First 4 Cases

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 98

EN BANC RESOLUTION

G.R. No. 135385 December 6, 2000 PER CURIAM:

ISAGANI CRUZ and CESAR EUROPA, petitioners, Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as
citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No.
vs. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and
its Implementing Rules and Regulations (Implementing Rules).
SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET
AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL
COMMISSION ON INDIGENOUS PEOPLES, respondents.
In its resolution of September 29, 1998, the Court required respondents to comment.1 In
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI compliance, respondents Chairperson and Commissioners of the National Commission on
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO Indigenous Peoples (NCIP), the government agency created under the IPRA to implement its
CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI provisions, filed on October 13, 1998 their Comment to the Petition, in which they defend the
KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG- constitutionality of the IPRA and pray that the petition be dismissed for lack of merit.
ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO SABASALES, DATU
EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN, TIMUAY JOSE ANOY,
TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING, DATU SAHAMPONG
MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY, BAY INAY On October 19, 1998, respondents Secretary of the Department of Environment and Natural
DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed
MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY, through the Solicitor General a consolidated Comment. The Solicitor General is of the view that
LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources
GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, to indigenous peoples and prays that the petition be granted in part.
LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING
DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO CAYETANO,
CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR,
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the
MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B. GUINOSAO, WALTER
authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission,
N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O. SULATAN, RAFFY MALINDA,
and the leaders and members of 112 groups of indigenous peoples (Flavier, et. al), filed their
ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE
Motion for Leave to Intervene. They join the NCIP in defending the constitutionality of IPRA and
SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S. LIESES,
praying for the dismissal of the petition.
FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY
UGYUB, SALVADOR TIONGSON, VENANCIO APANG, MADION MALID, SUKIM MALID,
NENENG MALID, MANGKATADONG AUGUSTO DIANO, JOSEPHINE M. ALBESO, MORENO
MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P. SARZA, FELIPE P. BAGON, On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to
SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA, Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of
SR., JERSON P. GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M. the principle of parens patriae and that the State has the responsibility to protect and guarantee
GERARDA, ELIZABETH L. MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS the rights of those who are at a serious disadvantage like indigenous peoples. For this reason it
MARICEL MALID, represented by her father CORNELIO MALID, MARCELINO M. LADRA, prays that the petition be dismissed.
represented by her father MONICO D. LADRA, JENNYLYN MALID, represented by her father
TONY MALID, ARIEL M. EVANGELISTA, represented by her mother LINAY BALBUENA,
EDWARD M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO B'LAAN TRIBAL FARMER'S
ASSOCIATION, INTER-PEOPLE'S EXCHANGE, INC. and GREEN FORUM-WESTERN On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the
VISAYAS, intervenors. Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a
motion to Intervene with attached Comment-in-Intervention. They agree with the NCIP and
COMMISSION ON HUMAN RIGHTS, intervenor. Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition for
prohibition and mandamus be dismissed.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE CONSERVATION
OF NATURAL RESOURCES, INC., intervenor.

The motions for intervention of the aforesaid groups and organizations were granted.

1
Petitioners also content that, by providing for an all-encompassing definition of "ancestral
domains" and "ancestral lands" which might even include private lands found within said areas,
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their Sections 3(a) and 3(b) violate the rights of private landowners.3
respective memoranda in which they reiterate the arguments adduced in their earlier pleadings
and during the hearing.

In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of
the NCIP and making customary law applicable to the settlement of disputes involving ancestral
Petitioners assail the constitutionality of the following provisions of the IPRA and its domains and ancestral lands on the ground that these provisions violate the due process clause
Implementing Rules on the ground that they amount to an unlawful deprivation of the State’s of the Constitution.4
ownership over lands of the public domain as well as minerals and other natural resources
therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution:

These provisions are:

"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b)
which, in turn, defines ancestral lands;
"(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of ancestral
domains and which vest on the NCIP the sole authority to delineate ancestral domains and
ancestral lands;
"(2) Section 5, in relation to section 3(a), which provides that ancestral domains including
inalienable public lands, bodies of water, mineral and other resources found within ancestral
domains are private but community property of the indigenous peoples;
"(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is an
ancestral domain and upon notification to the following officials, namely, the Secretary of
Environment and Natural Resources, Secretary of Interior and Local Governments, Secretary of
"(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral Justice and Commissioner of the National Development Corporation, the jurisdiction of said
domains and ancestral lands; officials over said area terminates;

"(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the "(3) Section 63 which provides the customary law, traditions and practices of indigenous peoples
ancestral domains; shall be applied first with respect to property rights, claims of ownership, hereditary succession
and settlement of land disputes, and that any doubt or ambiguity in the interpretation thereof
shall be resolved in favor of the indigenous peoples;
(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral lands;
"(4) Section 65 which states that customary laws and practices shall be used to resolve disputes
involving indigenous peoples; and
"(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting,
extraction, development or exploration of minerals and other natural resources within the areas
claimed to be their ancestral domains, and the right to enter into agreements with nonindigenous "(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes involving
peoples for the development and utilization of natural resources therein for a period not rights of the indigenous peoples."5
exceeding 25 years, renewable for not more than 25 years; and

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative
"(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, Order No. 1, series of 1998, which provides that "the administrative relationship of the NCIP to
protect and conserve the ancestral domains and portions thereof which are found to be the Office of the President is characterized as a lateral but autonomous relationship for purposes
necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, of policy and program coordination." They contend that said Rule infringes upon the President’s
forest cover or reforestation."2 power of control over executive departments under Section 17, Article VII of the Constitution.6

Petitioners pray for the following:

2
"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case
provisions of R.A. 8371 are unconstitutional and invalid; was redeliberated upon. However, after redeliberation, the voting remained the same.
Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is
DISMISSED.
"(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the
NCIP to cease and desist from implementing the assailed provisions of R.A. 8371 and its
Implementing Rules; Attached hereto and made integral parts thereof are the separate opinions of Justices Puno,
Vitug, Kapunan, Mendoza, and Panganiban.

