Constitutional Law II Part 1 - Due Process and Equal Protection

7/25/2019 Constitutional Law II Part 1 - Due Process and Equal Protection

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CONSTITUTIONAL LAW II: Due Process and Equal Protection asLimitations on Police Power, Eminent Domain and Taation

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A" #undamental Princi$les on Constitutional Law and t%e &ill o' (i)%ts"""""""""""""""""""""""" """"""*

+anila Prince otel -s" .SIS /."(" No" !**!01 #e2ruar3 4, !5567""""""""""""""""""""""""""""""""*

Tanada -s" An)ara /."(" No" !!8*50 +a3 *, !5567""""""""""""""""""""""""""""""" """""""""""""" """"""" ""*1

Domino -s" Comelec /."(" No" !49!0 ;ul3 !5, !5557"""""""""""""""""""""""""""""""""""""""""""""""""48

Pamaton) -s" Comelec /."(" No" !1!86* A$ril !4, *97"""""""""""""""""""" """""""" """"90


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marine =one as cited in t%e 'irst and second $ara)ra$%s o' Sec" *, Art" JII, !586Constitution" Accordin) to res$ondents, w%ile $etitioner s$eaFs o' t%e )uests w%o %a-esle$t in t%e %otel and t%e e-ents t%at %a-e trans$ired t%erein w%ic% maFe t%e %otel %istoric,t%ese alone do not maFe t%e %otel 'all under t%epatrimonyo' t%e nation" W%at is more, t%emandate o' t%e Constitution is addressed to t%e State, not to res$ondent .SIS w%ic%$ossesses a $ersonalit3 o' its own se$arate and distinct 'rom t%e P%ili$$ines as a State"

&hird, )rantin) t%at t%e +anila otel 'orms $art o' t%e national patrimony, t%e constitutional

$ro-ision in-oFed is still ina$$lica2le since w%at is 2ein) sold is onl3 0!G o' t%eoutstandin) s%ares o' t%e cor$oration, not t%e %otel 2uildin) nor t%e land u$on w%ic% t%e2uildin) stands" Certainl3, 0!G o' t%e equit3 o' t%e +C cannot 2e considered $art o't%e national patrimony" +oreo-er, i' t%e dis$osition o' t%e s%ares o' t%e +C is reall3contrar3 to t%e Constitution, $etitioner s%ould %a-e questioned it ri)%t 'rom t%e 2e)innin)and not a'ter it %ad lost in t%e 2iddin)"

Fourth, t%e reliance 23 $etitioner on $ar" @", su2$ar" ;" !", o' t%e 2iddin) rules w%ic%$ro-ides t%at if for any reason, the ighest !idder cannot be a%arded the !lock ofShares, "SIS may offer this to the other 'ualified !idders that have validly submitted bidsprovided that these 'ualified !idders are %illing to match the highest bid in terms of priceper share, is mis$laced" (es$ondents $ostulate t%at t%e $ri-ile)e o' su2mittin) a matc%in)2id %as not 3et arisen since it onl3 taFes $lace if for any reason, the ighest !idder cannotbe a%arded the !lock of Shares" T%us t%e su2mission 23 $etitioner o' a matc%in) 2id is

$remature since (enon) &er%ad could still -er3 well 2e awarded t%e 2locF o' s%ares andt%e condition )i-in) rise to t%e eercise o' t%e $ri-ile)e to su2mit a matc%in) 2id %ad not3et taFen $lace"

Finally, t%e $ra3er 'or $ro%i2ition )rounded on )ra-e a2use o' discretion s%ould 'ail sinceres$ondent .SIS did not eercise its discretion in a ca$ricious, w%imsical manner, and i'e-er it did a2use its discretion it was not so $atent and )ross as to amount to an e-asiono' a $ositi-e dut3 or a -irtual re'usal to $er'orm a dut3 en?oined 23 law" Similarl3, t%e$etition 'or mandamuss%ould 'ail as $etitioner %as no clear le)al ri)%t to w%at it demandsand res$ondents do not %a-e an im$erati-e dut3 to $er'orm t%e act required o' t%em 23$etitioner"

We now resol-e" A constitution is a s3stem o' 'undamental laws 'or t%e )o-ernance andadministration o' a nation" It is su$reme, im$erious, a2solute and unaltera2le ece$t 23

t%e aut%orit3 'rom w%ic% it emanates" It %as 2een de'ined as t%efundamental andparamount la% of the nation" $1It $rescri2es t%e $ermanent 'rameworF o' a s3stem o')o-ernment, assi)ns to t%e di''erent de$artments t%eir res$ecti-e $owers and duties, andesta2lis%es certain 'ied $rinci$les on w%ic% )o-ernment is 'ounded" T%e 'undamentalconce$tion in ot%er words is t%at it is a su$reme law to w%ic% all ot%er laws must con'ormand in accordance wit% w%ic% all $ri-ate ri)%ts must 2e determined and all $u2lic aut%orit3administered" $$Under t%e doctrine o' constitutional su$remac3, i' a law or contract-iolates an3 norm o' t%e constitution t%at law or contract w%et%er $romul)ated 23 t%ele)islati-e or 23 t%e eecuti-e 2ranc% or entered into 23 $ri-ate $ersons 'or $ri-ate$ur$oses is null and -oid and wit%out an3 'orce and e''ect" T%us, since the .onstitution isthe fundamental, paramount and supreme la% of the nation, it is deemed %ritten in everystatute and contract"

Admittedl3, some constitutions are merel3 declarations o' $olicies and $rinci$les" T%eir

$ro-isions command t%e le)islature to enact laws and carr3 out t%e $ur$oses o' t%e'ramers w%o merel3 esta2lis% an outline o' )o-ernment $ro-idin) 'or t%e di''erentde$artments o' t%e )o-ernmental mac%iner3 and securin) certain 'undamental and

inaliena2le ri)%ts o' citi=ens" $%A $ro-ision w%ic% la3s down a )eneral $rinci$le, suc% ast%ose 'ound in Art" II o' t%e !586 Constitution, is usuall3 not sel'>eecutin)" &ut a $ro-isionw%ic% is com$lete in itsel' and 2ecomes o$erati-e wit%out t%e aid o' su$$lementar3 orena2lin) le)islation, or t%at w%ic% su$$lies su''icient rule 23 means o' w%ic% t%e ri)%t it)rants ma3 2e en?o3ed or $rotected, is sel'>eecutin)" T%us a constitutional $ro-ision issel'>eecutin) i' t%e nature and etent o' t%e ri)%t con'erred and t%e lia2ilit3 im$osed are'ied 23 t%e constitution itsel', so t%at t%e3 can 2e determined 23 an eamination andconstruction o' its terms, and t%ere is no lan)ua)e indicatin) t%at t%e su2?ect is re'erred to

t%e le)islature 'or action" $*

As a)ainst constitutions o' t%e $ast, modern constitutions %a-e 2een )enerall3 dra'tedu$on a di''erent $rinci$le and %a-e o'ten 2ecome in e''ect etensi-e codes o' lawsintended to o$erate directl3 u$on t%e $eo$le in a manner similar to t%at o' statutor3enactments, and t%e 'unction o' constitutional con-entions %as e-ol-ed into one more liFet%at o' a le)islati-e 2od3" ence, unless it is e$ressl3 $ro-ided t%at a le)islati-e act isnecessar3 to en'orce a constitutional mandate, t%e $resum$tion now is t%at all $ro-isionso' t%e constitution are sel'>eecutin) I' t%e constitutional $ro-isions are treated asrequirin) le)islation instead o' sel'>eecutin), t%e le)islature would %a-e t%e $ower toi)nore and $racticall3 nulli'3 t%e mandate o' t%e 'undamental law"$/T%is can 2ecatacl3smic" T%at is w%3 t%e $re-ailin) -iew is, as it %as alwa3s 2een, t%at

" " " in case o' dou2t, t%e Constitution s%ould 2e considered sel'>eecutin) rat%er t%an non>

sel'>eecutin) " " " " Unless t%e contrar3 is clearl3 intended, t%e $ro-isions o' t%eConstitution s%ould 2e considered sel'>eecutin), as a contrar3 rule would )i-e t%ele)islature discretion to determine w%en, or w%et%er, t%e3 s%all 2e e''ecti-e" T%ese$ro-isions would 2e su2ordinated to t%e will o' t%e lawmaFin) 2od3, w%ic% could maFet%em entirel3 meanin)less 23 sim$l3 re'usin) to $ass t%e needed im$lementin) statute" $&

(es$ondents ar)ue t%at Sec" !, second $ar", Art" JII, o' t%e !586 Constitution is clearl3not sel'>eecutin), as t%e3 quote 'rom discussions on t%e 'loor o' t%e !581 ConstitutionalCommission

+(" (OD(I.O" +adam President, I am asFin) t%is question as t%e C%airman o' t%eCommittee on St3le" I' t%e wordin) o' HP(E#E(ENCEH is )i-en to UALI#IED#ILIPINOS,H can it 2e understood as a $re'erence to quali'ied #ili$inos vis(a(vis #ili$inosw%o are not quali'ied" So, w%3 do we not maFe it clear To quali'ied #ili$inos as a)ainst

aliensTE P(ESIDENT" W%at is t%e question o' Commissioner (odri)o Is it to remo-e t%eword HUALI#IEDH"

+(" (OD(I.O" No, no, 2ut sa3 de'initel3 HTO UALI#IED #ILIPINOSH as a)ainst w%omAs a)ainst aliens or o-er aliens

+(" NOLLEDO" +adam President, I t%inF t%at is understood" We use t%e wordHUALI#IEDH 2ecause t%e existing la%s or prospective la%s %ill al%ays lay do%nconditions under %hich business may be done"For example, qualifications on the settingup of other financial structures, et cetera/em$%asis su$$lied 23 res$ondents7

+(" (OD(I.O" It is ?ust a matter o' st3le"

+(" NOLLEDO sel'>eecutin) 2ut sim$l3 'or $ur$oses o' st3le" &ut, certainl3, t%ele)islature is not $recluded 'rom enactin) ot%er 'urt%er laws to en'orce t%e constitutional


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$ro-ision so lon) as t%e contem$lated statute squares wit% t%e Constitution" +inor detailsma3 2e le't to t%e le)islature wit%out im$airin) t%e sel'>eecutin) nature o' constitutional$ro-isions"

In sel'>eecutin) constitutional $ro-isions, t%e le)islature ma3 still enact le)islation to'acilitate t%e eercise o' $owers directl3 )ranted 23 t%e constitution, 'urt%er t%e o$erationo' suc% a $ro-ision, $rescri2e a $ractice to 2e used 'or its en'orcement, $ro-ide acon-enient remed3 'or t%e $rotection o' t%e ri)%ts secured or t%e determination t%ereo', or

$lace reasona2le sa'e)uards around t%e eercise o' t%e ri)%t" T%e mere 'act t%atle)islation ma3 su$$lement and add to or $rescri2e a $enalt3 'or t%e -iolation o' a sel'>eecutin) constitutional $ro-ision does not render suc% a $ro-ision ine''ecti-e in t%ea2sence o' suc% le)islation" T%e omission 'rom a constitution o' an3 e$ress $ro-ision 'ora remed3 'or en'orcin) a ri)%t or lia2ilit3 is not necessaril3 an indication t%at it was notintended to 2e sel'>eecutin)" T%e rule is t%at a sel'>eecutin) $ro-ision o' t%e constitutiondoes not necessaril3 e%aust le)islati-e $ower on t%e su2?ect, 2ut an3 le)islation must 2ein %armon3 wit% t%e constitution, 'urt%er t%e eercise o' constitutional ri)%t and maFe itmore a-aila2le" $-Su2sequent le)islation %owe-er does not necessaril3 mean t%at t%esu2?ect constitutional $ro-ision is not, 23 itsel', 'ull3 en'orcea2le"

(es$ondents also ar)ue t%at t%e non>sel'>eecutin) nature o' Sec" !, second $ar", o' Art"JII is im$lied 'rom t%e tenor o' t%e 'irst and t%ird $ara)ra$%s o' t%e same section w%ic%undou2tedl3 are not sel'>eecutin)" $0T%e ar)ument is 'lawed" I' t%e 'irst and t%ird

$ara)ra$%s are not sel'>eecutin) 2ecause Con)ress is still to enact measures toencoura)e t%e 'ormation and o$eration o' enter$rises 'ull3 owned 23 #ili$inos, as in t%e'irst $ara)ra$%, and t%e State still needs le)islation to re)ulate and eercise aut%orit3 o-er'orei)n in-estments wit%in its national ?urisdiction, as in t%e t%ird $ara)ra$%, t%en afortiori,23 t%e same lo)ic, t%e second $ara)ra$% can onl3 2e sel'>eecutin) as it does not 23 itslan)ua)e require an3 le)islation in order to )i-e $re'erence to quali'ied #ili$inos in t%e)rant o' ri)%ts, $ri-ile)es and concessions co-erin) t%e national econom3 and $atrimon3"A constitutional $ro-ision ma3 2e sel'>eecutin) in one $art and non>sel'>eecutin) inanot%er" $,

E-en t%e cases cited 23 res$ondents %oldin) t%at certain constitutional $ro-isions aremerel3 statements o' $rinci$les and $olicies, w%ic% are 2asicall3 not sel'>eecutin) andonl3 $laced in t%e Constitution as moral incenti-es to le)islation, not as ?udiciall3en'orcea2le ri)%ts are sim$l3 not in $oint" !asco v" Philippine musements and

