the
fact
of
"substantial
likelihood"
that
the
identical
product
was
made
by
the
patented
process.
The
foregoing
should
really
present
no
problem
in
changing
the
rules
of
evidence
as
the
present
law
on
the
subject,
Republic
Act
No.
165,
as
amended,
otherwise
known
as
the
Patent
Law,
provides
a
similar
presumption
in
cases
of
infringement
of
patented
design
or
utility
model,
thus:
"SEC.
60.Infringement.
Infringement
of
a
design
patent
or
of
a
patent
for
utility
model
shall
consist
in
unauthorized
copying
of
the
patented
design
or
utility
model
for
the
purpose
of
trade
or
industry
in
the
article
or
product
and
in
the
making,
using
or
selling
of
the
article
or
product
copying
the
patented
design
or
utility
model.
Identity
or
substantial
identity
with
the
patented
design
or
utility
model
shall
constitute
evidence
of
copying."
(emphasis
supplied)
Moreover,
it
should
be
noted
that
the
requirement
of
Article
34
to
provide
a
disputable
presumption
applies
only
if
(1)
the
product
obtained
by
the
patented
process
is
NEW
or
(2)
there
is
a
substantial
likelihood
that
the
identical
product
was
made
by
the
process
and
the
process
owner
has
not
been
able
through
reasonable
effort
to
determine
the
process
used.
Where
either
of
these
two
provisos
does
not
obtain,
members
shall
be
free
to
determine
the
appropriate
method
of
implementing
the
provisions
of
TRIPS
within
their
own
internal
systems
and
processes.
By
and
large,
the
arguments
adduced
in
connection
with
our
disposition
of
the
third
issue
derogation
of
legislative
power
will
apply
to
this
fourth
issue
also.
Suffice
it
to
say
that
the
reciprocity
clause
more
than
justifies
such
intrusion,
if
any
actually
exists.
Besides,
Article
34
does
not
contain
an
unreasonable
burden,
consistent
as
it
is
with
due
process
and
the
concept
of
adversarial
dispute
settlement
inherent
in
our
judicial
system.
So
too,
since
the
Philippine
is
a
signatory
to
most
international
conventions
on
patents,
trademarks
and
copyrights,
the
adjustment
in
legislation
and
rules
of
procedure
will
not
be
substantial.
52
Fifth
Issue:
Concurrence
Only
in
the
WTO
Agreement
and
Not
in
Other
Documents
Contained
in
the
Final
Act
Petitioners
allege
that
the
Senate
concurrence
in
the
WTO
Agreement
and
its
annexes
but
not
in
the
other
documents
referred
to
in
the
Final
Act,
namely
the
Ministerial
Declaration
and
Decisions
and
the
Understanding
on
Commitments
in
Financial
Services
is
defective
and
insufficient
and
thus
constitutes
abuse
of
discretion.
They
submit
that
such
concurrence
in
the
WTO
Agreement
alone
is
flawed
because
it
is
in
effect
a
rejection
of
the
Final
Act,
which
in
turn
was
the
document
signed
by
Secretary
Navarro,
in
representation
of
the
Republic
upon
authority
of
the
President.
They
contend
that
the
second
letter
of
the
President
to
the
Senate
53
which
enumerated
what
constitutes
the
Final
Act
should
have
been
the
subject
of
concurrence
of
the
Senate.
cdt
"A
final
act,
sometimes
called
protocol
de
clture,
is
an
instrument
which
records
the
winding
up
of
the
proceedings
of
a
diplomatic
conference
and
usually
includes
a
reproduction
of
the
texts
of
treaties,
conventions,
recommendations
and
other
acts
agreed
upon
and
signed
by
the
plenipotentiaries
attending
the
conference."
54
It
is
not
the
treaty
itself.
It
is
rather
a
summary
of
the
proceedings
of
a
protracted
conference
which
may
have
taken
place
over
several
years.
The
text
of
the
"Final
Act
Embodying
the
Results
of
the
Uruguay
Round
of
Multilateral
Trade
Negotiations"
is
contained
in
just
one
page55
in
Vol.
I
of
the
36-volume
Uruguay
Round
of
Multilateral
Trade
Negotiations.
By
signing
said
Final
Act,
Secretary
Navarro
as
representative
of
the
Republic
of
the
Philippines
undertook:
"(a)to
submit,
as
appropriate,
the
WTO
Agreement
for
the
consideration
of
their
respective
competent
authorities
with
a
view
to
seeking
approval
of
the
Agreement
in
accordance
with
their
procedures;
and
(b)to
adopt
the
Ministerial
Declarations
and
Decisions."
The
assailed
Senate
Resolution
No.
97
expressed
concurrence
in
exactly
what
the
Final
Act
required
from
its
signatories,
namely,
concurrence
of
the
Senate
in
the
WTO
Agreement.
The
Ministerial
Declarations
and
Decisions
were
deemed
adopted
without
need
for
ratification.
They
were
approved
by
the
ministers
by
virtue
of
Article
XXV:
1
of
GATT
which
provides
that
representatives
of
the
members
can
meet
"to
give
effect
to
those
provisions
of
this
Agreement
which
invoke
joint
action,
and
generally
with
a
view
to
facilitating
the
operation
and
furthering
the
objectives
of
this
Agreement."
56
The
Understanding
on
Commitments
in
Financial
Services
also
approved
in
Marrakesh
does
not
apply
to
the
Philippines.
It
applies
only
to
those
27
Members
which
"have
indicated
in
their
respective
schedules
of
commitments
on
standstill,
elimination
of
monopoly,
expansion
of
operation
of
existing
financial
service
suppliers,
temporary
entry
of
personnel,
free
transfer
and
processing
of
information,
and
national
treatment
with
respect
to
access
to
payment,
clearing
systems
and
refinancing
available
in
the
normal
course
of
business."
57
On
the
other
hand,
the
WTO
Agreement
itself
expresses
what
multilateral
agreements
are
deemed
included
as
its
integral
parts,
58
as
follows:
"Article
II
Scope
of
the
WTO
1.The
WTO
shall
provide
the
common
institutional
framework
for
the
conduct
of
trade
relations
among
its
Members
in
matters
to
the
agreements
and
associated
legal
instruments
included
in
the
Annexes
to
this
Agreement.
2.The
Agreements
and
associated
legal
instruments
included
in
Annexes
1,
2,
and
3
(hereinafter
referred
to
as
"Multilateral
Agreements")
are
integral
parts
of
this
Agreement,
binding
on
all
Members.
3.The
Agreements
and
associated
legal
instruments
included
in
Annex
4
(hereinafter
referred
to
as
"Plurilateral
Trade
Agreements")
are
also
part
of
this
Agreement
for
those
Members
that
have
accepted
them,
and
are
binding
on
those
Members.
The
Plurilateral
Trade
Agreements
do
not
create
either
obligation
or
rights
for
Members
that
have
not
accepted
them.
4.The
General
Agreement
on
Tariffs
and
Trade
1994
as
specified
in
annex
1A
(hereinafter
referred
to
as
"GATT
1994")
is
legally
distinct
from
the
General
Agreement
on
Tariffs
and
Trade,
dated
30
October
1947,
annexed
to
the
Final
Act
adopted
at
the
conclusion
of
the
Second
Session
of
the
Preparatory
Committee
of
the
United
Nations
Conference
on
Trade
and
Employment,
as
subsequently
rectified,
amended
or
modified
(hereinafter
referred
to
as
"GATT
1947").
It
should
be
added
that
the
Senate
was
well-aware
of
what
it
was
concurring
in
as
shown
by
the
members'
deliberation
on
August
25,
1994.
After
reading
the
letter
of
President
Ramos
dated
August
11,
1994,
59
the
senators
of
the
Republic
minutely
dissected
what
the
Senate
was
concurring
in,
as
follows:
60
"THE
CHAIRMAN:
Yes.
Now,
the
question
of
the
validity
of
the
submission
came
up
in
the
first
day
hearing
of
this
Committee
yesterday.
Was
the
observation
made
by
Senator
Taada
that
what
was
submitted
to
the
Senate
was
not
the
agreement
on
establishing
the
World
Trade
Organization
by
the
final
act
of
the
Uruguay
Round
which
is
not
the
same
as
the
agreement
establishing
the
World
Trade
Organization?
And
on
that
basis,
Senator
Tolentino
raised
a
point
of
order
which,
however,
he
agreed
to
withdraw
upon
understanding
that
his
suggestion
for
an
alternative
solution
at
that
time
was
acceptable.
That
suggestion
was
to
treat
the
proceedings
of
the
Committee
as
being
in
the
nature
of
briefings
for
Senators
until
the
question
of
the
submission
could
be
clarified.
And
so,
Secretary
Romulo,
in
effect,
is
the
President
submitting
a
new.
.
.
is
he
making
a
new
submission
which
improves
on
the
clarity
of
the
first
submission?
MR.
ROMULO:
Mr.
Chairman,
to
make
sure
that
it
is
clear
cut
and
there
should
be
no
misunderstanding,
it
was
his
intention
to
clarify
all
matters
by
giving
this
letter.
THE
CHAIRMAN:
Thank
you.
Can
this
Committee
hear
from
Senator
Taada
and
later
on
Senator
Tolentino
since
they
were
the
ones
that
raised
this
question
yesterday?
Senator
Taada,
please.
SEN.
TAADA:
Thank
you,
Mr.
Chairman.
Based
on
what
Secretary
Romulo
has
read,
it
would
now
clearly
appear
that
what
is
being
submitted
to
the
Senate
for
ratification
is
not
the
Final
Act
of
the
Uruguay
Round,
but
rather
the
Agreement
on
the
World
Trade
Organization
as
well
as
the
Ministerial
Declarations
and
Decisions,
and
the
Understanding
and
Commitments
in
Financial
Services.
I
am
now
satisfied
with
the
wording
of
the
new
submission
of
President
Ramos.
SEN.
TAADA.
.
.
.
of
President
Ramos,
Mr.
Chairman.
THE
CHAIRMAN.
Thank
you,
Senator
Taada.
Can
we
hear
from
Senator
Tolentino?
And
after
him
Senator
Neptali
Gonzales
and
Senator
Lina.
SEN.
TOLENTINO,
Mr.
Chairman,
I
have
not
seen
the
new
submission
actually
transmitted
to
us
but
I
saw
the
draft
of
his
earlier,
and
I
think
it
now
complies
with
the
provisions
of
the
Constitution,
and
with
the
Final
Act
itself
.
The
Constitution
does
not
require
us
to
ratify
the
Final
Act.
It
requires
us
to
ratify
the
Agreement
which
is
now
being
submitted.
The
Final
Act
itself
specifies
what
is
going
to
be
submitted
to
with
the
governments
of
the
participants.
prcd
In
paragraph
2
of
the
Final
Act,
we
read
and
I
quote:
'By
signing
the
present
Final
Act,
the
representatives
agree:
(a)
to
submit
as
appropriate
the
WTO
Agreement
for
the
consideration
of
the
respective
competent
authorities
with
a
view
of
seeking
approval
of
the
Agreement
in
accordance
with
their
procedures.'
In
other
words,
it
is
not
the
Final
Act
that
was
agreed
to
be
submitted
to
the
governments
for
ratification
or
acceptance
as
whatever
their
constitutional
procedures
may
provide
but
it
is
the
World
Trade
Organization
Agreement.
And
if
that
is
the
one
that
is
being
submitted
now,
I
think
it
satisfies
both
theConstitution
and
the
Final
Act
itself
.
Thank
you,
Mr.
Chairman.
THE
CHAIRMAN.
Thank
you,
Senator
Tolentino,
May
I
call
on
Senator
Gonzales.
SEN.
GONZALES.
Mr.
Chairman,
my
views
on
this
matter
are
already
a
matter
of
record.
And
they
had
been
adequately
reflected
in
the
journal
of
yesterday's
session
and
I
don't
see
any
need
for
repeating
the
same.
needs
no
further
guidelines
or
implementing
laws
or
rules
for
its
enforcement.
From
its
very
words
the
provision
does
not
require
any
legislation
to
put
it
in
operation.
It
is
per
se
judicially
enforceable.
When
ourConstitution
mandates
that
[i]n
the
grant
of
rights,
privileges,
and
concessions
covering
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos,
it
means
just
that
qualified
Filipinos
shall
be
preferred.
And
when
our
Constitution
declares
that
a
right
exists
in
certain
specified
circumstances
an
action
may
be
maintained
to
enforce
such
right
notwithstanding
the
absence
of
any
legislation
on
the
subject;
consequently,
if
there
is
no
statute
especially
enacted
to
enforce
such
constitutional
right,
such
right
enforces
itself
by
its
own
inherent
potency
and
puissance
and
from
which
all
legislations
must
take
their
bearings.
Where
there
is
a
right
there
is
a
remedy.
Ubi
jus
ibi
remedium.
7.
ID.;
ID.;
ID.;
INCLUDES
THE
NATIONAL
RESOURCES
AND
CULTURAL
HERITAGE.
When
the
Constitution
speaks
of
national
patrimony,
it
refers
not
only
to
the
natural
resources
of
the
Philippines,
as
the
Constitution
could
have
very
well
used
the
term
natural
resources,
but
also
to
the
cultural
heritage
of
the
Filipinos.
8.
ID.;
ID.;
ID.;
MANILA
HOTEL
CORPORATION,
EMBRACED
THEREIN;
FILIPINO
FIRST
POLICY
PROVISION,
APPLICABLE
IN
SALES
OF
HOTEL
STOCKS.
For
more
than
eight
(8)
decades
Manila
Hotel
has
bore
mute
witness
to
the
triumphs
and
failures,
loves
and
frustrations
of
the
Filipinos;
its
existence
is
impressed
with
public
interest;
its
own
historicity
associated
with
our
struggle
for
sovereignty,
independence
and
nationhood.
Verily,
Manila
Hotel
has
become
part
of
our
national
economy
and
patrimony.
For
sure,
51%
of
the
equity
of
the
MHC
comes
within
the
purview
of
the
constitutional
shelter
for
it
comprises
the
majority
and
controlling
stock,
so
that
anyone
who
acquires
or
owns
the
51%
will
have
actual
control
and
management
of
the
hotel.
In
this
instance,
51%
of
the
MHC
cannot
be
disassociated
from
the
hotel
and
the
land
on
which
the
hotel
edifice
stands.
Consequently,
we
cannot
sustain
respondents'
claim
that
the
Filipino
First
Policy
provision
is
not
applicable
since
what
is
being
sold
is
only
51%
of
the
outstanding
shares
of
the
corporation,
not
the
Hotel
building
nor
the
land
upon
which
the
building
stands.
9.
ID.;
STATE;
SALE
BY
THE
GSIS
OF
51%
OF
ITS
SHARE
IN
MANILA
HOTEL
CORP.,
A
STATE
ACTION,
SUBJECT
TO
CONSTITUTIONAL
COMMAND.
In
constitutional
jurisprudence,
the
acts
of
persons
distinct
from
the
government
are
considered
"state
action"
covered
by
the
Constitution
(1)
when
the
activity
it
engages
in
is
a
"
public
function",
(2)
when
the
government
is
so-significantly
involved
with
the
private
actor
as
to
make
the
government
responsible
for
his
action;
and,
(3)
when
the
government
has
approved
or
authorized
the
action.
It
is
evident
that
the
act
of
respondent
GSIS
in
selling
51%
of
its
share
in
respondent
MHC
comes
under
the
second
and
third
categories
of
"state
action."
Without
doubt
therefore
the
transaction,
although
entered
into
by
respondent
GSIS,
is
in
fact
a
transaction
of
the
State
and
therefore
subject
to
the
constitutional
command.
10.
ID.;
CONSTITUTION;
WHEN
THE
CONSTITUTION
ADDRESSES
THE
STATE,
IT
REFERS
TO
BOTH
PEOPLE
AND
GOVERNMENT.
When
the
Constitutionaddresses
the
State
it
refers
not
only
to
the
people
but
also
to
the
government
as
elements
of
the
State.
After
all,
government
is
composed
of
three
(3)
divisions
of
power
legislative,
executive
and
judicial.
Accordingly,
a
constitutional
mandate
directed
to
the
State
is
correspondingly
directed
to
the
three
(3)
branches
of
government.
It
is
undeniable
that
in
this
case
the
subject
constitutional
injunction
is
addressed
among
others
to
the
Executive
Department
and
respondent
GSIS,
a
government
instrumentality
deriving
its
authority
from
the
State.
11.
ID.;
ID.;
NATIONAL
PATRIMONY;
PREFERENCE
TO
QUALIFIED
FILIPINOS;
SALE
OF
STOCKS
OF
MANILA
HOTEL
CORPORATION
BY
THE
GSIS;
FILIPINOS
ALLOWED
TO
MATCH
THE
BID
OF
FOREIGN
ENTITY.
In
the
instant
case,
where
a
foreign
firm
submits
the
highest
bid
in
a
public
bidding
concerning
the
grant
of
rights,
privileges
and
concessions
covering
the
national
economy
and
patrimony,
thereby
exceeding
the
bid
of
a
Filipino,
there
is
no
question
that
the
Filipino
will
have
to
be
allowed
to
match
the
bid
of
the
foreign
entity.
And
if
the
Filipino
matches
the
bid
of
a
foreign
firm
the
award
should
go
to
the
Filipino.
It
must
be
so
if
we
are
to
give
life
and
meaning
to
the
Filipino
First
Policy
provision
of
the
1987
Constitution.
For,
while
this
may
neither
be
expressly
stated
nor
contemplated
in
the
bidding
rules,
the
constitutional
fiat
is
omnipresent
to
be
imply
disregarded.
To
ignore
it
would
be
to
sanction
a
perilous
skirting
of
the
basic
law.
12.
REMEDIAL
LAW;
ACTIONS;
FOREIGN
BIDDERS
WITHOUT
CAUSE
OF
ACTION
AGAINST
GSIS
BEFORE
ACCEPTANCE
OF
BID.
The
argument
of
respondents
that
petitioner
is
now
estopped
from
questioning
the
sale
to
Renong
Berhad
since
petitioner
was
well
aware
from
the
beginning
that
a
foreigner
could
participate
in
the
bidding
is
meritless.
Undoubtedly,
Filipinos
and
foreigners
alike
were
invited
to
the
bidding.
But
foreigners
may
be
awarded
the
sale
only
if
no
Filipino
qualifies,
or
if
the
qualified
Filipino
fails
to
match
the
highest
bid
tendered
by
the
foreign
entity.
In
the
case
before
us,
while
petitioner
was
already
preferred
at
the
inception
of
the
bidding
because
of
the
constitutional
mandate,
petitioner
had
not
yet
matched
the
bid
offered
by
Renong
Berhad.
Thus
it
did
not
have
the
right
or
personality
then
to
compel
respondent
GSIS
to
accept
its
earlier
bid.
Rightly,
only
after
it
had
matched
the
bid
of
the
foreign
firm
and
the
apparent
disregard
by
respondent
GSIS
of
petitioner's
matching
bid
did
the
latter
have
a
cause
of
action.
13.
ID.;
SPECIAL
CIVIL
ACTION,
CERTIORARI;
FAILURE
OF
THE
GSIS
TO
EXECUTE
CORRESPONDING
DOCUMENTS
WHERE
PETITIONER
HAD
MATCHED
THE
BID
PRICE
BY
FOREIGN
BIDDER,
A
GRAVE
ABUSE
OF
DISCRETION.
Since
petitioner
has
already
matched
the
bid
price
tendered
by
Renong
Berhad
pursuant
to
the
bidding
rules,
respondent
GSIS
is
left
with
no
alternative
but
to
award
to
petitioner
the
block
of
shares
of
MHC
and
to
execute
the
necessary
agreements
and
documents
to
effect
the
sale
in
accordance
not
only
with
the
bidding
guidelines
and
procedures
but
with
the
Constitution
as
well.
