Manila Prince Hotel Vs Gsis

 

MANILA PRINCE HOTEL VS. GSIS FACTS: Pursuant to the privatization program of the Philippine Government, the GSIS sold in public auction its stae in !anila "otel Corporation #!"C$% &nl' ( bidders bidde rs parti participat cipated: ed: peti petitione tioner r !anil !anila a of Pri Prince nce!"C "ote "otel l Corpo Corporatio ration, n, shares a Filip ilipino ino corporation, )hich o*ered to bu' +the or +,.//,/// at P0%+1 per share, and 2e 2enong nong 3erhad, a !ala'sian 4rm, )ith ITT ITT5Sheraton 5Sheraton as its hotel operator, )hich bid for the same number of shares at P00%// per share, or P(%0( more than the bid of petitioner% Petitioner 4led a petition before the Supreme Court to compel the GSIS to allo) it to match the bid of 2enong 3erhad% It invoed the Filipino First Polic' enshrined in 6/, paragraph (, Article 7II of the 819 Constitution, )hich provides that in the grant of rights, privileges, and concessions covering the national econom' and patrimon', the State shall give preference to ;uali4ed Filipinos%< ISS=>S: % ?heth ?hether er 6/ 6/,, parag paragraph raph (, A Articl rticle e 7II of th the e 81 819 9 Const Constituti itution on is a se self lf55 e@ecuting provision and does not need implementing legislation to carr' it into e*ect (% Assum Assuming ing 6/, paragr paragraph aph (, Arti Article cle 7II is self self5e@ 5e@ecut ecuting, ing, )het )hether her the controlling shares of the !anila "otel Corporation form part of our patrimon' as a nation .% ?he ?hethe therr G GSIS SIS is inc includ luded ed in the ter term m  Sta State, te,< < h henc ence, e, man mandat dated ed to implement 6/, paragraph (, Article 7II of the Constitution and 0% Assuming GSI GSIS S is part of the State, )hether iitt should give pr preference eference to th the e pe peti titi tion oner er,, a Fil ilip ipin ino o co corp rpor orat atio ion, n, ov over er 2en enon ong g 3e 3errha had, d, a fo forreign eign corp co rpor orat atio ion, n, in the the sa sale le of the the co cont ntrrol olli ling ng sh shar ares es of th the e !a !ani nila la "o "ote tell Corporation% 2=BIG: % D>S D>S,, 6 6/, /, p para aragra graph ph ( (,, Ar Artic ticle le 7 7II II o off th the e 8 819 19 Con Consti stitut tution ion is a sel selff5 e@ecuting provision and does not need implementing legislation to carr' it into e*ect% Sec% /, second par%, of Art 7II is couched in such a )a' as not to mae it appearr that it is non5se appea non5self lf5e@ 5e@ecuti ecuting ng but simpl' for purpos purposes es of st'le% 3ut, certai cer tainl' nl',, the legis legislat latur ure e is not pr precl eclude uded d from from ena enacti cting ng fur furthe therr la) la)s s to enfor enf orce ce the con consti stitut tution ional al provi provisio sion n so lon long g as the con contem templa plated ted stat statute ute

 

s;uares )ith the Constitu s;uares Constitution% tion% !inor det details ails ma' be left to the legislat legislature ure )ithout impairing the self self5e@ 5e@ecuting ecuting nature of constitutional provisions% @@@