"aming .orporation%1s$eaFs o' constitutional $ro-isions on $ersonal di)nit3, %$t%esanctit3 o' 'amil3 li'e, %%t%e -ital role o' t%e 3out% in nation>2uildin) %*t%e $romotion o'social ?ustice, %/and t%e -alues o' education" %&&olentino v" Secretary of Finance %'re'ersto t%e constitutional $ro-isions on social ?ustice and %uman ri)%ts %-and oneducation" %0Lastl3, 0ilosbayan, Inc"v" Morato %,cites $ro-isions on t%e $romotion o')eneral wel'are, *1t%e sanctit3 o' 'amil3 li'e, *$t%e -ital role o' t%e 3out% in nation>2uildin) *%and t%e $romotion o' total %uman li2eration and de-elo$ment" **A readin) o't%ese $ro-isions indeed clearl3 s%ows t%at t%e3 are not ?udiciall3 en'orcea2le constitutionalri)%ts 2ut merel3 )uidelines 'or le)islation" T%e -er3 terms o' t%e $ro-isions mani'est t%att%e3 are onl3 $rinci$les u$on w%ic% t%e le)islations must 2e 2ased" #es ipsa loquitur"

On t%e ot%er %and, Sec" !, second $ar", Art" JII o' t%e o' t%e !586 Constitution is amandator3, $ositi-e command w%ic% is com$lete in itsel' and w%ic% needs no 'urt%er)uidelines or im$lementin) laws or rules 'or its en'orcement" #rom its -er3 words t%e

$ro-ision does not require an3 le)islation to $ut it in o$eration" It is per se?udiciall3en'orcea2le W%en our Constitution mandates t%at 1i2n the grant of rights, privileges, andconcessions covering national economy and patrimony, the State shall give preference to

qualified Filipinos, it means ?ust t%at quali'ied #ili$inos s%all 2e $re'erred" And w%en ourConstitution declares t%at a ri)%t eists in certain s$eci'ied circumstances an action ma32e maintained to en'orce suc% ri)%t notwit%standin) t%e a2sence o' an3 le)islation on t%esu2?ect consequentl3, i' t%ere is no statute es$eciall3 enacted to en'orce suc%constitutional ri)%t, suc% ri)%t en'orces i tsel' 23 its own in%erent $otenc3 and $uissance,and 'rom w%ic% all le)islations must taFe t%eir 2earin)s" W%ere t%ere is a ri)%t t%ere is aremed3" 3bi 4us ibi remedium"

As re)ards our national patrimony, a mem2er o' t%e !581 ConstitutionalCommission */e$lains

T%e $atrimon3 o' t%e Nation t%at s%ould 2e conser-ed and de-elo$ed re'ers not onl3 toout ric% natural resources 2ut also to t%e cultural %erita)e o' out race" It also re'ers to ourintelli)ence in arts, sciences and letters" T%ere'ore, we s%ould de-elo$ not onl3 our lands,'orests, mines and ot%er natural resources 2ut also t%e mental a2ilit3 or 'acult3 o' our$eo$le"

We a)ree" In its $lain and ordinar3 meanin), t%e term $atrimon3 $ertains to%erita)e" *&W%en t%e Constitution s$eaFs o' national $atrimon3, it re'ers not onl3 to t%enatural resources o' t%e P%ili$$ines, as t%e Constitution could %a-e -er3 well used t%eterm natural resources, 2ut also to t%e cultural heritageo' t%e #ili$inos"

+anila otel %as 2ecome a landmarF a li-in) testimonial o' P%ili$$ine %erita)e" W%ile it

was restricti-el3 an American %otel w%en it 'irst o$ened in !5!*, it immediatel3 e-ol-ed to2e trul3 #ili$ino, #ormerl3 a concourse 'or t%e elite, it %as since t%en 2ecome t%e -enue o'-arious si)ni'icant e-ents w%ic% %a-e s%a$ed P%ili$$ine %istor3" It was called t%e .ultural.enter of the 56789s" It was t%e site o' t%e 'esti-ities durin) t%e inau)uration o' t%eP%ili$$ine Commonwealt%" Du22ed as t%e fficial "uest ouse of the Philippine"overnment" it $la3s %ost to di)nitaries and o''icial -isitors w%o are accorded t%etraditional P%ili$$ine %os$italit3" *'

T%e %istor3 o' t%e %otel %as 2een c%ronicled in t%e 2ooF &he Manila otel:&he eart andMemory of a .ity" *-Durin) World War II t%e %otel was con-erted 23 t%e ;a$anese +ilitar3Administration into a militar3 %eadquarters" W%en t%e American 'orces returned toreca$ture +anila t%e %otel was selected 23 t%e ;a$anese to)et%er wit% Intramuros as t%etwo /*7 $laces 'ro t%eir 'inal stand" T%erea'ter, in t%e !50Ms and !51Ms, t%e %otel 2ecamet%e center o' $olitical acti-ities, $la3in) %ost to almost e-er3 $olitical con-ention" In !56

t%e %otel reo$ened a'ter a reno-ation and rea$ed numerous international reco)nitions, anacFnowled)ment o' t%e #ili$ino talent and in)enuit3" In !581 t%e %otel was t%e site o' a'ailed coup d9 etat w%ere an as$irant 'or -ice>$resident was H$roclaimedH President o' t%eP%ili$$ine (e$u2lic"

#or more t%an ei)%t /87 decades +anila otel %as 2ore mute witness to t%e trium$%s and'ailures, lo-es and 'rustrations o' t%e #ili$inos its eistence is im$ressed wit% $u2licinterest its own %istoricit3 associated wit% our stru))le 'or so-erei)nt3, inde$endence andnation%ood" @eril3, +anila otel %as 2ecome $art o' our national econom3 and $atrimon3"#or sure, 0!G o' t%e equit3 o' t%e +C comes wit%in t%e $ur-iew o' t%e constitutionals%elter 'or it com$rises t%e ma?orit3 and controllin) stocF, so t%at an3one w%o acquires orowns t%e 0!G will %a-e actual control and mana)ement o' t%e %otel" In t%is instance, 0!Go' t%e +C cannot 2e disassociated 'rom t%e %otel and t%e land on w%ic% t%e %otel edi'icestands" Consequentl3, we cannot sustain res$ondentsM claim t%at t%eFilipino FirstPolicy$ro-ision is not a$$lica2le since %hat is being sold is only :5;o' t%e outstandingshares of the corporation, not the otel building nor the land upon %hich the buildingstands" *0


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T%e ar)ument is $ure so$%istr3" T%e term qualified Filipinosas used in Our Constitutionalso includes cor$orations at least 1G o' w%ic% is owned 23 #ili$inos" T%is is -er3 clear'rom t%e $roceedin)s o' t%e !581 Constitutional Commission

TE P(ESIDENT" Commissioner Da-ide is reco)ni=ed"

+(" DA@IDE" I would l iFe to introduce an amendment to t%e Nolledo amendment" And t%eamendment would consist in su2stitutin) t%e words HUALI#IED #ILIPINOSH wit% t%e'ollowin): HCITIENS O# TE PILIPPINES O( CO(PO(ATIONS O( ASSOCIATIONSWOSE CAPITAL O( CONT(OLLIN. STOCB IS WOLL< OWNED &< SUCCITIENS"

+(" +ONSOD" +adam President, a$$arentl3 t%e $ro$onent is a)reea2le, 2ut we %a-e toraise a question" Su$$ose it is a cor$oration t%at is 8>$ercent #ili$ino, do we not )i-e it$re'erence

+(" DA@IDE" T%e Nolledo amendment would re'er to an indi-idual #ili$ino" W%at a2out acor$oration w%oll3 owned 23 #ili$ino citi=ens

+(" +ONSOD" At least 1 $ercent, +adam President"

+(" DA@IDE" Is t%at t%e intention

+(" +ONSOD" controlled 23 #ili$inos" /1

T%e $%rase $re'erence to quali'ied #ili$inos was e$lained t%us

+(" #O" +adam President, I would liFe to request Commissioner Nolledo to $leaserestate %is amendment so t%at I can asF a question"

+(" NOLLEDO" HIN TE .(ANT O# (I.TS, P([email protected] AND CONCESSIONSCO@E(IN. TE NATIONAL ECONO+< AND PAT(I+ON


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(es$ondents 'urt%er ar)ue t%at t%e constitutional $ro-ision is addressed to t%e State, notto res$ondent .SIS w%ic% 23 itsel' $ossesses a se$arate and distinct $ersonalit3" T%isar)ument a)ain is at 2est s$ecious" It is undis$uted t%at t%e sale o' 0!G o' t%e +C couldonl3 2e carried out wit% t%e $rior a$$ro-al o' t%e State actin) t%rou)% res$ondentCommittee on Pri-ati=ation" As correctl3 $ointed out 23 #r" ;oaquin ." &ernas, S";", t%is'act alone maFes t%e sale o' t%e assets o' res$ondents .SIS and +C a Hstate action"H Inconstitutional ?uris$rudence, t%e acts o' $ersons distinct 'rom t%e )o-ernment areconsidered Hstate actionH co-ered 23 t%e Constitution /!7 w%en t%e acti-it3 it en)a)es in is

a -public function-/*7 w%en t%e )o-ernment is so si)ni'icantl3 in-ol-ed wit% t%e $ri-ateactor as to maFe t%e )o-ernment res$onsi2le 'or %is action and, /47 w%en t%e )o-ernment%as a$$ro-ed or aut%ori=ed t%e action" It is e-ident t%at t%e act o' res$ondent .SIS insellin) 0!G o' its s%are in res$ondent +C comes under t%e second and t%ird cate)orieso' Hstate action"H Wit%out dou2t t%ere'ore t%e transaction" alt%ou)% entered into 23res$ondent .SIS, is in 'act a transaction o' t%e State and t%ere'ore su2?ect to t%econstitutional command" /'

W%en t%e Constitution addresses t%e State it re'ers not onl3 to t%e $eo$le 2ut also to t%e)o-ernment as elements o' t%e State" A'ter all, )o-ernment is com$osed o' t%ree /47di-isions o' $ower le)islati-e, eecuti-e and ?udicial" Accordin)l3, a constitutionalmandate directed to t%e State is corres$ondin)l3 directed to t%e t%ree/47 2ranc%es o')o-ernment" It is undenia2le t%at in t%is case t%e su2?ect constitutional in?unction isaddressed amon) ot%ers to t%e Eecuti-e De$artment and res$ondent .SIS, a)o-ernment instrumentalit3 deri-in) its aut%orit3 'rom t%e State"

It s%ould 2e stressed t%at w%ile t%e +ala3sian 'irm o''ered t%e %i)%er 2id it is not 3et t%ewinnin) 2idder" T%e 2iddin) rules e$ressl3 $ro-ide t%at t%e %i)%est 2idder s%all onl3 2edeclared t%e winnin) 2idder a'ter i t %as ne)otiated and eecuted t%e necessar3 contracts,and secured t%e requisite a$$ro-als" Since t%e HFilipino First Policy$ro-ision o' t%eConstitution 2estows $re'erence on quali'ied #ili$inos t%e mere tendin) o' t%e %i)%est 2idis not an assurance t%at t%e %i)%est 2idder will 2e declared t%e winnin) 2idder"(esultantl3, res$ondents are not 2ound to maFe t%e award 3et, nor are t%e3 undero2li)ation to enter into one wit% t%e %i)%est 2idder" #or in c%oosin) t%e awardeeres$ondents are mandated to a2ide 23 t%e dictates o' t%e !586 Constitution t%e $ro-isionso' w%ic% are $resumed to 2e Fnown to all t%e 2idders and ot%er interested $arties"

Ad%erin) to t%e doctrine o' constitutional su$remac3, t%e su2?ect constitutional $ro-ision

is, as it s%ould 2e, im$liedl3 written in t%e 2iddin) rules issued 23 res$ondent .SIS, lestt%e 2iddin) rules 2e nulli'ied 'or 2ein) -iolati-e o' t%e Constitution" It is a 2asic $rinci$le inconstitutional law t%at all laws and contracts must con'orm wit% t%e 'undamental law o' t%eland" T%ose w%ic% -iolate t%e Constitution lose t%eir reason 'or 2ein)"

Para)ra$% @" ;" ! o' t%e 2iddin) rules $ro-ides t%at 1if2 for any reasonthe ighest !iddercannot be a%arded the !lock of Shares, "SIS may offer this to other 'ualified !iddersthat have validly submitted bids provided that these 'ualified !idders are %illing to matchthe highest bid in terms of price pershare" /-Certainl3, t%e constitutional mandate itsel' is reason enoughnot to award t%e2locF o' s%ares immediatel3 to t%e 'orei)n 2idder notwit%standin) its su2mission o' a%i)%er, or e-en t%e %i)%est, 2id" In 'act, we cannot concei-e o' a stron)er reason t%an t%econstitutional in?unction itsel'"

In t%e instant case, w%ere a 'orei)n 'irm su2mits t%e %i)%est 2id in a $u2lic 2iddin)concernin) t%e )rant o' ri)%ts, $ri-ile)es and concessions co-erin) t%e national econom3and $atrimon3, t%ere23 eceedin) t%e 2id o' a #ili$ino, t%ere is no question t%at t%e

#ili$ino will %a-e to 2e allowed to matc% t%e 2id o' t%e 'orei)n entit3" And i' t%e #ili$inomatc%es t%e 2id o' a 'orei)n 'irm t%e award s%ould )o to t%e #ili$ino" It must 2e so i' weare to )i-e li'e and meanin) to t%e Filipino First Policy$ro-ision o' t%e !586 Constitution"#or, w%ile t%is ma3 neit%er 2e e$ressl3 stated nor contem$lated in t%e 2iddin) rules, t%econstitutional 'iat is, omni$resent to 2e sim$l3 disre)arded" To i)nore it would 2e tosanction a $erilous sFirtin) o' t%e 2asic law"

