ARTICLE XII: NATIONAL ECONOMY AND PATRIMONY

Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the
national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least
sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may
prescribe, certain areas of investments. The Congress shall enact measures that will encourage the
formation and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the
State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national jurisdiction
and in accordance with its national goals and priorities.

Garcia v. BOI
FACTS: Under P.D. No. 1803, 576 hectares of land
located in Bataan were reserved for the
Petrochemical
Industrial
Zone
under
the
administration of the Philippine National Oil
Company (PNOC).
The Bataan Refining Corporation (BRC) is a wholly
government owned corporation, located at
Bataan. It produces 60% of the national output of
naphtha.
Taiwanese
investors
formed
the
Bataan
Petrochemical
Corporation
(BPC)
for
a
petrochemical project. They also applied with BOI
for registration as a new domestic producer of
petrochemicals, specifying Bataan as their plant
site. The terms and conditions included the use of

"naphtha cracker" and "naphtha" as feedstock or

fuel for its petrochemical plant. The petrochemical
plant was to be a joint venture with PNOC. BOI
granted the application and issued a certificate of
registration.
However, one of the major investors of BPC
requested that the site of the petrochemical plant
be transferred to Batangas due to insurgency and
unstable labor conditions, and the presence of a
LPG depot in Batangas BOI approved this request.
Petitioner vigorously opposed the proposal on the
ground that the foreign investor did not have the
final choice on the site of the plant. Therefore,
BOIs decision to approve the transfer constitutes
a grave abuse of discretion.
ISSUE: Whether or not the foreign investor has the
right of final choice of the plant site?

RULING: NO. Section 10, Article XII of the 1987

Constitution provides that it is the duty of the
State to "regulate and exercise authority over
foreign investments within its national jurisdiction
and in accordance with its national goals and
priorities." The development of a self-reliant and
independent
national
economy
effectively
controlled by Filipinos is also mandated in Section
19, Article II of the Constitution. The Omnibus
Investments Code of 1987 also states that the
sound development of the national economy in
consonance with the principles and objectives of
economic nationalism is the set goal of
government.
To add to this, there are clear advantages of
constructing the site in Bataan. BRC, located in
Bataan, produces 60% of the national output of
naphtha that can be used as feedstock for the
plant. Also, if the plant site is maintained in

Bataan, PNOC shall be a partner in the venture to

the advantage of the government which shall
have a participation in the management of the
project.
A petrochemical industry is not an ordinary
investment opportunity. The industry is essential
to the national interest. In this particular BPC
venture, not only has the Government given
unprecedented favors but through its regulatory
agency, the BOI, it surrenders even the power to
make a company abide by its initial choice, a
choice free from any suspicion of unscrupulous
machinations and a choice which is undoubtedly
in the best interests of the Filipino people.