The
refusal
of
respondent
GSIS
to
execute
the
corresponding
documents
with
petitioner
as
provided
in
the
bidding
rules
after
the
latter
has
matched
the
bid
of
the
Malaysian
firm
clearly
constitutes
grave
abuse
of
discretion.
14.
ID.;
SUPREME
COURT;
DUTY
BOUND
TO
MAKE
SURE
THAT
CONTRACTS
DO
NOT
VIOLATE
THE
CONSTITUTION
OR
THE
LAWS.
While
it
is
no
business
of
the
Court
to
intervene
in
contracts
of
the
kind
referred
to
or
set
itself
up
as
the
judge
of
whether
they
are
viable
or
attainable,
it
is
its
bounden
duty
to
make
sure
that
they
do
not
violate
the
Constitution
or
the
laws,
or
are
not
adopted
or
implemented
with
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction.
It
will
never
shirk
that
duty,
no
matter
how
buffeted
by
winds
of
unfair
and
ill-informed
criticism.
Indeed,
the
Court
will
always
defer
to
the
Constitution
in
the
proper
governance
of
a
free
society;
after
all,
there
is
nothing
so
sacrosanct
in
any
economic
policy
as
to
draw
itself
beyond
judicial
review
when
the
Constitution
is
involved.
PADILLA,
J.,
concurring
opinion:
1.
POLITICAL
LAW;
CONSTITUTION;
PATRIMONY
OF
THE
NATION,
CONSTRUED.
A
study
of
the
1935
Constitution,
where
the
concept
of
"national
patrimony"
originated,
would
show
that
its
framers
decided
to
adopt
the
even
more
comprehensive
expression
"Patrimony
of
the
Nation"
in
the
belief
that
the
phrase
encircles
a
concept
embracing
not
only
the
natural
resources
of
the
country
but
practically
everything
that
belongs
to
the
Filipino
people,
the
tangible
and
the
material
as
well
as
the
intangible
and
the
spiritual
assets
and
possessions
of
the
people.
It
is
to
be
noted
that
the
framers
did
not
stop
with
conservation.
They
knew
that
conservation
alone
does
not
spell
progress;
and
that
this
may
be
achieved
only
through
development
as
a
correlative
factor
to
assure
to
the
people
not
only
the
exclusive
ownership,
but
also
the
exclusive
benefits
of
their
national
patrimony.
Moreover,
the
concept
of
national
patrimony
has
been
viewed
as
referring
not
only
to
our
rich
natural
resources
but
also
to
the
cultural
heritage
of
our
race.
There
is
no
doubt
in
my
mind
that
the
Manila
Hotel
is
very
much
a
part
of
our
national
patrimony
and,
as
such
deserves
constitutional
protection
as
to
who
shall
own
it
and
benefit
from
its
operation.
This
institution
has
played
an
important
role
in
our
nation's
history,
having
been
the
venue
of
many
a
historical
event,
and
serving
as
it
did,
and
as
it
does,
as
the
Philippine
Guest
House
for
visiting
foreign
heads
of
state,
dignitaries,
celebrities,
and
others.
2.
ID.;
ID.;
MANILA
HOTEL,
PART
OF
OUR
NATIONAL
PATRIMONY.
There
is
no
doubt
in
my
mind
that
the
Manila
Hotel
is
very
much
a
part
of
our
national
patrimony
and,
as
such,
deserves
constitutional
protection
as
to
who
shall
own
it
and
benefit
from
its
operation.
This
institution
has
played
an
important
role
in
our
nation's
history,
having
been
the
venue
of
many
a
historical
event,
and
serving
as
it
did,
and
as
it
does,
as
the
Philippine
Guest
House
for
visiting
foreign
heads
of
state,
dignitaries,
celebrities,
and
others.
3.
ID.;
ID.;
PREFERENCE
TO
QUALIFIED
FILIPINOS;
APPLIED
TO
SALES
OF
SHARE
OF
STOCKS
OF
MANILA
HOTEL.
"Preference
to
qualified
Filipinos,"
to
be
meaningful,
must
refer
not
only
to
things
that
are
peripheral,
collateral,
or
tangential.
It
must
touch
and
affect
the
very
"heart
of
the
existing
order."
In
the
field
of
public
bidding
in
the
acquisition
of
things
that
pertain
to
the
national
patrimony,
preference
to
qualified
Filipinos
must
allow
a
qualified
Filipino
to
match
or
equal
the
higher
bid
of
a
non-Filipino;
the
preference
shall
not
operate
only
when
the
bids
of
the
qualified
Filipino
and
the
non-Filipino
are
equal
in
which
case,
the
award
should
undisputedly
be
made
to
the
qualified
Filipino.
The
Constitutional
preference
should
give
the
qualified
Filipino
an
opportunity
to
match
or
equal
the
higher
bid
of
the
non-
Filipino
bidder
if
the
preference
of
the
qualified
Filipino
bidder
is
to
be
significant
at
all.
While
government
agencies,
including
the
courts
should
re-condition
their
thinking
to
such
a
trend,
and
make
it
easy
and
even
attractive
for
foreign
investors
to
come
to
our
shores,
yet
we
should
not
preclude
ourselves
from
reserving
to
us
Filipinos
certain
areas
where
our
national
identity,
culture
and
heritage
are
involved.
In
the
hotel
industry,
for
instance,
foreign
investors
have
established
themselves
creditably,
such
as
in
the
Shangri-La,
the
Nikko,
the
Peninsula,
and
Mandarin
Hotels.
This
should
not
stop
us
from
retaining
51%
of
the
capital
stock
of
the
Manila
Hotel
Corporation
in
the
hands
of
Filipinos.
This
would
be
in
keeping
with
the
intent
of
the
Filipino
people
to
preserve
our
national
patrimony,
including
our
historical
and
cultural
heritage
in
the
hands
of
Filipinos.
VITUG,
J.,
separate
opinion:
1.
POLITICAL
LAW;
CONSTITUTION;
NATIONAL
PATRIMONY;
PROVISION
GIVING
PREFERENCE
TO
QUALIFIED
FILIPINOS,
SELF-EXECUTORY.
The
provision
in
our
fundamental
law
which
provides
that
"(i)n
the
grant
of
rights,
privileges,
and
concessions
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos"
is
self-executory.
The
provision
verily
does
not
need,
although
it
can
obviously
be
amplified
or
regulated
by,
an
enabling
law
or
a
set
of
rules.
2.
ID.;
ID.;
ID.;
PATRIMONY
INCLUDES
CULTURAL
HERITAGE
OF
THE
COUNTRY;
MANILA
HOTEL,
EMBRACED
THEREIN.
The
term
"patrimony"
does
not
merely
refer
to
the
country's
natural
resources
but
also
to
its
cultural
heritage.
A
"historical
landmark,"
to
use
the
words
of
Mr.
Justice
Justo
P.
Torres,
Jr.,Manila
Hotel
has
now
indeed
become
part
of
Philippine
heritage.
3.
ADMINISTRATIVE
LAW;
GOVERNMENT
SERVICE
INSURANCE
SYSTEM;
SALE
OF
ITS
SHARE
IN
MANILA
HOTEL
CORPORATION,
AN
ACT
OF
THE
STATE;
CONSTITUTIONAL
REQUIREMENT
SHOULD
BE
COMPLIED
WITH.
The
act
of
the
Government
Service
Insurance
System
("GSIS"),
a
government
entity
which
derives
its
authority
from
the
State,
in
selling
51%
of
its
share
in
MHC
should
be
considered
an
act
of
the
State
subject
to
the
Constitutional
mandate.
4.
POLITICAL
LAW;
CONSTITUTION;
NATIONAL
PATRIMONY;
PREFERENCE
TO
QUALIFIED
FILIPINOS;
DOES
NOT
REFER
TO
ALLOWING
QUALIFIED
FILIPINOS
TO
MATCH
FOREIGN
BID.
On
the
pivotal
issue
of
the
degree
of
"preference
to
qualified
Filipinos"
I
find
it
somewhat
difficult
to
take
the
same
path
traversed
by
the
forceful
reasoning
of
Justice
Puno.
In
the
particular
case
before
us,
the
only
meaningful
preference,
it
seems,
would
really
be
to
allow
the
qualified
Filipino
to
match
the
foreign
bid
for,
as
a
practical
matter,
I
cannot
see
any
bid
that
literally
calls
for
millions
of
dollars
to
be
at
par
(to
the
last
cent)
with
another.
The
magnitude
of
the
bids
is
such
that
it
becomes
hardly
possible
for
the
competing
bids
to
stand
exactly
"equal"
which
alone,
under
the
dissenting
view,
could
trigger
the
right
of
preference.
MENDOZA,
J.,
separate
opinion:
POLITICAL
LAW;
CONSTITUTION;
NATIONAL
PATRIMONY;
PREFERENCE
TO
QUALIFIED
FILIPINOS;
FILIPINO
BIDDERS
SHOULD
BE
ALLOWED
TO
EQUAL
BID
OF
FOREIGN
FIRM
IN
SALE
OF
STOCKS
OF
MANILA
HOTEL
CORPORATION.
I
take
the
view
that
in
the
context
of
the
present
controversy
the
only
way
to
enforce
the
constitutional
mandate
that
"[i]n
the
grant
of
rights,
privileges
and
concessions
covering
the
national
patrimony
the
State
shall
give
preference
to
qualified
Filipinos"
is
to
allow
petitioner
Philippine
corporation
to
equal
the
bid
of
the
Malaysian
firm
Renong
Berhad
for
the
purchase
of
the
controlling
shares
of
stocks
in
the
Manila
Hotel
Corporation.
Indeed,
it
is
the
only
way
a
qualified
Filipino
or
Philippine
corporation
can
be
given
preference
in
the
enjoyment
of
a
right,
privilege
or
concession
given
by
the
State,
by
favoring
it
over
a
foreign
national
or
corporation.
Under
the
rules
on
public
bidding
of
the
Government
Service
and
Insurance
System,
if
petitioner
and
the
Malaysian
firm
had
offered
the
same
price
per
share,
"priority
[would
be
given]
to
the
bidder
seeking
the
larger
ownership
interest
in
MHC,"
so
that
if
petitioner
bid
for
more
shares,
it
would
be
preferred
to
the
Malaysian
corporation
for
that
reason
and
not
because
it
is
a
Philippine
corporation.
Consequently,
it
is
only
in
cases
like
the
present
one,
where
an
alien
corporation
is
the
highest
bidder,
that
preferential
treatment
of
the
Philippine
corporation
is
mandated
not
by
declaring
it
winner
but
by
allowing
it
"to
match
the
highest
bid
in
terms
of
price
per
share"
before
it
is
awarded
the
shares
of
stocks.
That,
to
me,
is
what
"preference
to
qualified
Filipinos"
means
in
the
context
of
this
case
by
favoring
Filipinos
whenever
they
are
at
a
disadvantage
vis-a-vis
foreigners.
TORRES,
JR.,
J.,
separate
opinion:
POLITICAL
LAW;
CONSTITUTION;
PATRIMONY
OF
THE
NATION;
MANILA
HOTEL,
EMBRACED
WITHIN
THE
MEANING
THEREOF;
SALE
OF
ITS
STOCKS
SHOULD
BE
LIMITED
TO
QUALIFIED
FILIPINOS.
Section
10,
Article
XII
of
the
1987
Constitution
should
be
read
in
conjunction
with
Article
II
of
the
same
Constitutionpertaining
to
"Declaration
of
Principles
and
State
Policies"
which
ordain
"The
State
shall
develop
a
self-reliant
and
independent
national
economy,
effectively
controlled
by
Filipinos."
(Sec.
19),
Interestingly,
the
matter
of
giving
preference
to
"qualified
Filipinos"
was
one
of
the
highlights
in
the
1987Constitution
Commission
proceedings.
The
nationalistic
provisions
of
the
1987
Constitution
reflect
the
history
and
spirit
of
the
Malolos
Constitution
of
1898,
the
1935
Constitution
and
the
1973
Constitution.
I
subscribe
to
the
view
that
history,
culture,
heritage,
and
tradition
are
not
legislated
and
is
the
product
of
events,
customs,
usages
and
practices.
It
is
actually
a
product
of
growth
and
acceptance
by
the
collective
mores
of
a
race.
It
is
the
spirit
and
soul
of
a
people.
The
Manila
Hotel
is
part
of
our
history,
culture
and
heritage.
Every
inch
of
the
Manila
Hotel
is
witness
to
historic
events
(too
numerous
to
mention)
which
shaped
our
history
for
almost
84
years.
The
history
of
the
Manila
Hotel
should
not
be
placed
in
the
auction
block
of
a
purely
business
transaction,
where
profit
subverts
the
cherished
historical
values
of
our
people.
The
Filipino
should
be
first
under
his
Constitution
and
in
his
own
land.
PUNO,
J.,
dissenting
opinion:
1.
POLITICAL
LAW;
CONSTITUTION;
AS
A
RULE
PROVISIONS
THEREOF
ARE
SELF-EXECUTING.
A
Constitution
provides
the
guiding
policies
and
principles
upon
which
is
built
the
substantial
foundation
and
general
framework
of
the
law
and
government.
As
a
rule,
its
provisions
are
deemed
self-executing
and
can
be
enforced
without
further
legislative
action.
Some
of
its
provisions,
however,
can
be
implemented
only
through
appropriate
laws
enacted
by
the
Legislature,
hence
not
self-executing.
Courts
as
a
rule
consider
the
provisions
of
the
Constitution
as
self-executing,
rather
than
as
requiring
future
legislation
for
their
enforcement.
The
reason
is
not
difficult
to
discern
For
if
they
are
not
treated
as
self-executing,
the
mandate
of
the
fundamental
law
ratified
by
the
sovereign
people
can
be
easily
ignored
and
nullified
by
Congress.
Suffused
with
wisdom
of
the
ages
is
the
unyielding
rule
that
legislative
actions
may
give
breath
to
constitutional
rights
but
congressional
inaction
should
not
suffocate
them.
2.
ID.;
ID.;
PROVISIONS
ARE
NOT
SELF-EXECUTING
WHERE
IT
MERELY
ANNOUNCES
A
POLICY
AND
EMPOWERS
THE
LEGISLATURE
TO
ENACT
LAWS
TO
CARRY
THE
POLICY
INTO
EFFECT.
Contrariwise,
case
law
lays
down
the
rule
that
a
constitutional
provision
is
not
self-executing
where
it
merely
announces
a
policy
and
its
language
empowers
the
Legislature
to
prescribe
the
means
by
which
the
policy
shall
be
carried
into
effect.
3.
ID.;
ID.;
FIRST
PARAGRAPH
OF
SECTION
10,
ARTICLE
12
NOT
SELF-EXECUTING.
The
first
paragraph
directs
Congress
to
reserve
certain
areas
of
investments
in
the
country
to
Filipino
citizens
or
to
corporations
sixty
per
cent
of
whose
capital
stock
is
owned
by
Filipinos.
It
further
commands
Congress
to
enact
laws
that
will
encourage
the
formation
and
operation
of
one
hundred
percent
Filipino-owned
enterprises.
In
checkered
contrast,
the
second
paragraph
orders
the
entire
State
to
give
preference
to
qualified
Filipinos
in
the
grant
of
rights
and
privileges
covering
the
national
economy
and
patrimony.
The
third
paragraph
also
directs
the
State
to
regulate
foreign
investments
in
line
with
our
national
goals
and
well-set
priorities.
The
first
paragraph
of
Section
10
is
not
self-executing.
By
its
express
text,
there
is
a
categorical
command
for
Congress
to
enact
laws
restricting
foreign
ownership
in
certain
areas
of
investments
in
the
country
and
to
encourage
the
formation
and
operation
of
wholly-owned
Filipino
enterprises.
4.
ID.;
ID.;
NATIONAL
PATRIMONY;
PREFERENCE
TO
QUALIFIED
FILIPINOS
UNDER
PARAGRAPHS
2
AND
3
OF
SECTION
10,
ARTICLE
12,
SELF-EXECUTING.
The
second
and
third
paragraphs
of
Section
10
are
different.
They
are
directed
to
the
State
and
not
to
Congress
alone
which
is
but
one
of
the
three
great
branches
of
our
government.
Their
coverage
is
also
broader
for
they
cover
"the
national
economy
and
patrimony"
and
"foreign
investments
within
[the]
national
jurisdiction"
and
not
merely
"certain
areas
of
investments."
Beyond
debate,
they
cannot
be
read
as
granting
Congress
the
exclusive
power
to
implement
by
law
the
policy
of
giving
preference
to
qualified
Filipinos
in
the
conferral
of
rights
and
privileges
covering
our
national
economy
and
patrimony.
Their
language
does
not
suggest
that
any
of
the
State
agency
or
instrumentality
has
the
privilege
to
hedge
or
to
refuse
its
implementation
for
any
reason
whatsoever.
Their
duty
to
implement
is
unconditional
and
it
is
now.
The
second
and
the
third
paragraphs
of
Section
10,
Article
XII
are
thus
self-
executing.
5.
ID.;
ID.;
ID.;
MANILA
HOTEL
CORPORATION,
PART
OF
THE
NATIONAL
PATRIMONY.
The
second
issue
is
whether
the
sale
of
a
majority
of
the
stocks
of
the
Manila
Hotel
Corporation
involves
the
disposition
of
part
of
our
national
patrimony.
The
records
of
the
Constitutional
Commission
show
that
the
Commissioners
entertained
the
same
view
as
to
its
meaning.
According
to
Commissioner
Nolledo,
"patrimony"
refers
not
only
to
our
rich
natural
resources
but
also
to
the
cultural
heritage
of
our
race.
By
this
yardstick,
the
sale
of
Manila
Hotel
falls
within
the
coverage
of
the
constitutional
provision
giving
preferential
treatment
to
qualified
Filipinos
in
the
grant
of
rights
involving
our
national
patrimony.
6.
ID.;
STATE;
GSIS,
EMBRACED
WITHIN
THE
MEANING
THEREOF.
The
third
issue
is
whether
the
constitutional
command
to
the
State
includes
the
respondent
GSIS.
A
look
at
its
charter
will
reveal
that
GSIS
is
a
government-owned
and
controlled
corporation
that
administers
funds
that
come
from
the
monthly
contributions
of
government
employees
and
the
government.
The
funds
are
held
in
trust
for
a
distinct
purpose
which
cannot
be
disposed
of
indifferently.
They
are
to
be
used
to
finance
the
retirement,
disability
and
life
insurance
benefits
of
the
employees
and
the
administrative
and
operational
expenses
of
the
GSIS.
Excess
funds,
however,
are
allowed
to
be
invested
in
business
and
other
ventures
for
the
benefit
of
the
employees.
The
GSIS
is
not
a
pure
private
corporation.
It
is
essentially
a
public
corporation
created
by
Congress
and
granted
an
original
charter
to
serve
a
public
purpose.
It
is
subject
to
the
jurisdictions
of
the
Civil
Service
Commission
and
the
Commission
on
Audit.
As
a
state-owned
and
controlled
corporation,
it
is
skin-bound
to
adhere
to
the
policies
spelled
out
in
the
Constitution
especially
those
designed
to
promote
the
general
welfare
of
the
people.
One
of
these
policies
is
the
Filipino
First
policy
which
the
people
elevated
as
a
constitutional
command.
7.
ID.;
CONSTITUTION;
PROVISIONS
THEREOF
DEEMED
INCLUDED
IN
ALL
LEGISLATIONS
AND
ALL
STATE
ACTIONS.
The
constitutional
command
to
enforce
the
Filipino
First
policy
is
addressed
to
the
State
and
not
to
Congress
alone.
Hence,
the
word
"laws"
should
not
be
understood
as
limited
to
legislations
but
all
state
actions
which
include
applicable
rules
and
regulations
adopted
by
agencies
and
instrumentalities
of
the
State
in
the
exercise
of
their
rule-making
power.
8.