T%is Court does not discount t%e a$$re%ension t%at t%is $olic3 ma3 discoura)e 'orei)n

in-estors" &ut t%e Constitution and laws o' t%e P%ili$$ines are understood to 2e alwa3so$en to $u2lic scrutin3" T%ese are )i-en 'actors w%ic% in-estors must consider w%en-enturin) into 2usiness in a 'orei)n ?urisdiction" An3 $erson t%ere'ore desirin) to do2usiness in t%e P%ili$$ines or wit% an3 o' its a)encies or instrumentalities is $resumed toFnow %is ri)%ts and o2li)ations under t%e Constitution and t%e laws o' t%e 'orum"

T%e ar)ument o' res$ondents t%at $etitioner is now esto$$ed 'rom questionin) t%e sale to(enon) &er%ad since $etitioner was well aware 'rom t%e 2e)innin) t%at a 'orei)ner could$artici$ate in t%e 2iddin) is meritless" Undou2tedl3, #ili$inos and 'orei)ners aliFe werein-ited to t%e 2iddin)" &ut 'orei)ners ma3 2e awarded t%e sale onl3 i' no #ili$ino quali'ies,or i' t%e quali'ied #ili$ino 'ails to matc% t%e %i)%est 2id tendered 23 t%e 'orei)n entit3" In t%ecase 2e'ore us, w%ile $etitioner was alread3 $re'erred at t%e ince$tion o' t%e 2iddin)2ecause o' t%e constitutional mandate, $etitioner %ad not 3et matc%ed t%e 2id o''ered 23(enon) &er%ad" T%us it did not %a-e t%e ri)%t or $ersonalit3 t%en to com$el res$ondent

.SIS to acce$t its earlier 2id" (i)%tl3, onl3 a'ter it %ad matc%ed t%e 2id o' t%e 'orei)n 'irmand t%e a$$arent disre)ard 23 res$ondent .SIS o' $etitionerMs matc%in) 2id did t%e latter%a-e a cause o' action"

&esides, t%ere is no time 'rame 'or in-oFin) t%e constitutional sa'e)uard unless $er%a$st%e award %as 2een 'inall3 made" To insist on sellin) t%e +anila otel to 'orei)ners w%ent%ere is a #ili$ino )rou$ willin) to matc% t%e 2id o' t%e 'orei)n )rou$ is to insist t%at)o-ernment 2e treated as an3 ot%er ordinar3 marFet $la3er, and 2ound 23 its mistaFes or)ross errors o' ?ud)ment, re)ardless o' t%e consequences to t%e #ili$ino $eo$le" T%emiscom$re%ension o' t%e Constitution is re)retta2le" T%us we would rat%er remed3 t%eindiscretion w%ile t%ere is still an o$$ortunit3 to do so t%an let t%e )o-ernment de-elo$ t%e%a2it o' 'or)ettin) t%at t%e Constitution la3s down t%e 2asic conditions and $arameters 'orits actions"

Since $etitioner %as alread3 matc%ed t%e 2id $rice tendered 23 (enon) &er%ad $ursuantto t%e 2iddin) rules, res$ondent .SIS is le't wit% no alternati-e 2ut to award to $etitionert%e 2locF o' s%ares o' +C and to eecute t%e necessar3 a)reements and documents toe''ect t%e sale in accordance not onl3 wit% t%e 2iddin) )uidelines and $rocedures 2ut wit%t%e Constitution as well" T%e re'usal o' res$ondent .SIS to eecute t%e corres$ondin)documents wit% $etitioner as $ro-ided in t%e 2iddin) rules a'ter t%e latter %as matc%ed t%e2id o' t%e +ala3sian 'irm clearl3 constitutes )ra-e a2use o' discretion"

T%e Filipino First Policyis a $roduct o' P%ili$$ine nationalism" It is em2odied in t%e !586Constitution not merel3 to 2e used as a )uideline 'or 'uture le)islation 2ut $rimaril3 to 2een'orced so must it 2e en'orced" T%is Court as t%e ultimate )uardian o' t%e Constitutionwill ne-er s%un, under an3 reasona2le circumstance, t%e dut3 o' u$%oldin) t%e ma?est3 o't%e Constitution w%ic% it is tasFed to de'end" It is wort% em$%asi=in) t%at it is not t%eintention o' t%is Court to im$ede and diminis%, muc% less undermine, t%e in'lu o' 'orei)n

in-estments" #ar 'rom it, t%e Court encoura)es and welcomes more 2usinesso$$ortunities 2ut a-owedl3 sanctions t%e $re'erence 'or #ili$inos w%ene-er suc%


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$re'erence is ordained 23 t%e Constitution" T%e $osition o' t%e Court on t%is matter could%a-e not 2een more a$$ro$riatel3 articulated 23 C%ie' ;ustice Nar-asa

As scru$ulousl3 as it %as tried to o2ser-e t%at it is not its 'unction to su2stitute its ?ud)ment'or t%at o' t%e le)islature or t%e eecuti-e a2out t%e wisdom and 'easi2ilit3 o' le)islationeconomic in nature, t%e Su$reme Court %as not 2een s$ared criticism 'or decisions$ercei-ed as o2stacles to economic $ro)ress and de-elo$ment " " " in connection wit% atem$orar3 in?unction issued 23 t%e CourtMs #irst Di-ision a)ainst t%e sale o' t%e +anila

otel to a +ala3sian #irm and its $artner, certain statements were $u2lis%ed in a ma?ordail3 to t%e e''ect t%at in?unction Ha)ain demonstrates t%at t%e P%ili$$ine le)al s3stem can2e a ma?or o2stacle to doin) 2usiness %ere"

Let it 2e stated 'or t%e record once a)ain t%at w%ile it is no 2usiness o' t%e Court tointer-ene in contracts o' t%e Find re'erred to or set itsel' u$ as t%e ?ud)e o' w%et%er t%e3are -ia2le or attaina2le, it is its 2ounden dut3 to maFe sure t%at t%e3 do not -iolate t%eConstitution or t%e laws, or are not ado$ted or im$lemented wit% )ra-e a2use o' discretionamountin) to lacF or ecess o' ?urisdiction" It will ne-er s%irF t%at dut3, no matter %ow2u''eted 23 winds o' un'air and ill>in'ormed criticism" /0

Pri-ati=ation o' a 2usiness asset 'or $ur$oses o' en%ancin) its 2usiness -ia2ilit3 and$re-entin) 'urt%er losses, re)ardless o' t%e c%aracter o' t%e asset, s%ould not taFe$recedence o-er non>material -alues" A commercial, na3 e-en a 2ud)etar3, o2?ecti-es%ould not 2e $ursued at t%e e$ense o' national $ride and di)nit3" #or t%e Constitutionens%rines %i)%er and no2ler non>material -alues" Indeed, t%e Court will alwa3s de'er tot%e Constitution in t%e $ro$er )o-ernance o' a 'ree societ3 a'ter all, t%ere is not%in) sosacrosanct in an3 economic $olic3 as to draw itsel' 2e3ond ?udicial re-iew w%en t%eConstitution is in-ol-ed" /,

Nationalism is in%erent, in t%e -er3 conce$t o' t%e P%ili$$ines 2ein) a democratic andre$u2lican state, wit% so-erei)nt3 residin) in t%e #ili$ino $eo$le and 'rom w%om all)o-ernment aut%orit3 emanates" In nationalism, t%e %a$$iness and wel'are o' t%e $eo$lemust 2e t%e )oal" T%e nation>state can %a-e no %i)%er $ur$ose" An3 inter$retation o' an3constitutional $ro-ision must ad%ere to suc% 2asic conce$t" Protection o' 'orei)nin-estments, w%ile laudi2le, is merel3 a $olic3" It cannot o-erride t%e demands o'nationalism" &1

T%e +anila otel or, 'or t%at matter, 0!G o' t%e +C, is not ?ust an3 commodit3 to 2e sold

to t%e %i)%est 2idder solel3 'or t%e saFe o' $ri-ati=ation" We are not talFin) a2out anordinar3 $iece o' $ro$ert3 in a commercial district" We are talFin) a2out a %istoric relic t%at%as %osted man3 o' t%e most im$ortant e-ents in t%e s%ort %istor3 o' t%e P%ili$$ines as anation" We are talFin) a2out a %otel w%ere %eads o' states would $re'er to 2e %oused as astron) mani'estation o' t%eir desire to cloaF t%e di)nit3 o' t%e %i)%est state 'unction to t%eiro''icial -isits to t%e P%ili$$ines" T%us t%e +anila otel %as $la3ed and continues to $la3 asi)ni'icant role as an aut%entic re$ositor3 o' twentiet% centur3 P%ili$$ine %istor3 andculture" In t%is sense, it %as 2ecome trul3 a re'lection o' t%e #ili$ino soul a place %ith ahistory of grandeur< a most historical setting that has played a part in the shaping of acountry" &$

T%is Court cannot etract r%3me nor reason 'rom t%e determined e''orts o' res$ondents tosell t%e %istorical landmarF t%is "rand ld =ame o' %otels in Asia to a total stran)er"#or, indeed, t%e con-e3ance o' t%is e$ic e$onent o' t%e #ili$ino $s3c%e to alien %andscannot 2e less t%an me$%isto$%elian 'or it is, in w%ate-er manner -iewed, a -erita2lealienation o' a nationMs soul 'or some $ieces o' 'orei)n sil-er" And so we asF: W%atad-anta)e, w%ic% cannot 2e equall3 drawn 'rom a quali'ied #ili$ino, can 2e )ained 23 t%e

#ili$inos +anila otel and all t%at it stands 'or is sold to a non>#ili$ino ow muc% o'national $ride will -anis% i' t%e nationMs cultural %erita)e is entrusted to a 'orei)n entit3 Ont%e ot%er %and, %ow muc% di)nit3 will 2e $reser-ed and reali=ed i' t%e national $atrimon3is sa'eFe$t in t%e %ands o' aqualified, =ealous and well>meanin) #ili$ino T%is is t%e $lainand sim$le meanin) o' t%e Filipino First Policy$ro-ision o' t%e P%ili$$ine Constitution" Andt%is Court, %eedin) t%e clarion call o' t%e Constitution and acce$tin) t%e dut3 o' 2ein) t%eelderl3 watc%man o' t%e nation, will continue to res$ect and $rotect t%e sanctit3 o' t%eConstitution"

WE(E#O(E, res$ondents .O@E(N+ENT SE(@ICE INSU(ANCE S


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de-elo$ment as a correlati-e 'actor to assure to t%e $eo$le not onl3 t%e eclusi-eowners%i$, 2ut also t%e eclusi-e 2ene'its o' t%eir national $atrimon37" *

+oreo-er, t%e conce$t o' national $atrimon3 %as 2een -iewed as re'errin) not onl3 to ourric% natural resources 2ut also to t%e cultural %erita)e o' ourrace"/

T%ere is no dou2t in m3 mind t%at t%e +anila otel is -er3 muc% a $art o' our national$atrimon3 and, as suc%, deser-es constitutional $rotection as to w%o s%all own it and2ene'it 'rom its o$eration" T%is institution %as $la3ed an im$ortant role in our nationMs%istor3, %a-in) 2een t%e -enue o' man3 a %istorical e-ent, and ser-in) as it did, and as itdoes, as t%e P%ili$$ine .uest ouse 'or -isitin) 'orei)n %eads o' state, di)nitaries,cele2rities, and ot%ers"&

It is t%ere'ore our dut3 to $rotect and $reser-e it 'or 'uture )enerations o' #ili$inos" AsPresident +anuel L" ue=on once said, we must e$loit t%e natural resources o' ourcountr3, 2ut we s%ould do so wit%" an e3e to t%e wel'are o' t%e 'uture )enerations" In ot%erwords, t%e leaders o' toda3 are t%e trustees o' t%e $atrimon3 o' our race" To $reser-e ournational $atrimon3 and reser-e it 'or #ili$inos was t%e intent o' t%e distin)uis%ed)entlemen w%o 'irst 'ramed our Constitution" T%us, in de2atin) t%e need 'or nationali=ationo' our lands and natural resources, one e$ounded t%at we s%ould H$ut more teet% intoour laws, and not maFe t%e nationali=ation o' our lands and natural resources a su2?ect o'ordinar3 le)islation 2ut o' constitutional enactmentH'To quote 'urt%er: HLet not our c%ildren2e mere tenants and tres$assers in t%eir own countr3" Let us $reser-e and 2equeat% tot%em w%at is ri)%t'ull3 t%eirs, 'ree 'rom all 'orei)n liens and encum2rancesH"-

Now, a word on $re'erence" In m3 -iew H$re'erence to quali'ied #ili$inosH, to 2emeanin)'ul, must re'er not onl3 to t%in)s t%at are $eri$%eral, collateral, or tan)ential" Itmust touc% and a''ect t%e -er3 H%eart o' t%e eistin) order"H In t%e 'ield o' $u2lic 2iddin) int%e acquisition o' t%in)s t%at $ertain to t%e national $atrimon3, $re'erence to quali'ied#ili$inos must allow a quali'ied #ili$ino to matc% or equal t%e %i)%er 2id o' a non>#ili$inot%e $re'erence s%all not o$erate onl3 w%en t%e 2ids o' t%e quali'ied #ili$ino and t%e non>#ili$ino are equal in w%ic% case, t%e award s%ould undis$utedl3 2e made to t%e quali'ied#ili$ino" T%e Constitutional $re'erence s%ould )i-e t%e quali'ied #ili$ino an o$$ortunit3 tomatc% or equal t%e %i)%er 2id o' t%e non>#ili$ino 2idder i' t%e $re'erence o' t%e quali'ied#ili$ino 2idder is to 2e si)ni'icant at all"

