cases envi nov 17

8/9/2019 Cases Envi Nov 17

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Declaration of Principles and State PoliciesArt II Sec 16The State shall protect and advance the right of the people to a balancedand healthful ecology in accord with the rhythm and harmony of nature.

OPOSA VS FACTORAN

In a broader sense, this petition bears upon the right of Filipinos to abalanced and healthful ecology which the petitioners dramaticallyassociate with the twin concepts of "inter-generational responsibility" and"inter-generational justice." Specifically, it touches on the issue of whetherthe said petitioners have a cause of action to "prevent the misappropriation

or impairment" of Philippine rainforests and "arrest the unabatedhemorrhage of the country's vital life support systems and continued rapeof Mother Earth."

The controversy has its genesis in Civil Case No. 90-77 which was filedbefore Branch 66 (Makati, Metro Manila) of the Regional Trial Court (RTC),National Capital Judicial Region. The principal plaintiffs therein, now theprincipal petitioners, are all minors duly represented and joined by theirrespective parents. Impleaded as an additional plaintiff is the PhilippineEcological Network, Inc. (PENI), a domestic, non-stock and non-profit

corporation organized for the purpose of, inter alia, engaging in concertedaction geared for the protection of our environment and natural resources.The original defendant was the Honorable Fulgencio S. Factoran, Jr., thenSecretary of the Department of Environment and Natural Resources(DENR). His substitution in this petition by the new Secretary, theHonorable Angel C. Alcala, was subsequently ordered upon proper motionby the petitioners.1The complaint2was instituted as a taxpayers' classsuit3and alleges that the plaintiffs "are all citizens of the Republic of thePhilippines, taxpayers, and entitled to the full benefit, use and enjoyment ofthe natural resource treasure that is the country's virgin tropical forests."The same was filed for themselves and others who are equally concernedabout the preservation of said resource but are "so numerous that it isimpracticable to bring them all before the Court." The minors furtherasseverate that they "represent their generation as well as generations yetunborn."4Consequently, it is prayed for that judgment be rendered:

. . . ordering defendant, his agents, representatives and otherpersons acting in his behalf to


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(1) Cancel all existing timber license agreements in thecountry;

(2) Cease and desist from receiving, accepting, processing,renewing or approving new timber license agreements.

and granting the plaintiffs ". . . such other reliefs just and equitable underthe premises."5

The complaint starts off with the general averments that the Philippinearchipelago of 7,100 islands has a land area of thirty million (30,000,000)hectares and is endowed with rich, lush and verdant rainforests in whichvaried, rare and unique species of flora and fauna may be found; theserainforests contain a genetic, biological and chemical pool which isirreplaceable; they are also the habitat of indigenous Philippine cultures

which have existed, endured and flourished since time immemorial;scientific evidence reveals that in order to maintain a balanced andhealthful ecology, the country's land area should be utilized on the basis ofa ratio of fifty-four per cent (54%) for forest cover and forty-six per cent(46%) for agricultural, residential, industrial, commercial and other uses;the distortion and disturbance of this balance as a consequence ofdeforestation have resulted in a host of environmental tragedies, such as(a) water shortages resulting from drying up of the water table, otherwiseknown as the "aquifer," as well as of rivers, brooks and streams, (b)salinization of the water table as a result of the intrusion therein of saltwater, incontrovertible examples of which may be found in the island ofCebu and the Municipality of Bacoor, Cavite, (c) massive erosion and theconsequential loss of soil fertility and agricultural productivity, with thevolume of soil eroded estimated at one billion (1,000,000,000) cubicmeters per annum approximately the size of the entire island ofCatanduanes, (d) the endangering and extinction of the country's unique,rare and varied flora and fauna, (e) the disturbance and dislocation ofcultural communities, including the disappearance of the Filipino'sindigenous cultures, (f) the siltation of rivers and seabeds andconsequential destruction of corals and other aquatic life leading to acritical reduction in marine resource productivity, (g) recurrent spells of

drought as is presently experienced by the entire country, (h) increasingvelocity of typhoon winds which result from the absence of windbreakers,(i) the floodings of lowlands and agricultural plains arising from theabsence of the absorbent mechanism of forests, (j) the siltation andshortening of the lifespan of multi-billion peso dams constructed andoperated for the purpose of supplying water for domestic uses, irrigationand the generation of electric power, and (k) the reduction of the earth's


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capacity to process carbon dioxide gases which has led to perplexing andcatastrophic climatic changes such as the phenomenon of global warming,otherwise known as the "greenhouse effect."

Plaintiffs further assert that the adverse and detrimental consequences of

continued and deforestation are so capable of unquestionabledemonstration that the same may be submitted as a matter of judicialnotice. This notwithstanding, they expressed their intention to presentexpert witnesses as well as documentary, photographic and film evidencein the course of the trial.

As their cause of action, they specifically allege that:

CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had somesixteen (16) million hectares of rainforests constituting roughly53% of the country's land mass.

9. Satellite images taken in 1987 reveal that there remainedno more than 1.2 million hectares of said rainforests or fourper cent (4.0%) of the country's land area.

10. More recent surveys reveal that a mere 850,000 hectares

of virgin old-growth rainforests are left, barely 2.8% of theentire land mass of the Philippine archipelago and about 3.0million hectares of immature and uneconomical secondarygrowth forests.

11. Public records reveal that the defendant's, predecessorshave granted timber license agreements ('TLA's') to variouscorporations to cut the aggregate area of 3.89 million hectaresfor commercial logging purposes.

A copy of the TLA holders and the corresponding areascovered is hereto attached as Annex "A".

12. At the present rate of deforestation, i.e.about 200,000hectares per annum or 25 hectares per hour nighttime,Saturdays, Sundays and holidays included the Philippines


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will be bereft of forest resources after the end of this ensuingdecade, if not earlier.

13. The adverse effects, disastrous consequences, seriousinjury and irreparable damage of this continued trend of

deforestation to the plaintiff minor's generation and togenerations yet unborn are evident and incontrovertible. As amatter of fact, the environmental damages enumerated inparagraph 6 hereof are already being felt, experienced andsuffered by the generation of plaintiff adults.

14. The continued allowance by defendant of TLA holders tocut and deforest the remaining forest stands will work greatdamage and irreparable injury to plaintiffs especiallyplaintiff minors and their successors who may never see,

use, benefit from and enjoy this rare and unique naturalresource treasure.

This act of defendant constitutes a misappropriation and/orimpairment of the natural resource property he holds in trustfor the benefit of plaintiff minors and succeeding generations.

15. Plaintiffs have a clear and constitutional right to abalanced and healthful ecology and are entitled to protectionby the State in its capacity as theparens patriae.

16. Plaintiff have exhausted all administrative remedies withthe defendant's office. On March 2, 1990, plaintiffs servedupon defendant a final demand to cancel all logging permits inthe country.

A copy of the plaintiffs' letter dated March 1, 1990 is heretoattached as Annex "B".

17. Defendant, however, fails and refuses to cancel theexisting TLA's to the continuing serious damage and extreme

prejudice of plaintiffs.

18. The continued failure and refusal by defendant to cancelthe TLA's is an act violative of the rights of plaintiffs, especiallyplaintiff minors who may be left with a country that isdesertified (sic), bare, barren and devoid of the wonderful


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flora, fauna and indigenous cultures which the Philippines hadbeen abundantly blessed with.

19. Defendant's refusal to cancel the aforementioned TLA's ismanifestly contrary to the public policy enunciated in the

Philippine Environmental Policy which, in pertinent part, statesthat it is the policy of the State

(a) to create, develop, maintain and improve conditions underwhich man and nature can thrive in productive and enjoyableharmony with each other;

(b) to fulfill the social, economic and other requirements ofpresent and future generations of Filipinos and;

(c) to ensure the attainment of an environmental quality that isconductive to a life of dignity and well-being. (P.D. 1151, 6June 1977)

20. Furthermore, defendant's continued refusal to cancel theaforementioned TLA's is contradictory to the Constitutionalpolicy of the State to

a. effect "a more equitable distribution of opportunities, incomeand wealth" and "make full and efficient use of naturalresources (sic)." (Section 1, Article XII of the Constitution);

b. "protect the nation's marine wealth." (Section 2, ibid);

c. "conserve and promote the nation's cultural heritage andresources (sic)" (Section 14, Article XIV,id.);

d. "protect and advance the right of the people to a balancedand healthful ecology in accord with the rhythm and harmonyof nature." (Section 16, Article II, id.)