ID.;
ID.;
NATIONAL
PATRIMONY;
PREFERENCE
TO
QUALIFIED
FILIPINOS;
STATE
NOT
PROHIBITED
FROM
GRANTING
RIGHTS
TO
FOREIGN
FIRM
IN
THE
ABSENCE
OF
QUALIFIED
FILIPINOS.
In
the
absence
of
qualified
Filipinos,
the
State
is
not
prohibited
from
granting
these
rights,
privileges
and
concessions
to
foreigners
if
the
act
will
promote
the
weal
of
the
nation.
9.
ID.;
ID.;
ID.;
ID.;
CASE
AT
BAR.
The
right
of
preference
of
petitioner
arises
only
if
it
tied
the
bid
of
Renong
Berhad.
In
that
instance,
all
things
stand
equal,
and
petitioner,
as
a
qualified
Filipino
bidder,
should
be
preferred.
It
is
with
deep
regret
that
I
cannot
subscribe
to
the
view
that
petitioner
has
a
right
to
match
the
bid
of
Renong
Berhad.
Petitioner's
submission
must
be
supported
by
the
rules
but
even
if
we
examine
the
rules
inside-out
a
thousand
times,
they
can
not
justify
the
claimed
right.
Under
the
rules,
the
right
to
match
the
highest
bid
arises
only
"if
for
any
reason,
the
highest
bidder
cannot
be
awarded
the
block
of
shares
.
.
.
."
No
reason
has
arisen
that
will
prevent
the
award
to
Renong
Berhad.
It
deserves
the
award
as
a
matter
of
right
for
the
rules
clearly
did
not
give
to
the
petitioner
as
a
qualified
Filipino
the
privilege
to
match
the
higher
bid
of
a
foreigner.
What
the
rules
did
not
grant,
petitioner
cannot
demand.
Our
sympathies
may
be
with
petitioner
but
the
court
has
no
power
to
extend
the
latitude
and
longitude
of
the
right
of
preference
as
defined
by
the
rules.
We
are
duty-bound
to
respect
that
determination
even
if
we
differ
with
the
wisdom
of
their
judgment.
The
right
they
grant
may
be
little
but
we
must
uphold
the
grant
for
as
long
as
the
right
of
preference
is
not
denied.
It
is
only
when
a
State
action
amounts
to
a
denial
of
the
right
that
the
Court
can
come
in
and
strike
down
the
denial
as
unconstitutional.
10.
REMEDIAL
LAW;
ACTIONS;
ESTOPPEL;
PARTY
ESTOPPED
FROM
ASSAILING
THE
WINNING
BID
OF
FOREIGN
FIRM
FROM
BEING
AWARE
OF
THE
RULES
AND
REGULATIONS
OF
THE
BIDDINGS
IT
AGREED
TO
RESPECT.
I
submit
that
petitioner
is
estopped
from
assailing
the
winning
bid
of
Renong
Berhad.
Petitioner
was
aware
of
the
rules
and
regulations
of
the
bidding.
It
knew
that
the
rules
and
regulations
do
not
provide
that
a
qualified
Filipino
bidder
can
match
the
winning
bid
after
submitting
an
inferior
bid.
It
knew
that
the
bid
was
open
to
foreigners
and
that
foreigners
qualified
even
during
the
first
bidding.
Petitioner
cannot
be
allowed
to
repudiate
the
rules
which
it
agreed
to
respect.
It
cannot
be
allowed
to
obey
the
rules
when
it
wins
and
disregard
them
when
it
loses.
If
sustained,
petitioners'
stance
will
wreak
havoc
on
the
essence
of
bidding.
PANGANIBAN,
J.,
separate
dissenting
opinion:
POLITICAL
LAW;
CONSTITUTION;
PATRIMONY
OF
THE
NATION;
PREFERENCE
TO
QUALIFIED
FILIPINOS;
LOSING
FILIPINO
NOT
GIVEN
RIGHT
TO
EQUAL
THE
HIGHEST
FOREIGN
BID.
The
majority
contends
the
Constitution
should
be
interpreted
to
mean
that,
after
a
bidding
process
is
concluded,
the
losing
Filipino
bidder
should
be
given
the
right
to
equal
the
highest
foreign
bid,
and
thus
to
win.
However,
the
Constitution
[Sec.
10
(2),
Art.
XII]
simply
states
that
"in
the
grant
of
rights
.
.
.
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos."
The
majority
concedes
that
there
is
no
law
defining
the
extent
or
degree
of
such
preference.
Specifically,
no
statute
empowers
a
losing
Filipino
bidder
to
increase
his
bid
and
equal
that
of
the
winning
foreigner.
In
the
absence
of
such
empowering
law,
the
majority's
strained
interpretation,
I
respectfully
submit,
constitutes
unadulteratedjudicial
legislation,
which
makes
bidding
a
ridiculous
sham
where
no
Filipino
can
lose
and
where
no
foreigner
can
win.
Only
in
the
Philippines!
Aside
from
being
prohibited
by
the
Constitution,
such
judicial
legislation
is
short-sighted
and,
viewed
properly,
gravely
prejudicial
to
long-term
Filipino
interests.
In
the
absence
of
a
law
specifying
the
degree
or
extent
of
the
"Filipino
First"
policy
of
the
Constitution,
the
constitutional
preference
for
the
"qualified
Filipinos"
may
be
allowed
only
where
all
the
bids
are
equal.
In
this
manner,
we
put
the
Filipino
ahead
without
self-destructing
him
and
without
being
unfair
to
the
foreigner.
In
short,
the
Constitution
mandates
a
victory
for
the
qualified
Filipino
only
when
the
scores
are
tied.
But
not
when
the
ballgame
is
over
and
the
foreigner
clearly
posted
the
highest
score.
D
E
C
I
S
I
O
N
BELLOSILLO,
J
p:
The
Filipino
First
Policy
enshrined
in
the
1987
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,
1
is
invoked
by
petitioner
in
its
bid
to
acquire
51%
of
the
shares
of
the
Manila
HotelCorporation
(MHC)
which
owns
the
historic
Manila
Hotel.
Opposing,
respondents
maintain
that
the
provision
is
not
self-executing
but
requires
an
implementing
legislation
for
its
enforcement.
Corollarily,
they
ask
whether
the
51%
shares
form
part
of
the
national
economy
and
patrimony
covered
by
the
protective
mantle
of
the
Constitution.
The
controversy
arose
when
respondent
Government
Service
Insurance
System
(GSIS),
pursuant
to
the
privatization
program
of
the
Philippine
Government
under
Proclamation
No.
50
dated
8
December
1986,
decided
to
sell
through
public
bidding
30%
to
51%
of
the
issued
and
outstanding
shares
of
respondent
MHC.
The
winning
bidder,
or
the
eventual
"strategic
partner,"
is
to
provide
management
expertise
and/or
an
international
marketing/reservation
system,
and
financial
support
to
strengthen
the
profitability
and
performance
of
the
Manila
Hotel.
2
In
a
close
bidding
held
on
18
September
1995
only
two
(2)
bidders
participated:
petitioner
Manila
Prince
Hotel
Corporation,
a
Filipino
corporation,
which
offered
to
buy
51%
of
the
MHC
or
15,300,000
shares
at
P41.58
per
share,
and
Renong
Berhad,
a
Malaysian
firm,
with
ITT-Sheraton
as
its
hotel
operator,
which
bid
for
the
same
number
of
shares
at
P44.00
per
share,
or
P2.42
more
than
the
bid
of
petitioner.
Pertinent
provisions
of
the
bidding
rules
prepared
by
respondent
GSIS
state
I.
EXECUTION
OF
THE
NECESSARY
CONTRACTS
WITH
GSIS/MHC
1.
The
Highest
Bidder
must
comply
with
the
conditions
set
forth
below
by
October
23,
1995
(reset
to
November
3,
1995)
or
the
Highest
Bidder
will
lose
the
right
to
purchase
the
Block
of
Shares
and
GSIS
will
instead
offer
the
Block
of
Shares
to
the
other
Qualified
Bidders:
a.
The
Highest
Bidder
must
negotiate
and
execute
with
the
GSIS/MHC
the
Management
Contract,
International
Marketing/Reservation
System
Contract
or
other
type
of
contract
specified
by
the
Highest
Bidder
in
its
strategic
plan
for
the
Manila
Hotel
.
.
.
.
b.
The
Highest
Bidder
must
execute
the
Stock
Purchase
and
Sale
Agreement
with
GSIS
.
.
.
.
K.
DECLARATION
OF
THE
WINNING
BIDDER/STRATEGIC
PARTNER
The
Highest
Bidder
will
be
declared
the
Winning
Bidder/Strategic
Partner
after
the
following
conditions
are
met
a.
Execution
of
the
necessary
contracts
with
GSIS/MHC
not
later
than
October
23,
1995
(reset
to
November
3,
1995);
and
b.
Requisite
approvals
from
the
GSIS/MHC
and
COP
(Committee
on
Privatization)/
OGCC
(Office
of
the
Government
Corporate
Counsel)
are
obtained."
3
Pending
the
declaration
of
Renong
Berhard
as
the
winning
bidder/strategic
partner
and
the
execution
of
the
necessary
contracts,
petitioner
in
a
letter
to
respondent
GSIS
dated
28
September
1995
matched
the
bid
price
of
P44.00
per
share
tendered
by
Renong
Berhad.
4
In
a
subsequent
letter
dated
10
October
1995
petitioner
sent
a
manager's
check
issued
by
Philtrust
Bank
for
Thirty-three
Million
Pesos
(P33,000,000.00)
as
Bid
Security
to
match
the
bid
of
the
Malaysian
Group,
Messrs.
Renong
Berhad
.
.
.
.
5
which
respondent
GSIS
refused
to
accept.
On
17
October
1995,
perhaps
apprehensive
that
respondent
GSIS
has
disregarded
the
tender
of
the
matching
bid
and
that
the
sale
of
51%
of
the
MHC
may
be
hastened
by
respondent
GSIS
and
consummated
with
Renong
Berhad,
petitioner
came
to
this
Court
on
prohibition
and
mandamus.
On
18
October
1995
the
Court
issued
a
temporary
restraining
order
enjoining
respondents
from
perfecting
and
consummating
the
sale
to
the
Malaysian
firm.
On
10
September
1996
the
instant
case
was
accepted
by
the
Court
En
Banc
after
it
was
referred
to
it
by
the
First
Division.
The
case
was
then
set
for
oral
arguments
with
former
Chief
Justice
Enrique
M.
Fernando
and
Fr.
Joaquin
G.
Bernas,
S.J.,
as
amici
curiae.
In
the
main,
petitioner
invokes
Sec.
10,
second
par.,
Art.
XII,
of
the
1987
Constitution
and
submits
that
the
Manila
Hotel
has
been
identified
with
the
Filipino
nation
and
has
practically
become
a
historical
monument
which
reflects
the
vibrancy
of
Philippine
heritage
and
culture.
It
is
a
proud
legacy
of
an
earlier
generation
of
Filipinos
who
believed
in
the
nobility
and
sacredness
of
independence
and
its
power
and
capacity
to
release
the
full
potential
of
the
Filipino
people.
To
all
intents
and
purposes,
it
has
become
a
part
of
the
national
patrimony.
6
Petitioner
also
argues
that
since
51%
of
the
shares
of
the
MHC
carries
with
it
the
ownership
of
the
business
of
the
hotel
which
is
owned
by
respondent
GSIS,
a
government-owned
and
controlled
corporation,
the
hotel
business
of
respondent
GSIS
being
a
part
of
the
tourism
industry
is
unquestionably
a
part
of
the
national
economy.
Thus,
any
transaction
involving
51%
of
the
shares
of
stock
of
the
MHC
is
clearly
covered
by
the
term
national
economy,
to
which
Sec.
10,
second
par.,
Art.
XII,
1987
Constitution,
applies.
7
It
is
also
the
thesis
of
petitioner
that
since
Manila
Hotel
is
part
of
the
national
patrimony
and
its
business
also
unquestionably
part
of
the
national
economy
petitioner
should
be
preferred
after
it
has
matched
the
bid
offer
of
the
Malaysian
firm.
For
the
bidding
rules
mandate
that
if
for
any
reason,
the
Highest
Bidder
cannot
be
awarded
the
Block
of
Shares,
GSIS
may
offer
this
to
the
other
Qualified
Bidders
that
have
validly
submitted
bids
provided
that
these
Qualified
Bidders
are
willing
to
match
the
highest
bid
in
terms
of
price
per
share.
8
Respondents
except.
They
maintain
that:
First,
Sec.
10,
second
par.,
Art.
XII,
of
the
1987
Constitution
is
merely
a
statement
of
principle
and
policy
since
it
isnot
a
self-executing
provision
and
requires
implementing
legislation(s).
.
.
.
Thus,
for
the
said
provision
to
operate,
there
must
be
existing
laws
"to
lay
down
conditions
under
which
business
may
be
done."
9
Second,
granting
that
this
provision
is
self-executing,
Manila
Hotel
does
not
fall
under
the
term
national
patrimony
which
only
refers
to
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
all
marine
wealth
in
its
territorial
sea,
and
exclusive
marine
zone
as
cited
in
the
first
and
second
paragraphs
of
Sec.
2,
Art.
XII,
1987
Constitution.
According
to
respondents,
while
petitioner
speaks
of
the
guests
who
have
slept
in
the
hotel
and
the
events
that
have
transpired
therein
which
make
the
hotel
historic,
these
alone
do
not
make
the
hotel
fall
under
the
patrimony
of
the
nation.
What
is
more,
the
mandate
of
the
Constitution
is
addressed
to
the
State,
not
to
respondent
GSIS
which
possesses
a
personality
of
its
own
separate
and
distinct
from
the
Philippines
as
a
State.
lexlib
Third,
granting
that
the
Manila
Hotel
forms
part
of
the
national
patrimony,
the
constitutional
provision
invoked
is
still
inapplicable
since
what
is
being
sold
is
only
51%
of
the
outstanding
shares
of
the
corporation,
not
the
hotel
building
nor
the
land
upon
which
the
building
stands.
Certainly,
51%
of
the
equity
of
the
MHC
cannot
be
considered
part
of
the
national
patrimony.
Moreover,
if
the
disposition
of
the
shares
of
the
MHC
is
really
contrary
to
the
Constitution,
petitioner
should
have
questioned
it
right
from
the
beginning
and
not
after
it
had
lost
in
the
bidding.
Fourth,
the
reliance
by
petitioner
on
par.
V.,
subpar.
J.
1,
of
the
bidding
rules
which
provides
that
if
for
any
reason,
the
Highest
Bidder
cannot
be
awarded
the
Block
of
Shares,
GSIS
may
offer
this
to
the
other
Qualified
Bidders
that
have
validly
submitted
bids
provided
that
these
Qualified
Bidders
are
willing
to
match
the
highest
bid
in
terms
of
price
per
share,
is
misplaced.
Respondents
postulate
that
the
privilege
of
submitting
a
matching
bid
has
not
yet
arisen
since
it
only
takes
place
if
for
any
reason,
the
Highest
Bidder
cannot
be
awarded
the
Block
of
Shares.
Thus
the
submission
by
petitioner
of
a
matching
bid
is
premature
since
Renong
Berhad
could
still
very
well
be
awarded
the
block
of
shares
and
the
condition
giving
rise
to
the
exercise
of
the
privilege
to
submit
a
matching
bid
had
not
yet
taken
place.
Finally,
the
prayer
for
prohibition
grounded
on
grave
abuse
of
discretion
should
fail
since
respondent
GSIS
did
not
exercise
its
discretion
in
a
capricious,
whimsical
manner,
and
if
ever
it
did
abuse
its
discretion
it
was
not
so
patent
and
gross
as
to
amount
to
an
evasion
of
a
positive
duty
or
a
virtual
refusal
to
perform
a
duty
enjoined
by
law.
Similarly,
the
petition
for
mandamus
should
fail
as
petitioner
has
no
clear
legal
right
to
what
it
demands
and
respondents
do
not
have
an
imperative
duty
to
perform
the
act
required
of
them
by
petitioner.
We
now
resolve.
A
constitution
is
a
system
of
fundamental
laws
for
the
governance
and
administration
of
a
nation.
It
is
supreme,
imperious,
absolute
and
unalterable
except
by
the
authority
from
which
it
emanates.
It
has
been
defined
as
the
fundamental
and
paramount
law
of
the
nation.
10
It
prescribes
the
permanent
framework
of
a
system
of
government,
assigns
to
the
different
departments
their
respective
powers
and
duties,
and
establishes
certain
fixed
principles
on
which
government
is
founded.
The
fundamental
conception
in
other
words
is
that
it
is
a
supreme
law
to
which
all
other
laws
must
conform
and
in
accordance
with
which
all
private
rights
must
be
determined
and
all
public
authority
administered.
11
Under
the
doctrine
of
constitutional
supremacy,
if
a
law
or
contract
violates
any
norm
of
the
constitution
that
law
or
contract
whether
promulgated
by
the
legislative
or
by
the
executive
branch
or
entered
into
by
private
persons
for
private
purposes
is
null
and
void
and
without
any
force
and
effect.
Thus,
since
the
Constitution
is
the
fundamental
paramount
and
supreme
law
of
the
nation,
it
is
deemed
written
in
every
statute
and
contract.
Admittedly,
some
constitutions
are
merely
declarations
of
policies
and
principles.
Their
provisions
command
the
legislature
to
enact
laws
and
carry
out
the
purposes
of
the
framers
who
merely
establish
an
outline
of
government
providing
for
the
different
departments
of
the
governmental
machinery
and
securing
certain
fundamental
and
inalienable
rights
of
citizens.
12
A
provision
which
lays
down
a
general
principle,
such
as
those
found
in
Art.
II
of
the
1987Constitution,
is
usually
not
self-executing.
But
a
provision
which
is
complete
in
itself
and
becomes
operative
without
the
aid
of
supplementary
or
enabling
legislation,
or
that
which
supplies
sufficient
rule
by
means
of
which
the
right
it
grants
may
be
enjoyed
or
protected,
is
self-executing.
Thus
a
constitutional
provision
is
self-executing
if
the
nature
and
extent
of
the
right
conferred
and
the
liability
imposed
are
fixed
by
the
constitution
itself,
so
that
they
can
be
determined
by
an
examination
and
construction
of
its
terms,
and
there
is
no
language
indicating
that
the
subject
is
referred
to
the
legislature
for
action.
13
As
against
constitutions
of
the
past,
modern
constitutions
have
been
generally
drafted
upon
a
different
principle
and
have
often
become
in
effect
extensive
codes
of
laws
intended
to
operate
directly
upon
the
people
in
a
manner
similar
to
that
of
statutory
enactments,
and
the
function
of
constitutional
conventions
has
evolved
into
one
more
like
that
of
a
legislative
body.
Hence,
unless
it
is
expressly
provided
that
a
legislative
act
is
necessary
to
enforce
a
constitutional
mandate,
the
presumption
now
is
that
all
provisions
of
the
constitution
are
self-executing.
If
the
constitutional
provisions
are
treated
as
requiring
legislation
instead
of
self-executing,
the
legislature
would
have
the
power
to
ignore
and
practically
nullify
the
mandate
of
the
fundamental
law.
14This
can
be
cataclysmic.
That
is
why
the
prevailing
view
is,
as
it
has
always
been,
that
.
.
.
in
case
of
doubt,
the
Constitution
should
be
considered
self-executing
rather
than
non-self-
executing.
.
.
.
Unless
the
contrary
is
clearly
intended,
the
provisions
of
the
Constitution
should
be
considered
self-executing,
as
a
contrary
rule
would
give
the
legislature
discretion
to
determine
when,
or
whether,
they
shall
be
effective.
These
provisions
would
be
subordinated
to
the
will
of
the
lawmaking
body,
which
could
make
them
entirely
meaningless
by
simply
refusing
to
pass
the
needed
implementing
statute.
15
Respondents
argue
that
Sec.
10,
second
par.,
Art.
