1. Prince Hotel vs GSIS (Feb. 3, 1997, per Justice Josue N. Bellosillo).

Here, the Supreme Court directed the Government Service Insurance System to award the sale of
Manila Hotel to a losing Filipino bidder after it equaled the higher bid of a Malaysian competitor.
To justify the award, the Supreme Court cited this constitutional provision: “In the grant of rights,
privileges and concessions covering the national economy and patrimony, the State shall give
preference to qualified Filipinos.”

2. La Bugal-B’laan vs Ramos

This case involved a Financial and Technical Assistance Agreement (FTAA) entered into by
President Fidel V. Ramos with an Australian company. In its Jan. 27, 2004, decision (per Justice
Conchita Carpio Morales), the Supreme Court, voting 8-5, struck down major provisions of the
Mining Law of 1995 and its implementing regulations, as well as the FTAA for violating the
constitutional dictum requiring the development of natural resources to be “under the full control
and supervision of the State.”
Acting on the motion for reconsideration, the Supreme Court on Dec. 1, 2004, reversed
itself, 10-4. It upheld the said law, regulations and FTAA, because the Charter expressly authorized
the President to enter into FTAAs with foreign corporations for large-scale mining and impliedly
allowed the foreign partners some management covenants to assure that the billions they invested
would be used for the purposes intended, provided that ultimate full control remained with the
President.

3. Gamboa vs Teves (June 28, 2011, per Justice Carpio), held that the 40-percent
constitutional limitation on foreign ownership in public utilities should be computed only on the
“shares of stock entitled to vote in the election of directors… not to the total outstanding capital
stock,” which may include nonvoting shares.

4. Initiatives for Dialogue vs PSALM (October 9, 2012, per Justice Martin S. Villarama Jr.),
ruled that water flowing in a river is a natural resource reserved for Filipinos. However, once
“appropriated” by a qualified local company and “collected in a dam,” it becomes private in
character and may thereafter be used by a Korean firm to generate electricity.

National Economy and Patrimony

A. Goals (Sec. 1, Art. XII)
1. More equitable distribution of opportunities, income and wealth.
2. Sustained increase in the amount of goods and services produced by the nation for
the benefit of the people.
3. Expanding production as the key to raising the quality of life for all, especially the
underprivileged.
“The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of human
and natural resources, and which are competitive in both domestic and foreign markets.
However, the State shall protect Filipino enterprises against unfair foreign competition and
trade practices.”
B. NATURAL RESOURCES
1. REGALIAN DOCTRINE [JURA REGALIA]
 “The Universal feudal Theory that all land were held from the crown” as cited in
the case of Carino v. Insular Government (1909)

a. Section 2
 All lands of the public domain, waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural resources are owned
by the State. With the exception of agricultural lands, all other natural
resources shall not be alienated.

b. Case example:
Sunbeam Convenience food vs. Court of Appeals, 181 SCRA 443

 Adherence to the Regalian doctrine subjects all agricultural, timber, and mineral
lands to the dominion of the State. Thus, before any land may be declassified
from the forest group and converted into alienable or disposable land for
agricultural or other purposes, there must be a positive act from the
government. Even rules on the confirmation of imperfect titles do not apply
unless and until the land classified as forest land is released in an official
proclamation to that effect so that it may form part of the disposable agricultural
lands of the public domain.

The mere fact that a title was issued by the Director of Lands does not confer any validity on
such title if the property covered by the title or patent is part of the public forest.

Republic vs. Sayo 191 SCRA 71

 The absence of proof that a property is privately owned, the presumption is that
it belongs to the state. Thus, where there is no showing that the land had been
classified as alienable before the title was issued, any possession thereof, no
matter how lengthy, cannot ripen into ownership.
2. IMPERIUM AND DOMINIUM
Imperium- The government’s Authority possessed by the State which is appropriately
embrace in sovereignty. It is also the right to command, which includes the right to employ the
force of the state to enforce the laws.
Dominium- The Capacity of the State to own or acquire property.
3. CITIZENSHIP REQUIREMENTS:
a. For co-production, joint venture, or production-sharing agreements in exploration,
development, and utilization of natural resources – For Filipino Citizens, or Corporations or
associations at least 60% of whose capital is owned by such citizens. Such agreements may
be for a period not exceeding 25 years, renewable for not more than 25 years.
b. Use and enjoyment of the nation’s marine wealth in its archipelagic waters, territorial
sea and exclusive economic zone [P.D. 1599 (June 11, 1978); UN Convention on the Law of the
Sea (ratified by RP in August, 1983)]: Exclusively for Filipino citizens [Sec. 2, Art. XII].
c. Alienable lands of the public domain [which shall be limited to agricultural lands]:
Only Filipino citizens may acquire not more than 12 hectares by purchase, homestead or
grant; or lease not more than 500 hectares. Private corporations may lease not more than
1,000 hectares for 25 years, renewable for another 25 years.
d. Certain areas of investment [as Congress shall provide when the national interest so
dictates]: Reserved for Filipino citizens or corporations 60% of whose capital is Filipino
owned, although Congress may prescribe a higher percentage of Filipino ownership [Sec. 10,
Art. XII].
e. Franchise, certificate or any other form of authorization for the operation of a public
utility: Only to citizens of the Philippines, or corporations at least 60% of whose capital is
Filipino-owned [Sec. 11, Art. XII].
4. CLASSIFICATION OF LAND OF THE PUBLIC DOMAIN
 Lands of the public domain are classified into agricultural, forest or timber,
mineral lands and national parks. Agricultural lands may further be classified by
law according to the uses to which they may be devoted, x x x Taking into
account the requirements of conservation, ecology and development, and
subject to the requirements of agrarian reform, Congress shall determine, by
law, the size of lands of the public domain which may be acquired, developed,
held or leased and the conditions therefor [Sec. 3, Art. XII]. The classification of
public lands is a function of the executive branch of government, specifically the
Director of Lands, now the Director of the Land Management Bureau. The
decision of the Director, when approved by the Secretary of the Department of
Environment and Natural Resources, as to questions of fact, is conclusive upon
the courts [Republic v. Imperial, G.R. No. 130906, February 11, 1999].