"(3) The issuance of a writ of prohibition directing the Secretary of the Department of
Environment and Natural Resources to cease and desist from implementing Department of SO ORDERED.
Environment and Natural Resources Circular No. 2, series of 1998;

Davide, Jr., C.J., Bellosillo, Melo, Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-
"(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management to Santiago, and De Leon, Jr., JJ., concur.
cease and desist from disbursing public funds for the implementation of the assailed provisions
of R.A. 8371; and Puno, Vitug, Kapunan, Mendoza and Panganiban JJ., see separate opinion

"(5) The issuance of a writ of mandamus commanding the Secretary of Environment and Natural
Resources to comply with his duty of carrying out the State’s constitutional mandate to control
and supervise the exploration, development, utilization and conservation of Philippine natural Footnotes
resources."7

1 Rollo, p. 114.
After due deliberation on the petition, the members of the Court voted as follows:

2 Petition, Rollo, pp. 16-23.


Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice
and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged
provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged 3 Id. at 23-25.
provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative
Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57
of the IPRA which he contends should be interpreted as dealing with the large-scale exploitation
of natural resources and should be read in conjunction with Section 2, Article XII of the 1987 4 Section 1, Article III of the Constitution states: "No person shall be deprived of life, liberty or
Constitution. On the other hand, Justice Mendoza voted to dismiss the petition solely on the property without due process of law, nor shall any person be denied the equal protection of the
ground that it does not raise a justiciable controversy and petitioners do not have standing to laws."
question the constitutionality of R.A. 8371.

5 Rollo, pp. 25-27.


Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a
separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related
provisions of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of
6 Id. at 27-28.
Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases
by those whose rights may have been violated by the IPRA. Justice Vitug also filed a separate
opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.
Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of 7 Transcript of Stenographic Notes of the hearing held on April 13, 1999, pp. 5-6.
Justices Panganiban and Vitug.

3
B. Valenton v. Murciano

The Lawphil Project - Arellano Law Foundation C. The Public Land Acts and the Torrens System

SEPARATE OPINION D. The Philippine Constitutions

PUNO, J.: II. The Indigenous Peoples Rights Act (IPRA).

PRECIS A. Indigenous Peoples

A classic essay on the utility of history was written in 1874 by Friedrich Nietzsche entitled "On 1. Indigenous Peoples: Their History
the Uses and Disadvantages of History for Life." Expounding on Nietzsche's essay, Judge
Richard Posner1 wrote:2

2. Their Concept of Land

"Law is the most historically oriented, or if you like the most backward-looking, the most 'past-
dependent,' of the professions. It venerates tradition, precedent, pedigree, ritual, custom, ancient
practices, ancient texts, archaic terminology, maturity, wisdom, seniority, gerontocracy, and III. The IPRA is a Novel Piece of Legislation.
interpretation conceived of as a method of recovering history. It is suspicious of innovation,
discontinuities, 'paradigm shifts,' and the energy and brashness of youth. These ingrained
attitudes are obstacles to anyone who wants to re-orient law in a more pragmatic direction. But, A. Legislative History
by the same token, pragmatic jurisprudence must come to terms with history."

IV. The Provisions of the IPRA Do Not Contravene the Constitution.


When Congress enacted the Indigenous Peoples Rights Act (IPRA), it introduced radical
concepts into the Philippine legal system which appear to collide with settled constitutional and
jural precepts on state ownership of land and other natural resources. The sense and subtleties
of this law cannot be appreciated without considering its distinct sociology and the labyrinths of A. Ancestral domains and ancestral lands are the private property of indigenous peoples and do
its history. This Opinion attempts to interpret IPRA by discovering its soul shrouded by the mist not constitute part of the land of the public domain.
of our history. After all, the IPRA was enacted by Congress not only to fulfill the constitutional
mandate of protecting the indigenous cultural communities' right to their ancestral land but more
importantly, to correct a grave historical injustice to our indigenous people.
1. The right to ancestral domains and ancestral lands: how acquired

This Opinion discusses the following:


2. The concept of native title

I. The Development of the Regalian Doctrine in the Philippine Legal System.


(a) Cariño v. Insular Government

A. The Laws of the Indies


(b) Indian Title to land

4
(c) Why the Cariño doctrine is unique

A. The Laws of the Indies

3. The option of securing a torrens title to the ancestral land

The capacity of the State to own or acquire property is the state's power of dominium.3 This was
the foundation for the early Spanish decrees embracing the feudal theory of jura regalia. The
B. The right of ownership and possession by the ICCs/IPs to their ancestral domains is a limited "Regalian Doctrine" or jura regalia is a Western legal concept that was first introduced by the
form of ownership and does not include the right to alienate the same. Spaniards into the country through the Laws of the Indies and the Royal Cedulas. The Laws of
the Indies, i.e., more specifically, Law 14, Title 12, Book 4 of the Novisima Recopilacion de
Leyes de las Indias, set the policy of the Spanish Crown with respect to the Philippine Islands in
the following manner:
1. The indigenous concept of ownership and customary law

"We, having acquired full sovereignty over the Indies, and all lands, territories, and possessions
C. Sections 7 (a), 7 (b) and 57 of the IPRA do not violate the Regalian Doctrine enshrined in
not heretofore ceded away by our royal predecessors, or by us, or in our name, still pertaining to
Section 2, Article XII of the 1987 Constitution.
the royal crown and patrimony, it is our will that all lands which are held without proper and true
deeds of grant be restored to us as they belong to us, in order that after reserving before all what
to us or to our viceroys, audiencias, and governors may seem necessary for public squares,
1. The rights of ICCs/IPs over their ancestral domains and lands ways, pastures, and commons in those places which are peopled, taking into consideration not
only their present condition, but also their future and their probable increase, and after
distributing to the natives what may be necessary for tillage and pasturage, confirming them in
what they now have and giving them more if necessary, all the rest of said lands may remain
2. The right of ICCs/IPs to develop lands and natural resources within the ancestral domains free and unencumbered for us to dispose of as we may wish.
does not deprive the State of ownership over the natural resources, control and supervision in
their development and exploitation.