XII,
of
the
1987
Constitution
is
clearly
not
self-executing,
as
they
quote
from
discussions
on
the
floor
of
the
1986
Constitutional
Commission
MR.
RODRIGO.
Madam
President,
I
am
asking
this
question
as
the
Chairman
of
the
Committee
on
Style.
If
the
wording
of
"PREFERENCE"
is
given
to
"QUALIFIED
FILIPINOS,"
can
it
be
understood
as
a
preference
to
qualified
Filipinos
vis-a-vis
Filipinos
who
are
not
qualified.
So,
why
do
we
not
make
it
clear?
To
qualified
Filipinos
as
against
aliens?
THE
PRESIDENT.
What
is
the
question
of
Commissioner
Rodrigo?
Is
it
to
remove
the
word
"QUALIFIED?"
MR.
RODRIGO.
No,
no,
but
say
definitely
"TO
QUALIFIED
FILIPINOS"
as
against
whom?
As
against
aliens
or
over
aliens?
MR.
NOLLEDO.
Madam
President,
I
think
that
is
understood.
We
use
the
word
"QUALIFIED"
because
the
existing
laws
or
prospective
laws
will
always
lay
down
conditions
under
which
business
may
be
done.
For
example,
qualifications
on
capital,
qualifications
on
the
setting
up
of
other
financial
structures,
et
cetera
(italics
supplied
by
respondents).
MR
RODRIGO.
It
is
just
a
matter
of
style.
MR.
NOLLEDO.
Yes.
16
Quite
apparently,
Sec.
10,
second
par.,
of
Art.
XII
is
couched
in
such
a
way
as
not
to
make
it
appear
that
it
is
non-self-
executing
but
simply
for
purposes
of
style.
But,
certainly,
the
legislature
is
not
precluded
from
enacting
further
laws
to
enforce
the
constitutional
provision
so
long
as
the
contemplated
statute
squares
with
the
Constitution.
Minor
details
may
be
left
to
the
legislature
without
the
self-executing
nature
of
constitutional
provisions.
In
self-executing
constitutional
provisions,
the
legislature
may
still
enact
legislation
to
facilitate
the
exercise
of
powers
directly
granted
by
the
constitution,
further
the
operation
of
such
a
provision,
prescribe
a
practice
to
be
used
for
its
enforcement,
provide
a
convenient
remedy
for
the
protection
of
the
rights
secured
or
the
determination
thereof,
or
place
reasonable
safeguards
around
the
exercise
of
the
right.
The
mere
fact
that
legislation
may
supplement
and
add
to
or
prescribe
a
penalty
for
the
violation
of
a
self-executing
constitutional
provision
does
not
render
such
a
provision
ineffective
in
the
absence
of
such
legislation.
The
omission
from
a
constitution
of
any
express
provision
for
a
remedy
for
enforcing
a
right
or
liability
is
not
necessarily
an
indication
that
it
was
not
intended
to
be
self-executing.
The
rule
is
that
a
self-executing
provision
of
the
constitution
does
not
necessarily
exhaust
legislative
power
on
the
subject,
but
any
legislation
must
be
in
harmony
with
the
constitution,
further
the
exercise
of
constitutional
right
and
make
it
more
available.
17
Subsequent
legislation
however
does
not
necessarily
mean
that
the
subject
constitutional
provision
is
not,
by
itself,
fully
enforceable.
Respondents
also
argue
that
the
non-self-executing
nature
of
Sec.
10,
second
par.,
of
Art.
XII
is
implied
from
the
tenor
of
the
first
and
third
paragraphs
of
the
same
section
which
undoubtedly
are
not
self-executing.
18
The
argument
is
flawed.
If
the
first
and
third
paragraphs
are
not
self-executing
because
Congress
is
still
to
enact
measures
to
encourage
the
formation
and
operation
of
enterprises
fully
owned
by
Filipinos,
as
in
the
first
paragraph,
and
the
State
still
needs
legislation
to
regulate
and
exercise
authority
over
foreign
investments
within
its
national
jurisdiction,
as
in
the
third
paragraph,
then
a
fortiori,
by
the
same
logic,
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,
privileges
and
concessions
covering
the
national
economy
and
patrimony.
A
constitutional
provision
may
be
self-executing
in
one
part
and
non-self-executing
in
another.
19
Even
the
cases
cited
by
respondents
holding
that
certain
constitutional
provisions
are
merely
statements
of
principles
and
policies,
which
are
basically
not
self-executing
and
only
placed
in
the
Constitution
as
moral
incentives
to
legislation,
not
as
judicially
enforceable
rights
are
simply
not
in
point.
Basco
v.Philippine
Amusements
and
Gaming
Corporation
20
speaks
of
constitutional
provisions
on
personal
dignity,
21
the
sanctity
of
family
life,
22
the
vital
role
of
the
youth
in
nation-building,
23
the
promotion
of
social
justice,
24
and
the
values
of
education.
25
Tolentino
v.
Secretary
of
Finance
26
refers
to
constitutional
provisions
on
social
justice
and
human
rights
27
and
on
education.
28
Lastly,
Kilosbayan,
Inc.
v.
Morato
29
cites
provisions
on
the
promotion
of
general
welfare,30
the
sanctity
of
family
life,
31
the
vital
role
of
the
youth
in
nation-building
32
and
the
promotion
of
total
human
liberation
and
development.
33
A
reading
of
these
provisions
indeed
clearly
shows
that
they
are
not
judicially
enforceable
constitutional
rights
but
merely
guidelines
for
legislation.
The
very
terms
of
the
provisions
manifest
that
they
are
only
principles
upon
which
legislations
must
be
based.
Res
ipsa
loquitur.
On
the
other
hand,
Sec.
10,
second
par.,
Art.
XII
of
the
1987
Constitution
is
a
mandatory,
positive
command
which
is
complete
in
itself
and
which
needs
no
further
guidelines
or
implementing
laws
or
rules
for
its
enforcement.
From
its
very
words
the
provision
does
not
require
any
legislation
to
put
it
in
operation.
It
is
per
se
judicially
enforceable.
When
our
Constitution
mandates
that
[i]n
the
grant
of
rights,
privileges,
and
concessions
covering
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos,
it
means
just
that
qualified
Filipinos
shall
be
preferred.
And
when
our
Constitutiondeclares
that
a
right
exists
in
certain
specified
circumstances
an
action
may
be
maintained
to
enforce
such
right
notwithstanding
the
absence
of
any
legislation
on
the
subject;
consequently,
if
there
is
no
statute
especially
enacted
to
enforce
such
constitutional
right,
such
right
enforces
itself
by
its
own
inherent
potency
and
puissance,
and
from
which
all
legislations
must
take
their
bearings.
Where
there
is
a
right
there
is
a
remedy.
Ubi
jus
ibi
remedium.
As
regards
our
national
patrimony,
a
member
of
the
1986
Constitutional
Commission
34
explains
The
patrimony
of
the
Nation
that
should
be
conserved
and
developed
refers
not
only
to
our
rich
natural
resources
but
also
to
the
cultural
heritage
of
our
race.
It
also
refers
to
our
intelligence
in
arts,
sciences
and
letters.
Therefore,
we
should
develop
not
only
our
lands,
forests,
mines
and
other
natural
resources
but
also
the
mental
ability
or
faculty
of
our
people.
We
agree.
In
its
plain
and
ordinary
meaning,
the
term
patrimony
pertains
to
heritage.
35
When
the
Constitution
speaks
of
national
patrimony,
it
refers
not
only
to
the
natural
resources
of
the
Philippines,
as
the
Constitution
could
have
very
well
used
the
term
natural
resources,
but
also
to
the
cultural
heritage
of
the
Filipinos.
Manila
Hotel
has
become
a
landmark
a
living
testimonial
of
Philippine
heritage.
While
it
was
restrictively
an
American
hotel
when
it
first
opened
in
1912,
it
immediately
evolved
to
be
truly
Filipino.
Formerly
a
concourse
for
the
elite,
it
has
since
then
become
the
venue
of
various
significant
events
which
have
shaped
Philippine
history.
It
was
called
the
Cultural
Center
of
the
1930's.
It
was
the
site
of
the
festivities
during
the
inauguration
of
the
Philippine
Commonwealth.
Dubbed
as
the
Official
Guest
House
of
the
Philippine
Government
it
plays
host
to
dignitaries
and
official
visitors
who
are
accorded
the
traditional
Philippine
hospitality.
36
The
history
of
the
hotel
has
been
chronicled
in
the
book
The
Manila
Hotel:
The
Heart
and
Memory
of
a
City.
37
During
World
War
II
the
hotel
was
converted
by
the
Japanese
Military
Administration
into
a
military
headquarters.
When
the
American
forces
returned
to
recapture
Manila
the
hotel
was
selected
by
the
Japanese
together
with
Intramuros
as
the
two
(2)
places
for
their
final
stand.
Thereafter,
in
the
1950's
and
1960's,
the
hotel
became
the
center
of
political
activities,
playing
host
to
almost
every
political
convention.
In
1970
the
hotel
reopened
after
a
renovation
and
reaped
numerous
international
recognitions,
an
acknowledgment
of
the
Filipino
talent
and
ingenuity.
In
1986
the
hotel
was
the
site
of
a
failed
coup
d'etat
where
an
aspirant
for
vice-president
was
"proclaimed"
President
of
the
Philippine
Republic.
For
more
than
eight
(8)
decades
Manila
Hotel
has
bore
mute
witness
to
the
triumphs
and
failures,
loves
and
frustrations
of
the
Filipinos;
its
existence
is
impressed
with
public
interest;
its
own
historicity
associated
with
our
struggle
for
sovereignty,
independence
and
nationhood.
Verily,
Manila
Hotel
has
become
part
of
our
national
economy
and
patrimony.
For
sure,
51%
of
the
equity
of
the
MHC
comes
within
the
purview
of
the
constitutional
shelter
for
it
comprises
the
majority
and
controlling
stock,
so
that
anyone
who
acquires
or
owns
the
51%
will
have
actual
control
and
management
of
the
hotel.
In
this
instance,
51%
of
the
MHC
cannot
be
disassociated
from
the
hotel
and
the
land
on
which
the
hotel
edifice
stands.
Consequently,
we
cannot
sustain
respondents'
claim
that
the
Filipino
First
Policy
provision
is
not
applicable
since
what
is
being
sold
is
only
51%
of
the
outstanding
shares
of
the
corporation,
not
the
Hotel
building
nor
the
land
upon
which
the
building
stands.
38
The
argument
is
pure
sophistry.
The
term
qualified
Filipinos
as
used
in
our
Constitution
also
includes
corporations
at
least
60%
of
which
is
owned
by
Filipinos.
This
is
very
clear
from
the
proceedings
of
the
1986
Constitutional
Commission
THE
PRESIDENT.
Commissioner
Davide
is
recognized.
MR.
DAVIDE.
I
would
like
to
introduce
an
amendment
to
the
Nolledo
amendment.
And
the
amendment
would
consist
in
substituting
the
words
"QUALIFIED
FILIPINOS"
with
the
following:
"CITIZENS
OF
THE
PHILIPPINES
OR
CORPORATIONS
OR
ASSOCIATIONS
WHOSE
CAPITAL
OR
CONTROLLING
STOCK
IS
WHOLLY
OWNED
BY
SUCH
CITIZENS."
xxx
xxx
xxx
MR.
MONSOD.
Madam
President,
apparently
the
proponent
is
agreeable,
but
we
have
to
raise
a
question.
Suppose
it
is
a
corporation
that
is
80-percent
Filipino,
do
we
not
give
it
preference?
MR.
DAVIDE.
The
Nolledo
amendment
would
refer
to
an
individual
Filipino.
What
about
a
corporation
wholly
owned
by
Filipino
citizens?
MR.
MONSOD.
At
least
60
percent,
Madam
President.
MR.
DAVIDE.
Is
that
the
intention?
MR
MONSOD.
Yes,
because,
in
fact,
we
would
be
limiting
it
if
we
say
that
the
preference
should
only
be
100-
percent
Filipino.
MR.
DAVIDE.
I
want
to
get
that
meaning
clear
because
"QUALIFIED
FILIPINOS"
may
refer
only
to
individuals
and
not
to
juridical
personalities
or
entities.
MR.
MONSOD.
We
agree,
Madam
President.
39
xxx
xxx
xxx
MR.
RODRIGO.
Before
we
vote,
may
I
request
that
the
amendment
be
read
again.
MR.
NOLLEDO.
The
amendment
will
read:
"IN
THE
GRANT
OF
RIGHTS,
PRIVILEGES
AND
CONCESSIONS
COVERING
THE
NATIONAL
ECONOMY
AND
PATRIMONY,
THE
STATE
SHALL
GIVE
PREFERENCE
TO
QUALIFIED
FILIPINOS."
And
the
word
"Filipinos"
here,
as
intended
by
the
proponents,
will
include
not
only
individual
Filipinos
but
also
Filipino-controlled
entities
or
entities
fully-controlled
by
Filipinos.
40
The
phrase
preference
to
qualified
Filipinos
was
explained
thus
MR.
FOZ.
Madam
President,
I
would
like
to
request
Commissioner
Nolledo
to
please
restate
his
amendment
so
that
I
can
ask
a
question.
MR.
NOLLEDO.
"IN
THE
GRANT
OF
RIGHTS,
PRIVILEGES
AND
CONCESSIONS
COVERING
THE
NATIONAL
ECONOMY
AND
PATRIMONY,
THE
STATE
SHALL
GIVE
PREFERENCE
TO
QUALIFIED
FILIPINOS."
MR.
FOZ.
In
connection
with
that
amendment,
if
a
foreign
enterprise
is
qualified
and
a
Filipino
enterprise
is
also
qualified,
will
the
Filipino
enterprise
still
be
given
a
preference?
MR.
NOLLEDO.
Obviously.
MR.
FOZ.
If
the
foreigner
is
more
qualified
in
some
aspects
than
the
Filipino
enterprise,
will
the
Filipino
still
be
preferred?
MR.
NOLLEDO.
The
answer
is
"yes."
MR.
FOZ.
Thank
you.
41
Expounding
further
on
the
Filipino
First
Policy
provision
Commissioner
Nolledo
continues
MR
NOLLEDO.
Yes,
Madam
President.
Instead
of
"MUST,"
it
will
be
"SHALL
THE
STATE
SHALL
GIVE
PREFERENCE
TO
QUALIFIED
FILIPINOS."
This
embodies
the
so-called
"Filipino
First"
policy.
That
means
that
Filipinos
should
be
given
preference
in
the
grant
of
concessions,
privileges
and
rights
covering
the
national
patrimony.
42
The
exchange
of
views
in
the
sessions
of
the
Constitutional
Commission
regarding
the
subject
provision
was
still
further
clarified
by
Commissioner
Nolledo43
"Paragraph
2
of
Section
10
explicitly
mandates
the
"Pro-Filipino"
bias
in
all
economic
concerns.
It
is
better
known
as
the
FILIPINO
FIRST
Policy.
.
.
.
This
provision
was
never
found
in
previous
Constitutions.
.
.
.
The
term
"qualified
Filipinos"
simply
means
that
preference
shall
be
given
to
those
citizens
who
can
make
a
viable
contribution
to
the
common
good,
because
of
credible
competence
and
efficiency.
It
certainly
does
NOT
mandate
the
pampering
and
preferential
treatment
to
Filipino
citizens
or
organizations
that
are
incompetent
or
inefficient,
since
such
an
indiscriminate
preference
would
be
counterproductive
and
inimical
to
the
common
good.
In
the
granting
of
economic
rights,
privileges,
and
concessions,
when
a
choice
has
to
be
made
between
a
"qualified
foreigner"
and
a
"qualified
Filipino,"
the
latter
shall
be
chosen
over
the
former."
Lastly,
the
word
qualified
is
also
determinable.
Petitioner
was
so
considered
by
respondent
GSIS
and
selected
as
one
of
the
qualified
bidders.
It
was
pre-qualified
by
respondent
GSIS
in
accordance
with
its
own
guidelines
so
that
the
sole
inference
here
is
that
petitioner
has
been
found
to
be
possessed
of
proven
management
expertise
in
the
hotel
industry,
or
it
has
significant
equity
ownership
in
another
hotel
company,
or
it
has
an
overall
management
and
marketing
proficiency
to
successfully
operate
the
Manila
Hotel.
44
The
penchant
to
try
to
whittle
away
the
mandate
of
the
Constitution
by
arguing
that
the
subject
provision
is
not
self-
executory
and
requires
implementing
legislation
is
quite
disturbing.
The
attempt
to
violate
a
clear
constitutional
provision
by
the
government
itself
is
only
too
distressing.
To
adopt
such
a
line
of
reasoning
is
to
renounce
the
duty
to
ensure
faithfulness
to
the
Constitution.
For,
even
some
of
the
provisions
of
the
Constitution
which
evidently
need
implementing
legislation
have
juridical
life
of
their
own
and
can
be
the
source
of
a
judicial
remedy.
We
cannot
simply
afford
the
government
a
defense
that
arises
out
of
the
failure
to
enact
further
enabling,
implementing
or
guiding
legislation.
In
fine,
the
discourse
of
Fr.
Joaquin
G.
Bernas,
S.J.,
on
constitutional
government
is
apt
The
executive
department
has
a
constitutional
duty
to
implement
laws,
including
the
Constitution,
even
before
Congress
acts
provided
that
there
are
discoverable
legal
standards
for
executive
action.
When
the
executive
acts,
it
must
be
guided
by
its
own
understanding
of
the
constitutional
command
and
of
applicable
laws.
The
responsibility
for
reading
and
understanding
the
Constitution
and
the
laws
is
not
the
sole
prerogative
of
Congress.
If
it
were,
the
executive
would
have
to
ask
Congress,
or
perhaps
the
Court,
for
an
interpretation
every
time
the
executive
is
confronted
by
a
constitutional
command.
That
is
not
how
constitutional
government
operates.
45
Respondents
further
argue
that
the
constitutional
provision
is
addressed
to
the
State,
not
to
respondent
GSIS
which
by
itself
possesses
a
separate
and
distinct
personality.
This
argument
again
is
at
best
specious.
It
is
undisputed
that
the
sale
of
51%
of
the
MHC
could
only
be
carried
out
with
the
prior
approval
of
the
State
acting
through
respondent
Committee
on
Privatization.
As
correctly
pointed
out
by
Fr.
Joaquin
G.
Bernas,
S.J.,
this
fact
alone
makes
the
sale
of
the
assets
of
respondents
GSIS
and
MHC
a
"state
action."
In
constitutional
jurisprudence,
the
acts
of
persons
distinct
from
the
government
are
considered
"state
action"
covered
by
the
Constitution
(1)
when
the
activity
it
engages
in
is
a
"public
function;"
(2)
when
the
government
is
so-significantly
involved
with
the
private
actor
as
to
make
the
government
responsible
for
his
action;
and,
(3)
when
the
government
has
approved
or
authorized
the
action.
It
is
evident
that
the
act
of
respondent
GSIS
in
selling
51%
of
its
share
in
respondent
MHC
comes
under
the
second
and
third
categories
of
"state
action."
Without
doubt
therefore
the
transaction,
although
entered
into
by
respondent
GSIS,
is
in
fact
a
transaction
of
the
State
and
therefore
subject
to
the
constitutional
command.
46
When
the
Constitution
addresses
the
State
it
refers
not
only
to
the
people
but
also
to
the
government
as
elements
of
the
State.
After
all,
government
is
composed
of
three
(3)
divisions
of
power
legislative,
executive
and
judicial.
Accordingly,
a
constitutional
mandate
directed
to
the
State
is
correspondingly
directed
to
the
three
(3)
branches
of
government.
It
is
undeniable
that
in
this
case
the
subject
constitutional
injunction
is
addressed
among
others
to
the
Executive
Department
and
respondent
GSIS,
a
government
instrumentality
deriving
its
authority
from
the
State.