It is true t%at in t%is $resent a)e o' )lo2ali=ation o' attitude towards 'orei)n in-estments inour countr3, stress is on t%e elimination o' 2arriers to 'orei)n trade and in-estment in t%ecountr3" W%ile )o-ernment a)encies, includin) t%e courts s%ould re>condition t%eir t%inFin)to suc% a trend, and maFe it eas3 and e-en attracti-e 'or 'orei)n in-estors to come to ours%ores, 3et we s%ould not $reclude oursel-es 'rom reser-in) to us #ili$inos certain areasw%ere our national identit3, culture and %erita)e are in-ol-ed" In t%e %otel industr3, 'orinstance, 'orei)n in-estors %a-e esta2lis%ed t%emsel-es credita2l3, suc% as in t%eS%an)ri>La, t%e NiFFo, t%e Peninsula, and +andarin otels" T%is s%ould not sto$ us 'romretainin) 0!G o' t%e ca$ital stocF o' t%e +anila otel Cor$oration in t%e %ands o' #ili$inos"T%is would 2e in Fee$in) wit% t%e intent o' t%e #ili$ino $eo$le to $reser-e our national$atrimon3, includin) our %istorical and cultural %erita)e in t%e %ands o' #ili$inos"

5!67G+ J., concurrin):

I a)ree wit% +r" ;ustice ;osue N" &ellosillo on %is clear>cut statements, s%ared 23 +r";ustice (e3nato S" Puno in a well written se$arate /dissentin)7 o$inion, t%at:

First, t%e $ro-ision in our 'undamental law w%ic% $ro-ides t%at H/I7n t%e )rant o' ri)%ts,$ri-ile)es, and concessions co-erin) t%e national econom3 and $atrimon3, t%e State s%all)i-e $re'erence to quali'ied #ili$inosH $is sel'>eecutor3" T%e $ro-ision -eril3 does notneed, alt%ou)% it can o2-iousl3 2e am$li'ied or re)ulated 23, an ena2lin) law or a set o'rules"

Second, t%e term H$atrimon3H does not merel3 re'er to t%e countr3Ms natural resources 2utalso to its cultural %erita)e" A H%istorical landmarF,H to use t%e words o' +r" ;ustice ;usto P"

Torres, ;r", +anila otel %as now indeed 2ecome $art o' P%ili$$ine %erita)e"&hird, t%e act o' t%e .o-ernment Ser-ice Insurance S3stem /H.SISH7, a )o-ernment entit3w%ic% deri-es its aut%orit3 'rom t%e State, in sellin) 0!G o' its s%are in +C s%ould 2econsidered an act o' t%e State su2?ect to t%e Constitutional mandate"

On t%e $i-otal issue o' t%e de)ree o' H$re'erence to quali'ied #ili$inos,H I 'ind i t somew%atdi''icult to taFe t%e same $at% tra-ersed 23 t%e 'orce'ul reasonin) o' ;ustice Puno" In t%e$articular case 2e'ore us, t%e onl3 meanin)'ul $re'erence, it seems, would reall3 2e toallow t%e quali'ied #ili$ino to matc% t%e 'orei)n 2id 'or, as a $articular matter, I cannot seean3 2id t%at literall3 calls 'or millions o' dollars to 2e at $ar /to t%e last cent7 wit% anot%er"T%e ma)nitude o' t%e ma)nitude o' t%e 2ids is suc% t%at it 2ecomes %ardl3 $ossi2le 'or t%ecom$etin) 2ids to stand eactl3 HequalH w%ic% alone, under t%e dissentin) -iew, couldtri))er t%e ri)%t o' $re'erence"

It is most un'ortunate t%at (enon) &er%ad %as not 2een s$ared t%is )reat disa$$ointment,a letdown t%at it did not deser-e, 23 a sim$le and timel3 ad-ise o' t%e $ro$er rules o'2iddin) alon) wit% t%e $eculiar constitutional im$lications o' t%e $ro$osed transaction" It isalso re)retta2le t%at t%e Court at time is seen, to instead, 2e t%e re'u)e 'or 2ureaucraticinadequate w%ic% create t%e $erce$tion t%at it e-en taFes on non>?usticia2le contro-ersies"

All told, I am constrained to -ote 'or )rantin) t%e $etition"

M8#439A+ J., concurrin) in t%e ?ud)ment:

I taFe t%e -iew t%at in t%e contet o' t%e $resent contro-ers3 t%e onl3 wa3 to en'orce t%econstitutional mandate t%at Hin t%e )rant o' ri)%ts, $ri-ile)es and concessions co-erin)t%e national $atrimon3 t%e State s%all )i-e $re'erence to quali'ied #ili$inosH$is to allow$etitioner P%ili$$ine cor$oration to equal t%e 2id o' t%e +ala3sian 'irm (enon) &er%ad 'ort%e $urc%ase o' t%e controllin) s%ares o' stocFs in t%e +anila otel Cor$oration" Indeed, itis t%e onl3 wa3 a quali'ied #ili$ino o' P%ili$$ine cor$oration can 2e )i-enpreferencein t%een?o3ment o' a ri)%t, $ri-ile)e or concession )i-en 23 t%e State, 23 'a-orin) it o-er a'orei)n national cor$oration"

Under t%e rules on $u2lic 2iddin) o' t%e .o-ernment Ser-ice and Insurance S3stem, i'$etitioner and t%e +ala3sian 'irm %ad o''ered t%e same $rice $er s%are, H$riorit3 would 2e)i-en to t%e 2idder seeFin) t%e lar)er owners%i$ interest in +C,H%so t%at $etitioner 2id'or more s%ares, it would 2e $re'erred to t%e +ala3sian cor$oration 'or t%at reason and not2ecause it is a P%ili$$ine cor$oration" Consequentl3, it is onl3 in cases l iFe t%e $resentone, w%ere an alien cor$oration is t%e %i)%est 2idder, t%at $re'erential treatment o' t%eP%ili$$ine cor$oration is mandated not 23 declarin) it winner 2ut 23 allowin) it Hto matc%t%e %i)%est 2id in terms o' $rice $er s%areH 2e'ore it is awarded t%e s%ares o'stocFs"*T%at, to me, is w%at H$re'erence to quali'ied #ili$inosH means in t%e contet o' t%iscase 23 'a-orin) #ili$inos w%ene-er t%e3 are at a disad-anta)e vis(a(vis'orei)ners"

T%is was t%e meanin) )i-en in .o .hiong v".uaderno/to a !596 statute )i-in)H$re'erence to #ili$ino citi=ens in t%e lease o' $u2lic marFet stalls"H &T%is Court u$%eld t%e


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cancellation o' eistin) leases co-erin) marFet stalls occu$ied 23 $ersons w%o were not#ili$inos and t%e award t%erea'ter o' t%e stalls to quali'ied #ili$ino -endors as ordered 23t%e De$artment o' #inance" Similarl3, in ?da"de Salgado v" =e la Fuente,'t%is Courtsustained t%e -alidit3 o' a munici$al ordinance $assed $ursuant to t%e statute /("A" No"467, terminatin) eistin) leases o' $u2lic marFet stalls and )rantin) $re'erence to #ili$inociti=ens in t%e issuance o' new licenses 'or t%e occu$anc3 o' t%e stalls" In .hua @aov" #aymundo,-t%e $re'erence )ranted under t%e statute was %eld to a$$l3 to cases inw%ic% #ili$ino -endors sou)%t t%e same stalls occu$ied 23 alien -endors in t%e $u2lic

marFets e-en i' t%ere were a-aila2le ot%er stalls as )ood as t%ose occu$ied 23 aliens"HT%e law, a$$arentl3, is a$$lica2le w%ene-er t%ere is a con'lict o' interest 2etween #ili$inoa$$licants and aliens 'or lease o' stalls in $u2lic marFets, in w%ic% situation t%e ri)%t to$re'erence immediatel3 arises"H0

Our le)islation on t%e matter t%us antedated 23 a quarter o' a centur3 e''orts 2e)an onl3 int%e !56s in America to reali=e t%e $romise o' equalit3, t%rou)% a''irmati-e action andre-erse discrimination $ro)rams desi)ned to remed3 $ast discrimination a)ainst colored$eo$le in suc% areas as em$lo3ment, contractin) and licensin)",Indeed, in -ital areas o'our national econom3, t%ere are situations in w%ic% t%e onl3 wa3 to $lace #ili$inos incontrol o' t%e national econom3 as contem$lated in t%e Constitution $1is to )i-e t%em$re'erential treatment w%ere t%e3 can at least stand on equal 'ootin) wit% aliens"

T%ere need 2e no 'ear t%at t%us $re'errin) #ili$inos would eit%er in-ite 'orei)n retaliation or

de$ri-e t%e countr3 o' t%e 2ene'it o' 'orei)n ca$ital or Fnow>%ow" We are dealin) %ere notwit% common trades o' common means o' li-eli%ood w%ic% are o$en to aliens in ourmidst, $$2ut wit% t%e sale o' )o-ernment $ro$ert3, w%ic% is liFe t%e )rant o' )o-ernmentlar)ess o' 2ene'its and concessions co-erin) t%e national econom3H and t%ere'ore no ones%ould 2e)rud)e us i' we )i-e $re'erential treatment to our citi=ens" T%at at an3 rate is t%ecommand o' t%e Constitution" #or t%e +anila otel is a 2usiness owned 23 t%e.o-ernment" It is 2ein) $ri-ati=ed" Pri-ati=ation s%ould result in t%e relinquis%ment o' t%e2usiness in 'a-or o' $ri-ate indi-iduals and )rou$s w%o are #ili$ino citi=ens, not in 'a-or o'aliens"

Nor s%ould t%ere 2e an3 dou2t t%at 23 awardin) t%e s%ares o' stocFs to $etitioner wewould 2e tradin) com$etence and ca$a2ilit3 'or nationalism" &ot% $etitioner and t%e+ala3sian 'irm are quali'ied, %a-in) %urdled t%e $requali'ication $rocess" $%It is onl3 t%eresult o' t%e $u2lic 2iddin) t%at is sou)%t to 2e modi'ied 23 ena2lin) $etitioner to u$ i ts 2id

to equal t%e %i)%est 2id"Nor, 'inall3, is t%ere an3 2asis 'or t%e su))estion t%at to allow a #ili$ino 2idder to matc% t%e%i)%est 2id o' an alien could encoura)e s$eculation, since all t%at a #ili$ino entit3 wouldt%en do would 2e not to maFe a 2id or maFe onl3 a toFen one and, a'ter it is Fnown t%at a'orei)n 2idder %as su2mitted t%e %i)%est 2id, maFe an o''er matc%in) t%at o' t%e 'orei)n'irm" T%is is not $ossi2le under t%e rules on $u2lic 2iddin) o' t%e .SIS" Under t%ese rulest%ere is a minimum 2id required /P41"86 $er s%are 'or a ran)e o' 5 to !0 millions%ares7" $*&ids 2elow t%e minimum will not 2e considered" On t%e ot%er %and, i' t%e#ili$ino entit3, a'ter $assin) t%e $requali'ication $rocess, does not su2mit a 2id, %e will not2e allowed to matc% t%e %i)%est 2id o' t%e 'orei)n 'irm 2ecause t%is is a $ri-ile)e allowedonl3 to t%ose w%o %a-e H-alidl3 su2mitted 2ids"H $/T%e su))estion is, to sa3 t%e least,'anci'ul and %as no 2asis in 'act"

#or t%e 'ore)oin) reasons, I -ote to )rant t%e $etition"63RR8+ :R.+ J., se$arate o$inion:

Constanc3 in law is not an attri2ute o' a ?udicious mind" I sa3 t%is as we are not con'rontedin t%e case at 2ar wit% le)al and constitutional issues and 3et I am dri-en so to s$eaFon t%e side o' %istor3" T%e reason $er%a$s is due to t%e 2elie' t%at in t%e words o' ;usticeOli-er Wendell olmes, ;r", a H$a)e o' %istor3 is wort% a -olume o' lo)ic"H

I will, %owe-er, attem$t to s%are m3 t%ou)%ts on w%et%er t%e +anila otel %as a %istoricaland cultural as$ect wit%in t%e meanin) o' t%e constitution and t%us, 'ormin) $art o' t%eH$atrimon3 o' t%e nationH"

Section !, Article JII o' t%e !586 Constitution $ro-ides:

In t%e )rant o' ri)%ts, $ri-ile)es, and concessions co-erin) t%e national econom3 and$atrimon3, t%e State s%all )i-e $re'erence to quali'ied #ili$inos"

T%e State s%all re)ulate and eercise aut%orit3 o-er 'orei)n in-estments wit%in its national)oals and $riorities"

T%e 'ore)oin) $ro-isions s%ould 2e read in con?unction wit% Article II o' t%e sameConstitution $ertainin) to HDeclaration o' Princi$les and State PoliciesH w%ic% ordain

T%e State s%all de-elo$ a sel'>reliant and inde$endent national econom3 e''ecti-el3 23#ili$inos" /Sec" !57"