21. Finally, defendant's act is contrary to the highest law ofhumankind the natural law and violative of plaintiffs' rightto self-preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy inlaw other than the instant action to arrest the unabatedhemorrhage of the country's vital life support systems andcontinued rape of Mother Earth. 6


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On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed aMotion to Dismiss the complaint based on two (2) grounds, namely: (1) theplaintiffs have no cause of action against him and (2) the issue raised bythe plaintiffs is a political question which properly pertains to the legislativeor executive branches of Government. In their 12 July 1990 Opposition to

the Motion, the petitioners maintain that (1) the complaint shows a clearand unmistakable cause of action, (2) the motion is dilatory and (3) theaction presents a justiciable question as it involves the defendant's abuseof discretion.

On 18 July 1991, respondent Judge issued an order granting theaforementioned motion to dismiss.7In the said order, not only was thedefendant's claim that the complaint states no cause of action againsthim and that it raises a political question sustained, the respondentJudge further ruled that the granting of the relief prayed for would result in

the impairment of contracts which is prohibited by the fundamental law ofthe land.

Plaintiffs thus filed the instant special civil action for certiorariunder Rule65 of the Revised Rules of Court and ask this Court to rescind and setaside the dismissal order on the ground that the respondent Judge gravelyabused his discretion in dismissing the action. Again, the parents of theplaintiffs-minors not only represent their children, but have also joined thelatter in this case.8

On 14 May 1992, We resolved to give due course to the petition andrequired the parties to submit their respective Memoranda after the Officeof the Solicitor General (OSG) filed a Comment in behalf of therespondents and the petitioners filed a reply thereto.

Petitioners contend that the complaint clearly and unmistakably states acause of action as it contains sufficient allegations concerning their right toa sound environment based on Articles 19, 20 and 21 of the Civil Code(Human Relations), Section 4 of Executive Order (E.O.) No. 192 creatingthe DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (PhilippineEnvironmental Policy), Section 16, Article II of the 1987 Constitution

recognizing the right of the people to a balanced and healthful ecology, theconcept of generational genocide in Criminal Law and the concept ofman's inalienable right to self-preservation and self-perpetuation embodiedin natural law. Petitioners likewise rely on the respondent's correlativeobligation per Section 4 of E.O. No. 192, to safeguard the people's right toa healthful environment.


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It is further claimed that the issue of the respondent Secretary's allegedgrave abuse of discretion in granting Timber License Agreements (TLAs)to cover more areas for logging than what is available involves a judicialquestion.

Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that the same does not apply inthis case because TLAs are not contracts. They likewise submit that evenif TLAs may be considered protected by the said clause, it is well settledthat they may still be revoked by the State when the public interest sorequires.

On the other hand, the respondents aver that the petitioners failed toallege in their complaint a specific legal right violated by the respondentSecretary for which any relief is provided by law. They see nothing in the

complaint but vague and nebulous allegations concerning an"environmental right" which supposedly entitles the petitioners to the"protection by the state in its capacity asparens patriae." Such allegations,according to them, do not reveal a valid cause of action. They thenreiterate the theory that the question of whether logging should bepermitted in the country is a political question which should be properlyaddressed to the executive or legislative branches of Government. Theytherefore assert that the petitioners' resources is not to file an action tocourt, but to lobby before Congress for the passage of a bill that would banlogging totally.

As to the matter of the cancellation of the TLAs, respondents submit thatthe same cannot be done by the State without due process of law. Onceissued, a TLA remains effective for a certain period of time usually fortwenty-five (25) years. During its effectivity, the same can neither berevised nor cancelled unless the holder has been found, after due noticeand hearing, to have violated the terms of the agreement or other forestrylaws and regulations. Petitioners' proposition to have all the TLAsindiscriminately cancelled without the requisite hearing would be violativeof the requirements of due process.

Before going any further, We must first focus on some procedural matters.Petitioners instituted Civil Case No. 90-777 as a class suit. The originaldefendant and the present respondents did not take issue with this matter.Nevertheless, We hereby rule that the said civil case is indeed a class suit.The subject matter of the complaint is of common and general interest not

just to several, but to all citizens of the Philippines. Consequently, sincethe parties are so numerous, it, becomes impracticable, if not totally


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impossible, to bring all of them before the court. We likewise declare thatthe plaintiffs therein are numerous and representative enough to ensurethe full protection of all concerned interests. Hence, all the requisites forthe filing of a valid class suit under Section 12, Rule 3 of the Revised Rulesof Court are present both in the said civil case and in the instant petition,

the latter being but an incident to the former.

This case, however, has a special and novel element. Petitioners minorsassert that they represent their generation as well as generations yetunborn. We find no difficulty in ruling that they can, for themselves, forothers of their generation and for the succeeding generations, file a classsuit. Their personality to sue in behalf of the succeeding generations canonly be based on the concept of intergenerational responsibility insofar asthe right to a balanced and healthful ecology is concerned. Such a right, ashereinafter expounded, considers

the "rhythm and harmony of nature." Nature means the created world in itsentirety.9Such rhythm and harmony indispensably include, inter alia, the

judicious disposition, utilization, management, renewal and conservation ofthe country's forest, mineral, land, waters, fisheries, wildlife, off-shoreareas and other natural resources to the end that their exploration,development and utilization be equitably accessible to the present as wellas future generations. 10Needless to say, every generation has aresponsibility to the next to preserve that rhythm and harmony for the fullenjoyment of a balanced and healthful ecology. Put a little differently, theminors' assertion of their right to a sound environment constitutes, at the

same time, the performance of their obligation to ensure the protection ofthat right for the generations to come.

The locus standiof the petitioners having thus been addressed, We shallnow proceed to the merits of the petition.

After a careful perusal of the complaint in question and a meticulousconsideration and evaluation of the issues raised and arguments adducedby the parties, We do not hesitate to find for the petitioners and ruleagainst the respondent Judge's challenged order for having been issuedwith grave abuse of discretion amounting to lack of jurisdiction. The

pertinent portions of the said order reads as follows:

xxx xxx xxx

After a careful and circumspect evaluation of the Complaint,the Court cannot help but agree with the defendant. Foralthough we believe that plaintiffs have but the noblest of all


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intentions, it (sic) fell short of alleging, with sufficientdefiniteness, a specific legal right they are seeking to enforceand protect, or a specific legal wrong they are seeking toprevent and redress (Sec. 1, Rule 2, RRC). Furthermore, theCourt notes that the Complaint is replete with vague

assumptions and vague conclusions based on unverified data.In fine, plaintiffs fail to state a cause of action in its Complaintagainst the herein defendant.

Furthermore, the Court firmly believes that the matter before it,being impressed with political color and involving a matter ofpublic policy, may not be taken cognizance of by this Courtwithout doing violence to the sacred principle of "Separation ofPowers" of the three (3) co-equal branches of theGovernment.

The Court is likewise of the impression that it cannot, nomatter how we stretch our jurisdiction, grant the reliefs prayedfor by the plaintiffs,i.e., to cancel all existing timber licenseagreements in the country and to cease and desist fromreceiving, accepting, processing, renewing or approving newtimber license agreements. For to do otherwise would amountto "impairment of contracts" abhored (sic) by the fundamentallaw. 11

We do not agree with the trial court's conclusions that the plaintiffs failed toallege with sufficient definiteness a specific legal right involved or a specificlegal wrong committed, and that the complaint is replete with vagueassumptions and conclusions based on unverified data. A reading of thecomplaint itself belies these conclusions.

The complaint focuses on one specific fundamental legal right the rightto a balanced and healthful ecology which, for the first time in our nation'sconstitutional history, is solemnly incorporated in the fundamental law.Section 16, Article II of the 1987 Constitution explicitly provides:

Sec. 16. The State shall protect and advance the right of thepeople to a balanced and healthful ecology in accord with therhythm and harmony of nature.

This right unites with the right to health which is provided for inthe preceding section of the same article:


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Sec. 15. The State shall protect and promote the right tohealth of the people and instill health consciousness amongthem.