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2espondents % % % argue that the non5self5e@ecuting nature of Sec% /, second par%, of Art% 7II is implied from the tenor of the 4rst and third paragraphs of  the same section )hich undoubtedl' are not self5e@ecuting% The argument is Ea)ed% Ea) ed% If the 4r 4rst st and thir third d par paragr agraph aphs s ar are e not self self5e 5e@ @ecu ecutin ting g bec becaus ause e Congress is still to enact measures to encourage the formation and operation of enterprises full' o)ned b' Filipinos, as in the 4rst paragraph, and the State still needs legislation to regulate and e@ercise authorit' over foreign investments )ithin its national urisdiction, as in the third paragraph, then a fortiori, b' the same logic, the second paragraph can onl' be self5e@ecuting as it do does es no nott b' it its s la lang nguag uage e re; e;ui uirre an an' ' le legi gisl slat atio ion n in orde orderr to give give pr pref efer eren ence ce to ;u ;ual ali4 i4ed ed Fil ilip ipin inos os in the the gr grant ant of ri righ ghts ts,, priv privil ileg eges es and concessions covering the national econom' and patrimon' patrimon'%% A constitutional pr prov ovis isio ion n ma ma' ' be se self lf5e 5e@ @ec ecut utin ing g in on one e pa part rt an and d no non5 n5se self lf5e 5e@ @ec ecut utin ing g in another% @@@% Sec% /, second par%, Art% 7II of the 819 Constitution is a mandator', positive command )hich is complete in itself and )hich needs no further guidelines or implementing implementing la)s or rule rules s for its enforce enforcement% ment% From its ve ver' r' )ords the provision provision does not rre;uire e;uire an' legi legislation slation to put it in operation% It is per se udiciall' udiciall' enfor enforceabl ceable% e% ?hen our Consti Constitutio tution n mandate mandates s that iHn the grant of rights, privileges, and concessions covering national econom' and patrimon', the State shall give preference to ;uali4ed Filipinos, it means  ust that 5 ;uali4ed Filipinos shall be prefer preferred% red% And )hen our Constitution declares that a right e@ists in certain speci4ed circumstances an action ma' be mai mainta ntaine ined d to enf enfor orce ce suc such h rig right ht not not)it )ithst hstand anding ing the abs absenc ence e of an' legisl leg islati ation on on the sub subec ect t con conse; se;uen uentl' tl',, if the therre is no sta statut tute e esp especi eciall all' ' enacted to enforce such constitutional right, such right enforces itself b' its o)n inherent potenc' and puissance, and from )hich all legislations must tae ta e thei theirr beari bearings% ngs% ?her ?here e ther there e is a rig right ht ther there e is a rremed' emed'% =bi us iibi bi remedium%

(% D>S, the controlling shares of the !anila "otel Corporation form part of  our patrimon' as a nation% In its plain and ordinar' meaning, the term patrimon' pertains to heritage% ?hen the Constitution speas of national patrimon', it refers not onl' to the natural resources of the Philippines, as the Constitution could have ver' )ell used the term natural resources, but also to the cultural heritage of the Filipinos%

 

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For more than eight #1$ decades !anila "otel has bore mute )itness to the triumphs and failures, lov loves es and frustrations of the F Filipinos ilipinos its e@i e@istence stence is impr im pres esse sed d )i )ith th pu publ blic ic in inte terres est t it its s o) o)n n hist histor oric icit it' ' as asso soci ciat ated ed )i )ith th ou ourr struggle for sovereignt', sovereignt', independence and nationhood% eril', !anila " "otel otel has become part of our national econom' and patrimon' patrimon'%% For sur sure, e, +- of  the e;uit' of the !"C comes )ithin the purvie) of the constitutional shelter for it com compri prises ses the maor maorit' it' and con contr troll olling ing sto stoc, c, so tha thatt an' an'one one )ho ac;uires or o)ns the +- )ill have actual control and management of the hotel%% In this insta hotel instance, nce, +- of the !"C can cannot not be disasso disassociate ciated d from the hotel hot el and the lan land d on )hic )hich h the hot hotel el edi4 edi4ce ce stan stands% ds% Con Conse; se;uen uentl' tl',, )e cannot sustain respondentsJ claim that the Filipino First P Polic' olic' provision is not applicable since )hat is being sold is onl' +- of the outstanding shares of  the corporation, not the "otel building nor the land upon )hich the building stands% .% D>S D>S,, GS GSIS IS iis s in inclu cluded ded in tthe he ter term m S Stat tate,< e,< hen hence, ce, it is m mand andate ated d to implement 6/, paragraph (, Article 7II of the Constitution% It is undisputed that the sale of +- of the !"C could onl' be carried out )ith the prior approval of the State acting through respondent Committee on Privatization% Privatiz ation% THhis fact alone maes the sale of the assets o off respondents GSIS and !"C a state action%< action%< In constit constitutiona utionall urisp urispruden rudence, ce, the acts of  persons distinct from the government are considered state action< covered b' the Constitution #$ )hen the activit' it engages in is a public function< #($ )hen the government is so signi4cantl' involved )ith the private actor as to ma ma e the the go gove verrnm nmen entt res espo pons nsib ible le fo forr his his ac acti tion on an and, d, #. #.$$ )h )hen en the the government governme nt has approved or author authorized ized the action% It is evident that the act of respondent GSIS in selling +- of its share in respondent !"C comes under und er the secon second d and thir third d cat catego egori ries es of st state ate acti action%< on%< ?i ?itho thout ut doubt therefore the transaction, although entered into b' respondent GSIS, is in fact a transaction of the State and therefore subect to the constitutional command% ?hen the Constitution addresses the State it refers not onl' to the people but also to the government government as elem elements ents of the State% Aft After er all, gover government nment is com compos posed ed of thr three ee #. #.$$ div divisi isions ons of po) po)er er 5 leg legisl islati ative, ve, e@ e@ecu ecutiv tive e and  udicial% Accor Accordingl', dingl', a constitutional mandate directed to the State is corrresp cor espondi ondingl ngl' ' dir direct ected ed to the thr three ee #.$ bra branch nches es of gov gover ernme nment% nt% It is undeniable that in this case the subect constitutional inunction is addressed amon am ong g ot othe hers rs to the the >@ >@ec ecut utiv ive e Ke Kepa part rtme ment nt an and d res espo pond nden entt GS GSIS IS,, a government governme nt instrumentalit' deriving its authorit' from the State%