Interestin)l3, t%e matter o' )i-in) $re'erence to Hquali'ied #ili$inosH was one o' t%e%i)%li)%ts in t%e !586 Constitution Commission $roceedin)s t%us:

+(" NOLLEDO" T%e Amendment will read: HIN TE .(ANT O# (I.TS, P([email protected] CONCESSIONS CO@E(IN. TE NATIONAL ECONO+< AND PAT(I+ON


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T%e nationalistic $ro-isions o' t%e !586 Constitution re'lect t%e %istor3 and s$irit o' t%e+alolos Constitution o' !858, t%e !540 Constitution and t%e !564 Constitutions" T%at we%a-e no rene)ed on t%is nationalist $olic3 is articulated in one o' t%e earliest case, t%isCourt said

T%e nationalistic tendenc3 is mani'ested in -arious $ro-isions o' t%e Constitution" " " " Itcannot t%ere'ore 2e said t%at a law im2ued wit% t%e same $ur$ose and s$irit underl3in)man3 o' t%e $ro-isions o' t%e Constitution is unreasona2le, in-alid or unconstitutional

/Ic%on), et al" -s" ernande=, et al", !! P%il" !!007"I su2scri2e to t%e -iew t%at %istor3, culture, %erita)e, and traditions are not le)islated andis t%e $roduct o' e-ents, customs, usa)es and $ractices" It is actuall3 a $roduct o' )rowt%and acce$tance 23 t%e collecti-e moreso' a race" It is t%e s$irit and soul o' a $eo$le"

T%e +anila otel is $art o' our %istor3, culture and %erita)e" E-er3 inc% o' t%e +anila otelis witness to %istoric e-ents /too numerous to mention7 w%ic% s%a$ed our %istor3 'oralmost 89 3ears"

As I intimated earlier, it is not m3 $osition in t%is o$inion, to eamine t%e sin)le instanceso' t%e le)al lar)ese w%ic% %a-e )i-en rise to t%is contro-ers3" As I 2elie-e t%at %as 2eene%austi-el3 discussed in t%eponencia" Su''ice it to sa3 at t%is $oint t%at t%e %istor3 o' t%e+anila otel s%ould not 2e $laced in t%e auction 2locF o' a $urel3 2usiness transaction,w%ere $ro'its su2-erts t%e c%eris%ed %istorical -alues o' our $eo$le"

As a %istorical landmarF in t%is HPearl o' t%e Orient SeasH, it %as its en-ia2le traditionw%ic%, in t%e words o' t%e $%iloso$%er Sal-ador de +adarria)a tradition is Hmore o' a ri-ert%an a stone, it Fee$s 'lowin), and one must -iew t%e 'lowin) , and one must -iew t%e 'lowo' 2ot% directions" I' 3ou looF towards t%e %ill 'rom w%ic% t%e ri-er 'lows, 3ou see traditionin t%e 'orm o' 'orce'ul currents t%at $us% t%e ri-er or $eo$le towards t%e 'uture, and i' 3oulooF t%e ot%er wa3, 3ou $ro)ress"H

Indeed, tradition and $ro)ress are t%e same, 'or $ro)ress de$ends on t%e Find o' tradition"Let us not ?ettison t%e tradition o' t%e +anila otel and t%ere23 re$eat our colonial %istor3"

I )rant, o' course t%e men o' t%e law can see t%e same su2?ect in di''erent li)%ts"

I remem2er, %owe-er, a S$anis% $ro-er2 w%ic% sa3s He is alwa3s ri)%t w%o sus$ectst%at %e maFes mistaFesH" On t%is note, I sa3 t%at i' I %a-e to maFe a mistaFe, I would

rat%er err u$%oldin) t%e 2elie' t%at t%e #ili$ino 2e 'irst under %is Constitution and in %isown land"

I -ote .(ANT t%e $etition"

P7#3+ J., dissentin):

T%is is a" $etition 'or $ro%i2ition and mandamus'iled 23 t%e +anila Prince otelCor$oration, a domestic cor$oration, to sto$ t%e .o-ernment Ser-ice Insurance S3stem/.SIS7 'rom sellin) t%e controllin) s%ares o' t%e +anila otel Cor$oration to a 'orei)ncor$oration" Alle)edl3, t%e sale -iolates t%e second $ara)ra$% o' section !, Article JII o't%e Constitution"

(es$ondent .SIS is a )o-ernment>owned and controlled cor$oration" It is t%e sole ownero' t%e +anila otel w%ic% it o$erates t%rou)% its su2sidiar3, t%e +anila otel Cor$oration"+anila otel was included in t%e $ri-ati=ation $ro)ram o' t%e )o-ernment" In !550, .SIS$ro$osed to sell to interested 2u3ers 4G to 0!G o' its s%ares, ran)in) 'rom 5,, to

!0,4, s%ares, in t%e +anila otel Cor$oration" A'ter t%e a2sence o' 2ids at t%e 'irst$u2lic 2iddin), t%e 2locF o' s%ares o''ered 'or sale was increased 'rom a maimum o' 4Gto 0!G" Also, t%e winnin) 2idder, or t%e e-entual Hstrate)ic $artnerH o' t%e .SIS wasrequired to H$ro-ide mana)ement e$ertise andKor an international marFetin)Kreser-ations3stem, and 'inancial su$$ort to stren)t%en t%e $ro'ita2ilit3 and $er'ormance o' t%e +anilaotelH$T%e $ro$osal was a$$ro-ed 23 res$ondent Committee on Pr i-ati=ation"

In ;ul3 !550, a con'erence was %eld w%ere $requali'ication documents and t%e 2iddin)

rules were 'urnis%ed interested $arties" Petitioner +anila Prince otel, a domesticcor$oration, and (enon) &er%ad, +ala3sian 'irm wit% ITT S%eraton as o$erator,$requali'ied"%

T%e 2iddin) rules and $rocedures entitled H.uidelines and Procedures: SecondPrequali'ication and Pu2lic &iddin) o' t%e +C Pri-ati=ationH $ro-ide:

I INT(ODUCTION AND I.LI.TS

DETE(+ININ. TE WINNIN. &IDDE(KST(ATE.IC PA(TNE(

T%e $art3 t%at accom$lis%es t%e ste$s set 'ort% 2elow will 2e declared t%e Winnin)&idderKStrate)ic Partner and will 2e awarded t%e &locF o' S%ares:

#irst Pass t%e $requali'ication $rocess

Second Su2mit t%e %i)%est 2id on aprice per share basis 'or t%e &locF o' S%aresT%ird Ne)otiate and eecute t%e necessar3 contracts wit% .SISK+C not later t%anOcto2er *4, !550

I@ .UIDELINES #O( P(EUALI#ICATION

A" PA(TIES WO +AP APPL< #O( P(EUALI#ICATION

T%e Winnin) &idderKStrate)ic Partner will 2e e$ected to $ro-ide mana)ement e$ertiseandKor an international marFetin) reser-ation s3stem, and 'inancial su$$ort to stren)t%ent%e $ro'ita2ilit3 and $er'ormance o' T%e +anila otel" In t%is contet, t%e .SIS is in-itin)to t%e $requali'ication $rocess an3 local andKor 'orei)n cor$oration, consortiumK?oint-enture or ?uridical entit3 wit% at least one o' t%e 'ollowin) quali'ications:

a" Pro-en mana)ement "e$ertise in t%e %otel industr3 or

2" Si)ni'icant equit3 owners%i$ /i"e" 2oard re$resentation7 in anot%er %otel com$an3 or

c" O-erall mana)ement and marFetin) e$ertise to success'ull3 o$erate t%e +anila otel"

Parties interested in 2iddin) 'or +C s%ould 2e a2le to $ro-ide access to t%e requisitemana)ement e$ertise andKor international marFetin)Kreser-ation s3stem 'or T%e +anilaotel"

D" P(EUALI#ICATION DOCU+ENTS

E" APPLICATION P(OCEDU(E

!" =.3M$A&S ?I@!@$ & &$ #$"IS&IA FFI.$


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T%e $requali'ication documents can 2e secured at t%e (e)istration O''ice 2etween 5:A+ to 9: P+ durin) worFin) da3s wit%in t%e $eriod s$eci'ied in Section III" Eac% set o'documents consists o' t%e 'ollowin):

a" .uidelines and Procedures: Second Prequali'ication and Pu2lic &iddin) o' t%e +CPri-ati=ation

2" Con'idential In'ormation +emorandum: T%e +anila otel Cor$oration

c" Letter o' In-itation" to t%e Prequali'ication and &iddin) Con'erence

9" P#$'3@IFI.&IA A= !I==IA" .AF$#$A.$

A $requali'ication and 2iddin) con'erence will 2e %eld at T%e +anila otel on t%e dates$eci'ied in Section III to allow t%e A$$licant to seeF clari'ications and 'urt%er in'ormationre)ardin) t%e )uidelines and $rocedures" Onl3 t%ose w%o $urc%ased t%e $requali'icationdocuments will 2e allowed in t%is con'erence" Attendance to t%is con'erence is stron)l3ad-ised, alt%ou)% t%e A$$licant will not 2e $enali=ed i' it does not attend"

0" S3!MISSIA F P#$'3@IFI.&IA =.3M$A&S

T%e a$$licant s%ould su2mit 0 sets o' t%e $requali'ication documents /! ori)inal set $lus 9co$ies7 at t%e (e)istration O''ice 2etween 5: A+ to 9: P+ durin) worFin) da3s wit%int%e $eriod s$eci'ied in Section III"

#" P(EUALI#ICATION P(OCESS

!" T%e A$$licant will 2e e-aluated 23 t%e P&AC wit% t%e assistance o' t%e TEC 2ased ont%e In'ormation PacFa)e and ot%er in'ormation a-aila2le to t%e P&AC"

*" I' t%e A$$licant is a ConsortiumK;oint @enture, t%e e-aluation will consider t%e o-erallquali'ications o' t%e )rou$, taFin) into account t%e contri2ution o' eac% mem2er to t%e-enture"

4" T%e decision o' t%e P&AC wit% res$ect to t%e results o' t%e P&AC e-aluation will 2e'inal"

9" T%e A$$licant s%all 2e e-aluated accordin) to t%e criteria set 'ort% 2elow:

a" &usiness mana)ement e$ertise, tracF record, and e$erience

2" #inancial ca$a2ilit3"

c" #easi2ilit3 and acce$ta2ilit3 o' t%e $ro$osed strate)ic $lan 'or t%e +anila otel

0" T%e P&AC will s%ortlist suc% num2er o' A$$licants as it ma3 deem a$$ro$riate"

1" T%e $arties t%at $requali'ied in t%e 'irst +C $u2lic 2iddin) ITT S%eraton, +arriotInternational Inc", (enaissance otels International Inc", consortium o' (C&C Ca$italK(it=Carlton ma3 $artici$ate in t%e Pu2lic &iddin) wit%out %a-in) to under)o t%e$requali'ication $rocess a)ain"

." S#&@IS& F '3@IFI$= !I==$#S

!" A notice o' $requali'ication results containin) t%e s%ortlist o' uali'ied &idders will 2e$osted at t%e (e)istration O''ice at t%e date s$eci'ied in Section III"

*" In t%e case o' a ConsortiumK;oint @enture, t%e wit%drawal 23 mem2er w%osequali'ication was a material consideration 'or 2ein) included in t%e s%ortlist is )round 'ordisquali'ication o' t%e A$$licant"

@" .UIDELINES #O( TE PU&LIC &IDDIN.

A" PA(TIES WO +A< PA(TICIPATE IN TE PU&LIC &IDDIN.

