View full case

MANILA PRINCE HOTEL v. GOVERNMENT SERVICE INSURANCE SYSTEM

FACTS:

The case involves a dispute regarding the sale of shares of the Manila Hotel Corporation (MHC). The petitioner argues that the sale violates a constitutional provision that reserves the operation of public utilities to Filipino citizens or corporations. The respondents argue that the constitutional provision is not self-executing and requires implementing legislation. The respondents also argue that the Manila Hotel does not fall under the term "national patrimony" that is protected by the constitution. The petitioner further argues that the sale is in violation of the constitution because it involves only the shares of the corporation and not the hotel building or land. The petitioner also challenges the bidding rules that allow for the submission of a matching bid by other qualified bidders if the highest bidder cannot be awarded the shares. Finally, the respondents argue that their actions do not constitute grave abuse of discretion and that the petitioner does not have a clear legal right to the relief sought. The court discusses the nature and supremacy of the constitution, and the distinction between self-executing provisions and those that require legislation. The court concludes that the second paragraph of Section 10, Article XII can be considered self-executing because it does not require any legislation to give preference to qualified Filipinos in the grant of rights, privileges, and concessions covering the national economy and patrimony.

ISSUES:

  1. Is Sec. 10, second paragraph, Art. XII, of the 1987 Philippine Constitution self-executing?

  2. Does the Manila Hotel form part of the national patrimony, thereby subject to the Filipino First Policy?

  3. Can the sale of shares of Manila Hotel Corporation to a foreign entity be prohibited in favor of a qualified Filipino entity that matches the foreign bidder's offer?

RULING:

  1. Yes, the provision is self-executing. The Court held that a constitutional provision is self-executing if it is complete in itself and requires no further legislative enactment to be enforced. Sec. 10, second paragraph, Art. XII, meets this criterion as it mandates that "the State shall give preference to qualified Filipinos" in the grant of rights, privileges, and concessions covering the national economy and patrimony.

  2. Yes, Manila Hotel forms part of the national patrimony. The Court held that Manila Hotel has become a significant part of Philippine heritage and culture, evolving from a historical landmark to a symbol of Filipino pride and dignity. Thus, the sale of 51% of its shares is subject to the Filipino First Policy, which prioritizes qualified Filipino entities over foreign ones.

  3. Yes, the sale to the foreign entity can be prohibited in favor of the Filipino entity. The Court emphasized that if a Filipino entity matches the bid of a foreign entity, the sale should be awarded to the Filipino entity in alignment with the Filipino First Policy provision. This enforcement gives meaning to the constitutional mandate and prioritizes the nation's patrimonial interests.

PRINCIPLES:

  1. Constitutional Supremacy A law or contract that violates any constitutional provision is null and void.

  2. Self-Executing Provisions Constitutional provisions that are complete in themselves and require no further legislative enactment are self-executing.

  3. Filipino First Policy This policy mandates that in the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.

  4. National Patrimony National patrimony includes not just natural resources but also cultural and historical heritage significant to the nation's identity and pride.

  5. Doctrine of Constitutional Universality Provisions of the Constitution are deemed to be written into every statute and contract.

  6. State Action Doctrine Actions by entities significantly involved with the State or requiring State approval are considered acts of the State and are subject to constitutional mandates.

  7. Ubi Jus Ibi Remedium Where there is a right, there must be a remedy. The Constitution, if violated, must provide a way to enforce the rights and obligations it guarantees.

These principles ensure that constitutional mandates like the Filipino First Policy are not bypassed and are accorded the needed recognition and enforcement in both judicial and administrative processes.