It
should
be
stressed
that
while
the
Malaysian
firm
offered
the
higher
bid
it
is
not
yet
the
winning
bidder.
The
bidding
rules
expressly
provide
that
the
highest
bidder
shall
only
be
declared
the
winning
bidder
after
it
has
negotiated
and
executed
the
necessary
contracts,
and
secured
the
requisite
approvals.
Since
the
Filipino
First
Policy
provision
of
the
Constitution
bestows
preference
on
qualified
Filipinos
the
mere
tending
of
the
highest
bid
is
not
an
assurance
that
the
highest
bidder
will
be
declared
the
winning
bidder.
Resultantly,
respondents
are
not
bound
to
make
the
award
yet,
nor
are
they
under
obligation
to
enter
into
one
with
the
highest
bidder.
For
in
choosing
the
awardee
respondents
are
mandated
to
abide
by
the
dictates
of
the
1987
Constitution
the
provisions
of
which
are
presumed
to
be
known
to
all
the
bidders
and
other
interested
parties.
Adhering
to
the
doctrine
of
constitutional
supremacy,
the
subject
constitutional
provision
is,
as
it
should
be,
impliedly
written
in
the
bidding
rules
issued
by
respondent
GSIS,
lest
the
bidding
rules
be
nullified
for
being
violative
of
the
Constitution.
It
is
a
basic
principle
in
constitutional
law
that
all
laws
and
contracts
must
conform
with
the
fundamental
law
of
the
land.
Those
which
violate
the
Constitution
lose
their
reason
for
being.
Paragraph
V.
J.
1
of
the
bidding
rules
provides
that
[i]f
for
any
reason
the
Highest
Bidder
cannot
be
awarded
the
Block
of
Shares,
GSIS
may
offer
this
to
other
Qualified
Bidders
that
have
validly
submitted
bids
provided
that
these
Qualified
Bidders
are
willing
to
match
the
highest
bid
in
terms
of
price
per
share.
47Certainly,
the
constitutional
mandate
itself
is
reason
enough
not
to
award
the
block
of
shares
immediately
to
the
foreign
bidder
notwithstanding
its
submission
of
a
higher,
or
even
the
highest,
bid.
In
fact,
we
cannot
conceive
of
a
stronger
reason
than
the
constitutional
injunction
itself.
In
the
instant
case,
where
a
foreign
firm
submits
the
highest
bid
in
a
public
bidding
concerning
the
grant
of
rights,
privileges
and
concessions
covering
the
national
economy
and
patrimony,
thereby
exceeding
the
bid
of
a
Filipino,
there
is
no
question
that
the
Filipino
will
have
to
be
allowed
to
match
the
bid
of
the
foreign
entity.
And
if
the
Filipino
matches
the
bid
of
a
foreign
firm
the
award
should
go
to
the
Filipino.
It
must
be
so
if
we
are
to
give
life
and
meaning
to
theFilipino
First
Policy
provision
of
the
1987
Constitution.
For,
while
this
may
neither
be
expressly
stated
nor
contemplated
in
the
bidding
rules,
the
constitutional
fiat
is
omnipresent
to
be
simply
disregarded.
To
ignore
it
would
be
to
sanction
a
perilous
skirting
of
the
basic
law.
This
Court
does
not
discount
the
apprehension
that
this
policy
may
discourage
foreign
investors.
But
the
Constitution
and
laws
of
the
Philippines
are
understood
to
be
always
open
to
public
scrutiny.
These
are
given
factors
which
investors
must
consider
when
venturing
into
business
in
a
foreign
jurisdiction.
Any
person
therefore
desiring
to
do
business
in
the
Philippines
or
with
any
of
its
agencies
or
instrumentalities
is
presumed
to
know
his
rights
and
obligations
under
the
Constitution
and
the
laws
of
the
forum
The
argument
of
respondents
that
petitioner
is
now
estopped
from
questioning
the
sale
to
Renong
Berhad
since
petitioner
was
well
aware
from
the
beginning
that
a
foreigner
could
participate
in
the
bidding
is
meritless.
Undoubtedly,
Filipinos
and
foreigners
alike
were
invited
to
the
bidding.
But
foreigners
may
be
awarded
the
sale
only
if
no
Filipino
qualifies,
or
if
the
qualified
Filipino
fails
to
match
the
highest
bid
tendered
by
the
foreign
entity.
In
the
case
before
us,
while
petitioner
was
already
preferred
at
the
inception
of
the
bidding
because
of
the
constitutional
mandate,
petitioner
had
not
yet
matched
the
bid
offered
by
Renong
Berhad.
Thus
it
did
not
have
the
right
or
personality
then
to
compel
respondent
GSIS
to
accept
its
earlier
bid.
Rightly,
only
after
it
had
matched
the
bid
of
the
foreign
firm
and
the
apparent
disregard
by
respondent
GSIS
of
petitioner's
matching
bid
did
the
latter
have
a
cause
of
action.
Besides,
there
is
no
time
frame
for
invoking
the
constitutional
safeguard
unless
perhaps
the
award
has
been
finally
made.
To
insist
on
selling
the
ManilaHotel
to
foreigners
when
there
is
a
Filipino
group
willing
to
match
the
bid
of
the
foreign
group
is
to
insist
that
government
be
treated
as
any
other
ordinary
market
player,
and
bound
by
its
mistakes
or
gross
errors
of
judgment,
regardless
of
the
consequences
to
the
Filipino
people.
The
miscomprehension
of
theConstitution
is
regrettable.
Thus
we
would
rather
remedy
the
indiscretion
while
there
is
still
an
opportunity
to
do
so
than
let
the
government
develop
the
habit
of
forgetting
that
the
Constitution
lays
down
the
basic
conditions
and
parameters
for
its
actions.
Since
petitioner
has
already
matched
the
bid
price
tendered
by
Renong
Berhad
pursuant
to
the
bidding
rules,
respondent
GSIS
is
left
with
no
alternative
but
to
award
to
petitioner
the
block
of
shares
of
MHC
and
to
execute
the
necessary
agreements
and
documents
to
effect
the
sale
in
accordance
not
only
with
the
bidding
guidelines
and
procedures
but
with
the
Constitution
as
well.
The
refusal
of
respondent
GSIS
to
execute
the
corresponding
documents
with
petitioner
as
provided
in
the
bidding
rules
after
the
latter
has
matched
the
bid
of
the
Malaysian
firm
clearly
constitutes
grave
abuse
of
discretion.
The
Filipino
First
Policy
is
a
product
of
Philippine
nationalism.
It
is
embodied
in
the
1987
Constitution
not
merely
to
be
used
as
a
guideline
for
future
legislation
but
primarily
to
be
enforced;
so
must
it
be
enforced.
This
Court
as
the
ultimate
guardian
of
the
Constitution
will
never
shun,
under
any
reasonable
circumstance,
the
duty
of
upholding
the
majesty
of
the
Constitution
which
it
is
tasked
to
defend.
It
is
worth
emphasizing
that
it
is
not
the
intention
of
this
Court
to
impede
and
diminish,
much
less
undermine,
the
influx
of
foreign
investments.
Far
from
it,
the
Court
encourages
and
welcomes
more
business
opportunities
but
avowedly
sanctions
the
preference
for
Filipinos
whenever
such
preference
is
ordained
by
the
Constitution.
The
position
of
the
Court
on
this
matter
could
have
not
been
more
appropriately
articulated
by
Chief
Justice
Narvasa
As
scrupulously
as
it
has
tried
to
observe
that
it
is
not
its
function
to
substitute
its
judgment
for
that
of
the
legislature
or
the
executive
about
the
wisdom
and
feasibility
of
legislation
economic
in
nature,
the
Supreme
Court
has
not
been
spared
criticism
for
decisions
perceived
as
obstacles
to
economic
progress
and
development
.
.
.
in
connection
with
a
temporary
injunction
issued
by
the
Court's
First
Division
against
the
sale
of
the
Manila
Hotel
to
a
Malaysian
Firm
and
its
partner,
certain
statements
were
published
in
a
major
daily
to
the
effect
that
that
injunction
"again
demonstrates
that
the
Philippine
legal
system
can
be
a
major
obstacle
to
doing
business
here."
Let
it
be
stated
for
the
record
once
again
that
while
it
is
no
business
of
the
Court
to
intervene
in
contracts
of
the
kind
referred
to
or
set
itself
up
as
the
judge
of
whether
they
are
viable
or
attainable,
it
is
its
bounden
duty
to
make
sure
that
they
do
not
violate
the
Constitution
or
the
laws,
or
are
not
adopted
or
implemented
with
grave
abuse
of
discretion
amounting
to
lack
or
excess
of
jurisdiction.
It
will
never
shirk
that
duty,
no
matter
how
buffeted
by
winds
of
unfair
and
ill-informed
criticism.
48
Privatization
of
a
business
asset
for
purposes
of
enhancing
its
business
viability
and
preventing
further
losses,
regardless
of
the
character
of
the
asset,
should
not
take
precedence
over
non-material
values.
A
commercial,
nay
even
a
budgetary,
objective
should
not
be
pursued
at
the
expense
of
national
pride
and
dignity.
For
the
Constitution
enshrines
higher
and
nobler
non-material
values.
Indeed,
the
Court
will
always
defer
to
the
Constitution
in
the
proper
governance
of
a
free
society;
after
all,
there
is
nothing
so
sacrosanct
in
any
economic
policy
as
to
draw
itself
beyond
judicial
review
when
the
Constitution
is
involved.
49
Nationalism
is
inherent
in
the
very
concept
of
the
Philippines
being
a
democratic
and
republican
state,
with
sovereignty
residing
in
the
Filipino
people
and
from
whom
all
government
authority
emanates.
In
nationalism,
the
happiness
and
welfare
of
the
people
must
be
the
goal.
The
nation-state
can
have
no
higher
purpose.
Any
interpretation
of
any
constitutional
provision
must
adhere
to
such
basic
concept.
Protection
of
foreign
investments,
while
laudable,
is
merely
a
policy.
It
cannot
override
the
demands
of
nationalism.
50
The
Manila
Hotel
or,
for
that
matter,
51%
of
the
MHC,
is
not
just
any
commodity
to
be
sold
to
the
highest
bidder
solely
for
the
sake
of
privatization.
We
are
not
talking
about
an
ordinary
piece
of
property
in
a
commercial
district.
We
are
talking
about
a
historic
relic
that
has
hosted
many
of
the
most
important
events
in
the
short
history
of
the
Philippines
as
a
nation.
We
are
talking
about
a
hotel
where
heads
of
states
would
prefer
to
be
housed
as
a
strong
manifestation
of
their
desire
to
cloak
the
dignity
of
the
highest
state
function
to
their
official
visits
to
the
Philippines.
Thus
the
Manila
Hotel
has
played
and
continues
to
play
a
significant
role
as
an
authentic
repository
of
twentieth
century
Philippine
history
and
culture.
In
this
sense,
it
has
become
truly
a
reflection
of
the
Filipino
soul
a
place
with
a
history
of
grandeur;
a
most
historical
setting
that
has
played
a
part
in
the
shaping
of
a
country.
51
cda
This
Court
cannot
extract
rhyme
nor
reason
from
the
determined
efforts
of
respondents
to
sell
the
historical
landmark
this
Grand
Old
Dame
of
hotels
in
Asia
to
a
total
stranger.
For,
indeed,
the
conveyance
of
this
epic
exponent
of
the
Filipino
psyche
to
alien
hands
cannot
be
less
than
mephistophelian
for
it
is,
in
whatever
manner
viewed,
a
veritable
alienation
of
a
nation's
soul
for
some
pieces
of
foreign
silver.
And
so
we
ask:
What
advantage,
which
cannot
be
equally
drawn
from
a
qualified
Filipino,
can
be
gained
by
the
Filipinos
if
Manila
Hotel
and
all
that
it
stands
for
is
sold
to
a
non-Filipino?
How
much
of
national
pride
will
vanish
if
the
nation's
cultural
heritage
is
entrusted
to
a
foreign
entity?
On
the
other
hand,
how
much
dignity
will
be
preserved
and
realized
if
the
national
patrimony
is
safekept
in
the
hands
of
a
qualified,
zealous
and
well-meaning
Filipino?
This
is
the
plain
and
simple
meaning
of
the
Filipino
First
Policy
provision
of
the
Philippine
Constitution.
And
this
Court,
heeding
the
clarion
call
of
the
Constitution
and
accepting
the
duty
of
being
the
elderly
watchman
of
the
nation,
will
continue
to
respect
and
protect
the
sanctity
of
the
Constitution.
WHEREFORE,
respondents
GOVERNMENT
SERVICE
INSURANCE
SYSTEM,
MANILA
HOTEL
CORPORATION,
COMMITTEE
ON
PRIVATIZATION
and
OFFICE
OF
THE
GOVERNMENT
CORPORATE
COUNSEL
are
directed
to
CEASE
and
DESIST
from
selling
51%
of
the
shares
of
the
Manila
Hotel
Corporation
to
RENONG
BERHAD,
and
to
ACCEPT
the
matching
bid
of
petitioner
MANILA
PRINCE
HOTEL
CORPORATION
to
purchase
the
subject
51%
of
the
shares
of
the
Manila
HotelCorporation
at
P44.00
per
share
and
thereafter
to
execute
the
necessary
agreements
and
documents
to
effect
the
sale,
to
issue
the
necessary
clearances
and
to
do
such
other
acts
and
deeds
as
may
be
necessary
for
the
purpose.
SO
ORDERED
Regalado,
Davide,
Jr.,
Romero,
Kapunan,
Francisco,
and
Hermosisima,
Jr.,
JJ.,
concur.
Narvasa,
C.J.,
I
join
Justice
Puno
in
his
dissent.
Padilla,
Vitug,
Mendoza,
and
Torrens,
Jr.,
JJ.,
see
concuring
opinion.
Puno
and
Panganiban,
JJ.,
please
see
separate
(Dissenting)
opinion.
Separate
Opinions
PADILLA,
J
.,
concurring:
I
concur
with
the
ponencia
of
Mr.
Justice
Bellosillo.
At
the
same
time,
I
would
like
to
expound
a
bit
more
on
the
concept
of
national
patrimony
as
including
within
its
scope
and
meaning
institutions
such
as
the
Manila
Hotel.
It
is
argued
by
petitioner
that
the
Manila
Hotel
comes
under
"national
patrimony"
over
which
qualified
Filipinos
have
the
preference,
in
ownership
and
operation.
The
Constitutional
provision
on
point
states:
"xxx
xxx
xxx
In
the
grant
of
rights,
privileges,
and
concessions
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos."
1
Petitioner's
argument,
I
believe,
is
well
taken.
Under
the
1987
Constitution,
"national
patrimony"
consists
of
the
natural
resources
provided
by
Almighty
God
(Preamble)
in
our
territory
(Article
1)
consisting
of
land,
sea,
and
air.
2
A
study
of
the
1935
Constitution,
where
the
concept
of
"national
patrimony"
originated,
would
show
that
its
framers
decided
to
adopt
the
even
more
comprehensive
expression
"Patrimony
of
the
Nation"
in
the
belief
that
the
phrase
encircles
a
concept
embracing
not
only
the
natural
resources
of
the
country
but
practically
everything
that
belongs
to
the
Filipino
people,
the
tangible
and
the
material
as
well
as
the
intangible
and
the
spiritual
assets
and
possessions
of
the
people.
It
is
to
be
noted
that
the
framers
did
not
stop
with
conservation.
They
knew
that
conservation
alone
does
not
spell
progress;
and
that
this
may
be
achieved
only
through
development
as
a
correlative
factor
to
assure
to
the
people
not
only
the
exclusive
ownership,
but
also
the
exclusive
benefits
of
their
national
patrimony.
3
Moreover,
the
concept
of
national
patrimony
has
been
viewed
as
referring
not
only
to
our
rich
natural
resources
but
also
to
the
cultural
heritage
of
our
race.4
There
is
no
doubt
in
my
mind
that
the
Manila
Hotel
is
very
much
a
part
of
our
national
patrimony
and,
as
such
deserves
constitutional
protection
as
to
who
shall
own
it
and
benefit
from
its
operation.
This
institution
has
played
an
important
role
in
our
nation's
history,
having
been
the
venue
of
many
a
historical
event,
and
serving
as
it
did,
and
as
it
does,
as
the
Philippine
Guest
House
for
visiting
foreign
heads
of
state,
dignitaries,
celebrities,
and
others.
5
It
is
therefore
our
duty
to
protect
and
preserve
it
for
future
generations
of
Filipinos.
As
President
Manuel
L.
Quezon
once
said,
we
must
exploit
the
natural
resources
of
our
country,
but
we
should
do
so
with
an
eye
to
the
welfare
of
the
future
generations.
In
other
words,
the
leaders
of
today
are
the
trustees
of
the
patrimony
of
our
race.
To
preserve
our
national
patrimony
and
reserve
it
for
Filipinos
was
the
intent
of
the
distinguished
gentlemen
who
first
framed
our
Constitution.
Thus,
in
debating
the
need
for
nationalization
of
our
lands
and
natural
resources,
one
expounded
that
we
should
"put
more
teeth
into
our
laws,
and;
not
make
the
nationalization
of
our
lands
and
natural
resources
a
subject
of
ordinary
legislation
but
of
constitutional
enactment."
6
To
quote
further:
"Let
not
our
children
be
mere
tenants
and
trespassers
in
their
own
country.
Let
us
preserve
and
bequeath
to
them
what
is
rightfully
theirs,
free
from
all
foreign
liens
and
encumbrances."
7
Now,
a
word
on
preference.
In
my
view
"preference
to
qualified
Filipinos",
to
be
meaningful,
must
refer
not
only
to
things
that
are
peripheral,
collateral,
or
tangential.
It
must
touch
and
affect
the
very
"heart
of
the
existing
order."
In
the
field
of
public
bidding
in
the
acquisition
of
things
that
pertain
to
the
national
patrimony,
preference
to
qualified
Filipinos
must
allow
a
qualified
Filipino
to
match
or
equal
the
higher
bid
of
a
non-Filipino;
the
preference
shall
not
operate
only
when
the
bids
of
the
qualified
Filipino
and
the
non-Filipino
are
equal
in
which
case,
the
award
should
undisputedly
be
made
to
the
qualified
Filipino.
The
Constitutional
preference
should
give
the
qualified
Filipino
an
opportunity
to
match
or
equal
the
higher
bid
of
the
non-Filipino
bidder
if
the
preference
of
the
qualified
Filipino
bidder
is
to
be
significant
at
all.
It
is
true
that
in
this
present
age
of
globalization
of
attitude
towards
foreign
investments
in
our
country,
stress
is
on
the
elimination
of
barriers
to
foreign
trade
and
investment
in
the
country.
While
government
agencies,
including
the
courts
should
re-condition
their
thinking
to
such
a
trend,
and
make
it
easy
and
even
attractive
for
foreign
investors
to
come
to
our
shores,
yet
we
should
not
preclude
ourselves
from
reserving
to
us
Filipinos
certain
areas
where
our
national
identity,
culture
and
heritage
are
involved.
In
the
hotel
industry,
for
instance,
foreign
investors
have
established
themselves
creditably,
such
as
in
the
Shangri-La,
the
Nikko,
the
Peninsula,
and
Mandarin
Hotels.
This
should
not
stop
us
from
retaining
51%
of
the
capital
stock
of
the
Manila
HotelCorporation
in
the
hands
of
Filipinos.
This
would
be
in
keeping
with
the
intent
of
the
Filipino
people
to
preserve
our
national
patrimony,
including
our
historical
and
cultural
heritage
in
the
hands
of
Filipinos.
VITUG,
J.:
I
agree
with
Mr.
Justice
Josue
N.
Bellosillo
on
his
clear-cut
statements,
shared
by
Mr.
Justice
Reynato
S.
Puno
in
a
well
written
separate
(dissenting)
opinion,
that:
First,
the
provision
in
our
fundamental
law
which
provides
that
"(i)n
the
grant
of
rights,
privileges,
and
concessions
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos"
1
is
self-executory.
