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Manila Prince Hotel v. GSIS G.R No.

122156, February 3, 1997


MANILA PRINCE HOTEL petitioner,
vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION,
COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE
COUNSEL, respondents.

BELLOSILLO, J.:

In the framework of the Self-Executing vs. Non-Self-Executing Topic

I. THE FACTS

The respondent, GSIS decided to sell their 30%-51% share in Manila Hotel Corporation (MHC) to the
highest bidder through a public auction. This action was pursuant to the privatization program under
Proclamation 50. There were only 2 bidders participated in a close bidding held on September 18, 1995.
The bidders were, Manila Prince Hotel Corporation - the petitioner, a Filipino corporation, which offered
to buy 51% of the MHC shares at P41.58 per share, and Renong Berhad, a Malaysian firm, which bid for
the same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner.

The declaration of Renong Berhard as the highest/winning bidder was pending since the petitioner tried to
rematch from the winning bid price of the latter, but still petitioner refused to accept it.

The petitioner questioned the validity of the qualification of Renong Berhard as a bidder as it violated the
norm of our constitution. It invoked the Filipino First Policy,as provided by in Section 10 paragraph 2,
Article XII of the 1987 Constitution, which provides that “in the grant of rights, privileges, and
concessions covering the national economy and patrimony, the State shall give preference to qualified
Filipinos.”

II. THE ISSUES

1. Whether or not Section 10, paragraph 2, Article 12 of the 1987 Constitution


is a self-executing provision and does not need implementing legislation to
carry it into effect;
2. Whether or not the Manila Hotel forms part of the national patrimony.
3. Whether GSIS is included in the term “State,” hence, mandated to implement
Section 10, paragraph 2, Article XII of the Constitution; and
4. Assuming GSIS is part of the State, whether it should give preference to the
petitioner, a Filipino corporation, over Renong Berhad, a foreign corporation,
in the sale of the controlling shares of the Manila Hotel Corporation.

III. Held

Yes, the provisions being cited by the petitioners are self-executing provisions. The provision being
cited by the petitioners is self-executing because it can already stand on itself and does not need other
legislation. Generally, most constitutional provisions are non-self-executing because they are just mere
guidelines, cannot stand on their own and needs further legislation to be executive. The second and third
paragraphs of Section 10, Article 12 of the Constitution are clearly self-executing provisions as it can
stand on its own. The said section completely states that preference for qualified Filipino Citizens must be
observed in cases involving national economy and patrimony.

Yes, the Manila Hotel is part of national patrimony. The Manila Hotel is included in the definition of
national patrimony because it has been a cultural landmark, overseeing the development of the city of
Manila for 8 decades (at time of the case) and important Filipino historical events has also been held
inside her halls. Furthermore, an entity owning of the 51 percent shares in the Manila Hotel would make
said entity as the majority owner of the hotel. The Manila Hotel Corporation, an object of national
patrimony, would cease to be a Filipino-owned company, if Renong Berhad will be allowed to buy the 51
percent of its shares.

Yes, GSIS is part of the State. Lastly, it was the State through the Committee on Privatization which
approved GSIS to sell its shares on the Manila Hotel under proclamation 50. This involves the State,
fulfilling the provision in the constitution wherein the State will give preference to qualified Filipinos in
matters of national economy and patrimony. Furthermore, GSIS is still part of the government. The GSIS
is an instrumentality that derives its authority from the State.

Yes, GSIS should give preference to the petitioner. As stated above, GSIS is part of the State. GSIS is
bound by the Constitution to give preference to qualified Filipinos in matters of national economy and
patrimony. Applying said constitutional provision, the GSIS should give prefer the Manila Prince Hotel
because the latter is a qualified Filipino while Renong Berhad is not.

Thereby, the Supreme Court ORDERS GSIS to stop the impending sale of the 51 percent of the Manila
Hotel Corporation to Renong Berhad and accept the bid of Manila Prince Hotel.

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