While the right to a balanced and healthful ecology is to be found under the

Declaration of Principles and State Policies and not under the Bill ofRights, it does not follow that it is less important than any of the civil andpolitical rights enumerated in the latter. Such a right belongs to a differentcategory of rights altogether for it concerns nothing less than self-preservation and self-perpetuation aptly and fittingly stressed by thepetitioners the advancement of which may even be said to predate allgovernments and constitutions. As a matter of fact, these basic rights neednot even be written in the Constitution for they are assumed to exist fromthe inception of humankind. If they are now explicitly mentioned in thefundamental charter, it is because of the well-founded fear of its framers

that unless the rights to a balanced and healthful ecology and to health aremandated as state policies by the Constitution itself, thereby highlightingtheir continuing importance and imposing upon the state a solemnobligation to preserve the first and protect and advance the second, theday would not be too far when all else would be lost not only for thepresent generation, but also for those to come generations which standto inherit nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlativeduty to refrain from impairing the environment. During the debates on this

right in one of the plenary sessions of the 1986 Constitutional Commission,the following exchange transpired between Commissioner WilfridoVillacorta and Commissioner Adolfo Azcuna who sponsored the section inquestion:

MR. VILLACORTA:

Does this section mandate the State to providesanctions against all forms of pollution air,water and noise pollution?

MR. AZCUNA:

Yes, Madam President. The right to healthful (sic)environment necessarily carries with it thecorrelative duty of not impairing the same and,therefore, sanctions may be provided forimpairment of environmental balance. 12


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The said right implies, among many other things, the judiciousmanagement and conservation of the country's forests.

Without such forests, the ecological or environmental balance wouldbe irreversiby disrupted.

Conformably with the enunciated right to a balanced and healthful ecologyand the right to health, as well as the other related provisions of theConstitution concerning the conservation, development and utilization ofthe country's natural resources, 13then President Corazon C. Aquinopromulgated on 10 June 1987 E.O. No. 192, 14Section 4 of whichexpressly mandates that the Department of Environment and NaturalResources "shall be the primary government agency responsible for theconservation, management, development and proper use of the country'senvironment and natural resources, specifically forest and grazing lands,

mineral, resources, including those in reservation and watershed areas,and lands of the public domain, as well as the licensing and regulation ofall natural resources as may be provided for by law in order to ensureequitable sharing of the benefits derived therefrom for the welfare of thepresent and future generations of Filipinos." Section 3 thereof makes thefollowing statement of policy:

Sec. 3. Declaration of Policy. It is hereby declared thepolicy of the State to ensure the sustainable use,development, management, renewal, and conservation of thecountry's forest, mineral, land, off-shore areas and othernatural resources, including the protection and enhancementof the quality of the environment, and equitable access of thedifferent segments of the population to the development andthe use of the country's natural resources, not only for thepresent generation but for future generations as well. It is alsothe policy of the state to recognize and apply a true valuesystem including social and environmental cost implicationsrelative to their utilization, development and conservation ofour natural resources.

This policy declaration is substantially re-stated it Title XIV, Book IV of theAdministrative Code of 1987,15specifically in Section 1 thereof whichreads:

Sec. 1. Declaration of Policy. (1) The State shall ensure, forthe benefit of the Filipino people, the full exploration anddevelopment as well as the judicious disposition, utilization,


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management, renewal and conservation of the country'sforest, mineral, land, waters, fisheries, wildlife, off-shore areasand other natural resources, consistent with the necessity ofmaintaining a sound ecological balance and protecting andenhancing the quality of the environment and the objective of

making the exploration, development and utilization of suchnatural resources equitably accessible to the differentsegments of the present as well as future generations.

(2) The State shall likewise recognize and apply a true valuesystem that takes into account social and environmental costimplications relative to the utilization, development andconservation of our natural resources.

The above provision stresses "the necessity of maintaining a sound

ecological balance and protecting and enhancing the quality of theenvironment." Section 2 of the same Title, on the other hand, specificallyspeaks of the mandate of the DENR; however, it makes particularreference to the fact of the agency's being subject to law and higherauthority. Said section provides:

Sec. 2. Mandate. (1) The Department of Environment andNatural Resources shall be primarily responsible for theimplementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge ofcarrying out the State's constitutional mandate to control andsupervise the exploration, development, utilization, andconservation of the country's natural resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set theobjectives which will serve as the bases for policy formulation, and havedefined the powers and functions of the DENR.

It may, however, be recalled that even before the ratification of the 1987Constitution, specific statutes already paid special attention to the

"environmental right" of the present and future generations. On 6 June1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152(Philippine Environment Code) were issued. The former "declared acontinuing policy of the State (a) to create, develop, maintain and improveconditions under which man and nature can thrive in productive andenjoyable harmony with each other, (b) to fulfill the social, economic andother requirements of present and future generations of Filipinos, and (c)


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to insure the attainment of an environmental quality that is conducive to alife of dignity and well-being." 16As its goal, it speaks of the"responsibilities of each generation as trustee and guardian of theenvironment for succeeding generations." 17The latter statute, on the otherhand, gave flesh to the said policy.

Thus, the right of the petitioners (and all those they represent) to abalanced and healthful ecology is as clear as the DENR's duty under itsmandate and by virtue of its powers and functions under E.O. No. 192 andthe Administrative Code of 1987 to protect and advance the said right.

A denial or violation of that right by the other who has the corelative duty orobligation to respect or protect the same gives rise to a cause of action.Petitioners maintain that the granting of the TLAs, which they claim wasdone with grave abuse of discretion, violated their right to a balanced and

healthful ecology; hence, the full protection thereof requires that no furtherTLAs should be renewed or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legalright or rights of the other; and its essential elements are legalright of the plaintiff, correlative obligation of the defendant, andact or omission of the defendant in violation of said legalright. 18

It is settled in this jurisdiction that in a motion to dismiss based on theground that the complaint fails to state a cause of action, 19the questionsubmitted to the court for resolution involves the sufficiency of the factsalleged in the complaint itself. No other matter should be considered;furthermore, the truth of falsity of the said allegations is beside the point forthe truth thereof is deemed hypothetically admitted. The only issue to beresolved in such a case is: admitting such alleged facts to be true, may thecourt render a valid judgment in accordance with the prayer in thecomplaint? 20In Militante vs. Edrosolano, 21this Court laid down the rulethat the judiciary should "exercise the utmost care and circumspection in

passing upon a motion to dismiss on the ground of the absence thereof[cause of action] lest, by its failure to manifest a correct appreciation of thefacts alleged and deemed hypothetically admitted, what the law grants orrecognizes is effectively nullified. If that happens, there is a blot on thelegal order. The law itself stands in disrepute."


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After careful examination of the petitioners' complaint, We find thestatements under the introductory affirmative allegations, as well as thespecific averments under the sub-heading CAUSE OF ACTION, to beadequate enough to show,prima facie, the claimed violation of their rights.On the basis thereof, they may thus be granted, wholly or partly, the reliefs

prayed for. It bears stressing, however, that insofar as the cancellation ofthe TLAs is concerned, there is the need to implead, as party defendants,the grantees thereof for they are indispensable parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a politicalquestion. Policy formulation or determination by the executive or legislativebranches of Government is not squarely put in issue. What is principallyinvolved is the enforcement of a right vis-a-vispolicies already formulatedand expressed in legislation. It must, nonetheless, be emphasized that thepolitical question doctrine is no longer, the insurmountable obstacle to the

exercise of judicial power or the impenetrable shield that protectsexecutive and legislative actions from judicial inquiry or review. Thesecond paragraph of section 1, Article VIII of the Constitution states that:

Judicial power includes the duty of the courts of justice tosettle actual controversies involving rights which are legallydemandable and enforceable, and to determine whether or notthere has been a grave abuse of discretion amounting to lackor excess of jurisdiction on the part of any branch orinstrumentality of the Government.

Commenting on this provision in his book, Philippine Political Law, 22Mr.Justice Isagani A. Cruz, a distinguished member of this Court, says:

The first part of the authority represents the traditional conceptof judicial power, involving the settlement of conflicting rightsas conferred as law. The second part of the authorityrepresents a broadening of judicial power to enable the courtsof justice to review what was before forbidden territory, to wit,the discretion of the political departments of the government.

As worded, the new provision vests in the judiciary, andparticularly the Supreme Court, the power to rule upon eventhe wisdom of the decisions of the executive and thelegislature and to declare their acts invalid for lack or excessof jurisdiction because tainted with grave abuse of discretion.The catch, of course, is the meaning of "grave abuse of


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discretion," which is a very elastic phrase that can expand orcontract according to the disposition of the judiciary.

