UP LAW BOC CONSTITUTIONAL LAW 1 VIII. National Economy and Patrimony Goals (1) More equitable distribution of ‘opportunities, income and wealth (2) Sustained increase in 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. ‘A. REGALIAN DOCTRINE Art. Xil, Sec. 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. The classification of public lands is an exclusive prerogative of the Executive Department through the Office of the President. [Republic v. Register of Deeds of Quezon (1994)] A.1, DOCTRINE OF NATIVE TITLE Ownership over native land is already vested on natives even if they do not have formal titles [Carifio v. Insular Government, 212 U.S. 449 (1909)] POLITICAL LAW. B. NATIONALIST AND CITIZENSHIP REQUIREMENT PROVISIONS ad Cg aa er oe (a) Use and tnjoyment of sharin vest, crease to Flipine citizens [Art. Xl, Sec. 2, par. a + Rules on greut fret tenes (art. Xi), See. 3) () Citizens may lease only 500 ha (2) Citizens may acquire by purchase, homestead or grant only <12 ha (b) Practice of professions, provided by low [are xi), Sec. 14(2)] (c) Small-scale utilization of natural resources, a5, may be provided by low [art xi, See. 2(3)] PAGE 90 OF 413 Cate Corea ee (a) Co- production, Joint venture, and Production sharing egreaments over natural resources [art xil, Sec. 2m) + Agreements shall not exceed period of 25 years renewable for another 25 years, (b) Educational Institutions [Are XIV, See. 4(2)] Congress may Increase Filipino equity participation. (c) Areas of Investment as Congress may prescribe (Congress may prescribe a higher percentage] (Are. xil, Sec. 10] (a) Operation of public utilities (art. xii, Sec. 11) 2 Cannot be forlonger period than 50 years > Executive and managing officers must be Filipino Gia er) Filipin lea) Engagement in advertising Industry [art XVI, Sec. I]UP LAW BOC NB. The Const. holds that private corporations or associations may not hold alienable lands of the public domain except by lease, for a period not exceeding 25 years, renewable for not more than 25 years, and not to exceed 1000 ha. in area, [Art. XIl, Sec. 3] but the Const, does not specify the capital requirements for such corporations. A public utility is a business or service engaged in regularly supplying the public with some commodity or service of public consequence. A joint venture falls within the purview of an “association” pursuant to Sec. Ti, Art. XII and must comply with the 60% Filipino-foreign capitalization ment. JG Summit Holdings v. CA What “capital” is covered: the 60% requirement applies to both the voting control and the beneficial ownership of the public utility, Therefore, it shall apply uniformly, separately, and across the board to all classes of shares, regardless of nomenclature or category, comprising the capital of the corporation. (e.g. 60% of common stock, 60% of preferred voting stock, and 60% of preferred non-voting stock.) [Gamboa v. Teves, G.R. No. 176579, October 9, 2012) Interpretation in line with Constitution's intent to. ensure a “self-reliant and independent national economy effectively- controlted by Filipinos.” (See Gamboa v. Teves, supra, June 28, 2011) In the original decision, only the voting stocks were subject to the 60% requirement. [Id.] There is some controversy in the interpretation of the resolution on the motion for reconsideration. (a) There is the question of whether the grandfather rule should be applied. (b)The dispositive merely denied the MRs, but did not reiterate the newer interpretation In any case, the released SEC guidelines comply with the strictest interpretation of Gamboa v. Teves. CONSTITUTIONAL LAW 1 POLITICAL LAW. B.1. FILIPINO FIRST Art. XIl, Sec. 10. 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. The term “patrimony” pertains to heritage, and given the history of the Manila Hotel, it has become a part of our national economy and patrimony. Thus, the Filipino First policy provision of the Constitution is applicable. Such provision is per se enforceable, and requires no further guidelines or implementing rules or laws for its operation. (Manila Prince Hotel v. GSIS, (1990)] The Constitution does not impose a policy of Filipino monopoly of the _ economic environment. It does not rule out the entry of foreign investments, goods, and services. While it does not encourage their unlimited entry into the country, it dees not prohibit them either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition that is unfair. The key, as in all economies in the world, is to strike a balance between protecting local businesses and allowing the entry of foreign investments and services, [Tariada v. Angara (1997)] Art. Xil, Sec. 12, The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive PAGE S10F 413UP LAW BOC CONSTITUTIONAL LAW 1 C. EXPLORATION, DEVELOPMENT, AND UTILIZATION OF NATURAL RESOURCES ‘Art. Xil, Sec. 2, par. 4. The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for _—_ large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources. The State, being the owner of the natural resources, is accorded the primary power and responsibility in the exploration, development and utilization thereof. As such it may undertake these activities through four modes: (1) The State may directly undertake such activities; (2) The State may enter into co-production, joint venture or production-sharing agreements with Filipino citizens or qualified corporations; (3) Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens; or (4) For the large-scale exploration, development and utilization of minerals, petroleum and other mineral oils, the President may enter into agreements with foreign-owned corporations involving technical or _ financial assistance. [La Bugal-B'Laan Tribal Assn. v, Ramos (Jan. 2004)] POLITICAL LAW. 7 Ba ereo ay (1987 Con: (1973 Const.) Parties Only the ‘Filipino citizen, corporation President (in or association with a “foreign behalf ofthe person or entity” State), and onty with corporations Size of Activities Only large- Contractor provides all scale necessary services and exploration, _ technology and the requisite development financing, performs the and utilization exploration work obligations, and assumes all exploration risks Natural Resources Covered Minerals, Virtually the entire range of petroleum and the countrys natural other mineral resources oils Scope of Agreements Involving either | Contractor provides financial financial or —_or technical resources, technical undertakes the exploitation or assistance production of a given resource, or directly manages the productive enterprise, ‘operations of the exploration and exploitation of the resources or the disposition (of marketing or resources, Service Contracts not prohibited. Even supposing FTAAs are service contracts, the latter are not prohibited under the Constitution. (Justification: A verba legis interpretation does not support an intended prohibition. The members of the CONCOM used the terms “service contracts” and “financial and technical assistance” interchangeably.] [Lo Bugal-B'aan Tribal Assn. v. Ramos, (Dec. 2004)] PAGE 92 OF 413