The
provision
verily
does
not
need,
although
it
can
obviously
be
amplified
or
regulated
by,
an
enabling
law
or
a
set
of
rules.
Second,
the
term
"patrimony"
does
not
merely
refer
to
the
country's
natural
resources
but
also
to
its
cultural
heritage.
A
"historical
landmark,"
to
use
the
words
of
Mr.
Justice
Justo
P.
Torres,
Jr.,
Manila
Hotel
has
now
indeed
become
part
of
Philippine
heritage.
Third,
the
act
of
the
Government
Service
Insurance
System
("GSIS"),
a
government
entity
which
derives
its
authority
from
the
State,
in
selling
51%
of
its
share
in
MHC
should
be
considered
an
act
of
the
State
subject
to
the
Constitutional
mandate.
On
the
pivotal
issue
of
the
degree
of
"preference
to
qualified
Filipinos,"
I
find
it
somewhat
difficult
to
take
the
same
path
traversed
by
the
forceful
reasoning
of
Justice
Puno.
In
the
particular
case
before
us,
the
only
meaningful
preference,
it
seems,
would
really
be
to
allow
the
qualified
Filipino
to
match
the
foreign
bid
for,
as
a
practical
matter,
I
cannot
see
any
bid
that
literally
calls
for
millions
of
dollars
to
be
at
par
(to
the
last
cent)
with
another.
The
magnitude
of
the
bids
is
such
that
it
becomes
hardly
possible
for
the
competing
bids
to
stand
exactly
"equal"
which
alone,
under
the
dissenting
view,
could
trigger
the
right
of
preference.
It
is
most
unfortunate
that
Renong
Berhad
has
not
been
spared
this
great
disappointment,
a
letdown
that
it
did
not
deserve,
by
a
simple
and
timely
advise
of
the
proper
rules
of
bidding
along
with
the
peculiar
constitutional
implications
of
the
proposed
transaction.
It
is
also
regrettable
that
the
Court
at
times
is
seen
to,
instead,
be
the
refuge
for
bureaucratic
inadequacies
which
create
the
perception
that
it
even
takes
on
non-justiciable
controversies.
cdtai
All
told,
I
am
constrained
to
vote
for
granting
the
petition.
MENDOZA,
J.:
I
take
the
view
that
in
the
context
of
the
present
controversy
the
only
way
to
enforce
the
constitutional
mandate
that
"[i]n
the
grant
of
rights,
privileges
and
concessions
covering
the
national
patrimony
the
State
shall
give
preference
to
qualified
Filipinos"
1
is
to
allow
petitioner
Philippine
corporation
to
equal
the
bid
of
the
Malaysian
firm
Renong
Berhad
for
the
purchase
of
the
controlling
shares
of
stocks
in
the
Manila
Hotel
Corporation.
Indeed,
it
is
the
only
way
a
qualified
Filipino
or
Philippine
corporation
can
be
given
preference
in
the
enjoyment
of
a
right,
privilege
or
concession
given
by
the
State,
by
favoring
it
over
a
foreign
national
or
corporation.
Under
the
rules
on
public
bidding
of
the
Government
Service
and
Insurance
System,
if
petitioner
and
the
Malaysian
firm
had
offered
the
same
price
per
share,
"priority
[would
be
given]
to
the
bidder
seeking
the
larger
ownership
interest
in
MHC,"
2
so
that
if
petitioner
bid
for
more
shares,
it
would
be
preferred
to
the
Malaysian
corporation
for
that
reason
and
not
because
it
is
a
Philippine
corporation.
Consequently,
it
is
only
in
cases
like
the
present
one,
where
an
alien
corporation
is
the
highest
bidder,
that
preferential
treatment
of
the
Philippine
corporation
is
mandated
not
by
declaring
it
winner
but
by
allowing
it
"to
match
the
highest
bid
in
terms
of
price
per
share"
before
it
is
awarded
the
shares
of
stocks.
3
That,
to
me,
is
what
"preference
to
qualified
Filipinos"
means
in
the
context
of
this
case
by
favoring
Filipinos
whenever
they
are
at
a
disadvantage
vis-a-vis
foreigners.
This
was
the
meaning
given
in
Co
Chiong
v.
Cuaderno
4
to
a
1947
statute
giving
"preference
to
Filipino
citizens
in
the
lease
of
public
market
stalls."
5
This
Court
upheld
the
cancellation
of
existing
leases
covering
market
stalls
occupied
by
persons
who
were
not
Filipinos
and
the
award
thereafter
of
the
stalls
to
qualified
Filipino
vendors
as
ordered
by
the
Department
of
Finance.
Similarly,
in
Vda.
de
Salgado
v.
De
la
Fuente,
6
this
Court
sustained
the
validity
of
a
municipal
ordinance
passed
pursuant
to
the
statute
(R.A.
No.
37),
terminating
existing
leases
of
public
market
stalls
and
granting
preference
to
Filipino
citizens
in
the
issuance
of
new
licenses
for
the
occupancy
of
the
stalls.
In
Chua
Lao
v.
Raymundo,
7
the
preference
granted
under
the
statute
was
held
to
apply
to
cases
in
which
Filipino
vendors
sought
the
same
stalls
occupied
by
alien
vendors
in
the
public
markets
even
if
there
were
available
other
stalls
as
good
as
those
occupied
by
aliens.
"The
law,
apparently,
is
applicable
whenever
there
is
a
conflict
of
interest
between
Filipino
applicants
and
aliens
for
lease
of
stalls
in
public
markets,
in
which
situation
the
right
to
preference
immediately
arises."
8
Our
legislation
on
the
matter
thus
antedated
by
a
quarter
of
a
century
efforts
began
only
in
the
1970's
in
America
to
realize
the
promise
of
equality,
through
affirmative
action
and
reverse
discrimination
programs
designed
to
remedy
past
discrimination
against
colored
people
in
such
areas
as
employment,
contracting
and
licensing.
9
Indeed,
in
vital
areas
of
our
national
economy,
there
are
situations
in
which
the
only
way
to
place
Filipinos
in
control
of
the
national
economy
as
contemplated
in
the
Constitution
10
is
to
give
them
preferential
treatment
where
they
can
at
least
stand
on
equal
footing
with
aliens.
There
need
be
no
fear
that
thus
preferring
Filipinos
would
either
invite
foreign
retaliation
or
deprive
the
country
of
the
benefit
of
foreign
capital
or
know-how.
We
are
dealing
here
not
with
common
trades
or
common
means
of
livelihood
which
are
open
to
aliens
in
our
midst,
11
but
with
the
sale
of
government
property,
which
is
like
the
grant
of
government
largess
or
benefits.
In
the
words
of
Art.
XII,
sec.
10,
we
are
dealing
here
with
"rights,
privileges
and
concessions
covering
the
national
economy"
and
therefore
no
one
should
begrudge
us
if
we
give
preferential
treatment
to
our
citizens.
That
at
any
rate
is
the
command
of
the
Constitution.
For
the
Manila
Hotel
is
a
business
owned
by
the
Government.
It
is
being
privatized.
Privatization
should
result
in
the
relinquishment
of
the
business
in
favor
of
private
individuals
and
groups
who
are
Filipino
citizens,
not
in
favor
of
aliens.
Nor
should
there
be
any
doubt
that
by
awarding
the
shares
of
stocks
to
petitioner
we
would
be
trading
competence
and
capability
for
nationalism.
Both
petitioner
and
the
Malaysian
firm
are
qualified,
having
hurdled
the
pre-qualification
process.
12
It
is
only
the
result
of
the
public
bidding
that
is
sought
to
be
modified
by
enabling
petitioner
to
up
its
bid
to
equal
the
highest
bid.
Nor,
finally,
is
there
any
basis
for
the
suggestion
that
to
allow
a
Filipino
bidder
to
match
the
highest
bid
of
an
alien
could
encourage
speculation,
since
all
the
Filipino
entity
would
then
do
would
be
not
to
make
a
bid
or
make
only
a
token
one
and,
after
it
is
known
that
a
foreign
bidder
has
submitted
the
highest
bid,
make
an
offer
matching
that
of
the
foreign
firm.
This
is
not
possible
under
the
rules
on
public
bidding
of
the
GSIS.
Under
these
rules
there
is
minimum
bid
required
(P36.67
per
share
for
a
range
of
9
to
15
million
shares).
13
Bids
below
the
minimum
will
not
be
considered.
On
the
other
hand,
if
the
Filipino
entity,
after
passing
the
pre-qualification
process,
does
not
submit
a
bid,
he
will
not
be
allowed
to
match
the
highest
bid
of
the
foreign
firm
because
this
is
a
privilege
allowed
only
to
those
who
have
"validly
submitted
bids."
14
The
suggestion
is,
to
say
the
least,
fanciful
and
has
no
basis
in
fact.
For
the
foregoing
reasons,
I
vote
to
grant
the
petition.
TORRES,
JR.,
J.:
Constancy
in
law
is
not
an
attribute
of
a
judicious
mind.
I
say
this
as
we
are
confronted
in
the
case
at
bar
with
legal
and
constitutional
issues
and
yet
I
am
driven
so
to
speak
on
the
side
of
history.
The
reason
perhaps
is
due
to
the
belief
that
in
the
words
of
Justice
Oliver
Wendell
Holmes,
Jr.,
a
"page
of
history
is
worth
a
volume
of
logic."
I
will,
however,
attempt
to
share
my
thoughts
on
whether
the
Manila
Hotel
has
a
historical
and
cultural
aspect
within
the
meaning
of
the
constitution
and
thus,
forming
part
of
the
"patrimony
of
the
nation."
Section
10,
Article
XII
of
the
1987
Constitution
provides
:
xxx
xxx
xxx
"In
the
grant
of
rights,
privileges,
and
concessions
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos.
The
State
shall
regulate
and
exercise
authority
over
foreign
investments
within
its
national
goals
and
priorities."
The
foregoing
provisions
should
be
read
in
conjunction
with
Article
II
of
the
same
Constitution
pertaining
to
"Declaration
of
Principles
and
State
Policies"
which
ordain
"The
State
shall
develop
a
self-reliant
and
independent
national
economy,
effectively
controlled
by
Filipinos."
(Sec.
19).
Interestingly,
the
matter
of
giving
preference
to
"qualified
Filipinos"
was
one
of
the
highlights
in
the
1987
Constitution
Commission
proceedings,
thus:
xxx
xxx
xxx
"MR.
NOLLEDO.
The
Amendment
will
read:
"IN
THE
GRANT
OF
RIGHTS,
PRIVILEGES
AND
CONCESSIONS
COVERING
THE
NATIONAL
ECONOMY
AND
PATRIMONY,
THE
STATE
SHALL
GIVE
PREFERENCE
TO
QUALIFIED
FILIPINOS."
And
the
word
"Filipinos"
here,
as
intended
by
the
proponents,
will
include
not
only
individual
Filipinos
but
also
Filipino-controlled
entities
fully
controlled
by
Filipinos
(Vol.
III,
Records
of
the
Constitutional,
p.
608)
MR.
MONSOD.
We
also
wanted
to
add,
as
Commissioner
Villegas
said,
this
committee
and
this
body
already
approved
what
is
known
as
the
Filipino
First
policy
which
was
suggested
by
Commissioner
de
Castro.
So
that
it
is
now
in
our
Constitution
(Vol.
IV,
Records
of
the
Constitutional
Commission,
p.
225).
Commissioner
Jose
Nolledo
explaining
the
provision
adverted
to
above,
said:
"MR.
NOLLEDO.
In
the
grant
of
rights,
privileges
and
concessions
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos.
MR.
FOZ.
In
connection
with
that
amendment,
if
a
foreign
enterprise
is
qualified
and
the
Filipinos
enterprise
is
also
qualified,
will
the
Filipino
enterprise
shall
be
given
a
preference?
MR.
NOLLEDO.
Obviously.
MR.
FOZ.
If
the
foreigner
is
more
qualified
in
some
aspects
than
the
Filipino
enterprise,
will
the
Filipino
still
be
preferred?
MR.
NOLLEDO.
The
answer
is
"yes"
(Vol.
III
p.
616,
Records
of
the
Constitutional
Commission).
The
nationalistic
provisions
of
the
1987
Constitution
reflect
the
history
and
spirit
of
the
Malolos
Constitution
of
1898,
the
1935
Constitution
and
the
1973
Constitutions.
That
we
have
not
reneged
on
this
nationalist
policy
is
articulated
in
one
of
the
earliest
cases,
this
Court
said
"The
'nationalistic
tendency
is
manifested
in
various
provisions
of
the
Constitution.
.
.
.
It
cannot
therefore
be
said
that
a
law
imbued
with
the
same
purpose
and
spirit
underlying
many
of
the
provisions
of
the
Constitution
is
unreasonable,
invalid
or
unconstitutional
(Ichong,
et
al.
vs.
Hernandez,
et
al.,
101
Phil.
1155).'"
I
subscribe
to
the
view
that
history,
culture,
heritage,
and
tradition
are
not
legislated
and
is
the
product
of
events,
customs,
usages
and
practices.
It
is
actually
a
product
of
growth
and
acceptance
by
the
collective
mores
of
a
race.
It
is
the
spirit
and
soul
of
a
people.
The
Manila
Hotel
is
part
of
our
history,
culture
and
heritage.
Every
inch
of
the
Manila
Hotel
is
witness
to
historic
events
(too
numerous
to
mention)
which
shaped
our
history
for
almost
84
years.
As
I
intimated
earlier,
it
is
not
my
position
in
this
opinion,
to
examine
the
single
instances
of
the
legal
largesse
which
have
given
rise
to
the
controversy,
as
I
believe
that
has
been
exhaustively
discussed
in
the
ponencia.
Suffice
it
to
say
at
this
point
that
the
history
of
the
Manila
Hotel
should
not
be
placed
in
the
auction
block
of
a
purely
business
transaction,
where
profit
subverts
the
cherished
historical
values
of
our
people.
As
a
historical
landmark
in
this
"Pearl
of
the
Orient
Seas",
it
has
its
enviable
tradition
which,
in
the
words
of
philosopher
Salvador
de
Madarriaga,
(tradition)
is
"more
of
a
river
than
a
stone,
it
keeps
flowing,
and
one
must
view
the
flow
in
both
directions.
If
you
look
towards
the
hill
from
which
the
river
flows,
you
see
tradition
in
the
form
of
forceful
currents
that
push
the
river
or
people
towards
the
future;
if
you
look
the
other
way,
you
progress."
Indeed,
tradition
and
progress
are
the
same,
for
progress
depends
on
the
kind
of
tradition.
Let
us
not
jettison
the
tradition
of
the
Manila
Hotel
and
thereby
repeat
our
colonial
history.
I
grant,
of
course,
that
men
of
the
law
can
see
the
same
subject
in
different
lights.
I
remember,
however,
a
Spanish
proverb
which
says
"He
is
always
right
who
suspects
that
he
makes
mistakes".
On
this
note,
I
say
that
if
I
have
to
make
a
mistake,
I
would
rather
err
upholding
the
belief
that
the
Filipino
is
first
under
his
Constitution
and
in
his
own
land.
I
vote
to
GRANT
the
petition.
PUNO,
J.,
dissenting:
This
is
a
petition
for
prohibition
and
mandamus
filed
by
the
Manila
Prince
Hotel
Corporation,
a
domestic
corporation,
to
stop
the
Government
Service
Insurance
System
(GSIS)
from
selling
the
controlling
shares
of
the
Manila
Hotel
Corporation
to
a
foreign
corporation.
Allegedly,
the
sale
violates
the
second
paragraph
of
Section
10,
Article
XII
of
the
Constitution.
Respondent
GSIS
is
a
government-owned
and
controlled
corporation.
It
is
the
sole
owner
of
the
Manila
Hotel
which
it
operates
through
its
subsidiary,
theManila
Hotel
Corporation.
Manila
Hotel
was
included
in
the
privatization
program
of
the
government.
In
1995,
GSIS
proposed
to
sell
to
interested
buyers
30%
to
51%
of
its
shares,
ranging
from
9,000,000
to
15,300,000
shares,
in
the
Manila
Hotel
Corporation.
After
the
absence
of
bids
at
the
first
public
bidding,
the
block
of
shares
offered
for
sale
was
increased
from
a
maximum
of
30%
to
51%.
Also,
the
winning
bidder,
or
the
eventual
"strategic
partner"
of
the
GSISwas
required
to
"provide
management
expertise
and/or
an
international
marketing/reservation
system,
and
financial
support
to
strengthen
the
profitability
and
performance
of
the
Manila
Hotel."
1
The
proposal
was
approved
by
respondent
Committee
on
Privatization.
In
July
1995,
a
conference
was
held
where
pre-qualification
documents
and
the
bidding
rules
were
furnished
interested
parties.
Petitioner
Manila
PrinceHotel,
a
domestic
corporation,
and
Renong
Berhad,
a
Malaysian
firm
with
ITT
Sheraton
as
operator,
pre-qualified.
2
The
bidding
rules
and
procedures
entitled
"Guidelines
and
Procedures:
Second
Pre-qualification
and
Public
Bidding
of
the
MHC
Privatization"
provide:
"I.
INTRODUCTION
AND
HIGHLIGHTS
DETERMINING
THE
WINNING
BIDDER/STRATEGIC
PARTNER
The
party
that
accomplishes
the
steps
set
forth
below
will
be
declared
the
Winning
Bidder/Strategic
Partner
and
will
be
awarded
the
Block
of
Shares:
First
Pass
the
prequalification
process;
Second
Submit
the
highest
bid
on
a
price
per
share
basis
for
the
Block
of
Shares;
Third
Negotiate
and
execute
the
necessary
contracts
with
GSIS/MHC
not
later
than
October
23,
1995.
xxx
xxx
xxx
IV.
GUIDELINES
FOR
PREQUALIFICATION
A.
PARTIES
WHO
MAY
APPLY
FOR
PREQUALIFICATION
The
Winning
Bidder/Strategic
Partner
will
be
expected
to
provide
management
expertise
and/or
an
international
marketing
reservation,
and
financial
support
to
strengthen
the
profitability
and
performance
of
The
Manila
Hotel.
In
this
context,
the
GSIS
is
inviting
to
the
prequalification
process
any
local
and/or
foreign
corporation,
consortium/joint
venture
or
juridical
entity
with
at
least
one
of
the
following
qualifications:
a.
Proven
management
expertise
in
the
hotel
industry;
or
b.
Significant
equity
ownership
(i.e.
board
representation)
in
another
hotel
company;
or
c.
Overall
management
and
marketing
expertise
to
successfully
operate
the
Manila
Hotel.
Parties
interested
in
bidding
for
MHC
should
be
able
to
provide
access
to
the
requisite
management
expertise
and/or
international
marketing/reservation
system
for
The
Manila
Hotel.
xxx
xxx
xxx
D.
PREQUALIFICATION
DOCUMENTS
xxx
xxx
xxx
E.
APPLICATION
PROCEDURE
c.
If
the
Bid
Security
is
in
the
form
of
a
manager's
check
or
unconditional
demand
draft,
the
interest
earned
on
the
Bid
Security
will
be
for
the
account
of
GSIS.
d.
If
the
Qualified
Bidder
becomes
the
Winning
Bidder/Strategic
Partner,
the
Bid
Security
will
be
applied
as
the
downpayment
on
the
Qualified
Bidder's
offered
purchase
price.
e.
The
Bid
Security
of
the
Qualified
Bidder
will
be
returned
immediately
after
the
Public
Bidding
if
the
Qualified
Bidder
is
not
declared
the
Highest
Bidder.
f.
The
Bid
Security
will
be
returned
by
October
23,
1995
if
the
Highest
Bidder
is
unable
to
negotiate
and
execute
with
GSIS/MHC
the
Management
Contract,
International
Marketing/Reservation
System
Contract
or
other
types
of
contract
specified
by
the
Highest
Bidder
in
its
strategic
plan
for
The
ManilaHotel.
g.