 

0% D>S, GSIS should give pre prefer ference ence to the peti petitione tionerr in the sale of the controlling shares of the !anila "otel Corporation% It should be stressed that )hile the !ala'sian 4rm o*ered the higher bid it is not 'et the )inning )inning bidder bidder%% The biddin bidding g rules e@pr e@pressl' essl' pr provid ovide e that the high highes estt bidd bidder er sh shal alll on onl' l' be de decl clar ared ed the the )i )inni nning ng bidd bidder er afte afterr it ha has s negotiated and e@ecuted the necessar' contracts, and secured the re;uisite approvals% Since the F Filipino ilipino F First irst Poli Polic' c' provision of the Constitution besto)s preference prefer ence on ;uali4ed Filipinos the mere tending of the highest bid is not an assura ass urance nce tha thatt the hig highe hest st bid bidder der )i )ill ll be dec declar lared ed the )i )inni nning ng bid bidder der%% 2esultantl', respondents are not bound to mae the a)ard 'et, nor are the' under obligatio obligation n to ente enterr into one )ith the highes highestt bidder bidder%% For in choo choosing sing the a)ardee respondents are mandated to abide b' the dictates of the 819 Constitution the provisions of )hich are presumed to be no)n to all the bidders and other intereste interested d parties% @@@

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Paragrap aragraph h  %% L%  of the bidding rule rules s provid provides es that iHf for an' re reason ason the "ighest 3idder cannot a)arded the 3loc of Shares, GSIS ma' o*er to other Muali4ed 3iddersbe that have validl' submitted bids provided that this these Muali4ed 3idders are )illing to match the highest bid in terms of price per share% Certainl', the constitutional mandate itself is reason enough not to a)ard the bloc of shares immediatel' to the foreign bidder not)ithstanding its submis submissio sion n of a highe higher, r, or even the hi highe ghest, st, bid bid%% In fact fact,, )e canno cannott conceive of a stronger reason than the constitutional inunction itself itself%% In the instant case, )here a foreign 4rm submits the highest bid in a public bidding concerning the grant of rights, privileges and concessions covering the national econom' and patrimon', thereb' e@ e@ceeding ceeding the bid of a Filipino, there is no ;uestion that the Filipino )ill have to be allo)ed to match the bid of the foreign entit'% entit'% And if the Fil Filipino ipino matches the bid of a foreign 4rm the a)ard a)a rd sho should uld go to the F Fili ilipin pino% o% It must be so if )e are to give lif life e and meaning to the Filipino Filipino F First irst Poli Polic' c' provision of the 81 819 9 Constitution% For, )hile this ma' neither be e@pressl' stated nor contemplated in the bidding rules, rule s, the constitut constitutional ional 4at is omnipre omnipresent sent to be simpl simpl' ' disreg disregarde arded% d% To ignore it )ould be to sanction a perilous sirting of the basic la) la)%%