In Daza vs. Singson, 23Mr. Justice Cruz, now speaking for this Court,noted:

In the case now before us, the jurisdictional objectionbecomes even less tenable and decisive. The reason is that,even if we were to assume that the issue presented before uswas political in nature, we would still not be precluded fromrevolving it under the expanded jurisdiction conferred upon usthat now covers, in proper cases, even the political question.

Article VII, Section 1, of the Constitution clearly provides: . . .

The last ground invoked by the trial court in dismissing the complaint is the

non-impairment of contracts clause found in the Constitution. The court aquo declared that:

The Court is likewise of the impression that it cannot, nomatter how we stretch our jurisdiction, grant the reliefs prayedfor by the plaintiffs, i.e., to cancel all existing timber licenseagreements in the country and to cease and desist fromreceiving, accepting, processing, renewing or approving newtimber license agreements. For to do otherwise would amountto "impairment of contracts" abhored (sic) by the fundamentallaw. 24

We are not persuaded at all; on the contrary, We are amazed, if notshocked, by such a sweeping pronouncement. In the first place, therespondent Secretary did not, for obvious reasons, even invoke in hismotion to dismiss the non-impairment clause. If he had done so, he wouldhave acted with utmost infidelity to the Government by providing undueand unwarranted benefits and advantages to the timber license holdersbecause he would have forever bound the Government to strictly respectthe said licenses according to their terms and conditions regardless ofchanges in policy and the demands of public interest and welfare. He was

aware that as correctly pointed out by the petitioners, into every timberlicense must be read Section 20 of the Forestry Reform Code (P.D. No.705) which provides:

. . . Provided, That when the national interest so requires, thePresident may amend, modify, replace or rescind any


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contract, concession, permit, licenses or any other form ofprivilege granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded byexecutive action. It is not a contract, property or a property right

protested by the due process clause of the Constitution. In Tan vs.Director of Forestry, 25this Court held:

. . . A timber license is an instrument by which the Stateregulates the utilization and disposition of forest resources tothe end that public welfare is promoted. A timber license is nota contract within the purview of the due process clause; it isonly a license or privilege, which can be validly withdrawnwhenever dictated by public interest or public welfare as in thiscase.

A license is merely a permit or privilege to do what otherwisewould be unlawful, and is not a contract between the authority,federal, state, or municipal, granting it and the person to whomit is granted; neither is it property or a property right, nor doesit create a vested right; nor is it taxation (37 C.J. 168). Thus,this Court held that the granting of license does not createirrevocable rights, neither is it property or property rights(People vs. Ong Tin, 54 O.G. 7576).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs.Deputy Executive Secretary: 26

. . . Timber licenses, permits and license agreements are theprincipal instruments by which the State regulates theutilization and disposition of forest resources to the end thatpublic welfare is promoted. And it can hardly be gainsaid thatthey merely evidence a privilege granted by the State toqualified entities, and do not vest in the latter a permanent orirrevocable right to the particular concession area and theforest products therein. They may be validly amended,

modified, replaced or rescinded by the Chief Executive whennational interests so require. Thus, they are not deemedcontracts within the purview of the due process of law clause[See Sections 3(ee) and 20 of Pres. Decree No. 705, asamended.Also, Tan v. Director of Forestry, G.R. No. L-24548,October 27, 1983, 125 SCRA 302].


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Since timber licenses are not contracts, the non-impairment clause, whichreads:

Sec. 10. No law impairing, the obligation of contracts shall bepassed. 27

cannot be invoked.

In the second place, even if it is to be assumed that the same arecontracts, the instant case does not involve a law or even an executiveissuance declaring the cancellation or modification of existing timberlicenses. Hence, the non-impairment clause cannot as yet be invoked.Nevertheless, granting further that a law has actually been passedmandating cancellations or modifications, the same cannot still bestigmatized as a violation of the non-impairment clause. This is because by

its very nature and purpose, such as law could have only been passed inthe exercise of the police power of the state for the purpose of advancingthe right of the people to a balanced and healthful ecology, promoting theirhealth and enhancing the general welfare. InAbe vs. Foster WheelerCorp. 28this Court stated:

The freedom of contract, under our system of government, isnot meant to be absolute. The same is understood to besubject to reasonable legislative regulation aimed at thepromotion of public health, moral, safety and welfare. In otherwords, the constitutional guaranty of non-impairment ofobligations of contract is limited by the exercise of the policepower of the State, in the interest of public health, safety,moral and general welfare.

The reason for this is emphatically set forth in Nebia vs. NewYork, 29quoted in Philippine American Life Insurance Co. vs. AuditorGeneral,30to wit:

Under our form of government the use of property and themaking of contracts are normally matters of private and not of

public concern. The general rule is that both shall be free ofgovernmental interference. But neither property rights norcontract rights are absolute; for government cannot exist if thecitizen may at will use his property to the detriment of hisfellows, or exercise his freedom of contract to work themharm. Equally fundamental with the private right is that of thepublic to regulate it in the common interest.


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In short, the non-impairment clause must yield to the police power of thestate. 31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to enjoin the

respondent Secretary from receiving, accepting, processing, renewing orapproving new timber licenses for, save in cases of renewal, no contractwould have as of yet existed in the other instances. Moreover, with respectto renewal, the holder is not entitled to it as a matter of right.

WHEREFORE, being impressed with merit, the instant Petition is herebyGRANTED, and the challenged Order of respondent Judge of 18 July 1991dismissing Civil Case No. 90-777 is hereby set aside. The petitioners maytherefore amend their complaint to implead as defendants the holders orgrantees of the questioned timber license agreements.

No pronouncement as to costs.

SO ORDERED.

MANILA PRINCE HOTEL,petitioner,vs. GOVERNMENT SERVICEINSURANCE SYSTEM, MANILA HOTEL CORPORATION,COMMITTEE ON PRIVATIZATION and OFFICE OF THEGOVERNMENT CORPORATE COUNSEL, respondents.

D E C I S I O N

BELLOSILLO,J.:

The Filipino First Policyenshrined in the 1987 Constitution, i.e., in thegrant of rights, privileges, and concessions covering the national economyand patrimony, the State shall give preference to qualified Filipinos,[1]isinvoked by petitioner in its bid to acquire 51% of the shares of the ManilaHotel Corporation (MHC) which owns the historic Manila Hotel. Opposing,respondents maintain that the provision is not self-executing but requiresan implementing legislation for its enforcement. Corollarily, they ask

whether the 51% shares form part of the national economy and patrimonycovered by the protective mantle of the Constitution.

The controversy arose when respondent Government ServiceInsurance System (GSIS), pursuant to the privatization program of thePhilippine Government under Proclamation No. 50 dated 8 December1986, decided to sell through public bidding 30% to 51% of the issued andoutstanding shares of respondent MHC. The winning bidder, or the


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eventual strategic partner, is to provide management expertise and/or aninternational marketing/reservation system, and financial support tostrengthen the profitability and performance of the Manila Hotel.[2]In aclose 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 hoteloperator, 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 GSISstate -

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 willlose the right to purchase the Block of Shares and GSIS will instead offerthe Block of Shares to the other Qualified Bidders:

a. The Highest Bidder must negotiate and execute with the GSIS/MHC theManagement Contract, International Marketing/Reservation SystemContract or other type of contract specified by the Highest Bidder in itsstrategic plan for the Manila Hotel x x x x

b. The Highest Bidder must execute the Stock Purchase and Sale

Agreement with GSIS x x x x

K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER-

The Highest Bidder will be declared the Winning Bidder/Strategic Partnerafter the following conditions are met:

a. Execution of the necessary contracts with GSIS/MHC not later thanOctober 23, 1995 (reset to November 3, 1995); and

b. Requisite approvals from the GSIS/MHC and COP (Committee onPrivatization)/ OGCC (Office of the Government Corporate Counsel) areobtained.[3]

Pending the declaration of Renong Berhard as the winningbidder/strategic partner and the execution of the necessary contracts,petitioner in a letter to respondent GSIS dated 28 September 1995


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matched the bid price of P44.00 per share tendered by RenongBerhad.[4] In a subsequent letter dated 10 October 1995 petitioner sent amanagers 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 Berhadx x x x[5]which respondent GSIS refused to

accept.

On 17 October 1995, perhaps apprehensive that respondent GSIS hasdisregarded the tender of the matching bid and that the sale of 51% of theMHC may be hastened by respondent GSIS and consummated withRenong Berhad, petitioner came to this Court on prohibition andmandamus. On 18 October 1995 the Court issued a temporary restrainingorder enjoining respondents from perfecting and consummating the sale tothe Malaysian firm.