The
Bid
Security
of
the
Highest
Bidder
will
be
forfeited
in
favor
of
GSIS
if
the
Highest
Bidder,
after
negotiating
and
executing
the
Management
Contract,
International
Marketing/Reservation
System
Contract
or
other
types
of
contract
specified
by
the
Highest
Bidder
in
its
strategic
plan
for
The
ManilaHotel,
fails
or
refuses
to:
i.
Execute
the
Stock
Purchase
and
Sale
Agreement
with
GSIS
not
later
than
October
23,
1995;
or
ii.
Pay
the
full
amount
of
the
offered
purchase
price
not
later
than
October
23,
1995;
or
iii.
Consummate
the
sale
of
the
Block
of
Shares
for
any
other
reason.
G.
SUBMISSION
OF
BIDS
1.
The
Public
Bidding
will
be
held
on
September
7,
1995
at
the
following
location:
New
GSIS
Headquarters
Building
Financial
Center,
Reclamation
Area
Roxas
Boulevard,
Pasay
City,
Metro
Manila
2.
The
Secretariat
of
the
PBAC
will
be
stationed
at
the
Public
Bidding
to
accept
any
and
all
bids
and
supporting
requirements.
Representatives
from
the
Commission
on
Audit
and
COP
will
be
invited
to
witness
the
proceedings.
3.
The
Qualified
Bidder
should
submit
its
bid
using
the
Official
Bid
Form.
The
accomplished
Official
Bid
Form
should
be
submitted
in
a
sealed
envelope
marked
"OFFICIAL
BID."
4.
The
Qualified
Bidder
should
submit
the
following
documents
in
another
sealed
envelope
marked
"SUPPORTING
BID
DOCUMENTS"
a.
Written
Authority
Bid
b.
Bid
Security
5.
The
two
sealed
envelopes
marked
"OFFICIAL
BID"
and
"SUPPORTING
BID
DOCUMENTS"
must
be
submitted
simultaneously
to
the
Secretariat
between
9:00
AM
and
2:00
PM,
Philippine
Standard
Time,
on
the
date
of
the
Public
Bidding.
No
bid
shall
be
accepted
after
the
closing
time.
Opened
or
tampered
bids
shall
not
be
accepted.
6.
The
Secretariat
will
log
and
record
the
actual
time
of
submission
of
the
two
sealed
envelopes.
The
actual
time
of
submission
will
also
be
indicated
by
the
Secretariat
on
the
face
of
the
two
envelopes.
7.
After
Step
No.
6,
the
two
sealed
envelopes
will
be
dropped
in
the
corresponding
bid
boxes
provided
for
the
purpose.
These
boxes
will
be
in
full
view
of
the
invited
public.
H.
OPENING
AND
READING
OF
BIDS
1.
After
the
closing
time
of
2:00
PM
on
the
date
of
the
Public
Bidding,
the
PBAC
will
open
all
sealed
envelopes
marked
"SUPPORTING
BID
DOCUMENTS"for
screening,
evaluation
and
acceptance.
Those
who
submitted
incomplete/insufficient
documents
or
document/s
which
is/are
not
substantially
in
the
form
required
by
PBAC
will
be
disqualified.
The
envelope
containing
their
Official
Bid
Form
will
be
immediately
returned
to
the
disqualified
bidders.
2.
The
sealed
envelopes
marked
"OFFICIAL
BID"
will
be
opened
at
3:00
PM.
The
name
of
the
bidder
and
the
amount
of
its
bid
price
will
be
read
publicly
as
the
envelopes
are
opened.
3.
Immediately
following
the
reading
of
the
bids,
the
PBAC
will
formally
announce
the
highest
bid
and
the
Highest
Bidder.
4
.
The
highest
bid
will
be
determined
on
a
price
per
share
basis.
In
the
event
of
a
tie
wherein
two
or
more
bids
have
the
same
equivalent
price
per
share,
priority
will
be
given
to
the
bidder
seeking
the
larger
ownership
interest
in
MHC.
5.
The
Public
Bidding
will
be
declared
a
failed
bidding
in
case:
a.
No
single
bid
is
submitted
within
the
prescribed
period;
or
b.
There
is
only
one
(1)
bid
that
is
submitted
and
acceptable
to
the
PBAC.
I.
EXECUTION
OF
THE
NECESSARY
CONTRACTS
WITH
GSIS/MHC
1.
The
Highest
Bidder
must
comply
with
the
conditions
set
forth
below
by
October
23,
1995
or
the
Highest
Bidder
will
lose
the
right
to
purchase
the
Block
of
Shares
and
GSIS
will
instead
offer
the
Block
of
Shares
to
the
other
Qualified
Bidders:
a.
The
Highest
Bidder
must
negotiate
and
execute
with
GSIS/MHC
the
Management
Contract,
International
Marketing/
Reservation
System
Contract
or
other
type
of
contract
specified
by
the
Highest
Bidder
in
its
strategic
plan
for
The
Manila
Hotel.
If
the
Highest
Bidder
is
intending
to
provide
only
financial
support
to
The
Manila
Hotel,
a
separate
institution
may
enter
into
the
aforementioned
contract/s
with
GSIS/MHC.
b.
The
Highest
Bidder
must
execute
the
Stock
Purchase
and
Sale
Agreement
with
GSIS,
a
copy
of
which
will
be
distributed
to
each
of
the
Qualified
Bidder
after
the
prequalification
process
is
completed.
2.
In
the
event
that
the
Highest
Bidder
chooses
a
Management
Contract
for
The
Manila
Hotel,
the
maximum
levels
for
the
management
fee
structure
that
GSIS/MHC
are
prepared
to
accept
in
the
Management
Contract
are
as
follows
:
a.
Basic
management
fee:
Maximum
of
2
.5%
of
gross
revenues.(1)
b.
Incentive
fee:
Maximum
of
8
.0%
of
gross
operating
profit
(1)
after
deducting
undistributed
overhead
expenses
and
the
basic
management
fee.
c.
Fixed
component
of
the
international
marketing/reservation
system
fee:
Maximum
of
2.0%
of
gross
room
revenues.(1)
The
Applicant
should
indicate
in
its
Information
Package
if
it
is
wishes
to
charge
this
fee.
Note
(1):
As
defined
in
the
uniform
system
of
account
for
hotels.
The
GSIS/MHC
have
indicated
above
the
acceptable
parameters
for
the
hotel
management
fees
to
facilitate
the
negotiations
with
the
Highest
Bidder
for
the
Management
Contract
after
the
Public
Bidding.
A
Qualified
Bidder
envisioning
a
Management
Contract
for
The
Manila
Hotel
should
determine
whether
or
not
the
management
fee
structure
above
is
acceptable
before
submitting
their
prequalification
documents
to
GSIS.
J.
BLOCK
SALE
TO
THE
OTHER
QUALIFIED
BIDDERS
1
.
If
for
any
reason,
the
Highest
Bidder
cannot
be
awarded
the
Block
of
Shares,
GSIS
may
offer
this
to
the
other
Qualified
Bidders
that
have
validly
submitted
bids
provided
that
these
Qualified
are
willing
to
match
the
highest
bid
in
terms
of
price
per
share.
2
.
The
order
of
priority
among
the
interested
Qualified
Bidders
will
be
in
accordance
with
the
equivalent
price
per
share
of
their
respective
bids
in
the
Public
Bidding,
i.e.
first
and
second
priority
will
be
given
to
the
Qualified
Bidders
that
submitted
the
second
and
third
highest
bids
on
the
price
per
share
basis,
respectively,
and
so
on.
K.
DECLARATION
OF
THE
WINNING
BIDDER/STRATEGIC
PARTNER
The
Highest
Bidder
will
be
declared
the
Winning
Bidder/Strategic
Partner
after
the
following
conditions
are
met:
a.
Execution
of
the
necessary
contract
with
GSIS/MHC
not
later
than
October
23,
1995;
and
b.
Requisite
approvals
from
the
GSIS/MHC
and
COP/OGCC
are
obtained.
I.
FULL
PAYMENT
FOR
THE
BLOCK
OF
SHARES
1.
Upon
execution
of
the
necessary
contracts
with
GSIS/MHC,
the
Winning
Bidder/Strategic
Partner
must
fully
pay,
not
later
than
October
23,
1995,
the
offered
purchase
price
for
the
Block
of
Shares
after
deducting
the
Bid
Security
applied
as
downpayment.
2.
All
payments
should
be
made
in
the
form
of
a
Manager's
Check
or
unconditional
Demand
Draft,
payable
to
the
"Government
Service
Insurance
System,"
issued
by
a
reputable
banking
institution
licensed
to
do
business
in
the
Philippines
and
acceptable
to
GSIS.
M.
GENERAL
CONDITIONS
1.
The
GSIS
unconditionally
reserves
the
right
to
reject
any
or
all
applications,
waive
any
formality
therein,
or
accept
such
application
as
maybe
considered
most
advantageous
to
the
GSIS.
The
GSIS
similarly
reserves
the
right
to
require
the
submission
of
any
additional
information
from
the
Applicant
as
the
PBAC
may
deem
necessary.
2.
The
GSIS
further
reserves
the
right
to
call
off
the
Public
Bidding
prior
to
acceptance
of
the
bids
and
call
for
a
new
public
bidding
under
amended
rules,
and
without
any
liability
whatsoever
to
any
or
all
the
Qualified
Bidders,
except
the
obligation
to
return
the
Bid
Security.
3.
The
GSIS
reserves
the
right
to
reset
the
date
of
the
prequalification/bidding
conference,
the
deadline
for
the
submission
of
the
prequalification
documents,
the
date
of
the
Public
Bidding
or
other
pertinent
activities
at
least
three
(3)
calendar
days
prior
to
the
respective
deadlines/target
dates.
4.
The
GSIS
sells
only
whatever
rights,
interest
and
participation
it
has
on
the
Block
of
Shares.
5.
All
documents
and
materials
submitted
by
the
Qualified
Bidders,
except
the
Bid
Security,
may
be
returned
upon
request.
6.
The
decision
of
the
PBAC/GSIS
on
the
results
of
the
Public
Bidding
is
final.
The
Qualified
Bidders,
by
participating
in
the
Public
Bidding,
are
deemed
to
have
agreed
to
accept
and
abide
by
these
results.
7.
The
GSIS
will
be
held
free
and
harmless
from
any
liability,
suit
or
allegation
arising
out
of
the
Public
Bidding
by
the
Qualified
Bidders
who
have
participated
in
the
Public
Bidding."
3
The
second
public
bidding
was
held
on
September
18,
1995.
Petitioner
bidded
P41.00
per
share
for
15,300,000
shares
and
Renong
Berhad
bidded
P44.00
per
share
also
for
15,300,000
shares.
The
GSIS
declared
Renong
Berhad
the
highest
bidder
and
immediately
returned
petitioner's
bid
security.
On
September
28,
1995,
ten
days
after
the
bidding,
petitioner
wrote
to
GSIS
offering
to
match
the
bid
price
of
Renong
Berhad.
It
requested
that
the
award
be
made
to
itself
citing
the
second
paragraph
of
Section
10,
Article
XII
of
the
Constitution.
It
sent
a
manager's
check
for
thirty-three
million
pesos
(P33,000,000.00)
as
bid
security.
Respondent
GSIS,
then
in
the
process
of
negotiating
with
Renong
Berhad
the
terms
and
conditions
of
the
contract
and
technical
agreements
in
the
operation
of
the
hotel,
refused
to
entertain
petitioner's
request.
Hence,
petitioner
filed
the
present
petition.
We
issued
a
temporary
restraining
order
on
October
18,
1995.
Petitioner
anchors
its
plea
on
the
second
paragraph
of
Article
XII,
Section
10
of
the
Constitution
4
on
the
"National
Economy
and
Patrimony"
which
provides:
"xxx
xxx
xxx
In
the
grant
of
rights,
privileges,
and
concessions
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos.
xxx
xxx
xxx"
The
vital
issues
can
be
summed
up
as
follows:
(1)
Whether
section
10,
paragraph
2
of
Article
XII
of
the
Constitution
is
a
self-executing
provision
and
does
not
need
implementing
legislation
to
carry
it
into
effect;
(2)
Assuming
section
10,
paragraph
2
of
Article
XII
is
self-executing,
whether
the
controlling
shares
of
the
Manila
Hotel
Corporation
form
part
of
our
patrimony
as
a
nation;
(3)
Whether
GSIS
is
included
in
the
term
"State,"
hence,
mandated
to
implement
section
10,
paragraph
2
of
Article
XII
of
the
Constitution;
(4)
Assuming
GSIS
is
part
of
the
State,
whether
it
failed
to
give
preference
to
petitioner,
a
qualified
Filipino
corporation,
over
and
above
Renong
Berhad,
a
foreign
corporation,
in
the
sale
of
the
controlling
shares
of
the
Manila
Hotel
Corporation;
(5)
Whether
petitioner
is
estopped
from
questioning
the
sale
of
the
shares
to
Renong
Berhad,
a
foreign
corporation.
Anent
the
first
issue,
it
is
now
familiar
learning
that
a
Constitution
provides
the
guiding
policies
and
principles
upon
which
is
built
the
substantial
foundation
and
general
framework
of
the
law
and
government.
5
As
a
rule,
its
provisions
are
deemed
self-executing
and
can
be
enforced
without
further
legislative
action.
6
Some
of
its
provisions,
however,
can
be
implemented
only
through
appropriate
laws
enacted
by
the
Legislature,
hence
not
self-executing.
To
determine
whether
a
particular
provision
of
a
Constitution
is
self-executing
is
a
hard
row
to
hoe.
The
key
lies
on
the
intent
of
the
framers
of
the
fundamental
law
oftentimes
submerged
in
its
language.
A
searching
inquiry
should
be
made
to
find
out
if
the
provision
is
intended
as
a
present
enactment,
complete
in
itself
as
a
definitive
law,
or
if
it
needs
future
legislation
for
completion
and
enforcement.
7
The
inquiry
demands
a
micro-analysis
of
the
text
and
the
context
of
the
provision
in
question.
8
Courts
as
a
rule
consider
the
provisions
of
the
Constitution
as
self-executing,
9
rather
than
as
requiring
future
legislation
for
their
enforcement.
10
The
reason
is
not
difficult
to
discern.
For
if
they
are
not
treated
as
self-executing,
the
mandate
of
the
fundamental
law
ratified
by
the
sovereign
people
can
be
easily
ignored
and
nullified
by
Congress.
11
Suffused
with
wisdom
of
the
ages
is
the
unyielding
rule
that
legislative
actions
may
give
breath
to
constitutional
rights
but
congressional
inaction
should
not
suffocate
them.
12
Thus,
we
have
treated
as
self-executing
the
provisions
in
the
Bill
of
Rights
on
arrests,
searches
and
seizures,
13
the
rights
of
a
person
under
custodial
investigation,
14
the
rights
of
an
accused,
15
and
the
privilege
against
self-incrimination.
16
It
is
recognized
that
legislation
is
unnecessary
to
enable
courts
to
effectuate
constitutional
provisions
guaranteeing
the
fundamental
rights
of
life,
liberty
and
the
protection
of
property.
17
The
same
treatment
is
accorded
to
constitutional
provisions
forbidding
the
taking
or
damaging
of
property
for
public
use
without
just
compensation.
18
Contrariwise,
case
law
lays
down
the
rule
that
a
constitutional
provision
is
not
self-executing
where
it
merely
announces
a
policy
and
its
language
empowers
the
Legislature
to
prescribe
the
means
by
which
the
policy
shall
be
carried
into
effect.
19
Accordingly,
we
have
held
that
the
provisions
in
Article
II
of
ourConstitution
entitled
"Declaration
of
Principles
and
State
Policies"
should
generally
be
construed
as
mere
statements
of
principles
of
the
State.
20
We
have
also
ruled
that
some
provisions
of
Article
XIII
on
"Social
Justice
and
Human
Rights,"
21
and
Article
XIV
on
"Education
Science
and
Technology,
Arts,
Culture
and
Sports"
22
cannot
be
the
basis
of
judicially
enforceable
rights.
Their
enforcement
is
addressed
to
the
discretion
of
Congress
though
they
provide
the
framework
for
legislation
23
to
effectuate
their
policy
content.
24
Guided
by
this
map
of
settled
jurisprudence,
we
now
consider
whether
Section
10,
Article
XII
of
the
1987
Constitution
is
self-executing
or
not.
It
reads:
cdasia
"Sec.
10.
The
Congress
shall,
upon
recommendation
of
the
economic
and
planning
agency,
when
the
national
interest
dictates,
reserve
to
citizens
of
the
Philippines
or
to
corporations
or
associations
at
least
sixty
per
centum
of
whose
capital
is
owned
by
such
citizens,
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
grant
of
rights,
privileges,
and
concessions
covering
the
national
economy
and
patrimony,
the
State
shall
give
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."
The
first
paragraph
directs
Congress
to
reserve
certain
areas
of
investments
in
the
country
25
to
Filipino
citizens
or
to
corporations
sixty
per
cent
26
of
whose
capital
stock
is
owned
by
Filipinos.
It
further
commands
Congress
to
enact
laws
that
will
encourage
the
formation
and
operation
of
one
hundred
percent
Filipino-owned
enterprises.
In
checkered
contrast,
the
second
paragraph
orders
the
entire
State
to
give
preference
to
qualified
Filipinos
in
the
grant
of
rights
and
privileges
covering
the
national
economy
and
patrimony.
The
third
paragraph
also
directs
the
State
to
regulate
foreign
investments
in
line
with
our
national
goals
and
well-set
priorities.
The
first
paragraph
of
Section
10
is
not
self-executing.
By
its
express
text,
there
is
a
categorical
command
for
Congress
to
enact
laws
restricting
foreign
ownership
in
certain
areas
of
investments
in
the
country
and
to
encourage
the
formation
and
operation
of
wholly-owned
Filipino
enterprises.
The
right
granted
by
the
provision
is
clearly
still
in
esse.
Congress
has
to
breathe
life
to
the
right
by
means
of
legislation.
Parenthetically,
this
paragraph
was
plucked
from
section
3,
Article
XIV
of
the
1973
Constitution.
27
The
provision
in
the
1973
Constitution
affirmed
our
ruling
in
the
landmark
case
of
Lao
Ichong
v.Hernandez,
28
where
we
upheld
the
discretionary
authority
of
Congress
to
Filipinize
certain
areas
of
investments.
29
By
reenacting
the
1973
provision,
the
first
paragraph
of
section
10
affirmed
the
power
of
Congress
to
nationalize
certain
areas
of
investments
in
favor
of
Filipinos.
The
second
and
third
paragraphs
of
Section
10
are
different.
They
are
directed
to
the
State
and
not
to
Congress
alone
which
is
but
one
of
the
three
great
branches
of
our
government.
Their
coverage
is
also
broader
for
they
cover
"the
national
economy
and
patrimony"
and
"foreign
investments
within
[the]
national
jurisdiction"
and
not
merely
"certain
areas
of
investments."
Beyond
debate,
they
cannot
be
read
as
granting
Congress
the
exclusive
power
to
implement
by
law
the
policy
of
giving
preference
to
qualified
Filipinos
in
the
conferral
of
rights
and
privileges
covering
our
national
economy
and
patrimony.
Their
language
does
not
suggest
that
any
of
the
State
agency
or
instrumentality
has
the
privilege
to
hedge
or
to
refuse
its
implementation
for
any
reason
whatsoever.
Their
duty
to
implement
is
unconditional
and
it
is
now.
The
second
and
the
third
paragraphs
of
Section
10,
Article
XII
are
thus
self-executing.
This
submission
is
strengthened
by
Article
II
of
the
Constitution
entitled
"Declaration
of
Principles
and
State
Policies."
Its
Section
19
provides
that
"[T]he
State
shall
develop
a
self-reliant
and
independent
national
economy
effectively
controlled
by
Filipinos."