We therefore order and command that all viceroys and presidents of pretorial courts designate at
such time as shall to them seem most expedient, a suitable period within which all possessors of
(a) Section 1, Part II, Rule III of the Implementing Rules goes beyond the parameters of Section tracts, farms, plantations, and estates shall exhibit to them and to the court officers appointed by
7(a) of the law on ownership of ancestral domains and is ultra vires. them for this purpose, their title deeds thereto. And those who are in possession by virtue of
proper deeds and receipts, or by virtue of just prescriptive right shall be protected, and all the
rest shall be restored to us to be disposed of at our will."4
(b) The small-scale utilization of natural resources in Section 7 (b) of the IPRA is allowed under
Paragraph 3, Section 2, Article XII of the 1987 Consitution.
The Philippines passed to Spain by virtue of "discovery" and conquest. Consequently, all lands
became the exclusive patrimony and dominion of the Spanish Crown. The Spanish Government
(c) The large-scale utilization of natural resources in Section 57 of the IPRA may be harmonized took charge of distributing the lands by issuing royal grants and concessions to Spaniards, both
with Paragraphs 1 and 4, Section 2, Article XII of the 1987 Constitution. military and civilian.5 Private land titles could only be acquired from the government either by
purchase or by the various modes of land grant from the Crown.6

V. The IPRA is a Recognition of Our Active Participation in the International Indigenous


Movement. The Laws of the Indies were followed by the Ley Hipotecaria, or the Mortgage Law of 1893.7
The Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as
possessory claims. The law sought to register and tax lands pursuant to the Royal Decree of
1880. The Royal Decree of 1894, or the "Maura Law," was partly an amendment of the
DISCUSSION Mortgage Law as well as the Laws of the Indies, as already amended by previous orders and
decrees.8 This was the last Spanish land law promulgated in the Philippines. It required the
"adjustment" or registration of all agricultural lands, otherwise the lands shall revert to the state.
I. THE DEVELOPMENT OF THE REGALIAN DOCTRINE IN THE PHILIPPINE LEGAL
SYSTEM.

5
Four years later, by the Treaty of Paris of December 10, 1898, Spain ceded to the government that it was not the intention of the law that mere possession for a length of time should make the
of the United States all rights, interests and claims over the national territory of the Philippine possessors the owners of the land possessed by them without any action on the part of the
Islands. In 1903, the United States colonial government, through the Philippine Commission, authorities."12
passed Act No. 926, the first Public Land Act.

The preamble stated that all those lands which had not been granted by Philip, or in his name, or
B. Valenton v. Murciano by the kings who preceded him, belonged to the Crown.13 For those lands granted by the king,
the decree provided for a system of assignment of such lands. It also ordered that all possessors
of agricultural land should exhibit their title deed, otherwise, the land would be restored to the
Crown.14
In 1904, under the American regime, this Court decided the case of Valenton v. Murciano.9

The Royal Cedula of October 15, 1754 reinforced the Recopilacion when it ordered the Crown's
Valenton resolved the question of which is the better basis for ownership of land: long-time principal subdelegate to issue a general order directing the publication of the Crown's
occupation or paper title. Plaintiffs had entered into peaceful occupation of the subject land in instructions:
1860. Defendant's predecessor-in-interest, on the other hand, purchased the land from the
provincial treasurer of Tarlac in 1892. The lower court ruled against the plaintiffs on the ground
that they had lost all rights to the land by not objecting to the administrative sale. Plaintiffs
appealed the judgment, asserting that their 30-year adverse possession, as an extraordinary "x x x to the end that any and all persons who, since the year 1700, and up to the date of the
period of prescription in the Partidas and the Civil Code, had given them title to the land as promulgation and publication of said order, shall have occupied royal lands, whether or not x x x
against everyone, including the State; and that the State, not owning the land, could not validly cultivated or tenanted, may x x x appear and exhibit to said subdelegates the titles and patents
transmit it. by virtue of which said lands are occupied. x x x. Said subdelegates will at the same time warn
the parties interested that in case of their failure to present their title deeds within the term
designated, without a just and valid reason therefor, they will be deprived of and evicted from
their lands, and they will be granted to others."15
The Court, speaking through Justice Willard, decided the case on the basis of "those special
laws which from earliest time have regulated the disposition of the public lands in the
colonies."10 The question posed by the Court was: "Did these special laws recognize any right
of prescription as against the State as to these lands; and if so, to what extent was it On June 25, 1880, the Crown adopted regulations for the adjustment of lands "wrongfully
recognized?" occupied" by private individuals in the Philippine Islands. Valenton construed these regulations
together with contemporaneous legislative and executive interpretations of the law, and
concluded that plaintiffs' case fared no better under the 1880 decree and other laws which
followed it, than it did under the earlier ones. Thus as a general doctrine, the Court stated:
Prior to 1880, the Court said, there were no laws specifically providing for the disposition of land
in the Philippines. However, it was understood that in the absence of any special law to govern a
specific colony, the Laws of the Indies would be followed. Indeed, in the Royal Order of July 5,
1862, it was decreed that until regulations on the subject could be prepared, the authorities of "While the State has always recognized the right of the occupant to a deed if he proves a
the Philippine Islands should follow strictly the Laws of the Indies, the Ordenanza of the possession for a sufficient length of time, yet it has always insisted that he must make that proof
Intendentes of 1786, and the Royal Cedula of 1754.11 before the proper administrative officers, and obtain from them his deed, and until he did that the
State remained the absolute owner."16