On 10 September 1996 the instant case was accepted by the Court En

Bancafter it was referred to it by the First Division. The case was then setfor 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 the1987 Constitution and submits that the Manila Hotel has been identifiedwith the Filipino nation and has practically become a historical monumentwhich reflects the vibrancy of Philippine heritage and culture. It is a proudlegacy of an earlier generation of Filipinos who believed in the nobility andsacredness 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% ofthe shares of the MHC carries with it the ownership of the business of thehotel which is owned by respondent GSIS, a government-owned andcontrolled corporation, the hotel business of respondent GSIS being a partof the tourism industry is unquestionably a part of the nationaleconomy. Thus, any transaction involving 51% of the shares of stock ofthe 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 thenational patrimony and its business also unquestionably part of thenational economy petitioner should be preferred after it has matched thebid offer of the Malaysian firm. For the bidding rules mandate that if forany reason, the Highest Bidder cannot be awarded the Block of Shares,GSIS may offer this to the other Qualified Bidders that have validlysubmitted bids provided that these Qualified Bidders are willing to matchthe highest bid in terms of price per share.[8]


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Respondents except. They maintain that: First, Sec. 10, second par.,Art. XII, of the 1987 Constitution is merely a statement of principle andpolicy since it is not a self-executing provision and requires implementinglegislation(s) x x x x Thus, for the said provision to operate, there must beexisting laws to lay down conditions under which business may be

done.[9]

Second, granting that this provision is self-executing, Manila Hoteldoes not fall under the term national patrimonywhich only refers to landsof the public domain, waters, minerals, coal, petroleum and other mineraloils, all forces of potential energy, fisheries, forests or timber, wildlife, floraand fauna and all marine wealth in its territorial sea, and exclusive marinezone as cited in the first and second paragraphs of Sec. 2, Art. XII, 1987Constitution. According to respondents, while petitioner speaks of theguests who have slept in the hotel and the events that have transpiredtherein which make the hotel historic, these alone do not make the hotelfall under thepatrimonyof the nation. What is more, the mandate of theConstitution is addressed to the State, not to respondent GSIS whichpossesses a personality of its own separate and distinct from thePhilippines as a State.

Third, granting that the Manila Hotel forms part of the nationalpatrimony, the constitutional provision invoked is still inapplicable sincewhat is being sold is only 51% of the outstanding shares of the corporation,not the hotel building nor the land upon which the buildingstands. Certainly, 51% of the equity of the MHC cannot be considered part

of the national patrimony. Moreover, if the disposition of the shares of theMHC is really contrary to the Constitution, petitioner should havequestioned it right from the beginning and not after it had lost in thebidding.

Fourth, the reliance by petitioner on par. V., subpar. J. 1., of thebidding rules which provides that if for any reason, the Highest Biddercannot be awarded the Block of Shares, GSIS may offer this to the otherQualified Bidders that have validly submitted bids provided that theseQualified Bidders are willing to match the highest bid in terms of price pershare, is misplaced. Respondents postulate that the privilege of submitting

a matching bid has not yet arisen since it only takes place if for anyreason, the Highest Bidder cannot be awarded the Block of Shares. Thusthe submission by petitioner of a matching bid is premature since RenongBerhad could still very well be awarded the block of shares and thecondition giving rise to the exercise of the privilege to submit a matchingbid had not yet taken place.


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Finally, the prayer for prohibition grounded on grave abuse ofdiscretion should fail since respondent GSIS did not exercise its discretionin a capricious, whimsical manner, and if ever it did abuse its discretion itwas not so patent and gross as to amount to an evasion of a positive dutyor 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 itdemands and respondents do not have an imperative duty to perform theact required of them by petitioner.

We now resolve. A constitution is a system of fundamental laws for thegovernance and administration of a nation. It is supreme, imperious,absolute and unalterable except by the authority from which itemanates. It has been defined as the fundamental and paramount law ofthe nation.[10]It prescribes the permanent framework of a system ofgovernment, assigns to the different departments their respective powersand duties, and establishes certain fixed principles on which government isfounded. The fundamental conception in other words is that it is asupreme law to which all other laws must conform and in accordance withwhich all private rights must be determined and all public authorityadministered.[11]Under the doctrine of constitutional supremacy, if a law orcontract violates any norm of the constitution that law or contract whetherpromulgated by the legislative or by the executive branch or entered intoby private persons for private purposes is null and void and without anyforce and effect. Thus, since the Constitution is the fundamental,paramount and supreme law of the nation, it is deemed written in everystatute and contract.

Admittedly, some constitutions are merely declarations of policies andprinciples. Their provisions command the legislature to enact laws andcarry out the purposes of the framers who merely establish an outline ofgovernment providing for the different departments of the governmentalmachinery and securing certain fundamental and inalienable rights ofcitizens.[12]A provision which lays down a general principle, such as thosefound in Art. II of the 1987 Constitution, is usually not self-executing. But aprovision which is complete in itself and becomes operative without the aidof supplementary or enabling legislation, or that which supplies sufficientrule by means of which the right it grants may be enjoyed or protected, isself-executing. Thus a constitutional provision is self-executing if thenature and extent of the right conferred and the liability imposed are fixedby the constitution itself, so that they can be determined by an examinationand construction of its terms, and there is no language indicating that thesubject is referred to the legislature for action. [13]


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As against constitutions of the past, modern constitutions have beengenerally drafted upon a different principle and have often become in effectextensive codes of laws intended to operate directly upon the people in amanner similar to that of statutory enactments, and the function ofconstitutional conventions has evolved into one more like that of a

legislative body. Hence, unless it is expressly provided that a legislativeact is necessary to enforce a constitutional mandate, the presumption nowis that all provisions of the constitution are self-executing. If theconstitutional provisions are treated as requiring legislation instead of self-executing, the legislature would have the power to ignore and practicallynullify the mandate of the fundamental law.[14]This can becataclysmic. That is why the prevailing view is, as it has always been, that-

x x x x in case of doubt, the Constitution should be considered self-

executing rather than non-self-executing x x x x Unless the contrary isclearly intended, the provisions of the Constitution should be consideredself-executing, as a contrary rule would give the legislature discretion todetermine when, or whether, they shall be effective. These provisionswould be subordinated to the will of the lawmaking body, which couldmake them entirely meaningless by simply refusing to pass the neededimplementing statute.[15]

Respondents argue that Sec. 10, second par., Art. XII, of the 1987Constitution 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 ofPREFERENCE is given to QUALIFIED FILIPINOS, can it beunderstood as a preference to qualified Filipinos vis-a-visFilipinos who are not qualified. So, why do we not make itclear? To qualified Filipinos as against aliens?

THE PRESIDENT. What is the question of CommissionerRodrigo? Is it to remove the word QUALIFIED?

MR. RODRIGO. No, no, but say definitely TO QUALIFIEDFILIPINOS as against whom? As against aliens or over aliens?

MR. NOLLEDO. Madam President, I think that is understood. Weuse the word QUALIFIED because the existing laws orprospective laws will always lay down conditions under whichbusiness may be done. For example, qualifications on capital,


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qualifications on the setting up of other financial structures, etcetera(underscoring 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 away as not to make it appear that it is non-self-executing but simply forpurposes of style. But, certainly, the legislature is not precluded fromenacting further laws to enforce the constitutional provision so long as thecontemplated statute squares with the Constitution. Minor details may beleft to the legislature without impairing the self-executing nature ofconstitutional provisions.