It
engrafts
the
all-important
Filipino
First
policy
in
our
fundamental
law
and
by
the
use
of
the
mandatory
word
"shall,"
directs
its
enforcement
by
the
whole
State
without
any
pause
or
a
half-
pause
in
time.
The
second
issue
is
whether
the
sale
of
a
majority
of
the
stocks
of
the
Manila
Hotel
Corporation
involves
the
disposition
of
part
of
our
national
patrimony.
The
records
of
the
Constitutional
Commission
show
that
the
Commissioners
entertained
the
same
view
as
to
its
meaning.
According
to
Commissioner
Nolledo,
"patrimony"
refers
not
only
to
our
rich
natural
resources
but
also
to
the
cultural
heritage
of
our
race.
30
By
this
yardstick,
the
sale
of
Manila
Hotelfalls
within
the
coverage
of
the
constitutional
provision
giving
preferential
treatment
to
qualified
Filipinos
in
the
grant
of
rights
involving
our
national
patrimony.
The
unique
value
of
the
Manila
Hotel
to
our
history
and
culture
cannot
be
viewed
with
a
myopic
eye.
The
value
of
the
hotel
goes
beyond
pesos
and
centavos.
As
chronicled
by
Beth
Day
Romulo,
31
the
hotel
first
opened
on
July
4,
1912
as
a
first-class
hotel
built
by
the
American
Insular
Government
for
Americans
living
in,
or
passing
through,
Manila
while
travelling
to
the
Orient.
Indigenous
materials
and
Filipino
craftsmanship
were
utilized
in
its
construction.
For
sometime,
it
was
exclusively
used
by
American
and
Caucasian
travelers
and
served
as
the
"official
guesthouse"
of
the
American
Insular
Government
for
visiting
foreign
dignitaries.
Filipinos
began
coming
to
the
Hotel
as
guests
during
the
Commonwealth
period.
When
the
Japanese
occupiedManila,
it
served
as
military
headquarters
and
lodging
for
the
highest-ranking
officers
from
Tokyo.
It
was
at
the
Hotel
and
the
Intramuros
that
the
Japanese
made
their
last
stand
during
the
Liberation
of
Manila.
After
the
war,
the
Hotel
again
served
foreign
guests
and
Filipinos
alike.
Presidents
and
kings,
premiers
and
potentates,
as
well
as
glamorous
international
film
and
sports
celebrities
were
housed
in
the
Hotel.
It
was
also
the
situs
of
international
conventions
and
conferences.
In
the
local
scene,
it
was
the
venue
of
historic
meetings,
parties
and
conventions
of
political
parties.
The
Hotel
has
reaped
and
continues
reaping
numerous
recognitions
and
awards
from
international
hotel
and
travel
award-giving
bodies,
a
fitting
acknowledgment
of
Filipino
talent
and
ingenuity.
These
are
judicially
cognizable
facts
which
cannot
be
bent
by
a
biased
mind.
The
Hotel
may
not,
as
yet,
have
been
declared
a
national
cultural
treasure
pursuant
to
Republic
Act
No.
4846
but
that
does
not
exclude
it
from
our
national
patrimony.
Republic
Act
No
486,
"he
Cultural
Properties
Preservation
and
Protection
Act,"
merely
provides
a
procedure
whereby
a
particular
cultural
property
may
be
classified
a
"national
cultural
treasure"
or
an
"important
cultural
property."
32
Approved
on
June
18,
1966
and
amended
by
P.D.
374
in
1974,
the
law
is
limited
in
its
reach
and
cannot
be
read
as
the
exclusive
law
implementing
section
10,
Article
XII
of
the
1987
Constitution.
To
be
sure,
the
law
does
not
equate
cultural
treasure
and
cultural
property
as
synonymous
to
the
phrase
"patrimony
of
the
nation."
The
third
issue
is
whether
the
constitutional
command
to
the
State
includes
the
respondent
GSIS.
A
look
at
its
charter
will
reveal
that
GSIS
is
a
government-owned
and
controlled
corporation
that
administers
funds
that
come
from
the
monthly
contributions
of
government
employees
and
the
government.
33
The
funds
are
held
in
trust
for
a
distinct
purpose
which
cannot
be
disposed
of
indifferently.
34
They
are
to
be
used
to
finance
the
retirement,
disability
and
life
insurance
benefits
of
the
employees
and
the
administrative
and
operational
expenses
of
the
GSIS.
35
Excess
funds,
however,
are
allowed
to
be
invested
in
business
and
other
ventures
for
the
benefit
of
the
employees.
36
It
is
thus
contended
that
the
GSIS'
investment
in
the
Manila
Hotel
Corporation
is
a
simple
business
venture,
hence,
an
act
beyond
the
contemplation
of
section
10,
paragraph
2
of
Article
XII
of
the
Constitution.
The
submission
is
unimpressive.
The
GSIS
is
not
a
pure
private
corporation.
It
is
essentially
a
public
corporation
created
by
Congress
and
granted
an
original
charter
to
serve
a
public
purpose.
It
is
subject
to
the
jurisdictions
of
the
Civil
Service
Commission
37
and
the
Commission
on
Audit.
38
As
a
state-owned
and
controlled
corporation,
it
is
skin-bound
to
adhere
to
the
policies
spelled
out
in
the
Constitution
especially
those
designed
to
promote
the
general
welfare
of
the
people.
One
of
these
policies
is
the
Filipino
First
policy
which
the
people
elevated
as
a
constitutional
command.
The
fourth
issue
demands
that
we
look
at
the
content
of
the
phrase
"qualified
Filipinos"
and
their
"preferential
right."
The
Constitution
desisted
from
defining
their
contents.
This
is
as
it
ought
to
be
for
a
Constitution
only
lays
down
flexible
policies
and
principles
which
can
be
bent
to
meet
today's
manifest
needs
and
tomorrow's
unmanifested
demands.
Only
a
constitution
strung
with
elasticity
can
grow
as
a
living
constitution.
Thus,
during
the
deliberations
in
the
Constitutional
Commission,
Commissioner
Nolledo
brushed
aside
a
suggestion
to
define
the
phrase
"qualified
Filipinos."
He
explained
that
present
and
prospective
"laws"
will
take
care
of
the
problem
of
its
interpretation,
viz:
"xxx
xxx
xxx
THE
PRESIDENT.
What
is
the
suggestion
of
Commissioner
Rodrigo?
Is
it
to
remove
the
word
"QUALIFIED?"
MR.
RODRIGO.
No,
no,
but
say
definitely
"TO
QUALIFIED
FILIPINOS"
as
against
whom?
As
against
aliens
over
aliens?
MR.
NOLLEDO.
Madam
President,
I
think
that
is
understood.
We
use
the
word
"QUALIFIED"
because
the
existing
laws
or
the
prospective
laws
will
always
lay
down
conditions
under
which
business
may
be
done,
for
example,
qualifications
on
capital,
qualifications
or
the
setting
up
of
other
financial
structures,
et
cetera.
MR.
RODRIGO.
It
is
just
a
matter
of
style.
MR.
NOLLEDO.
Yes.
MR.
RODRIGO.
If
we
say,
"PREFERENCE
TO
QUALIFIED
FILIPINOS,"
it
can
be
understood
as
giving
preference
to
qualified
Filipinos
as
against
Filipinos
who
are
not
qualified.
MR.
NOLLEDO.
Madam
President,
that
was
the
intention
of
the
proponents.
The
committee
has
accepted
the
amendment.
xxx
xxx
xxx"
As
previously
discussed,
the
constitutional
command
to
enforce
the
Filipino
First
policy
is
addressed
to
the
State
and
not
to
Congress
alone.
Hence,
the
word
"laws"
should
not
be
understood
as
limited
to
legislations
but
all
state
actions
which
include
applicable
rules
and
regulations
adopted
by
agencies
and
instrumentalities
of
the
State
in
the
exercise
of
their
rule-making
power.
In
the
case
at
bar,
the
bidding
rules
and
regulations
set
forth
the,
standards
to
measure
the
qualifications
of
bidders
Filipinos
and
foreigners
alike.
It
is
not
seriously
disputed
that
petitioner
qualified
to
bid
as
did
Renong
Berhad.
39
Thus,
we
come
to
the
critical
issue
of
the
degree
of
preference
which
GSIS
should
have
accorded
petitioner,
a
qualified
Filipino,
over
Renong
Berhad,
a
foreigner,
in
the
purchase
of
the
controlling
shares
of
the
Manila
Hotel.
Petitioner
claims
that
after
losing
the
bid,
this
right
of
preference
gives
it
a
second
chance
to
match
the
highest
bid
of
Renong
Berhad.
With
due
respect,
I
cannot
sustain
petitioner's
submission.
I
prescind
from
the
premise
that
the
second
paragraph
of
section
10,
Article
XII
of
theConstitution
is
pro-Filipino
but
not
anti-alien.
It
is
pro-Filipino
for
it
gives
preference
to
Filipinos.
It
is
not,
however,
anti-alien
per
se
for
it
does
not
absolutely
bar
aliens
in
the
grant
of
rights,
privileges
and
concessions
covering
the
national
economy
and
patrimony.
Indeed,
in
the
absence
of
qualified
Filipinos,
the
State
is
not
prohibited
from
granting
these
rights,
privileges
and
concessions
to
foreigners
if
the
act
will
promote
the
weal
of
the
nation.
In
implementing
the
policy
articulated
in
Section
10,
Article
XII
of
the
Constitution,
the
stellar
task
of
our
State
policy-makers
is
to
maintain
a
creative
tensionbetween
two
desiderata
first,
the
need
to
develop
our
economy
and
patrimony
with
the
help
of
foreigners
if
necessary,
and,
second,
the
need
to
keep
our
economy
controlled
by
Filipinos.
Rightfully,
the
framers
of
the
Constitution
did
not
define
the
degree
of
the
right
of
preference
to
be
given
to
qualified
Filipinos.
They
knew
that
for
the
right
to
serve
the
general
welfare,
it
must
have
a
malleable
content
that
can
be
adjusted
by
our
policy-makers
to
meet
the
changing
needs
of
our
people.
In
fine,
the
right
of
preference
of
qualified
Filipinos
is
to
be
determined
by
degree
as
time
dictates
and
circumstances
warrant.
The
lesser
the
need
for
alien
assistance,
the
greater
the
degree
of
the
right
of
preference
can
be
given
to
Filipinos
and
vice
versa.
Again,
it
should
be
stressed
that
the
right
and
the
duty
to
determine
the
degree
of
this
privilege
at
any
given
time
is
addressed
to
the
entire
State.
While
under
our
constitutional
scheme,
the
right
primarily
belongs
to
Congress
as
the
lawmaking
department
of
our
government,
other
branches
of
government,
and
all
their
agencies
and
instrumentalities,
share
the
power
to
enforce
this
state
policy.
Within
the
limits
of
their
authority,
they
can
act
or
promulgate
rules
and
regulations
defining
the
degree
of
this
right
of
preference
in
cases
where
they
have
to
make
grants
involving
the
national
economy
and
judicial
duty.
On
the
other
hand,
our
duty
is
to
strike
down
acts
of
the
State
that
violate
the
policy.
To
date,
Congress
has
not
enacted
a
law
defining
the
degree
of
the
preferential
right.
Consequently,
we
must
turn
to
the
rules
and
regulations
of
respondents
Committee
on
Privatization
and
GSIS
to
determine
the
degree
of
preference
that
petitioner
is
entitled
to
as
a
qualified
Filipino
in
the
subject
sale.
A
tearless
look
at
the
rules
and
regulations
will
show
that
they
are
silent
on
the
degree
of
preferential
right
to
be
accorded
a
qualified
Filipino
bidder.
Despite
their
silence,
however,
they
cannot
be
read
to
mean
that
they
do
not
grant
any
degree
of
preference
to
petitioner
for
paragraph
2,
Section
10,
Article
XII
of
the
Constitution
is
deemed
part
of
said
rules
and
regulations.
Pursuant
to
legal
hermeneutics
which
demand
that
we
interpret
rules
to
save
them
from
unconstitutionality,
I
submit
that
the
right
of
preference
of
petitioner
arises
only
if
it
tied
the
bid
of
Renong
Berhad.
In
that
instance,
all
things
stand
equal,
and
petitioner,
as
a
qualified
Filipino
bidder,
should
be
preferred.
It
is
with
deep
regret
that
I
cannot
subscribe
to
the
view
that
petitioner
has
a
right
to
match
the
bid
of
Renong
Berhad.
Petitioner's
submission
must
be
supported
by
the
rules
but
even
if
we
examine
the
rules
inside-out
a
thousand
times,
they
can
not
justify
the
claimed
right.
Under
the
rules,
the
right
to
match
the
highest
bid
arises
only
"if
for
any
reason,
the
highest
bidder
cannot
be
awarded
the
block
of
shares
.
.
."
No
reason
has
arisen
that
will
prevent
the
award
to
Renong
Berhad.
It
qualified
as
a
bidder.
It
complied
with
the
procedure
of
bidding.
It
tendered
the
highest
bid.
It
was
declared
as
the
highest
bidder
by
the
GSIS
and
the
rules
say
this
decision
is
final.
It
deserves
the
award
as
a
matter
of
right
for
the
rules
clearly
did
not
give
to
the
petitioner
as
a
qualified
Filipino
the
privilege
to
match
the
higher
bid
of
a
foreigner.
What
the
rules
did
not
grant,
petitioner
cannot
demand.
Our
sympathies
may
be
with
petitionerbut
the
court
has
no
power
to
extend
the
latitude
and
longitude
of
the
right
of
preference
as
defined
by
the
rules.
The
parameters
of
the
right
of
preference
depend
on
a
galaxy
of
facts
and
factors
whose
determination
belongs
to
the
province
of
the
policy-making
branches
and
agencies
of
the
State.
We
are
duty-bound
to
respect
that
determination
even
if
we
differ
with
the
wisdom
of
their
judgment.
The
right
they
grant
may
be
little
but
we
must
uphold
the
grant
for
as
long
as
the
right
of
preference
is
not
denied.
It
is
only
when
a
State
action
amounts
to
a
denial
of
the
right
that
the
Court
can
come
in
and
strike
down
the
denial
as
unconstitutional.
Finally,
I
submit
that
petitioner
is
estopped
from
assailing
the
winning
bid
of
Renong
Berhad.
Petitioner
was
aware
of
the
rules
and
regulations
of
the
bidding.
It
knew
that
the
rules
and
regulations
do
not
provide
that
qualified
Filipino
bidder
can
match
the
winning
bid
after
submitting
an
inferior
bid.
It
knew
that
the
bid
was
open
to
foreigners
and
that
foreigners
qualified
even
during
the
first
bidding.
Petitioner
cannot
be
allowed
to
repudiate
the
rules
which
it
agreed
to
respect.
It
cannot
be
allowed
to
obey
the
rules
when
it
wins
and
disregard
them
when
it
loses.
If
sustained,
petitioners'
stance
will
wreak
havoc
on
the
essence
of
bidding.
Our
laws,
rules
and
regulations
require
highest
bidding
to
raise
as
much
funds
as
possible
for
the
government
to
maximize
its
capacity
to
deliver
essential
services
to
our
people.
This
is
a
duty
that
must
be
discharged
by
Filipinos
and
foreigners
participating
in
a
bidding
contest
and
the
rules
are
carefully
written
to
attain
this
objective.
Among
others,
bidders
are
prequalified
to
insure
their
financial
capability.
The
bidding
is
secret
and
the
bids
are
sealed
to
prevent
collusion
among
the
parties.
This
objective
will
be
undermined
if
we
grant
petitioner
the
privilege
to
know
the
winning
bid
and
a
chance
to
match
it.
For
plainly,
a
second
chance
to
bid
will
encourage
a
bidder
not
to
strive
to
give
the
highest
bid
in
the
first
bidding.
We
support
the
Filipino
First
policy
without
any
reservation.
The
visionary
nationalist
Don
Claro
M.
Recto
has
warned
us
that
the
greatest
tragedy
that
can
befall
a
Filipino
is
to
be
an
alien
in
his
own
land.
The
Constitution
has
embodied
Recto's
counsel
as
a
state
policy
and
our
decision
should
be
in
sync
with
this
policy.
But
while
the
Filipino
First
policy
requires
that
we
incline
to
a
Filipino,
it
does
not
demand
that
we
wrong
an
alien.
Our
policy
makers
can
write
laws
and
rules
giving
favored
treatment
to
the
Filipino
but
we
are
not
free
to
be
unfair
to
a
foreigner
after
writing
the
laws
and
the
rules.
After
the
laws
are
written,
they
must
be
obeyed
as
written,
by
Filipinos
and
foreigners
alike.
The
equal
protection
clause
of
the
Constitution
protects
all
against
unfairness.
We
can
be
pro-Filipino
without
unfairness
to
foreigners.
I
vote
to
dismiss
the
petition.
PANGANIBAN,
J
.,
dissenting:
I
regret
I
cannot
join
the
majority.
To
the
incisive
Dissenting
Opinion
of
Mr.
Justice
Reynato
S.
Puno,
may
I
just
add:
1.
The
majority
contends
the
Constitution
should
be
interpreted
to
mean
that,
after
a
bidding
process
is
concluded,
the
losing
Filipino
bidder
should
be
given
the
right
to
equal
the
highest
foreign
bid,
and
thus
to
win.
However,
the
Constitution
[Sec.
10
(2),
Art.
XII]
simply
states
that
"in
the
grant
of
rights
.
.
.
covering
the
national
economy
and
patrimony,
the
State
shall
give
preference
to
qualified
Filipinos."
The
majority
concedes
that
there
is
no
law
defining
the
extent
or
degree
of
such
preference.
Specifically,
no
statute
empowers
a
losing
Filipino
bidder
to
increase
his
bid
and
equal
that
of
the
winning
foreigner.
In
the
absence
of
such
empowering
law,
the
majority's
strained
interpretation,
I
respectfully
submit,
constitutes
unadulterated
judicial
legislation,
which
makes
bidding
a
ridiculous
sham
where
no
Filipino
can
lose
and
where
no
foreigner
can
win.
Only
in
the
Philippines!
2.
Aside
from
being
prohibited
by
the
Constitution,
such
judicial
legislation
is
short-sighted
and,
viewed
properly,
gravely
prejudicial
to
long-term
Filipino
interests.
It
encourages
other
countries
in
the
guise
of
reverse
comity
or
worse,
unabashed
retaliation
to
discriminate
against
us
in
their
own
jurisdictions
by
authorizing
their
own
nationals
to
similarly
equal
and
defeat
the
higher
bids
of
Filipino
enterprises
solely,
while
on
the
other
hand,
allowing
similar
bids
of
other
foreigners
to
remain
unchallenged
by
their
nationals.
The
majority's
thesis
will
thus
marginalize
Filipinos
as
pariahs
in
the
global
marketplace
with
absolutely
no
chance
of
winning
any
bidding
outside
our
country.
Even
authoritarian
regimes
and
hermit
kingdoms
have
long
ago
found
out
that
unfairness,
greed
and
isolation
are
self-defeating
and
in
the
long-term,
self-destructing.
cda
The
moral
lesson
here
is
simple:
Do
not
do
unto
others
what
you
do
not
want
others
to
do
unto
you.
3.
In
the
absence
of
a
law
specifying
the
degree
or
extent
of
the
"Filipino
First"
policy
of
the
Constitution,
the
constitutional
preference
for
the
"qualified
Filipinos"
may
be
allowed
only
where
all
the
bids
are
equal.
In
this
manner,
we
put
the
Filipino
ahead
without
self-destructing
him
and
without
being
unfair
to
the
foreigner.
In
short,
the
Constitution
mandates
a
victory
for
the
qualified
Filipino
only
when
the
scores
are
tied.
But
not
when
the
ballgame
is
over
and
the
foreigner
clearly
posted
the
highest
score.