Quoting the preamble of Law 14, Title 12, Book 4 of the Recopilacion de Leyes de las Indias, the
court interpreted it as follows: In conclusion, the Court ruled: "We hold that from 1860 to 1892 there was no law in force in
these Islands by which the plaintiffs could obtain the ownership of these lands by prescription,
without any action by the State."17 Valenton had no rights other than those which accrued to
mere possession. Murciano, on the other hand, was deemed to be the owner of the land by
"In the preamble of this law there is, as is seen, a distinct statement that all those lands belong virtue of the grant by the provincial secretary. In effect, Valenton upheld the Spanish concept of
to the Crown which have not been granted by Philip, or in his name, or by the kings who state ownership of public land.
preceded him. This statement excludes the idea that there might be lands not so granted, that
did not belong to the king. It excludes the idea that the king was not still the owner of all
ungranted lands, because some private person had been in the adverse occupation of them. By
the mandatory part of the law all the occupants of the public lands are required to produce As a fitting observation, the Court added that "[t]he policy pursued by the Spanish Government
before the authorities named, and within a time to be fixed by them, their title papers. And those from earliest times, requiring settlers on the public lands to obtain title deeds therefor from the
who had good title or showed prescription were to be protected in their holdings. It is apparent State, has been continued by the American Government in Act No. 926."18

6
doctrine.29 State ownership of natural resources was seen as a necessary starting point to
secure recognition of the state's power to control their disposition, exploitation, development, or
C. The Public Land Acts and the Torrens System utilization.30 The delegates to the Constitutional Convention very well knew that the concept of
State ownership of land and natural resources was introduced by the Spaniards, however, they
were not certain whether it was continued and applied by the Americans. To remove all doubts,
the Convention approved the provision in the Constitution affirming the Regalian doctrine.31
Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the the
Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It
prescribed rules and regulations for the homesteading, selling, and leasing of portions of the
public domain of the Philippine Islands, and prescribed the terms and conditions to enable Thus, the 1935 Constitution, in Section 1 of Article XIII on "Conservation and Utilization of
persons to perfect their titles to public lands in the Islands. It also provided for the "issuance of Natural Resources," reads as follows:
patents to certain native settlers upon public lands," for the establishment of town sites and sale
of lots therein, for the completion of imperfect titles, and for the cancellation or confirmation of
Spanish concessions and grants in the Islands." In short, the Public Land Act operated on the
assumption that title to public lands in the Philippine Islands remained in the government;19 and "Sec. 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
that the government's title to public land sprung from the Treaty of Paris and other subsequent petroleum, and other mineral oils, all forces of potential energy, and other natural resources of
treaties between Spain and the United States.20 The term "public land" referred to all lands of the Philippines belong to the State, and their disposition, exploitation, development, or utilization
the public domain whose title still remained in the government and are thrown open to private shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per
appropriation and settlement,21 and excluded the patrimonial property of the government and centum of the capital of which is owned by such citizens, subject to any existing right, grant,
the friar lands.22 lease, or concession at the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land, shall not be
alienated, and no license, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-five years, except as
Act No. 926 was superseded in 1919 by Act 2874, the second Public Land Act. This new law to water rights for irrigation, water supply, fisheries, or industrial uses other than the
was passed under the Jones Law. It was more comprehensive in scope but limited the development of water power, in which cases beneficial use may be the measure and the limit of
exploitation of agricultural lands to Filipinos and Americans and citizens of other countries which the grant."
gave Filipinos the same privileges.23 After the passage of the 1935 Constitution, Act 2874 was
amended in 1936 by Commonwealth Act No. 141. Commonwealth Act No. 141 remains the
present Public Land Law and it is essentially the same as Act 2874. The main difference
between the two relates to the transitory provisions on the rights of American citizens and The 1973 Constitution reiterated the Regalian doctrine in Section 8, Article XIV on the "National
corporations during the Commonwealth period at par with Filipino citizens and corporations.24 Economy and the Patrimony of the Nation," to wit:

Grants of public land were brought under the operation of the Torrens system under Act 496, or "Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils,
the Land Registration Law of 1903. Enacted by the Philippine Commission, Act 496 placed all all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines
public and private lands in the Philippines under the Torrens system. The law is said to be belong to the State. With the exception of agricultural, industrial or commercial, residential, and
almost a verbatim copy of the Massachussetts Land Registration Act of 1898,25 which, in turn, resettlement lands of the public domain, natural resources shall not be alienated, and no license,
followed the principles and procedure of the Torrens system of registration formulated by Sir concession, or lease for the exploration, development, exploitation, or utilization of any of the
Robert Torrens who patterned it after the Merchant Shipping Acts in South Australia. The natural resources shall be granted for a period exceeding twenty-five years, renewable for not
Torrens system requires that the government issue an official certificate of title attesting to the more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
fact that the person named is the owner of the property described therein, subject to such liens industrial uses other than the development of water power, in which cases beneficial use may be
and encumbrances as thereon noted or the law warrants or reserves.26 The certificate of title is the measure and the limit of the grant."
indefeasible and imprescriptible and all claims to the parcel of land are quieted upon issuance of
said certificate. This system highly facilitates land conveyance and negotiation.27
The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article XII on "National
Economy and Patrimony," to wit:
D. The Philippine Constitutions

"Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils,
The Regalian doctrine was enshrined in the 1935 Constitution. One of the fixed and dominating all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other
objectives of the 1935 Constitutional Convention was the nationalization and conservation of the natural resources are owned by the State. With the exception of agricultural lands, all other
natural resources of the country.28 There was an overwhelming sentiment in the Convention in natural resources shall not be alienated. The exploration, development and utilization of natural
favor of the principle of state ownership of natural resources and the adoption of the Regalian resources shall be under the full control and supervision of the State. The State may directly

7
undertake such activities or it may enter into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or associations at least sixty per centum of
whose capital is owned by such citizens. Such agreements may be for a period not exceeding - the right to claim parts of reservations;
twenty-five years, renewable for not more than twenty-five years, and under such terms and
conditions as may be provided by law. In cases of water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water power, beneficial use may be
- the right to resolve conflict;32
the measure and limit of the grant.