All $arties in t%e s%ortlist o' uali'ied &idders will 2e eli)i2le to $artici$ate in t%e Pu2lic

&iddin)"&" &LOCB O# SA(ES

A ran)e o' Nine +illion /5,,7 to #i'teen +illion T%ree undred T%ousand/!0,4,7 s%ares o' stocF re$resentin) T%irt3 Percent to #i't3>One Percent /4G>0!G7o' t%e issued and outstandin) s%ares o' +C, will 2e o''ered in t%e Pu2lic &iddin) 23 t%e.SIS" T%e uali'ied &idders will %a-e t%e O$tion o' determinin) t%e num2er o' s%areswit%in t%e ran)e to 2id 'or" T%e ran)e is intended to attract 2idders wit% di''erent$re'erences and o2?ecti-es 'or t%e o$eration and mana)ement o' T%e +anila otel"

C" +INI+U+ &ID (EUI(ED ON A P(ICE PE( SA(E &ASIS

!" &ids will 2e e-aluated on aprice per share basis"T%e minimum 2id required on a $rice$er s%are 2asis 'or t%e &locF o' S%ares is T%irt3>Si Pesos and Sit3>Se-en Centa-os

/P41"167"*" &ids s%ould 2e in t%e P%ili$$ine currenc3 $a3a2le to t%e .SIS"

4" &ids su2mitted wit% an equi-alent $rice $er s%are 2elow t%e minimum required will notconsidered"

D" T(ANS#E( COSTS

E" O##ICIAL &ID #O(+

!" &ids must 2e contained in t%e $rescri2ed O''icial &id #orm, a co$3 o' w%ic% is attac%edas Anne I@" T%e O''icial &id #orm must 2e $ro$erl3 accom$lis%ed in all details im$ro$eraccom$lis%ment ma3 2e a su''icient 2asis 'or disquali'ication"

*" Durin) t%e Pu2lic &iddin), t%e uali'ied &idder will su2mit t%e O''icial &id #orm, w%ic%will indicate t%e o''ered $urc%ase $rice, in a sealed en-elo$e marFed HO##ICIAL &ID"H

#" SUPPO(TIN. DOCU+ENTS

Durin) t%e Pu2lic &iddin), t%e 'ollowin) documents s%ould 2e su2mitted alon) wit% t%e 2idin a se$arate en-elo$ marFed HSUPPO(TIN. DOCU+ENTSH:

!" B#I&&$A 3I&C & !I= )3A=$# &* "

I' t%e uali'ied &idder is a cor$oration, t%e re$resentati-e o' t%e uali'ied &idder s%ouldsu2mit a &oard resolution w%ic% adequatel3 aut%ori=es suc% re$resentati-e to 2id 'or andin 2e%al' o' t%e cor$oration wit% 'ull aut%orit3 to $er'orm suc% acts necessar3 or requisiteto 2ind t%e uali'ied &idder"

I' t%e uali'ied &idder is a ConsortiumK;oint @enture, eac% mem2er o' t%eConsortiumK;oint -enture s%ould su2mit a &oard resolution aut%ori=in) one o' its mem2ers


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!*

and suc% mem2erMs re$resentati-e to maFe t%e 2id on 2e%al' o' t%e )rou$ wit% 'ullaut%orit3 to $er'orm suc% acts necessar3 or requisite to 2ind t%e uali'ied &idder"

*" !I= S$.3#I&C

a" T%e uali'ied &idder s%ould de$osit T%irt3>T%ree +illion Pesos /P44,,7, inP%ili$$ine currenc3 as &id Securit3 in t%e 'orm o':

i" +ana)erMs c%ecF or unconditional demand dra't $a3a2le to t%e H.o-ernment Ser-ice

Insurance S3stemH and issued 23 a re$uta2le 2anFin) institution dul3 licensed to do2usiness in t%e P%ili$$ines and acce$ta2le to .SIS or

ii" Stand23>23 letter o' credit issued 23 a re$uta2le 2anFin) institution acce$ta2le to t%e.SIS"

2" T%e .SIS will re?ect a 2id i ':

i" T%e 2id does not %a-e &id Securit3 or

ii" T%e &id Securit3 accom$an3in) t%e 2id is 'or less t%an t%e required amount"

c" I' t%e &id Securit3 is in t%e 'orm o' a mana)erMs c%ecF or unconditional demand dra't,t%e interest earned on t%e &id Securit3 will 2e 'or t%e account o' .SIS"

d" I' t%e uali'ied &idder 2ecomes t%e winnin) &idderKStrate)ic Partner, t%e &id Securit3

will 2e a$$lied as t%e down$a3ment on t%e uali'ied &idderMs o''ered $urc%ase $rice"e" T%e &id Securit3 o' t%e uali'ied &idder will 2e returned immediatel3 a'ter t%e Pu2lic&iddin) i' t%e uali'ied &idder is not declared t%e i)%est &idder"

'" T%e &id Securit3 will 2e returned 23 Octo2er *4, !550 i' t%e i)%est &idder is una2le tone)otiate and eecute wit% .SISK+C t%e +ana)ement Contract, International+arFetin)K(eser-ation S3stem Contract or ot%er t3$es o' contract s$eci'ied 23 t%e i)%est&idder in its strate)ic $lan 'or T%e +anila otel"

)" T%e &id Securit3 o' t%e i)%est &idder will 2e 'or'eited in 'a-or o' .SIS i' t%e i)%est&idder, a'ter ne)otiatin) and eecutin) t%e +ana)ement Contract, International+arFetin)K(eser-ation S3stem Contract s$eci'ied 23 t%e i)%est &idder or ot%er t3$es o'contract in its strate)ic $lan 'or T%e +anila otel, 'ails or re'uses to:

i" Eecute t%e StocF Purc%ase and Sale A)reement wit% .SIS not later t%an Octo2er *4,!550 or

ii" Pa3 t%e 'ull amount o' t%e o''ered $urc%ase $rice not later t%an Octo2er *4, !550 or

iii" Consummate t%e sale o' t%e &locF o' S%ares 'or an3 ot%er reason"

." SU&+ISSION O# &IDS

!" T%e Pu2lic &iddin) will 2e %eld on Se$tem2er 6, !550 at t%e 'ollowin) location:

New .SIS eadquarters &uildin)#inancial Center, (eclamation Area(oas &oule-ard, Pasa3 Cit3, +etro +anila"

*" T%e Secretariat o' t%e P&AC will 2e stationed at t%e Pu2lic &iddin) to acce$t an3 and all

2ids and su$$ortin) requirements" (e$resentati-es 'rom t%e Commission on Audit andCOP will 2e in-ited to witness t%e $roceedin)s"

4" T%e uali'ied &idder s%ould su2mit its 2id usin) t%e O''icial &id #orm" T%eaccom$lis%ed O''icial &id #orm s%ould 2e su2mitted in a sealed en-elo$e marFedHO##ICIAL &ID"H

9" T%e uali'ied &idder s%ould su2mit t%e 'ollowin) documents in anothersealed en-elo$emarFed HSUPPO(TIN. &ID DOCU+ENTSH

a" Written Aut%orit3 &id

2" &id Securit30" T%e two sealed en-elo$es marFed HO##ICIAL &IDH and HSUPPO(TIN. &IDDOCU+ENTSH must 2e su2mitted simultaneousl3 to t%e Secretariat 2etween 5: A+ and*: P+, P%ili$$ine Standard Time, on t%e date o' t%e Pu2lic &iddin)" No 2id s%all 2eacce$ted a'ter t%e closin) time" O$ened or tam$ered 2ids s%all not 2e acce$ted"

1" T%e Secretariat will lo) and record t%e actual time o' su2mission o' t%e two sealeden-elo$es" T%e actual time o' su2mission will also 2e indicated 23 t%e Secretariat on t%e'ace o' t%e two en-elo$es"

6" A'ter Ste$ No" 1, t%e two sealed en-elo$es will 2e dro$$ed in t%e corres$ondin) 2id2oes $ro-ided 'or t%e $ur$ose" T%ese 2oes will 2e in 'ull -iew o' t%e in-ited $u2lic"

" OPENIN. AND (EADIN. O# &IDS

!" A'ter t%e closin) time o' *: P+ on t%e date o' t%e Pu2lic &iddin), t%e P&AC will o$enall sealed en-elo$es marFed HSUPPO(TIN. &ID DOCU+ENTSH 'or screenin),e-aluation and acce$tance" T%ose w%o su2mitted incom$leteKinsu''icient documents ordocumentKs w%ic% isKare not su2stantiall3 in t%e 'orm required 23 P&AC will 2edisquali'ied" T%e en-elo$e containin) t%eir O''icial &id #orm will 2e immediatel3 returnedto t%e disquali'ied 2idders"

*" T%e sealed en-elo$es marFed HO##ICIAL &IDH will 2e o$ened at 4: P+" T%e name o't%e 2idder and t%e amount o' its 2id $rice will 2e read $u2licl3 as t%e en-elo$es areo$ened"

4" Immediatel3 'ollowin) t%e readin) o' t%e 2ids, t%e P&AC will 'ormall3 announce t%e%i)%est 2id and t%e i)%est &idder"

9" T%e %i)%est 2id will 2e, determined on aprice per share basis" In t%e e-ent o' a tiew%erein two or more 2ids %a-e t%e same equi-alent $rice $er s%are, $riorit3 will 2e )i-ento t%e 2idder seeFin) t%e lar)er owners%i$ interest in +C"

0" T%e Pu2lic &iddin) will 2e declared a 'ailed 2iddin) in case:

a" No sin)le 2id is su2mitted wit%in t%e $rescri2ed $eriod or

2" T%ere is onl3 one /!7 2id t%at is su2mitted and acce$ta2le to t%e P&AC"

I" EJECUTION O# TE NECESSA(< CONT(ACTS WIT .SISK+C

!" T%e i)%est &idder must com$l3 wit% t%e conditions set 'ort% 2elow 23 Octo2er *4,!550 or t%e i)%est &idder will lose t%e ri)%t to $urc%ase t%e &locF o' S%ares and .SISwill instead o''er t%e &locF o' S%ares to t%e ot%er uali'ied &idders:

a" T%e i)%est &idder must ne)otiate and eecute wit% .SISK+C t%e +ana)ementContract, International +arFetin) (eser-ation S3stem Contract or ot%er t3$e o' contracts$eci'ied 23 t%e i)%est &idder in its strate)ic $lan 'or T%e +anila otel" I' t%e i)%est


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&idder is intendin) to $ro-ide onl3 'inancial su$$ort to T%e +anila otel, a se$arateinstitution ma3 enter into t%e a'orementioned contractKs wit% .SISK+C"

2" T%e i)%est &idder must eecute t%e StocF Purc%ase and Sale A)reement wit% .SIS,a co$3 o' w%ic% will 2e distri2uted to eac% o' t%e uali'ied &idder a'ter t%e $requali'ication$rocess is com$leted"

*" In t%e e-ent t%at t%e i)%est &idder c%ooses a +ana)ement Contract 'or T%e +anilaotel, t%e maimum le-els 'or t%e mana)ement 'ee structure t%at .SISK+C are $re$ared

to acce$t in t%e +ana)ement Contract are as 'ollows:

a" &asic mana)ement 'ee: +aimum o' *"0G o' )ross re-enues"/!7

2" Incenti-e 'ee: +aimum o' 8"G o' )ross o$eratin) $ro'it/!7 a'ter deductin)undistri2uted o-er%ead e$enses and t%e 2asic mana)ement 'ee"

c" #ied com$onent o' t%e international marFetin)Kreser-ation s3stem 'ee: +aimum o'*"G o' )ross room re-enues"/!7 T%e A$$licant s%ould indicate in i ts In'ormation PacFa)ei' it is wis%es to c%ar)e t%is 'ee"

Note /!7: As de'ined in t%e uni'orm s3stem o' account 'or %otels"

T%e .SISK+C %a-e indicated a2o-e t%e acce$ta2le $arameters 'or t%e %otelmana)ement 'ees to 'acilitate t%e ne)otiations wit% t%e i)%est &idder 'or t%e

+ana)ement Contract a'ter t%e Pu2lic &iddin)"A uali'ied &idder en-isionin) a +ana)ement Contract 'or T%e +anila otel s%oulddetermine w%et%er or not t%e mana)ement 'ee structure a2o-e is acce$ta2le 2e'oresu2mittin) t%eir $requali'ication documents to .SIS"

;" &LOCB SALE TO TE OTE( UALI#IED &IDDE(S

!" I' 'or an3 reason, t%e i)%est &idder cannot 2e awarded t%e &locF o' S%ares, .SIS ma3o''er t%is to t%e ot%er uali'ied &idders t%at %a-e -alidl3 su2mitted 2ids $ro-ided t%att%ese uali'ied are willin) to matc% t%e %i)%est 2id in terms o'price per share"

*" T%e order o' $riorit3 amon) t%e interested uali'ied &idders will 2e in accordance witt%e equi-alentprice per shareo' t%eir res$ecti-e 2ids in t%eir $u2lic &iddin), i"e", 'irst andsecond $riorit3 will 2e )i-en to t%e uali'ied &idders t%at su2mitted t%e second and t%ird

%i)%est 2ids on t%eprice per share2asis, res$ecti-el3, and so on"B" DECLA(ATION O# TE WINNIN. &IDDE(KST(ATE.IC PA(TNE(

T%e i)%est &idder will 2e declared t%e Winnin) &idderKStrate)ic Partner a'ter t%e'ollowin) conditions are met:

a" Eecution o' t%e necessar3 contract wit% .SISK+C not later t%an Octo2er *4, !550and

2" (equisite a$$ro-als 'rom t%e .SISK+C and COPKO.CC are o2tained"

I" #ULL PA


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T%e -ital issues can 2e summed u$ as 'ollows:

/!7 W%et%er section !, $ara)ra$% * o' Article JII o' t%e Constitution is a sel'>eecutin)$ro-ision and does not need im$lementin) le)islation to carr3 it into e''ect

/*7 Assumin) section ! $ara)ra$% * o' Article JII is sel'>eecutin) w%et%er t%e controllin)s%ares o' t%e +anila otel Cor$oration 'orm $art o' our $atrimon3 as a nation

/47 W%et%er .SIS is included in t%e term HState,H %ence, mandated to im$lement section!, $ara)ra$% * o' Article JII o' t%e Constitution

/97 Assumin) .SIS is $art o' t%e State, w%et%er it 'ailed to )i-e $re'erence to $etitioner, aquali'ied #ili$ino cor$oration, o-er and a2o-e (enon) &er%ad, a 'orei)n cor$oration, in t%esale o' t%e controllin) s%ares o' t%e +anila otel Cor$oration

/07 W%et%er $etitioner is esto$$ed 'rom questionin) t%e sale o' t%e s%ares to (enon)&er%ad, a 'orei)n cor$oration"

Anent t%e 'irst issue, it is now 'amiliar learnin) t%at a Constitution $ro-ides t%e )uidin)$olicies and $rinci$les u$on w%ic% is 2uilt t%e su2stantial 'oundation and )eneral

'rameworF o' t%e law and )o-ernment"&As a rule, its $ro-isions are deemed sel'>eecutin) and can 2e en'orced wit%out 'urt%er le)islati-e action"'Some o' its $ro-isions,%owe-er, can 2e im$lemented onl3 t%rou)% a$$ro$riate laws enacted 23 t%e Le)islature,%ence not sel'>eecutin)"

