Name of writer (Aspacio)
MANILA PRINCE HOTEL VS. GSIS (title) 2, Art. XII, of the 1987 Constitution. (3) Since Manila Hotel is part of the
Feb. 3, 1997 | Bellosillo, J.
PETITIONER: Manila Prince Hotel
RESPONDENTS: Government Service Insurance System, Manila Hotel Corp.,
Committee on Privatization, and Office of the Government Corporate Counsel
SUMMARY: The Manila Hotel was put up for public bidding by the respondents.
Renong Berhad and Manila Prince Hotel were the only two bidders wherein
former initially outbid the latter. Petitioner matched the bid of Renong Berhad but
GSIS still denied of the sale. Citing Sec. 10, second par., Art. XII of the 1987
Constitution, petitioner argued that they should be awarded with the sale of Manila
Hotel pursuant to the provision of the Constitution’s Filipino First Policy. The
Court ordered the respondents to cease and desist the sale of Manila Hotel to
Renong Berhad and accept the bid of Manila Prince Hotel.
DOCTRINE: Sec. 10, second par., Art. XII, 1987 Constitution. In the grant of
rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
FACTS:
1. The Government Service Insurance System (GSIS), pursuant to the
privatization program of the Philippine Government under Proclamation No.
50, decided to sell 30% - 51% of the shares of the Manila Hotel Corporation
(MHC). In the close bidding held on Sep. 18, 1995, two bidders participated:
petitioner Manila Prince Hotel, a Filipino corporation; and Renong Berhad, a
Malaysian firm. The former offered to buy 51% of the shares at P41.58/share
while the latter offered to buy the same number of shares at P44.00/share.
2. Pending the declaration of Renong Berhad as the winning bidder, petitioner
sent a letter dated Oct. 10, 1995 to respondent matching the P44.00/share bid
of Renong Berhad and on Oct. 10, 1995, sent a manager’s check for
P33million as bid security to match the bid of Renong Berhad which
respondent refused to accept. On Oct. 17, 1995, respondent came to the
Supreme Court on prohibition and mandamus to prevent the finalizing of the
sale to Renong Berhad. The following day, the Court issued a temporary
restraining order enjoining respondents from perfecting and consummating
the sale.
3. Petitioner invoked Sec. 10, par. 2, Art. XII, of the 1987 Constitution.
Petitioner argues that (1) the Manila Hotel, considering its history and
heritage, is part of the national patrimony. (2) The 51% shares also carry with
it the ownership of the hotel and since it is owned by respondent GSIS, a
government-owned corporation, the hotel business is also part of the national
economy. Thus, the sale of the shares of the MHC is covered in Sec. 10, Par.
national patrimony and economy, the petitioner should be preferred after it
matched the bid of Renong Berhad. (4) Par. V, subpar. J. 1, of the bidding
rules also 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”.
4. Respondents argue that (1) Sec. 10, par. 2, Art. XII, of the 1987 Constitution
is merely a statement of principle and policy and is not a self-executing
provision and requires implementing regulation. (2) If it is in fact self-
executing, Manila Hotel does not fall under the term national patrimony as
cited in Sec. 2, par. 1 and 2, Art. XII, 1987 Constitution and the guests and
events which make it historic does not make it fall under the patrimony of the
nation. (3) If Manila Hotel does form part of the national patrimony, the
provision is still inapplicable because only the 51% shares are being sold and
not the hotel nor the land upon which it stands. (4) Also, the reliance of
petitioner on Par. V, subpar. J. 1, of the bidding rules is misplaced because a
matching bid can only be submitted if the highest bidder cannot be awarded
the block of shares and Renong Berhad could still be awarded the block of
shares. (5) And finally, prayer for prohibition grounded on grave abuse of
discretion should fail because its discretion was not so patent and gross as to
amount to an evasion of a positive duty, and that the petition for mandamus
should also fail as petitioner has no clear legal right to what is demands and
respondents do not have an imperative duty to perform the act required of
them by petitioner.
ISSUE/s:
1. W/N GSIS should award the sale to Manila Prince Hotel pursuant to Sec. 2,
Art. XII, 1987 Constitution. – YES
RULING: Petition granted.
RATIO:
1. A constitution is a system of fundamental laws for the governance and
administration of a nation. Some constitutions are merely declarations of
policies and principles which only commands the legislative to enact laws
and carry out the purposes of the framers. A provision which lays down a
general principle is usually not self-executing. But a provision which is
complete in itself and becomes operative without the aid of supplementary or
enabling legislation is self-executing.
2. SC said that 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
Name of writer (Aspacio)
covering national economy and patrimony. Sec. 2, par. 2, 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.

3. The Manila Hotel has become part of our national economy and patrimony.
In its plain and ordinary meaning, the term patrimony pertains to heritage.
When the Constitution speaks of national patrimony, it refers not only to the
natural resources but also to the cultural heritage.

4. 51% of the equity of the MHC comes within the purview of the
constitutional shelter. Anyone who owns the 51% of the shares will have
control of the hotel, thus the 51% sale of shares of the MHC cannot be
disassociated from the hotel.

5. While the Malaysian firm offered the higher bid, it is not yet the winning
bidder. 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 provides that preference is given to
qualified Filipinos, the mere tending of the highest bid is not the assurance of
being declared the winning bidder.