- the right to ancestral lands which include


x x x."

a. the right to transfer land/property to/among members of the same ICCs/IPs, subject to
Simply stated, all lands of the public domain as well as all natural resources enumerated therein,
customary laws and traditions of the community concerned;
whether on public or private land, belong to the State. It is this concept of State ownership that
petitioners claim is being violated by the IPRA.

b. the right to redemption for a period not exceeding 15 years from date of transfer, if the transfer
is to a non-member of the ICC/IP and is tainted by vitiated consent of the ICC/IP, or if the
II. THE INDIGENOUS PEOPLES RIGHTS ACT.
transfer is for an unconscionable consideration.33

Republic Act No. 8371 is entitled "An Act to Recognize, Protect and Promote the Rights of
Within their ancestral domains and ancestral lands, the ICCs/IPs are given the right to self-
Indigenous Cultural Communities/ Indigenous Peoples, Creating a National Commission on
governance and empowerment,34 social justice and human rights,35 the right to preserve and
Indigenous Peoples, Establishing Implementing Mechanisms, Appropriating Funds Therefor, and
protect their culture, traditions, institutions and community intellectual rights, and the right to
for Other Purposes." It is simply known as "The Indigenous Peoples Rights Act of 1997" or the
develop their own sciences and technologies.36
IPRA.

To carry out the policies of the Act, the law created the National Commission on Indigenous
The IPRA recognizes the existence of the indigenous cultural communities or indigenous
Peoples (NCIP). The NCIP is an independent agency under the Office of the President and is
peoples (ICCs/IPs) as a distinct sector in Philippine society. It grants these people the ownership
composed of seven (7) Commissioners belonging to ICCs/IPs from each of the ethnographic
and possession of their ancestral domains and ancestral lands, and defines the extent of these
areas- Region I and the Cordilleras; Region II; the rest of Luzon; Island groups including
lands and domains. The ownership given is the indigenous concept of ownership under
Mindoro, Palawan, Romblon, Panay and the rest of the Visayas; Northern and Western
customary law which traces its origin to native title.
Mindanao; Southern and Eastern Mindanao; and Central Mindanao.37 The NCIP took over the
functions of the Office for Northern Cultural Communities and the Office for Southern Cultural
Communities created by former President Corazon Aquino which were merged under a
Other rights are also granted the ICCs/IPs, and these are: revitalized structure.38

- the right to develop lands and natural resources; Disputes involving ICCs/IPs are to be resolved under customary laws and practices. When still
unresolved, the matter may be brought to the NCIP, which is granted quasi-judicial powers.39
The NCIP's decisions may be appealed to the Court of Appeals by a petition for review.

- the right to stay in the territories;

Any person who violates any of the provisions of the Act such as, but not limited to, unauthorized
and/or unlawful intrusion upon ancestral lands and domains shall be punished in accordance
- the right in case of displacement; with customary laws or imprisoned from 9 months to 12 years and/or fined from ₱100,000.00 to
₱500,000.00 and obliged to pay damages.40

- the right to safe and clean air and water;


A. Indigenous Peoples

8
Isabela, Cagayan; Ilongot of Quirino and Nueva Vizcaya; Gaddang of Quirino, Nueva Vizcaya,
Itawis of Cagayan; Ivatan of Batanes, Aeta of Cagayan, Quirino and Isabela.
The IPRA is a law dealing with a specific group of people, i.e., the Indigenous Cultural
Communities (ICCs) or the Indigenous Peoples (IPs). The term "ICCs" is used in the 1987
Constitution while that of "IPs" is the contemporary international language in the International
Labor Organization (ILO) Convention 16941 and the United Nations (UN) Draft Declaration on 2. In Region III- Aetas.
the Rights of Indigenous Peoples.42

3. In Region IV- Dumagats of Aurora, Rizal; Remontado of Aurora, Rizal, Quezon; Alangan or
ICCs/IPs are defined by the IPRA as: Mangyan, Batangan, Buid or Buhid, Hanunuo and Iraya of Oriental and Occidental Mindoro;
Tadyawan of Occidental Mindoro; Cuyonon, Palawanon, Tagbanua and Tao't bato of Palawan.

"Sec. 3 [h]. Indigenous Cultural Communities/ Indigenous Peoples- refer to a group of people or
homogeneous societies identified by self-ascription and ascription by others, who have 4. In Region V- Aeta of Camarines Norte and Camarines Sur; Aeta-Abiyan, Isarog, and Kabihug
continuously lived as organized community on communally bounded and defined territory, and of Camarines Norte; Agta, and Mayon of Camarines Sur; Itom of Albay, Cimaron of Sorsogon;
who have, under claims of ownership since time immemorial, occupied, possessed and utilized and the Pullon of Masbate and Camarines Sur.
such territories, sharing common bonds of language, customs, traditions and other distinctive
cultural traits, or who have, through resistance to political, social and cultural inroads of
colonization, non-indigenous religions and cultures, became historically differentiated from the
5. In Region VI- Ati of Negros Occidental, Iloilo and Antique, Capiz; the Magahat of Negros
majority of Filipinos. ICCs/IPs shall likewise include peoples who are regarded as indigenous on
Occidental; the Corolano and Sulod.
account of their descent from the populations which inhabited the country, at the time of
conquest or colonization, or at the time of inroads of non-indigenous religions and cultures, or
the establishment of present state boundaries, who retain some or all of their own social,
economic, cultural and political institutions, but who may have been displaced from their 6. In Region VII- Magahat of Negros Oriental and Eskaya of Bohol.
traditional domains or who may have resettled outside their ancestral domains."