To determine w%et%er a $articular $ro-ision o' a Constitution is sel'>eecutin) is a %ardrow to %oe" T%e Fe3 lies on t%e intent o' t%e 'ramers o' t%e 'undamental law o'tentimessu2mer)ed in its lan)ua)e" A searc%in) inquir3 s%ould 2e made to 'ind out i' t%e $ro-isionis intended as a $resent enactment, com$lete in itsel' as a de'initi-e law, or i' it needs'uture le)islation 'or com$letion and en'orcement"-T%e inquir3 demands a micro>anal3siso' t%e tet and t%e contet o' t%e $ro-ision in question"0

Courts as a rule consider t%e $ro-isions o' t%e Constitution as sel'>eecutin),,rat%er t%anas requirin) 'uture le)islation 'or t%eir en'orcement" $1T%e reason is not di''icult to discern"

#or i' t%e3 are not treated as sel'>eecutin), t%e mandate o' t%e 'undamental law rati'ied23 t%e so-erei)n $eo$le can 2e easil3 i)nored and nulli'ied 23 Con)ress" $$Su''used wit%wisdom o' t%e a)es is t%e un3ieldin) rule t%at le)islati-e actions ma3 )i-e 2reat% toconstitutional ri)%ts 2ut con)ressional in action s%ould not su''ocate t%em" $%

T%us, we %a-e treated as sel'>eecutin) t%e $ro-isions in t%e &ill o' (i)%ts on arrests,searc%es and sei=ures, $*t%e ri)%ts o' a $erson under custodial in-esti)ation, $/t%e ri)%tso' an accused, $&and t%e $ri-ile)e a)ainst sel'>incrimination, $'It is reco)ni=e a t%atle)islation is unnecessar3 to ena2le courts to e''ectuate constitutional $ro-isions)uaranteein) t%e 'undamental ri)%ts o' li'e, li2ert3 and t%e $rotection o' $ro$ert3" $-T%esame treatment is accorded to constitutional $ro-isions 'or2iddin) t%e taFin) or dama)in)o' $ro$ert3 'or $u2lic use wit%out ?ust com$ensation"$0

Contrariwise, case law la3s down t%e rule t%at a constitutional $ro-ision is not sel'>

eecutin) w%ere it merel3 announces a $olic3 and its lan)ua)e em$owers t%e Le)islatureto $rescri2e t%e means 23 w%ic% t%e $olic3 s%all 2e carried into e''ect" $,Accordin)l3, we%a-e %eld t%at t%e $ro-isions in Article II o' our Constitution entitled HDeclaration o'

Princi$les and State PoliciesH s%ould )enerall3 2e construed as mere statements o'$rinci$les o' t%e State" %1We %a-e also ruled t%at some $ro-isions o' Article JIII on HSocial;ustice and uman (i)%ts,H %$and Article JI@ on HEducation Science and Tec%nolo)3,Arts, Culture end S$ortsH %%cannot 2e t%e 2asis o' ?udiciall3 en'orcea2le ri)%ts" T%eiren'orcement is addressed to t%e discretion o' Con)ress t%ou)% t%e3 $ro-ide t%e'rameworF 'or le)islation %*to e''ectuate t%eir $olic3 content" %/

.uided 23 t%is ma$ o' settled ?uris$rudence, we now consider w%et%er Section !, Article

JII o' t%e !586 Constitution is sel'>eecutin) or not" It reads:Sec" !" T%e Con)ress s%all, u$on recommendation o' t%e economic and $lannin)a)enc3, w%en t%e national interest dictates, reser-e to citi=ens o' t%e P%ili$$ines or tocor$orations or associations at least sit3per centumo' w%ose ca$ital is owned 23 suc%citi=ens, or suc% %i)%er $ercenta)e as Con)ress ma3 $rescri2e, certain areas o'in-estments" T%e Con)ress s%all enact measures t%at will encoura)e t%e 'ormation ando$eration o' enter$rises w%ose ca$ital is w%oll3 owned 23 #ili$inos"


T%e State s%all re)ulate and eercise aut%orit3 o-er 'orei)n in-estments wit%in its national?urisdiction and in accordance wit% its national )oals and $riorities"

T%e 'irst $ara)ra$% directs Con)ress to reser-e certain areas o' in-estments in t%ecountr3 %&to #ili$ino citi=ens or to cor$orations sit3 $ercent %'o' w%ose ca$ital stocF is owned 23 #ili$inos" It 'urt%er commands Con)ress toenact laws t%at will encoura)e t%e 'ormation and o$eration o' one %undred $ercent#ili$ino>owned enter$rises" In c%ecFered contrast, t%e second $ara)ra$% orders t%e entireState to )i-e $re'erence to quali'ied #ili$inos in t%e )rant o' ri)%ts and $ri-ile)es co-erin)t%e national econom3 and $atrimon3" T%e t%ird $ara)ra$% also directs t%e State tore)ulate 'orei)n in-estments in line wit% our national )oals and well>set $riorities"

T%e 'irst $ara)ra$% o' Section ! is not sel'>eecutin)" &3 its e$ress tet, t%ere is acate)orical command 'or Con)ress to enact laws restrictin) 'orei)n owners%i$ in certainareas o' in-estments in t%e countr3 and to encoura)e t%e 'ormation and o$eration o'w%oll3>owned #ili$ino enter$rises" T%e ri)%t )ranted 23 t%e $ro-ision is clearl3 still in esse"Con)ress %as to 2reat%e li'e to t%e ri)%t 23 means o' le)islation" Parent%eticall3, t%is

$ara)ra$% was $lucFed 'rom section 4, Article JI@ o' t%e !564 Constitution"%-

T%e$ro-ision in t%e !564 Constitution a''irmed our rulin) in t%e landmarF case o' @ao Ichongv" ernandeD, %0w%ere we u$%eld t%e discretionar3 aut%orit3 o' Con)ress to #ili$ini=ecertain areas o' in-estments" %,&3 reenactin) t%e !564 $ro-ision, t%e 'irst $ara)ra$% o'section ! a''irmed t%e $ower o' Con)ress to nationali=e certain areas o' in-estments in'a-or o' #ili$inos"

T%e second and t%ird $ara)ra$%s o' Section ! are di''erent" T%e3 are directed to t%eState and not to Con)ress alone w%ic% is 2ut one o' t%e t%ree )reat 2ranc%es o' our)o-ernment" T%eir co-era)e is also 2roader 'or t%e3 co-er Ht%e national econom3 and$atrimon3H and H'orei)n in-estments wit%in t%e national ?urisdictionH and not merel3Hcertain areas o' in-estments"H &e3ond de2ate, t%e3 cannot 2e read as )rantin) Con)resst%e eclusi-e $ower to im$lement 23 law t%e $olic3 o' )i-in) $re'erence to quali'ied#ili$inos in t%e con'erral o' ri)%ts and $ri-ile)es co-erin) our national econom3 and

$atrimon3" T%eir lan)ua)e does not su))est t%at an3 o' t%e State a)enc3 orinstrumentalit3 %as t%e $ri-ile)e to %ed)e or to re'use its im$lementation 'or an3 reason


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w%atsoe-er" T%eir dut3 to im$lement is unconditional and it is now" T%e second and t%et%ird $ara)ra$%s o' Section !, Article JI I are t%us sel'>eecutin)"

T%is su2mission is stren)t%ened 23 Article II o' t%e Constitution entitled HDeclaration o'Princi$les and State Policies"H Its Section !5 $ro-ides t%at HT%e State s%all de-elo$ asel'>reliant and inde$endent national econom3 e''ecti-el3 controlled 23 #ili$inos"H Iten)ra'ts t%e all>im$ortant #ili$ino #irst $olic3 in our 'undamental law and 23 t%e use o' t%emandator3 word Hs%all,H directs its en'orcement 23 t%e w%ole State wit%out an3 $ause or a

%al'> $ause in time"T%e second issue is w%et%er t%e sale o' a ma?orit3 o' t%e stocFs o' t%e +anila otelCor$oration in-ol-es t%e dis$osition o' $art o' our national $atrimon3" T%e records o' t%eConstitutional Commission s%ow t%at t%e Commissioners entertained t%e same -iew as toits meanin)" Accordin) to Commissioner Nolledo, H$atrimon3H re'ers not onl3 to our ric%natural resources 2ut also to t%e cultural %erita)e o' our race" *1&3 t%is 3ardsticF, t%e saleo' +anila otel 'alls wit%in t%e co-era)e o' t%e constitutional $ro-ision )i-in) $re'erentialtreatment to quali'ied #ili$inos in t%e )rant o' ri)%ts in-ol-in) our national $atrimon3" T%eunique -alue o' t%e +anila otel to our %istor3 and culture cannot 2e -iewed wit% a m3o$ice3e" T%e -alue o' t%e %otel )oes 2e3ond $esos and centa-os" As c%ronicled 23 &et% Da3(omulo, *$t%e %otel 'irst o$ened on ;ul3 9, !5!* as a 'irst>class %otel 2uilt 23 t%eAmerican Insular .o-ernment 'or Americans li-in) in, or $assin) t%rou)%, +anila w%iletra-elin) to t%e Orient" Indi)enous materials and #ili$ino cra'tsmans%i$ were utili=ed in its

construction, #or sometime, it was eclusi-el3 used 23 American and Caucasian tra-elersand ser-ed as t%e Ho''icial )uest%ouseH o' t%e American Insular .o-ernment 'or -isitin)'orei)n di)nitaries" #ili$inos 2e)an comin) to t%e otel as )uests durin) t%eCommonwealt% $eriod" W%en t%e ;a$anese occu$ied +anila, it ser-ed as militar3%eadquarters and lod)in) 'or t%e %i)%est>ranFin) o''icers 'rom ToF3o" It was at t%e oteland t%e Intramuros t%at t%e ;a$anese made t%eir last stand durin) t%e Li2eration o'+anila" A'ter t%e war, t%e otel a)ain ser-ed 'orei)n )uests and #ili$inos aliFe" Presidentsand Fin)s, $remiers and $otentates, as well as )lamorous international 'ilm and s$ortscele2rities were %oused in t%e otel" It was also t%e situs o' international con-entions andcon'erences" In t%e local scene, it was t%e -enue o' %istoric meetin)s, $arties andcon-entions o' $olitical $arties" T%e otel %as rea$ed and continues rea$in) numerousreco)nitions and awards 'rom international %otel and tra-el award>)i-in) 2odies, a 'ittin)acFnowled)ment o' #ili$ino talent and in)enuit3" T%ese are ?udiciall3 co)ni=a2le 'actsw%ic% cannot 2e 2ent 23 a 2iased mind"

T%e otel ma3 not, as 3et, %a-e 2een declared a national cultural treasure $ursuant to(e$u2lic Act No" 9891 2ut t%at does not eclude it 'rom our national $atrimon3" (e$u2licAct No" 9891, HT%e Cultural Pro$erties Preser-ation and Protection Act,H merel3 $ro-idesa $rocedure w%ere23 a $articular cultural $ro$ert3 ma3 2e classi'ied a Hnational culturaltreasureH or an Him$ortant cultural $ro$ert3" *%A$$ro-ed on ;une !8, !511 and amended23 P"D" 469 in !569, t%e law is l imited in its reac% and cannot 2e read as t%e eclusi-e lawim$lementin) section !, Article JII o' t%e !586 Constitution" To 2e sure, t%e law does notequate cultural treasure and cultural $ro$ert3 as s3non3mous to t%e $%rase H$atrimon3 o't%e nation"H

T%e t%ird issue is w%et%er t%e constitutional command to t%e State includes t%eres$ondent .SIS" A looF at its c%arter will re-eal t%at .SIS is a )o-ernment>owned andcontrolled cor$oration t%at administers 'unds t%at come 'rom t%e mont%l3 contri2utions o'

)o-ernment em$lo3ees and t%e )o-ernment" **T%e 'unds are %eld in trust 'or a distinct$ur$ose w%ic% cannot 2e dis$osed o' indi''erentl3" */T%e3 are to 2e used to 'inance t%eretirement, disa2ilit3 and li'e insurance 2ene'its o' t%e em$lo3ees and t%e administrati-e

and o$erational e$enses o' t%e .SIS, *&Ecess 'unds, %owe-er, are allowed to 2ein-ested in 2usiness and ot%er -entures 'or t%e 2ene'it o' t%e em$lo3ees"*'It is t%uscontended t%at t%e .SIS in-estment in t%e +anila otel Cor$oration is a sim$le 2usiness-enture, %ence, an act 2e3ond t%e contem$lation o' section !, $ara)ra$% * o' Article JIIo' t%e Constitution"

T%e su2mission is unim$ressi-e" T%e .SIS is not a $ure $ri-ate cor$oration" It isessentiall3 a $u2lic cor$oration created 23 Con)ress and )ranted an ori)inal c%arter to

ser-e a $u2lic $ur$ose" It is su2?ect to t%e ?urisdictions o' t%e Ci-il Ser-iceCommission *-and t%e Commission on Audit" *0As state>owned and controlledcor$oration, it is sFin>2ound to ad%ere to t%e $olicies s$elled out in t%e )eneral wel'are o't%e $eo$le" One o' t%ese $olicies is t%e #ili$ino #irst $olic3 w%ic% t%e $eo$le ele-ated as aconstitutional command"

T%e 'ourt% issue demands t%at we looF at t%e content o' $%rase Hquali'ied #ili$inosH andt%eir H$re'erential ri)%t"H T%e Constitution desisted 'rom de'inin) t%eir contents" T%is is as itou)%t to 2e 'or a Constitution onl3 la3s down 'lei2le $olicies and $rinci$les w%ic% can2ent to meet toda3Ms mani'est needs and tomorrowMs unmani'ested demands" Onl3 aconstitution strun) wit% elasticit3 can )row as a li-in) constitution"