a. Alienable lands of the public domain shall be limited to agricultural lands.

Case: In Palomo v. Court of Appeals, 266 SCRA 392, it was determined that the
lands subject of the decree of the Court of First Instance were not alienable lands of
the public domain, being part of the reservation for provincial park purposes and
thus part of the forest zone. Forest land cannot be owned by private persons; it is
not registrable, and possession thereof, no matter how lengthy, cannot convert it
 into private land, unless the land is reclassified and considered disposable and
alienable.
b. Private corporations or associations may not hold such alienable lands of the public
domain except by lease.

Case: In Meralco v. Casto-Bartolome, 114 SCRA 799, the Court held that as
between the State and Meralco, the land is still public land. It would cease to be
public land only upon the issuance of the certificate of title to any Filipino citizen
qualified to acquire the same. Meralco, being a juridical person, is disqualified.
However, this ruling was abandoned in Director of Lands v. Intermediate
Appellate Court and Acme Plywood & Veneer Co., 146 SCRA 509, where the
Supreme Court declared that the 1973 Constitution cannot impair vested rights.
Where the land was acquired in 1962 when corporations were allowed to acquire
lands not exceeding 1,024 hectares, the same may be registered in 1982, despite the
constitutional prohibition against corporations acquiring lands of the public
domain. This is the controlling doctrine today.
c. Congress shall determine the specific limits of forest lands and national parks,
marking clearly their boundaries on the ground [Sec. 5, Art. XII].
d. The State shall protect the rights of indigenous cultural communities to their
ancestral lands to ensure their economic, social and cultural well being [Sec. 5, Art. XII].
5. STEWARDSHIP CONCEPT
 The use of property bears a social function, and all economic agents shall
contribute to the common good. Individuals and private groups, including
corporations, cooperatives and similar collective organizations, shall have the
right to own, establish and operate economic enterprises, subject to the duty of
the State to promote distributive justice and to intervene when the common
good so demands [Sec. 6, Art. XII].

a. The State shall apply the principles of agrarian reform or stewardship, whenever
applicable in accordance with law, in the disposition or utilization of other natural
resources, including lands of the public domain under lease or concession suitable
to agriculture, subject to prior rights, homestead rights of small settlers, and the
rights of indigenous communities to their ancestral lands, x x x The State may
resettle landless farmers and farm workers in its own agricultural estates which
shall be distributed to them in the manner provided by law [Sec. 6, Art. XIII].

C. PRIVATE LANDS
1. General Rule : Save in cases of hereditary succession, no private lands shall be transferred
or conveyed except to individuals, corporations or associations qualified to acquire or hold
lands of the public domain [Sec. 7, Art. XII].
a. The primary purpose of the constitutional provision disqualifying aliens from
acquiring lands of the public domain and private lands is the conservation of the national
economy and patrimony.
b. Any sale or transfer in violation of the prohibition is null and void.
c. An action to recover the property sold filed by the former owner will lie.
 d. Land tenure is not indispensable to the free exercise of religious profession and
worship. Thus, a religious corporation, controlled by non- Filipinos, cannot acquire and own
lands even for a religious use or purpose.
e. However, land sold to an alien which was later transferred to a Filipino citizen — or
where the alien later becomes a Filipino citizen — can no longer be recovered by the vendor,
because there is no longer any public policy involved.
2. Exceptions to the rule
a. Hereditary Succession. This does not apply to testamentary dispositions [Ramirez v.
Vda. De Ramirez, 111 SCRA 704].
b. A natural born citizen of the Philippines who has lost his Philippine citizenship may
be a transferee of private lands, subject to limitations provided by law [Sec. 8, Art. XII].
c. Americans hold valid title to private lands as against private persons.
Case: In Republic v. Quasha, 46 SCRA 160, the Supreme Court held that
American citizens and American-owned and controlled corporations cannot validly acquire
private agricultural lands under the Parity Amendment, since the exceptional rights granted to
them under the said Amendment refer only to agricultural, mineral and timber lands of the
public domain and natural resources, and conduct and operation of public utilities.
3. Remedies to recover private land from disqualified alien
a. Escheat proceedings.
b. Action for reversion under the Public Land Act.
c. An action for recovery filed by the former Filipino owner.