7. In Region IX- the Badjao numbering about 192,000 in Tawi-Tawi, Zamboanga del Sur; the
Indigenous Cultural Communities or Indigenous Peoples refer to a group of people or Kalibugan of Basilan, the Samal, Subanon and Yakat.
homogeneous societies who have continuously lived as an organized community on communally
bounded and defined territory. These groups of people have actually occupied, possessed and
utilized their territories under claim of ownership since time immemorial. They share common
bonds of language, customs, traditions and other distinctive cultural traits, or, they, by their 8. Region X- Numbering 1.6 million in Region X alone, the IPs are: the Banwaon, Bukidnon,
resistance to political, social and cultural inroads of colonization, non-indigenous religions and Matigsalog, Talaanding of Bukidnon; the Camiguin of Camiguin Island; the Higa-unon of Agusan
cultures, became historically differentiated from the Filipino majority. ICCs/IPs also include del Norte, Agusan del Sur, Bukidnon and Misamis Occidental; the Tigwahanon of Agusan del
descendants of ICCs/IPs who inhabited the country at the time of conquest or colonization, who Sur, Misamis Oriental and and Misamis Occidental, the Manobo of the Agusan provinces, and
retain some or all of their own social, economic, cultural and political institutions but who may the Umayamnon of Agusan and Bukidnon.
have been displaced from their traditional territories or who may have resettled outside their
ancestral domains.
9. In Region XI- There are about 1,774,065 IPs in Region XI. They are tribes of the Dibabaon,
Mansaka of Davao del Norte; B'laan, Kalagan, Langilad, T'boli and Talaingod of Davao del Sur;
1. Indigenous Peoples: Their History Mamamanua of Surigao del Sur; Mandaya of the Surigao provinces and Davao Oriental;
Manobo Blit of South Cotabato; the Mangguangon of Davao and South Cotabato; Matigsalog of
Davao del Norte and Del Sur; Tagakaolo, Tasaday and Ubo of South Cotabato; and Bagobo of
Davao del sur and South Cotabato.
Presently, Philippine indigenous peoples inhabit the interiors and mountains of Luzon,
Mindanao, Mindoro, Negros, Samar, Leyte, and the Palawan and Sulu group of islands. They
are composed of 110 tribes and are as follows:
10. In Region XII- Ilianen, Tiruray, Maguindanao, Maranao, Tausug, Yakan/Samal, and
Iranon.43

1. In the Cordillera Autonomous Region- Kankaney, Ibaloi, Bontoc, Tinggian or Itneg, Ifugao,
Kalinga, Yapayao, Aeta or Agta or Pugot, and Bago of Ilocos Norte and Pangasinan; Ibanag of

9
How these indigenous peoples came to live in the Philippines goes back to as early as 25,000 to such as inheritance, divorce, usury, loans, partnership, crime and punishment, property rights,
30,000 B.C. family relations and adoption. Whenever disputes arose, these were decided peacefully through
a court composed by the chieftain as "judge" and the barangay elders as "jury." Conflicts arising
between subjects of different barangays were resolved by arbitration in which a board composed
of elders from neutral barangays acted as arbiters.57
Before the time of Western contact, the Philippine archipelago was peopled largely by the
Negritos, Indonesians and Malays.44 The strains from these groups eventually gave rise to
common cultural features which became the dominant influence in ethnic reformulation in the
archipelago. Influences from the Chinese and Indian civilizations in the third or fourth millenium Baranganic society had a distinguishing feature: the absence of private property in land. The
B.C. augmented these ethnic strains. Chinese economic and socio-cultural influences came by chiefs merely administered the lands in the name of the barangay. The social order was an
way of Chinese porcelain, silk and traders. Indian influence found their way into the religious- extension of the family with chiefs embodying the higher unity of the community. Each individual,
cultural aspect of pre-colonial society.45 therefore, participated in the community ownership of the soil and the instruments of production
as a member of the barangay.58 This ancient communalism was practiced in accordance with
the concept of mutual sharing of resources so that no individual, regardless of status, was
without sustenance. Ownership of land was non-existent or unimportant and the right of usufruct
The ancient Filipinos settled beside bodies of water. Hunting and food gathering became was what regulated the development of lands.59 Marine resources and fishing grounds were
supplementary activities as reliance on them was reduced by fishing and the cultivation of the likewise free to all. Coastal communities depended for their economic welfare on the kind of
soil.46 From the hinterland, coastal, and riverine communities, our ancestors evolved an fishing sharing concept similar to those in land communities.60 Recognized leaders, such as the
essentially homogeneous culture, a basically common way of life where nature was a primary chieftains and elders, by virtue of their positions of importance, enjoyed some economic
factor. Community life throughout the archipelago was influenced by, and responded to, privileges and benefits. But their rights, related to either land and sea, were subject to their
common ecology. The generally benign tropical climate and the largely uniform flora and fauna responsibility to protect the communities from danger and to provide them with the leadership
favored similarities, not differences.47 Life was essentially subsistence but not harsh.48 and means of survival.61

The early Filipinos had a culture that was basically Malayan in structure and form. They had Sometime in the 13th century, Islam was introduced to the archipelago in Maguindanao. The
languages that traced their origin to the Austronesian parent-stock and used them not only as Sultanate of Sulu was established and claimed jurisdiction over territorial areas represented
media of daily communication but also as vehicles for the expression of their literary moods.49 today by Tawi-tawi, Sulu, Palawan, Basilan and Zamboanga. Four ethnic groups were within this
They fashioned concepts and beliefs about the world that they could not see, but which they jurisdiction: Sama, Tausug, Yakan and Subanon.62 The Sultanate of Maguindanao spread out
sensed to be part of their lives.50 They had their own religion and religious beliefs. They from Cotabato toward Maranao territory, now Lanao del Norte and Lanao del Sur.63
believed in the immortality of the soul and life after death. Their rituals were based on beliefs in a
ranking deity whom they called Bathalang Maykapal, and a host of other deities, in the
environmental spirits and in soul spirits. The early Filipinos adored the sun, the moon, the
animals and birds, for they seemed to consider the objects of Nature as something to be The Muslim societies evolved an Asiatic form of feudalism where land was still held in common
respected. They venerated almost any object that was close to their daily life, indicating the but was private in use. This is clearly indicated in the Muslim Code of Luwaran. The Code
importance of the relationship between man and the object of nature.51 contains a provision on the lease of cultivated lands. It, however, has no provision for the
acquisition, transfer, cession or sale of land.64

