MANILA PRINCE HOTEL v. GOVERNMENT SERVICE INSURANCE SYSTEM, et al.

G.R. No. 122156, 3 February 1997, EN BANC, (Bellosillo, J.)

The doctrine of constitutional supremacy dictates that all laws and contracts must conform to the fundamental law of the
land - the 1987 Philippine Constitution. 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.

FACTS

The Government Service Insurance System (GSIS), pursuant to the privatization program of the
Philippine Government, decided to sell through public bidding the issued and outstanding shares of the
Manila Hotel Corporation (MHC), which owns the Manila Hotel.

In a close bidding held, there were two (2) bids to acquire 51% of the MHC. Pending the declaration of
Renong Berhad, a Malaysian firm, as the highest winning bidder, Manila Prince Hotel Corporation
(MPHC), a Filipino corporation, matched the bid price tendered by Renong Berhad. Afterwards, MPHC
sent a manager's check as Bid Security which GSIS refused to accept.

Perhaps apprehensive that GSIS has disregarded the tender of the matching bid and that the sale of the
may be hastened by it and consummated with Renong Berhad, MPHC came to the Supreme Court on
prohibition and mandamus.

The Petitioner:

Manila Prince Hotel Corporation (MPHC) invoked the Filipino First Policy of Sec. 10, par. 2, Art. XII of
the 1987 Constitution and submitted that the Manila Hotel has become a part of the national economy
and patrimony.

The Respondent:

The Government Service Insurance System (GSIS) argued that the Filipino First Policy of the
Constitution is merely a statement of principle and policy since it is not a self-executing provision and
requires implementing legislations. Hence, for the said provision to operate, there must be existing laws
to lay down conditions under which business may be done.

ISSUES

1. Whether or not the bidding should be awarded on the basis of the constitutional mandate of
Filipino First Policy
2. Whether or not the constitutional provision of Filipino First Policy is self-executing and does not
require further implementing legislation to be enforceable
3. Whether or not the 51% shares of Manila Hotel Corporation form part of the national
economy and patrimony covered by Sec. 10, par. 2, Art. XII of the of the 1987 Constitution
HELD

1. YES. Supreme Court ruled that GSIS, et al. 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 Manila Prince Hotel and thereafter to execute the necessary clearances and to
do such other acts and deeds as may be necessary for purpose.

The Court held that the Constitution is the fundamental, paramount and supreme law of the
nation and it is deemed written in every statute and contract. It is a supreme law to which all
other laws must conform. On the constitutional mandate, the Filipino First Policy 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. Henceforth, GSIS is not bound to make
the award yet to one with the highest bidder. For in choosing the awardee, they 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.

2. YES. Filipino First Policy of the 1987 Constitution is self-executing and does not require further
implementing legislation to be enforceable.

The constitutional provision is complete in itself and becomes operative without the aid of
supplementary or enabling legislation for its enforcement. 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. Where there is a right there is a
remedy. Ubi jus ibi remedium.

3. YES. 51% shares of Manila Hotel Corporation form part of the national economy and
patrimony.

When the Constitution speaks of national patrimony, it refers not only to the natural resources
of the Philippines, but also to the cultural heritage of the Filipinos. Manila Hotel is part of the
national patrimony that reflects the vibrancy of Philippine heritage and culture, and its business is also
unquestionably part of the national economy. Moreover, since 51% of the shares of the MHC
carries with it the ownership of the business of the hotel which is owned by GSIS, a
government-owned and controlled corporation, the hotel business of GSIS, being a part of the
tourism industry, is unquestionably a part of the national economy.