In self-executing constitutional provisions, the legislature may stillenact legislation to facilitate the exercise of powers directly granted by the

constitution, further the operation of such a provision, prescribe a practiceto be used for its enforcement, provide a convenient remedy for theprotection of the rights secured or the determination thereof, or placereasonable safeguards around the exercise of the right. The mere fact thatlegislation may supplement and add to or prescribe a penalty for theviolation of a self-executing constitutional provision does not render such aprovision ineffective in the absence of such legislation. The omission froma constitution of any express provision for a remedy for enforcing a right orliability 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 anylegislation must be in harmony with the constitution, further the exercise ofconstitutional right and make it more available.[17]Subsequent legislationhowever does not necessarily mean that the subject constitutionalprovision 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 thirdparagraphs of the same section which undoubtedly are not self-executing.[18]The argument is flawed. If the first and third paragraphs arenot self-executing because Congress is still to enact measures to

encourage the formation and operation of enterprises fully owned byFilipinos, as in the first paragraph, and the State still needs legislation toregulate and exercise authority over foreign investments within its national

jurisdiction, as in the third paragraph, then a fortiori, by the same logic, thesecond paragraph can only be self-executing as it does not by its languagerequire any legislation in order to give preference to qualified Filipinos inthe grant of rights, privileges and concessions covering the national


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economy and patrimony. A constitutional provision may be self-executingin one part and non-self-executing in another.[19]

Even the cases cited by respondents holding that certain constitutionalprovisions are merely statements of principles and policies, which are

basically not self-executing and only placed in the Constitution as moralincentives to legislation, not as judicially enforceable rights - are simply notin point. Basco v. Philippine Amusements and GamingCorporation[20]speaks of constitutional provisions on personaldignity,[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 ofeducation.[25]Tolentino v. Secretary of Finance[26] refers to constitutionalprovisions on social justice and human rights[27]and oneducation.[28]Lastly, Kilosbayan, Inc. v. Morato[29] cites provisions on thepromotion of general welfare,[30]the sanctity of family life,[31]the vital role ofthe youth in nation-building[32]and the promotion of total human liberationand development.[33] A reading of these provisions indeed clearly showsthat they are not judicially enforceable constitutional rights but merelyguidelines for legislation. The very terms of the provisions manifest thatthey are only principles upon which legislations must be based. Res ipsaloquitur.

On the other hand, Sec. 10, second par., Art. XII of the 1987Constitution is a mandatory, positive command which is complete in itselfand which needs no further guidelines or implementing laws or rules for itsenforcement. From its very words the provision does not require any

legislation to put it in operation. It isper sejudicially enforceable. Whenour Constitution mandates that[i]n the grant of rights, privileges, andconcessions covering national economy and patrimony, the State shallgive preference to qualified Filipinos, it means just that - qualified Filipinosshall be preferred. And when our Constitution declares that a right existsin certain specified circumstances an action may be maintained to enforcesuch right notwithstanding the absence of any legislation on the subject;consequently, if there is no statute especially enacted to enforce suchconstitutional right, such right enforces itself by its own inherent potencyand puissance, and from which all legislations must take theirbearings. Where there is a right there is a remedy. Ubi jus ibi remedium.

As regards our national patrimony,a member of the 1986Constitutional Commission[34]explains -

The patrimony of the Nation that should be conserved anddeveloped refers not only to our rich natural resources but also tothe cultural heritage of our race. It also refers to our intelligence in


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arts, sciences and letters. Therefore, we should develop not onlyour lands, forests, mines and other natural resources but also themental ability or faculty of our people.

We agree. In its plain and ordinary meaning, the

termpatrimonypertains to heritage.[35]When the Constitution speaksof national patrimony,it refers not only to the natural resources of thePhilippines, as the Constitution could have very well used the term naturalresources, but also to thecultural heritageof the Filipinos.

Manila Hotel has become a landmark - a living testimonial of Philippineheritage. While it was restrictively an American hotel when it first openedin 1912, it immediately evolved to be truly Filipino. Formerly a concoursefor the elite, it has since then become the venue of various significantevents which have shaped Philippine history. It was called theCulturalCenter of the 1930s. It was the site of the festivities during theinauguration of the Philippine Commonwealth. Dubbed as the OfficialGuest House of the Philippine Governmentit plays host to dignitaries andofficial visitors who are accorded the traditional Philippine hospitality.[36]

The history of the hotel has been chronicled in the book The ManilaHotel: The Heart and Memory of a City.[37]During World War II the hotelwas converted by the Japanese Military Administration into a militaryheadquarters. When the American forces returned to recapture Manila thehotel was selected by the Japanese together with Intramuros as the two(2) places for their final stand. Thereafter, in the 1950s and 1960s, the

hotel became the center of political activities, playing host to almost everypolitical convention. In 1970 the hotel reopened after a renovation andreaped numerous international recognitions, an acknowledgment of theFilipino talent and ingenuity. In 1986 the hotel was the site of afailed coup detat where an aspirant for vice-president was proclaimedPresident of the Philippine Republic.

For more than eight (8) decades Manila Hotel has bore mute witness tothe triumphs and failures, loves and frustrations of the Filipinos; itsexistence is impressed with public interest; its own historicity associatedwith our struggle for sovereignty, independence and nationhood. Verily,

Manila Hotel has become part of our national economy and patrimony. Forsure, 51% of the equity of the MHC comes within the purview of theconstitutional shelter for it comprises the majority and controlling stock, sothat anyone who acquires or owns the 51% will have actual control andmanagement of the hotel. In this instance, 51% of the MHC cannot bedisassociated from the hotel and the land on which the hotel edificestands. Consequently, we cannot sustain respondents claim that


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the Filipino First Policyprovision is not applicable since what is being soldis only 51% of the outstanding shares of the corporation, not the Hotelbuilding nor the land upon which the building stands. [38]

The argument is pure sophistry. The term qualified Filipinosas used in

our Constitution also includes corporations at least 60% of which is ownedby Filipinos. This is very clear from the proceedings of the 1986Constitutional Commission -

THE PRESIDENT. Commissioner Davide is recognized.

MR. DAVIDE. I would like to introduce an amendment to theNolledo amendment. And the amendment would consist insubstituting the words QUALIFIED FILIPINOS with thefollowing: CITIZENS OF THE PHILIPPINES ORCORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL ORCONTROLLING STOCK IS WHOLLY OWNED BY SUCHCITIZENS.

x x x x

MR. MONSOD. Madam President, apparently the proponent isagreeable, but we have to raise a question. Suppose it is acorporation that is 80-percent Filipino, do we not give itpreference?

MR. DAVIDE. The Nolledo amendment would refer to an individualFilipino. 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 wesay that the preference should only be 100-percent Filipino.

MR. DAVIDE. I want to get that meaning clear becauseQUALIFIED FILIPINOS may refer only to individuals and notto juridical personalities or entities.

MR. MONSOD. We agree, Madam President.[39]

x x x x

MR. RODRIGO. Before we vote, may I request that theamendment be read again.

MR. NOLLEDO. The amendment will read: IN THE GRANT OFRIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE


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NATIONAL ECONOMY AND PATRIMONY, THE STATESHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS. Andthe word Filipinos here, as intended by the proponents, willinclude not only individual Filipinos but also Filipino-controlledentities or entities fully-controlled by Filipinos.[40]

The phrasepreference to qualified Filipinoswas explained thus -

MR. FOZ. Madam President, I would like to request CommissionerNolledo to please restate his amendment so that I can ask aquestion.

MR. NOLLEDO. IN THE GRANT OF RIGHTS, PRIVILEGES ANDCONCESSIONS COVERING THE NATIONAL ECONOMY

AND PATRIMONY, THE STATE SHALL GIVE PREFERENCETO QUALIFIED FILIPINOS.

MR. FOZ. In connection with that amendment, if a foreignenterprise 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 thanthe 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 CommissionerNolledo continues

MR. NOLLEDO. Yes, Madam President. Instead of MUST, it willbe SHALL - THE STATE SHALL GIVE PREFERENCE TOQUALIFIED FILIPINOS. This embodies the so-called FilipinoFirst policy. That means that Filipinos should be givenpreference in the grant of concessions, privileges and rightscovering the national patrimony.[42]

The exchange of views in the sessions of the Constitutional

Commission regarding the subject provision was still further clarified byCommissioner Nolledo[43]-

Paragraph 2 of Section 10 explicitly mandates the Pro-Filipino bias in alleconomic concerns. It is better known as the FILIPINO FIRST Policy x x xx This provision was never found in previous Constitutions x x x x


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The term qualified Filipinos simply means that preference shall be givento those citizens who can make a viable contribution to the common good,because of credible competence and efficiency. It certainly does NOTmandate the pampering and preferential treatment to Filipino citizens ororganizations that are incompetent or inefficient, since such an

indiscriminate preference would be counterproductive and inimical to thecommon good.

In the granting of economic rights, privileges, and concessions, when achoice has to be made between a qualified foreigner and a qualifiedFilipino, the latter shall be chosen over the former.