The unit of government was the "barangay," a term that derived its meaning from the Malay word
"balangay," meaning, a boat, which transported them to these shores.52 The barangay was The societies encountered by Magellan and Legaspi therefore were primitive economies where
basically a family-based community and consisted of thirty to one hundred families. Each most production was geared to the use of the producers and to the fulfillment of kinship
barangay was different and ruled by a chieftain called a "dato." It was the chieftain's duty to rule obligations. They were not economies geared to exchange and profit.65 Moreover, the family
and govern his subjects and promote their welfare and interests. A chieftain had wide powers for basis of barangay membership as well as of leadership and governance worked to splinter the
he exercised all the functions of government. He was the executive, legislator and judge and population of the islands into numerous small and separate communities.66
was the supreme commander in time of war.53

When the Spaniards settled permanently in the Philippines in 1565, they found the Filipinos
Laws were either customary or written. Customary laws were handed down orally from living in barangay settlements scattered along water routes and river banks. One of the first
generation to generation and constituted the bulk of the laws of the barangay. They were tasks imposed on the missionaries and the encomenderos was to collect all scattered Filipinos
preserved in songs and chants and in the memory of the elder persons in the community.54 The together in a reduccion.67 As early as 1551, the Spanish government assumed an unvarying
written laws were those that the chieftain and his elders promulgated from time to time as the solicitous attitude towards the natives.68 The Spaniards regarded it a sacred "duty to
necessity arose.55 The oldest known written body of laws was the Maragtas Code by Datu conscience and humanity to civilize these less fortunate people living in the obscurity of
Sumakwel at about 1250 A.D. Other old codes are the Muslim Code of Luwaran and the ignorance" and to accord them the "moral and material advantages" of community life and the
Principal Code of Sulu.56 Whether customary or written, the laws dealt with various subjects, "protection and vigilance afforded them by the same laws."69

10
the other. Colonialism tended to divide and rule an otherwise culturally and historically related
populace through a colonial system that exploited both the virtues and vices of the Filipinos.79
The Spanish missionaries were ordered to establish pueblos where the church and convent
would be constructed. All the new Christian converts were required to construct their houses
around the church and the unbaptized were invited to do the same.70 With the reduccion, the
Spaniards attempted to "tame" the reluctant Filipinos through Christian indoctrination using the President McKinley, in his instructions to the Philippine Commission of April 7, 1900, addressed
convento/casa real/plaza complex as focal point. The reduccion, to the Spaniards, was a the existence of the infieles:
"civilizing" device to make the Filipinos law-abiding citizens of the Spanish Crown, and in the
long run, to make them ultimately adopt Hispanic culture and civilization.71
"In dealing with the uncivilized tribes of the Islands, the Commission should adopt the same
course followed by Congress in permitting the tribes of our North American Indians to maintain
All lands lost by the old barangays in the process of pueblo organization as well as all lands not their tribal organization and government, and under which many of those tribes are now living in
assigned to them and the pueblos, were now declared to be crown lands or realengas, peace and contentment, surrounded by civilization to which they are unable or unwilling to
belonging to the Spanish king. It was from the realengas that land grants were made to non- conform. Such tribal government should, however, be subjected to wise and firm regulation; and,
Filipinos.72 without undue or petty interference, constant and active effort should be exercised to prevent
barbarous practices and introduce civilized customs."80

The abrogation of the Filipinos' ancestral rights in land and the introduction of the concept of
public domain were the most immediate fundamental results of Spanish colonial theory and Placed in an alternative of either letting the natives alone or guiding them in the path of
law.73 The concept that the Spanish king was the owner of everything of value in the Indies or civilization, the American government chose "to adopt the latter measure as one more in accord
colonies was imposed on the natives, and the natives were stripped of their ancestral rights to with humanity and with the national conscience."81
land.74

The Americans classified the Filipinos into two: the Christian Filipinos and the non-Christian
Increasing their foothold in the Philippines, the Spanish colonialists, civil and religious, classified Filipinos. The term "non-Christian" referred not to religious belief, but to a geographical area,
the Filipinos according to their religious practices and beliefs, and divided them into three types . and more directly, "to natives of the Philippine Islands of a low grade of civilization, usually living
First were the Indios, the Christianized Filipinos, who generally came from the lowland in tribal relationship apart from settled communities."82
populations. Second, were the Moros or the Muslim communities, and third, were the infieles or
the indigenous communities.75
Like the Spaniards, the Americans pursued a policy of assimilation. In 1903, they passed Act
No. 253 creating the Bureau of Non-Christian Tribes (BNCT). Under the Department of the
The Indio was a product of the advent of Spanish culture. This class was favored by the Interior, the BNCT's primary task was to conduct ethnographic research among unhispanized
Spaniards and was allowed certain status although below the Spaniards. The Moros and infieles Filipinos, including those in Muslim Mindanao, with a "special view to determining the most
were regarded as the lowest classes.76 practicable means for bringing about their advancement in civilization and prosperity." The
BNCT was modeled after the bureau dealing with American Indians. The agency took a keen
anthropological interest in Philippine cultural minorities and produced a wealth of valuable
materials about them.83
The Moros and infieles resisted Spanish rule and Christianity. The Moros were driven from
Manila and the Visayas to Mindanao; while the infieles, to the hinterlands. The Spaniards did not
pursue them into the deep interior. The upland societies were naturally outside the immediate
concern of Spanish interest, and the cliffs and forests of the hinterlands were difficult and The 1935 Constitution did not carry any policy on the non-Christian Filipinos. The raging issue
inaccessible, allowing the infieles, in effect, relative security.77 Thus, the infieles, which were then was the conservation of the national patrimony for the Filipinos.
peripheral to colonial administration, were not only able to preserve their own culture but also
thwarted the Christianization process, separating themselves from the newly evolved Christian
community.78 Their own political, economic and social systems were kept constantly alive and
In 1957, the Philippine Congress passed R.A. No. 1888, an "Act to effectuate in a more rapid
vibrant.
and complete manner the economic, social, moral and political advancement of the non-
Christian Filipinos or national cultural minorities and to render real, complete, and permanent the
integration of all said national cultural minorities into the body politic, creating the Commission
The pro-Christian or pro-Indio attitude of colonialism brought about a generally mutual feeling of on National Integration charged with said functions." The law called for a policy of integration of
suspicion, fear, and hostility between the Christians on the one hand and the non-Christians on indigenous peoples into the Philippine mainstream and for this purpose created the Commission
on National Integration (CNI).84 The CNI was given, more or less, the same task as the BNCT