T%us, durin) t%e deli2erations in t%e Constitutional Commission, Commissioner Nolledo tode'ine t%e $%rase 2rus%ed aside a su))estion to de'ine t%e $%rase Hquali'ied #ili$inos"H ee$lained t%at $resent and $ros$ecti-e HlawsH will taFe care o' t%e $ro2lem o' itsinter$retation, viD:

TE P(ESIDENT" W%at is t%e su))estion o' Commissioner (odri)o Is it to remo-e t%eword HUALI#IEDH

+(" (OD(I.O" No, no, 2ut sa3 de'initel3 HTO UALI#IED #ILIPINOSH as a)ainst w%omAs a)ainst aliens o-er aliens

+(" NOLLEDO" +adam President, I t%inF t%at is understood" We use t%e wordHUALI#IEDH 2ecause t%e eistin) laws or t%e $ros$ecti-e laws will alwa3s la3 downconditions under w%ic% 2usiness ma$ 2e done, 'or eam$le, quali'ications on ca$ital,quali'ications on t%e settin) u$ o' ot%er 'inancial structures, et cetera"

+(" (OD(I.O" It is ?ust a matter o' st3le"+(" NOLLEDO


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standards to measure t%e quali'ications o' 2idders #ili$inos and 'orei)ners aliFe" It is notseriousl3 dis$uted t%at $etitioner quali'ied to 2id as did (enon) &er%ad" *,

T%us, we come to t%e critical issue o' t%e de)ree o' $re'erence w%ic% .SIS s%ould %a-eaccorded $etitioner, a quali'ied #ili$ino, o-er (enon) &er%ad, a 'orei)ner, in t%e $urc%aseo' t%e controllin) s%ares o' t%e +anila otel" Petitioner claims t%at a'ter losin) t%e 2id, t%isri)%t o' $re'erence )i-es it a second c%ance to matc% t%e %i)%est 2id o' (enon) &er%ad"

Wit% due res$ect, I cannot sustain $etitionerMs su2mission" I $rescind 'rom t%e $remise

t%at t%e second $ara)ra$% o' section !, Article JII o' t%e Constitution is $ro>Pili$ino 2utnot anti>alien" It is $ro>#ili$ino 'or it )i-es $re'erence to #ili$inos" It is not, %owe-er, anti>alienper se 'or it does not a2solutel3 2ar aliens in t%e )rant o' ri)%ts, $ri-ile)es andconcessions co-erin) t%e national econom3 and $atrimon3" Indeed, in t%e a2sence o'quali'ied #ili$inos, t%e State is not $ro%i2ited 'rom )rantin) t%ese ri)%ts, $ri-ile)es andconcessions to 'orei)ners i' t%e act will $romote t%e weal o' t%e nation"

In im$lementin) t%e $olic3 articulated in section !, Article JII o' t%e Constitution, t%estellar tasF o' our State $olic3>maFers is to maintain a creati-e tension 2etween twodesiderata 'irst, t%e need to de-elo$ our econom3 and $atrimon3 wit% t%e %el$ o''orei)ners i' necessar3, and, second, t%e need to Fee$ our econom3 controlled 23#ili$inos" (i)%t'ull3, t%e 'ramers o' t%e Constitution did not de'ine t%e de)ree o' t%e ri)%t o'$re'erence to 2e )i-en to quali'ied #ili$inos" T%e3 Fnew t%at 'or t%e ri)%t to ser-e t%e)eneral wel'are, it must %a-e a mallea2le content t%at can 2e ad?usted 23 our $olic3>maFers to meet t%e c%an)in) needs o' our $eo$le" In 'ine, t%e ri)%t o' $re'erence o'quali'ied #ili$inos is to 2e determined 23 de)ree as time dictates and circumstanceswarrant" T%e lesser t%e need 'or alien assistance, t%e )reater t%e de)ree o' t%e ri)%t o'$re'erence can 2e )i-en to #ili$inos and -ice -erse"

A)ain, it s%ould 2e stressed t%at t%e ri)%t and t%e dut3 to determine t%e de)ree o' t%is$ri-ile)e at an3 )i-en time is addressed to t%e entire State" W%ile under our constitutionalsc%eme, t%e ri)%t $rimaril3 2elon)s to Con)ress as t%e lawmaFin) de$artment o' our)o-ernment, ot%er 2ranc%es o' )o-ernment, and all t%eir a)encies and instrumentalities,s%are t%e $ower to en'orce t%is state $olic3" Wit%in t%e limits o' t%eir aut%orit3, t%e3 can actor $romul)ate rules and re)ulations de'inin) t%e de)ree o' t%is ri)%t o' $re'erence in casesw%ere t%e3 %a-e to maFe )rants in-ol-in) t%e national econom3 and ?udicial dut3" On t%eot%er %and, our dut3 is to striFe down acts o' t%e state t%at -iolate t%e $olic3"

To date, Con)ress %as not enacted a law de'inin) t%e de)ree o' t%e $re'erential ri)%t"Consequentl3, we must turn to t%e rules and re)ulations o' on res$ondents CommitteePri-ati=ation and .SIS to determine t%e de)ree o' $re'erence t%at $etitioner is entitled toas a quali'ied #ili$ino in t%e su2?ect sale" A tearless looF at t%e rules and re)ulations wills%ow t%at t%e3 are silent on t%e de)ree o' $re'erential ri)%t to 2e accorded quali'ied#ili$ino 2idder" Des$ite t%eir silence, %owe-er, t%e3 cannot 2e read to mean t%at t%e3 donot )rant an3 de)ree o' $re'erence to $etitioner 'or $ara)ra$% *, section !, Article JII o't%e Constitution is deemed $art o' said rules and re)ulations" Pursuant to le)al%ermeneutics w%ic% demand t%at we inter$ret rules to sa-e t%em 'rom unconstitutionalit3, Isu2mit t%at t%e ri)%t o' $re'erence o' $etitioner arises onl3 i' it tied t%e 2id o' &enon)&er%ad" In t%at instance, all t%in)s stand equal, and 2idder, as a quali'ied Pili$ino 2idder,s%ould 2e $re'erred"

It is wit% dee$ re)ret t%at I cannot su2scri2e to t%e -iew t%at $etitioner %as a ri)%t to matc%

t%e 2id o' (enon) &er%ad" PetitionerMs su2mission must 2e su$$orted 23 t%e rules 2ute-en i' we eamine t%e rules inside>out "t%ousand times, t%e3 can not ?usti'3 t%e claimedri)%t" Under t%e rules, t%e ri)%t to matc% t%e %i)%est 2id arises onl3 H i' 'or an3 reason, t%e

%i)%est 2idder cannot 2e awarded 2locF o' s%ares " " "H No reason %as arisen t%at will$re-ent t%e award to (enon) &er%ad" I t quali'ied as 2idder" It com$lied wit% t%e $rocedureo' 2iddin)" It tendered t%e %i)%est 2id" It was declared as t%e %i)%est 2idder 23 t%e .SISand t%e rules sa3 t%is decision is 'inal" It deser-es t%e award as a matter o' ri)%t 'or t%erules clearl3 did not )i-e to t%e $etitioner as a quali'ied #ili$ino $ri-ile)e to matc% t%e%i)%er 2id o' a 'orei)ner" W%at t%e rules did not )rant, $etitioner cannot demand" Ours3m$%aties ma3 2e wit% $etitioner 2ut t%e court %as no $ower to etend t%e latitude andlon)titude o' t%e ri)%t o' $re'erence as de'ined 23 t%e rules" T%e $arameters o' t%e ri)%t o'

$re'erence de$end on )ala3 o' 'acts and 'actors w%ose determination 2elon)s to t%e$ro-ince o' t%e $olic3>maFin) 2ranc%es and a)encies o' t%e State" We are dut3>2ound tores$ect t%at determination e-en i' we di''er wit% t%e wisdom o' t%eir ?ud)ment" T%e ri)%tt%e3 )rant ma3 2e little 2ut we must u$%old t%e )rant 'or as lon) as t%e ri)%t o' $re'erenceis not denied" It is onl3 w%en a State action amounts to a denial o' t%e ri)%t t%at t%e Courtcan come in and striFe down t%e denial as unconstitutional"

#inall3, I su2mit t%at $etitioner is esto$$ed 'rom assailin) t%e winnin) 2id o' (enon)&er%ad" Petitioner was aware o' t%e rules and re)ulations o' t%e 2iddin)" It Fnew t%at t%erules and re)ulations do not $ro-ide t%at a quali'ied #ili$ino 2idder can matc% t%e winnin)2id su2mittin) an in'erior 2id" It Fnew t%at t%e 2id was o$en to 'orei)ners and t%at'orei)ners quali'ied e-en durin) t%e 'irst 2iddin)" Petitioner cannot 2e allowed to re$udiatet%e rules w%ic% it a)reed to res$ect" It cannot 2e allowed to o2e3 t%e rules w%en it winsand disre)ard t%em w%en it loses" I' sustained, $etitionersM stance will wreaF %a-oc on %e

essence o' 2iddin)" Our laws, rules and re)ulations require %i)%est 2iddin) to raise asmuc% 'unds as $ossi2le 'or t%e )o-ernment to maimi=e its ca$acit3 to deli-er essentialser-ices to our $eo$le" T%is is a dut3 t%at must 2e disc%ar)ed 23 #ili$inos and 'orei)ners$artici$atin) in a 2iddin) contest and t%e rules are care'ull3 written to attain t%is o2?ecti-e"Amon) ot%ers, 2idders are $requali'ied to insure t%eir 'inancial ca$a2ilit3" T%e 2iddin) issecret and t%e 2ids are sealed to $re-ent collusion amon) t%e $arties" T%is o2?ecti-e will2e undermined i' we )rant $etitioner t%at $ri-ile)e to Fnow t%e winnin) 2id and a c%ance tomatc% it" #or $lainl3, a second c%ance to 2id will encoura)e a 2idder not to stri-e to )i-et%e %i)%est 2id in t%e 'irst 2iddin)"

We su$$ort t%e #ili$ino #irst $olic3 wit%out an3 reser-ation" T%e -isionar3 nationalist DonClaro +" (ecto %as warned us t%at t%e )reatest tra)ed3 t%at can 2e'all a #ili$ino is to 2ean alien in %is own land" T%e Constitution %as em2odied (ectoMs counsel as a state $olic3"&ut w%ile t%e #ili$ino #irst $olic3 requires t%at we incline to a #ili$ino, it does not demandt%at we wron) an alien" Our $olic3 maFers can write laws and rules )i-in) 'a-oredtreatment to t%e #ili$ino 2ut we are not 'ree to 2e un'air to a 'orei)ner a'ter writin) t%e lawsand t%e rules" A'ter t%e laws are written, t%e3 must 2e o2e3ed as written, 23 #ili$inos and'orei)ners aliFe" T%e equal $rotection clause o' t%e Constitution $rotects all a)ainstun'airness" We can 2e $ro>#ili$ino wit%out un'airness to 'orei)ner"

I -ote to dismiss t%e $etition"

Aarvasa, .+>+, and Melo, >+, concur+

PA#GA#!BA#+ J., dissentin):

I re)ret I cannot ?oin t%e ma?orit3" To t%e incisi-e Dissentin) O$inion o' +r" ;ustice (e3nato

S" Puno, ma3 I ?ust add!" T%e ma?orit3 contends t%e Constitution s%ould 2e inter$reted to mean t%at, a'ter a2iddin) $rocess is concluded, t%e losin) #ili$ino 2idder s%ould 2e )i-en t%e ri)%t to equal


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t%e %i)%est 'orei)n 2id, and t%us to win" owe-er, t%e Constitution Sec" ! /*7, Art" JIIsim$l3 states t%at Hin t%e )rant o' ri)%ts " " " co-erin) t%e national econom3 and $atrimon3,t%e State s%all )i-e $re'erence to quali'ied #ili$inos"H T%e ma?orit3 concedes t%at t%ere isno law defining the extent or degreeo' suc% $re'erence" Specifically, no statute empo%ersa losing Filipino bidder to increase his bid and equal that of the %inning foreigner" In t%ea2sence o' suc% em$owerin) law, t%e ma?orit3Ms strained inter$retation, I res$ect'ull3su2mit constitutes unadulterated4udicial legislation, %hich makes bidding a ridiculoussham %here no Filipino can lose and %here no foreigner can %in" Onl3 in t%e P%ili$$inesQ"

*" Aside 'rom 2ein) $ro%i2ited 23 t%e Constitution, suc% ?udicial is s%ort>si)%ted and,-iewed $ro$erl3, )ra-el3 $re?udicial to lon)>term #ili$ino interest" I t encoura)es ot%ercountries in t%e )uise o' re-erse comit3 or worse, una2as%ed retaliation todiscriminate a)ainst us in t%eir own ?urisdictions 23 aut%ori=in) t%eir own nationals tosimilarl3 equal and de'eat t%e %i)%er 2ids o' #ili$ino enter$rises solel3, w%ile on t%e ot%er%and, allowin) similar 2ids o' ot%er 'orei)ners to remain unc%allen)ed 23 t%eirnationals" &he ma4ority9s thesis %ill thus marginaliDe Filipinos as pariahs in the globalmarketplace %ith absolute no chance of %inning any bidding outside our country" E-enaut%oritarian re)imes and %ermit Fin)doms %a-

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Constitutional Law II Part 1 - Due Process and Equal Protection

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