Lastly, the word qualifiedis also determinable. Petitioner was soconsidered by respondent GSIS and selected as one of the qualifiedbidders. It was pre-qualified by respondent GSIS in accordance with its

own guidelines so that the sole inference here is that petitioner has beenfound to be possessed of proven management expertise in the hotelindustry, or it has significant equity ownership in another hotel company, orit has an overall management and marketing proficiency to successfullyoperate the Manila Hotel.[44]

The penchant to try to whittle away the mandate of the Constitution byarguing that the subject provision is not self-executory and requiresimplementing legislation is quite disturbing. The attempt to violate a clearconstitutional provision - by the government itself - is only toodistressing. To adopt such a line of reasoning is to renounce the duty to

ensure faithfulness to the Constitution. For, even some of the provisions ofthe Constitution which evidently need implementing legislation have

juridical life of their own and can be the source of a judicial remedy. Wecannot simply afford the government a defense that arises out of the failureto enact further enabling, implementing or guiding legislation. In fine, thediscourse of Fr. Joaquin G. Bernas, S.J., on constitutional government isapt -

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 executiveacts, it must be guided by its own understanding of the constitutionalcommand and of applicable laws. The responsibility for reading andunderstanding the Constitution and the laws is not the sole prerogative ofCongress. If it were, the executive would have to ask Congress, orperhaps the Court, for an interpretation every time the executive isconfronted by a constitutional command. That is not how constitutionalgovernment operates.[45]


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Respondents further argue that the constitutional provision isaddressed to the State, not to respondent GSIS which by itself possessesa separate and distinct personality. This argument again is at bestspecious. It is undisputed that the sale of 51% of the MHC could only becarried 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 respondentsGSIS and MHC a state action. In constitutional jurisprudence, the acts ofpersons distinct from the government are considered state actioncovered by the Constitution (1) when the activity it engages in is a publicfunction; (2) when the government is so significantly involved with theprivate actor as to make the government responsible for his action; and,(3) when the government has approved or authorized the action. It isevident that the act of respondent GSIS in selling 51% of its share inrespondent MHC comes under the second and third categories of state

action. Without doubt therefore the transaction, although entered into byrespondent GSIS, is in fact a transaction of the State and therefore subjectto the constitutional command.[46]

When the Constitution addresses the State it refers not only to thepeople 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 tothe State is correspondingly directed to the three (3) branches ofgovernment. It is undeniable that in this case the subject constitutionalinjunction is addressed among others to the Executive Department and

respondent GSIS, a government instrumentality deriving its authority fromthe State.

It should be stressed that while the Malaysian firm offered the higherbid it is not yet the winning bidder. The bidding rules expressly providethat the highest bidder shall only be declared the winning bidder after it hasnegotiated and executed the necessary contracts, and secured therequisite approvals. Since the Filipino First Policyprovision of theConstitution bestows preference onqualified Filipinos the mere tending ofthe highest bid is not an assurance that the highest bidder will be declaredthe winning bidder. Resultantly, respondents are not bound to make theaward yet, nor are they under obligation to enter into one with the highestbidder. For in choosing the awardee respondents are mandated to abideby the dictates of the 1987 Constitution the provisions of which arepresumed to be known to all the bidders and other interested parties.

Adhering to the doctrine of constitutional supremacy, the subjectconstitutional provision is, as it should be, impliedly written in the bidding


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Court has not been spared criticism for decisions perceived as obstacles toeconomic progress and development x x x x in connection with atemporary injunction issued by the Courts First Division against the sale ofthe Manila Hotel to a Malaysian Firm and its partner, certain statementswere published in a major daily to the effect that that injunction again

demonstrates that the Philippine legal system can be a major obstacle todoing business here.

Let it be stated for the record once again that while it is no business of theCourt 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 tomake sure that they do not violate the Constitution or the laws, or are notadopted or implemented with grave abuse of discretion amounting to lackor excess of jurisdiction. It will never shirk that duty, no matter howbuffeted by winds of unfair and ill-informed criticism.[48]

Privatization of a business asset for purposes of enhancing itsbusiness viability and preventing further losses, regardless of the characterof the asset, should not take precedence over non-material values. Acommercial, nay even a budgetary, objective should not be pursued at theexpense of national pride and dignity. For the Constitution enshrineshigher and nobler non-material values. Indeed, the Court will always deferto the Constitution in the proper governance of a free society; after all,there is nothing so sacrosanctin any economic policy as to draw itselfbeyond judicial review when the Constitution is involved. [49]

Nationalism is inherent in the very concept of the Philippines being ademocratic and republican state, with sovereignty residing in the Filipinopeople 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 constitutionalprovision must adhere to such basic concept. Protection of foreigninvestments, while laudible, is merely a policy. It cannot override thedemands of nationalism.[50]

The Manila Hotel or, for that matter, 51% of the MHC, is not just anycommodity to be sold to the highest bidder solely for the sake ofprivatization. We are not talking about an ordinary piece of property in acommercial district. We are talking about a historic relic that has hostedmany of the most important events in the short history of the Philippines asa nation. We are talking about a hotel where heads of states would preferto be housed as a strong manifestation of their desire to cloak the dignityof the highest state function to their official visits to the Philippines. Thusthe Manila Hotel has played and continues to play a significant role as an


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authentic repository of twentieth century Philippine history and culture. Inthis sense, it has become truly a reflection of the Filipino soul - a place witha history of grandeur; a most historical setting that has played a part in theshaping of a country.[51]

This Court cannot extract rhyme nor reason from the determinedefforts of respondents to sell the historical landmark - this Grand OldDame of hotels in Asia - to a total stranger. For, indeed, the conveyanceof this epic exponent of the Filipino psyche to alien hands cannot be lessthan mephistophelian for it is, in whatever manner viewed, a veritablealienation of a nations soul for some pieces of foreign silver. And so weask: What advantage, which cannot be equally drawn from a qualifiedFilipino, can be gained by the Filipinos if Manila Hotel - and all that itstands for - is sold to a non-Filipino? How much of national pride willvanish if the nations cultural heritage is entrusted to a foreign entity? Onthe other hand, how much dignity will be preserved and realized if thenational patrimony is safekept in the hands of a qualified, zealous and well-meaning Filipino? This is the plain and simple meaning of the Filipino FirstPolicyprovision of the Philippine Constitution. And this Court, heeding theclarion call of the Constitution and accepting the duty of being the elderlywatchman of the nation, will continue to respect and protect the sanctity ofthe Constitution.

WHEREFORE, respondents GOVERNMENT SERVICE INSURANCESYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ONPRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE

COUNSEL are directed to CEASE and DESIST from selling 51% of theshares of the Manila Hotel Corporation to RENONG BERHAD, and toACCEPT the matching bid of petitioner MANILA PRINCE HOTELCORPORATION to purchase the subject 51% of the shares of the ManilaHotel Corporation at P44.00 per share and thereafter to execute thenecessary agreements and documents to effect the sale, to issue thenecessary clearances and to do such other acts and deeds as may benecessary for the purpose.

SO ORDERED.

MMDA Concerned citizens of Manila Bay

D E C I S I O N

VELASCO, JR., J.:


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The need to address environmental pollution, as a cause of climate

change, has of late gained the attention of the international

community. Media have finally trained their sights on the ill effects of

pollution, the destruction of forests and other critical habitats, oil spills, and

the unabated improper disposal of garbage. And rightly so, for the

magnitude of environmental destruction is now on a scale few ever

foresaw and the wound no longer simply heals by itself.[2] But amidst hard

evidence and clear signs of a climate crisis that need bold action, the voice

of cynicism, naysayers, and procrastinators can still be heard.

This case turns on government agencies and their officers who, by

the nature of their respective offices or by direct statutory command, are

tasked to protect and preserve, at the first instance, our internal waters,rivers, shores, and seas polluted by human activities. To most of these

agencies and their official complement, the pollution menace does not

seem to carry the high national priority it deserves, if their track records are

to be the norm. Their cavalier attitude towards solving, if not mitigating, the

environmental pollution problem, is a sad commentary on bureaucratic

efficiency and commitment.

At the core of the case is the Manila Bay, a place with a proud

historic past, once brimming with marine life and, for so many decades in

the past, a spot for different contact recreation activities, but now a dirty

and slowly dying expanse mainly because of the abject official indifference

of people and institutions that could have otherwise made a difference.

This case started when, on January 29, 1999, respondents

Concerned Residents of Manila Bay filed a complaint before the Regional

Trial Court (RTC) in Imus, Cavite against several government agencies,among them the petitioners, for the cleanup, rehabilitation, and protection

of the Manila Bay. Raffled to Branch 20 and docketed as Civil Case No.