D. Preference for Filipino Labor

 The State shall promote the preferential use of Filipino labor, domestic materials
and locally produced goods, and adopt measures that help make them
competitive [Sec. 12, Art. XII].

E. Practice of Profession
 The practice of all professions in the Philippines shall be limited to Filipino
citizens, save in cases prescribed by law [Sec. 14, Art. XII].
o Case: In Board of Medicine v. Yasuyuki Ota, G.R. No. 166097, July 14,
2008, the Supreme Court, while upholding the principle that the license
to practice medicine is a privilege or franchise granted by the
government, declared that the power to regulate the exercise of a
profession or pursuit of an occupation cannot be exercised by the State
or its agents in an arbitrary, despotic or oppressive manner.
F. COOPERATIVES
 The Congress shall create an agency to promote the viability and growth of
cooperatives as instruments for social justice and economic development [Sec.
15, Art. XII]. Read Republic Act No. 6939
o Case: In Cooperative Development Authority v. Dolefil Agrarian
Reform Beneficiaries Cooperative, G.R. No. 137489, May 29, 2002,
the Supreme Court said that, after ascertaining the clear legislative intent
of RA 6939, it now rules that the Cooperative Development Authority is
devoid of any quasi-judicial authority to adjudicate intra-cooperative
disputes and, more particularly, disputes related to the election of
officers and directors of cooperatives. It may, however, conduct hearings
and inquiries in the exercise of its administrative functions.

G. MONOPOLIES
1. The State shall regulate or prohibit monopolies when the public interest so requires.
No combinations in restraint of trade or unfair competition shall be allowed [Sec. 19, Art. XII].
a. A monopoly is “a privilege or peculiar advantage vested in one or more
persons or companies, consisting in the exclusive right (or power) to carry on a particular
business or trade, manufacture a particular article, or control the sale of a particular
commodity”. Clearly, monopolies are not per se prohibited by the Constitution but may be
permitted to exist to aid the government in carrying on an enterprise or to aid in the
performance of various services and functions in the interest of the public. However, because
monopolies are subject to abuses that can inflict severe prejudice to the public, they are
subjected to a higher level of State regulation than an ordinary business undertaking.
b. Be that as it may, in Tatad v. Secretary, Department of Energy, G.R. No.
124360, November 5, 1997, the Supreme Court declared that Sec. 19, Art. XII, is anti-trust in
history and spirit; it espouses competition. The desirability of competition is the reason for the
prohibition against restraint of trade, the reason for the interdiction of unfair competition, and
the reason for the prohibition of unmitigated monopolies. A market controlled by one player
(monopoly) or dominated by a handful of players (oligopoly) is hardly the market where
honest to-goodness competition will prevail. In this case, it cannot be denied that our
downstream oil industry is operated and controlled by an oligopoly, foreign oligopoly at that.
So, if only to help the many who are poor from further suffering as a result of unmitigated
increase in the prices of oil products due to deregulation, it is a must that R.A. 8180 be repealed
completely.
c. However, in Tanada v. Angara, 272 SCRA 18, the Supreme Court said that
the World Trade Organization (WTO) Agreement did not violate Sec. 19, Art. II, nor Secs. 19 and
12, Art. XII, because these sections should be read and understood in relation to Sections 1 and
13, Art. XII, which require the pursuit of a trade policy that “serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and reciprocity”. Note,
further, Association of Philippine Coconut Desiccators v. Philippine Coconut Authority,
G.R. No. 110526, February 10, 1998, where the Supreme Court declared that although the
Constitution enshrines free enterprise as a policy, it nevertheless reserves to the Government
the power to intervene whenever necessary for the promotion of the general welfare, as
reflected in Secs. 6 and 19, Art. XII.
 d. Thus, in Pharmaceutical and Health Care Association of the Philippines v.
Duque, G.R. No. 173034, October 9, 2007, the Court said that the framers of the Constitution
were well aware that trade must be subjected to some form of regulation for the public good.
Public interest must be held over business interests. In Pest Management Association of the
Philippines v. Fertilizer and Pesticide Authority, G.R. No. 156041, February 21, 2007, it was
held that “free enterprise does not call for the removal of protective regulations; it must be
clearly explained and proven by competent evidence just exactly how such protective
regulation would result in restraint of trade.
H. Central Monetary Authority
 The Congress shall establish an independent central monetary authority, the members
of whose governing board must be naturalborn Filipino citizens, of known probity,
integrity and patriotism, the majority of whom shall come from the private sector, x x x
The authority shall provide policy direction in the areas of money, banking and credit. It
shall have supervision over the operations of banks and exercise such regulatory
powers as may be provided by law over the operations of finance companies and other
institutions performing similar functions, x x x Until Congress otherwise provides, the
Central Bank of the Philippines, operating under existing laws, shall function as the
central monetary authority [Sec. 20, Art. XII].