14.

Manila Prince Hotel vs GSIS Name of Digester: Fred Bucu

G.R. No. 122156 Date: February 3, Ponente:

1997
Subject / Syllabus Topic: State Principles and Policies
Petitioner: Manila Prince Hotel Respondent: GSIS, Manila Hotel Corporation, Committee on
Privatization, and Office of the Government Corporate Counsel
Doctrine: Unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the presumption
now is that all provisions of the constitution are self-executing
Sect. 10, second par. Art. XII
Facts:
 The Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine Government
under Proclamation 50 in 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding shares of
the Manila Hotel (MHC).
 In a close bidding in 1995,only two bidders participated: 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 hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid
of petitioner. Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the execution of the
necessary contracts, the Manila Prince Hotel matched the bid price of P44.00 per share tendered by Renong Berhad in a
letter to GSIS.
 Manila Prince Hotel sent a manager’s check to the GSIS in a subsequent letter, but which GSIS refused to accept.
 Perhaps apprehensive that GSIS has disregarded the tender of the matching bid and that the sale of 51% of the MHC may
be hastened by GSIS and consummated with Renong Berhad, Manila Prince Hotel came to the Court on prohibition and
mandamus.
 Petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel “has been
identified with the Filipino nation and has practically become a historical monument… To all intents and purposes, it has
become a part of the national patrimony.”
 Petitioner also argues that since 51% of the shares of the MHC carries with it the ownership of the business of the hotel
which is owned by GSIS, a government-owned and controlled corporation, the hotel business of GSIS being a part of the
tourism industry is unquestionably a part of the national economy. Thus, any transaction involving 51% of the shares of
stock of the MHC is clearly covered by the term national economy, to which Sec. 10, second par., Art. XII, 1987
Constitution, applies.
 It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also
unquestionably part of the national economy, petitioner should be preferred after it has matched the bid offer of the
Malaysian firm. For the bidding rules (prepared by GSIS themselves) mandate that if for any reason, the Highest Bidder
cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids
provided that these Qualified Bidders are willing to match the highest bid in terms of price per share.
 Respondents except. They maintain that: Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of
principle and policy since it is not a self-executing provision and requires implementing legislation(s) x x x x Thus, for the
said provision to operate, there must be existing laws “to lay down conditions under which business may be done."
Issue/s: Ruling:
 W/N the provisions of the Constitution,  WHEREFORE, respondents directed to CEASE and DESIST
particularly Article XII Section 10, even without from selling 51% of the shares of the MHC to Renong Berhad,
implementing legislation, are self-executing? and to ACCEPT the matching bid of petitioner.
Holding:
 YES. A provision which lays down a general principle, such as those found in Article II of the 1987 Constitution, is usually
not self-executing. But a provision which is complete in itself and becomes operative without the aid of supplementary
or enabling legislation, or that which supplies sufficient rule by means of which the right it grants may be enjoyed or
protected, is self-executing. Thus, a constitutional provision is self-executing if the nature and extent of the right
conferred and the liability imposed are fixed by the constitution itself, so that they can be determined by an
examination and construction of its terms, and there is no language indicating that the subject is referred to the
legislature for action.
 In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers
directly granted by the constitution, further the operation of such a provision, prescribe a practice to be used for its
enforcement, provide a convenient remedy for the protection of the rights secured or the determination thereof, or place
reasonable safeguards around the exercise of the right.
  The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-executing
constitutional provision does not render such a provision ineffective in the absence of such legislation. The omission
from a constitution of any express provision for a remedy for enforcing a right or liability 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 any legislation must be in harmony with the constitution, further the exercise of constitutional right and
make it more available. Subsequent legislation however does not necessarily mean that the subject constitutional
provision is not, by itself, fully enforceable.
 As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and have
often become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that
of statutory enactments, and the function of constitutional conventions has evolved into one more like that of a legislative
body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the
presumption now is that all provisions of the constitution are self-executing.
 If the constitutional provisions are treated as requiring legislation instead of self-executing, the legislature would have the
power to ignore and practically nullify the mandate of the fundamental law. In fine, Section 10, second paragraph, Art.
XII of the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs no further
guidelines or implementing laws or rules for its enforcement. From its very words the provision does not require any
legislation to put it in operation.

Notes:
The cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies,
which are basically not self-executing and only placed in the Constitution as moral incentives to legislation, not as judicially
enforceable rights—are simply not in point.
 Basco v. Philippine Amusements and Gaming Corporation speaks of constitutional provisions on personal dignity, role of
the youth in nation-building, the promotion of social justice, and the values of education.
 Tolentino v. Secretary of Finance refers to constitutional provisions on social justice and human rights and on education.
 Lastly, Kilosbayan, Inc. v. Morato cites provisions on the promotion of general welfare, vital role of the youth in nation-
building and the promotion of total human liberation and development.
A reading of these provisions indeed clearly shows that they are not judicially enforceable constitutional rights but merely
guidelines for legislation. The very terms of the provisions manifest that they are only principles upon which legislations must
be based. Res ipsa loquitur.

On the other hand, Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in
itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision
does not require any legislation to put it in operation. It is per se judicially enforceable.