1851-99 of the RTC, the complaint alleged that the water quality of

the Manila Bay had fallen way below the allowable standards set by law,

specifically Presidential Decree No. (PD) 1152 or the Philippine


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Environment Code. This environmental aberration, the complaint stated,

stemmed from:

x x x [The] reckless, wholesale, accumulated and

ongoing acts of omission or commission [of the defendants]resulting in the clear and present danger to public health andin the depletion and contamination of the marine life of ManilaBay, [for which reason] ALL defendants must be held jointlyand/or solidarily liable and be collectively ordered to clean upManila Bay and to restore its water quality to class B waters fitfor swimming, skin-diving, and other forms of contactrecreation.[3]

In their individual causes of action, respondents alleged that thecontinued neglect of petitioners in abating the pollution of

the Manila Bay constitutes a violation of, among others:

(1) Respondents constitutional right to life, health, and abalanced ecology;

(2) The Environment Code (PD 1152);(3) The Pollution Control Law (PD 984);(4) The Water Code (PD 1067);(5) The Sanitation Code (PD 856);

(6) The Illegal Disposal of Wastes Decree (PD 825);(7) The Marine Pollution Law (PD 979);(8) Executive Order No. 192;(9) The Toxic and Hazardous Wastes Law (Republic Act

No. 6969);(10) Civil Code provisions on nuisance and human relations;(11) The Trust Doctrine and the Principle of Guardianship; and(12) International Law

Inter alia, respondents, as plaintiffs a quo, prayed that petitioners be

ordered to clean the Manila Bay and submit to the RTC a concertedconcrete plan of action for the purpose.

The trial of the case started off with a hearing at the Manila Yacht

Club followed by an ocular inspection of the Manila Bay. Renato T. Cruz,

the Chief of the Water Quality Management Section, Environmental


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Management Bureau, Department of Environment and Natural Resources

(DENR), testifying for petitioners, stated that water samples collected from

different beaches around the Manila Bay showed that the amount of fecal

coliform content ranged from 50,000 to 80,000 most probable number

(MPN)/ml when what DENR Administrative Order No. 34-90 prescribed as

a safe level for bathing and other forms of contact recreational activities, or

the SB level, is one not exceeding 200 MPN/100 ml.[4]

Rebecca de Vera, for Metropolitan Waterworks and Sewerage

System (MWSS) and in behalf of other petitioners, testified about the

MWSS efforts to reduce pollution along theManila Bay through the Manila

Second Sewerage Project. For its part, the Philippine Ports Authority

(PPA) presented, as part of its evidence, its memorandum circulars on thestudy being conducted on ship-generated waste treatment and disposal,

and its Linis Dagat (Clean the Ocean) project for the cleaning of wastes

accumulated or washed to shore.

The RTC Ordered Petitioners to Clean Up and Rehabilitate Manila Bay

On September 13, 2002, the RTC rendered a Decision[5]in favor of

respondents. The dispositive portion reads:

WHEREFORE, finding merit in the complaint, judgmentis hereby rendered ordering the abovenamed defendant-government agencies, jointly and solidarily, to clean up andrehabilitate Manila Bay and restore its waters to SBclassification to make it fit for swimming, skin-diving and otherforms of contact recreation. To attain this, defendant-agencies, with defendant DENR as the lead agency, aredirected, within six (6) months from receipt hereof, to act andperform their respective duties by devising a consolidated,

coordinated and concerted scheme of action for therehabilitation and restoration of the bay.In particular:

Defendant MWSS is directed to install, operate andmaintain adequate [sewerage] treatment facilities in strategicplaces under its jurisdiction and increase their capacities.


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Defendant LWUA, to see to it that the water districtsunder its wings, provide, construct and operate sewagefacilities for the proper disposal of waste.

Defendant DENR, which is the lead agency in cleaning

up Manila Bay, to install, operate and maintain waste facilitiesto rid the bay of toxic and hazardous substances.

Defendant PPA, to prevent and also to treat thedischarge not only of ship-generated wastes but also of othersolid and liquid wastes from docking vessels that contribute tothe pollution of the bay.

Defendant MMDA, to establish, operate and maintainan adequate and appropriate sanitary landfill and/or adequate

solid waste and liquid disposal as well as other alternativegarbage disposal system such as re-use or recycling ofwastes.

Defendant DA, through the Bureau of Fisheries andAquatic Resources, to revitalize the marine lifein Manila Bay and restock its waters with indigenous fish andother aquatic animals.

Defendant DBM, to provide and set aside an adequate

budget solely for the purpose of cleaning up and rehabilitationof Manila Bay.

Defendant DPWH, to remove and demolish structuresand other nuisances that obstruct the free flow of waters to thebay. These nuisances discharge solid and liquid wastes whicheventually end up in Manila Bay. As the construction andengineering arm of the government, DPWH is ordered toactively participate in removing debris, such as carcass ofsunken vessels, and other non-biodegradable garbage in thebay.

Defendant DOH, to closely supervise and monitor theoperations of septic and sludge companies and require themto have proper facilities for the treatment and disposal of fecalsludge and sewage coming from septic tanks.


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Defendant DECS, to inculcate in the minds and heartsof the people through education the importance of preservingand protecting the environment.

Defendant Philippine Coast Guard and the PNP

Maritime Group, to protect at all costs the Manila Bay from allforms of illegal fishing.

No pronouncement as to damages and costs.

SO ORDERED.

The MWSS, Local Water Utilities Administration (LWUA), and PPA

filed before the Court of Appeals (CA) individual Notices of Appeal which

were eventually consolidated and docketed as CA-G.R. CV No. 76528.

On the other hand, the DENR, Department of Public Works and

Highways (DPWH), Metropolitan Manila Development Authority (MMDA),

Philippine Coast Guard (PCG), Philippine National Police (PNP) Maritime

Group, and five other executive departments and agencies filed directly

with this Court a petition for review under Rule 45. The Court, in a

Resolution of December 9, 2002, sent the said petition to the CA for

consolidation with the consolidated appeals of MWSS, LWUA, and PPA,

docketed as CA-G.R. SP No. 74944.

Petitioners, before the CA, were one in arguing in the main that the

pertinent provisions of the Environment Code (PD 1152) relate only to the

cleaning of specific pollution incidents and do not cover cleaning in

general. And apart from raising concerns about the lack of funds

appropriated for cleaning purposes, petitioners also asserted that the

cleaning of the Manila Bayis not a ministerial act which can be compelled

by mandamus.

The CA Sustained the RTC

By a Decision[6]of September 28, 2005, the CA denied petitioners

appeal and affirmed the Decision of the RTC in toto, stressing that the trial


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courts decision did not require petitioners to do tasks outside of their usual

basic functions under existing laws.[7]

Petitioners are now before this Court praying for the allowance of

their Rule 45 petition on the following ground and supporting arguments:THE [CA] DECIDED A QUESTION OF SUBSTANCE

NOT HERETOFORE PASSED UPON BY THE HONORABLECOURT, I.E., IT AFFIRMED THE TRIAL COURTS DECISIONDECLARING THAT SECTION 20 OF [PD] 1152 REQUIRESCONCERNED GOVERNMENT AGENCIES TO REMOVE ALLPOLLUTANTS SPILLED AND DISCHARGED IN THEWATER SUCH AS FECAL COLIFORMS.

ARGUMENTS

I[SECTIONS] 17 AND 20 OF [PD] 1152 RELATE ONLY

TO THE CLEANING OF SPECIFIC POLLUTION INCIDENTSAND [DO] NOT COVER CLEANING IN GENERAL

IITHE CLEANING OR REHABILITATION OF

THE MANILA BAY IS NOT A MINISTERIAL ACT OFPETITIONERS THAT CAN BE COMPELLED BY

MANDAMUS.

The issues before us are two-fold. First, do Sections 17 and 20 of

PD 1152 under the headings, Upgrading of Water Qualityand Clean-up

Operations, envisage a cleanup in general or are they limited only to the

cleanup of specific pollution incidents? And second, can petitioners be

compelled by mandamus to clean up and rehabilitate the Manila Bay?

On August 12, 2008, the Court conducted and heard the parties onoral arguments.

Our Ruling


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We shall first dwell on the propriety of the issuance of mandamus

under the premises.

The Cleaning or Rehabilitation of Manila BayCan be Compelled by Mandamus

Generally, the writ of mandamus lies to require the execution of a

ministerial duty.[8]A ministerial duty is one that requires neither the

exercise of official discretion nor judgment.[9] It connotes an act in which

nothing is left to the discretion of the person executing it. It is a simple,

defini

cases envi nov 17

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