MANILA PRINCE HOTEL v.

GSIS
267 SCRA 408
February 3, 1997

Art. XII, Sec. 10 (Par. 2): In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified Filipinos.

FACTS:
Respondent Government Service Insurance System (GSIS) decided to auction 30% to 51% of
shares in the Manila Hotel Corporation (MHC). Only two bidders participated in the sale, held
on September 18, 1995: a) petitioner Manila Prince Hotel Corporation, a Filipino corporation
which offered P41.58 per share for 51%; and Renong Berhad, a Malaysian firm that offered to
purchase the same amount for P44.00 per share.

Pending Renong Berhad’s declaration as the winning bidder, petitioner matched the former’s bid
in a letter to the GSIS dated October 28, 1995. In a subsequent letter, petitioner sent a P33-M
check as bid security, which the GSIS refused. On October 17, 1995, petitioner filed for
prohibition and mandamus. On October 18, the Court issued a TRO on the sale.

Petitioner contends that, under Par. 2 of Sec. 10, Article XII of the 1987 Constitution, the Manila
Hotel is part of the national patrimony. Respondents’ arguments can be summarized thus: a) said
provision is not self-executing; b) the Manila Hotel does not fall under the national patrimony; c)
the mandate of the Constitution is addressed to the State, not the GSIS; and d) petitioners’
prayers for prohibition and mandamus should fail.

ISSUES:
1. Whether Par. 2 of Section 10, Article XII of the 1987 Constitution is not self-executing.
2. Whether the Manila Hotel falls under the national patrimony.
3. Whether the mandate of the Constitution pertains to the State and not to GSIS.
4. Whether the petitions for prohibition and mandamus should prosper.

HELD:
1. NO.
Unless it is expressly provided that legislation is needed to fulfill a constitutional mandate,
constituional provisions are presumed to be self-executory. This extends to Par. 2 of Sec. 10,
Article XII of the 1987 Constitution, which only seemed non-executory due to the style in
which it was written.

2. YES.
As explained by a member of the 1986 Constitutional Commission, the national patrimony
does not only include natural resources but also cultural heritage. Since its opening in 1912,
the hotel has been the site of major historic events for more than eight decades. Clearly, it has
become a cultural landmark and is part of the national patrimony.

3. NO.
The sale of 51% of MHC is carried out by the GSIS, which cannot have done so without the
State’s approval. This makes the sale a state action, which binds both the State and the GSIS
to the Constitution.

4. YES.
Par. 2 of Sec. 10, also known as the Filipino First Policy, makes it clear that preference for
owning the national patrimony will go to qualified Filipinos. In the instant case, petitioners’
matching of Renong Berhad’s bid qualifies them to acquire MHC. The GSIS’s refusal to
accept the bid thus constitutes a grave abuse of discretion.