11
during the American regime. The post-independence policy of integration was like the colonial
policy of assimilation understood in the context of a guardian-ward relationship.85
The Aquino government signified a total shift from the policy of integration to one of
preservation. Invoking her powers under the Freedom Constitution, President Aquino created
the Office of Muslim Affairs, Office for Northern Cultural Communities and the Office for
The policy of assimilation and integration did not yield the desired result. Like the Spaniards and Southern Cultural Communities all under the Office of the President.95
Americans, government attempts at integration met with fierce resistance. Since World War II, a
tidal wave of Christian settlers from the lowlands of Luzon and the Visayas swamped the
highlands and wide open spaces in Mindanao.86 Knowledge by the settlers of the Public Land
Acts and the Torrens system resulted in the titling of several ancestral lands in the settlers' The 1987 Constitution carries at least six (6) provisions which insure the right of tribal Filipinos to
names. With government initiative and participation, this titling displaced several indigenous preserve their way of life.96 This Constitution goes further than the 1973 Constitution by
peoples from their lands. Worse, these peoples were also displaced by projects undertaken by expressly guaranteeing the rights of tribal Filipinos to their ancestral domains and ancestral
the national government in the name of national development.87 lands. By recognizing their right to their ancestral lands and domains, the State has effectively
upheld their right to live in a culture distinctly their own.

It was in the 1973 Constitution that the State adopted the following provision:
2. Their Concept of Land

"The State shall consider the customs, traditions, beliefs, and interests of national cultural
communities in the formulation and implementation of State policies."88 Indigenous peoples share distinctive traits that set them apart from the Filipino mainstream.
They are non-Christians. They live in less accessible, marginal, mostly upland areas. They have
a system of self-government not dependent upon the laws of the central administration of the
Republic of the Philippines. They follow ways of life and customs that are perceived as different
For the first time in Philippine history, the "non-Christian tribes" or the "cultural minorities" were from those of the rest of the population.97 The kind of response the indigenous peoples chose to
addressed by the highest law of the Republic, and they were referred to as "cultural deal with colonial threat worked well to their advantage by making it difficult for Western
communities." More importantly this time, their "uncivilized" culture was given some recognition concepts and religion to erode their customs and traditions. The "infieles societies" which had
and their "customs, traditions, beliefs and interests" were to be considered by the State in the become peripheral to colonial administration, represented, from a cultural perspective, a much
formulation and implementation of State policies. President Marcos abolished the CNI and older base of archipelagic culture. The political systems were still structured on the patriarchal
transferred its functions to the Presidential Adviser on National Minorities (PANAMIN). The and kinship oriented arrangement of power and authority. The economic activities were
PANAMIN was tasked to integrate the ethnic groups that sought full integration into the larger governed by the concepts of an ancient communalism and mutual help. The social structure
community, and at the same time "protect the rights of those who wish to preserve their original which emphasized division of labor and distinction of functions, not status, was maintained. The
lifeways beside the larger community."89 In short, while still adopting the integration policy, the cultural styles and forms of life portraying the varieties of social courtesies and ecological
decree recognized the right of tribal Filipinos to preserve their way of life.90 adjustments were kept constantly vibrant.98

In 1974, President Marcos promulgated P.D. No. 410, otherwise known as the Ancestral Lands Land is the central element of the indigenous peoples' existence. There is no traditional concept
Decree. The decree provided for the issuance of land occupancy certificates to members of the of permanent, individual, land ownership. Among the Igorots, ownership of land more accurately
national cultural communities who were given up to 1984 to register their claims.91 In 1979, the applies to the tribal right to use the land or to territorial control. The people are the secondary
Commission on the Settlement of Land Problems was created under E.O. No. 561 which owners or stewards of the land and that if a member of the tribe ceases to work, he loses his
provided a mechanism for the expeditious resolution of land problems involving small settlers, claim of ownership, and the land reverts to the beings of the spirit world who are its true and
landowners, and tribal Filipinos.92 primary owners. Under the concept of "trusteeship," the right to possess the land does not only
belong to the present generation but the future ones as well.99

Despite the promulgation of these laws, from 1974 to the early 1980's, some 100,000 Kalingas
and Bontoks of the Cordillera region were displaced by the Chico River dam project of the Customary law on land rests on the traditional belief that no one owns the land except the gods
National Power Corporation (NPC). The Manobos of Bukidnon saw their land bulldozed by the and spirits, and that those who work the land are its mere stewards.100 Customary law has a
Bukidnon Sugar Industries Company (BUSCO). In Agusan del Sur, the National Development strong preference for communal ownership, which could either be ownership by a group of
Company was authorized by law in 1979 to take approximately 40,550 hectares of land that later individuals or families who are related by blood or by marriage,101 or ownership by residents of
became the NDC-Guthrie plantation in Agusan del Sur. Most of the land was possessed by the the same locality who may not be related by blood or marriage. The system of communal
Agusan natives.93 Timber concessions, water projects, plantations, mining, and cattle ranching ownership under customary laws draws its meaning from the subsistence and highly
and other projects of the national government led not only to the eviction of the indigenous collectivized mode of economic production. The Kalingas, for instance, who are engaged in team
peoples from their land but also to the reduction and destruction of their natural environment.94 occupation like hunting, foraging for forest products, and swidden farming found it natural that

12
forest areas, swidden farms, orchards, pasture and burial grounds should be communally- supported the resettlement of people to their ancestral land, which was massive during the
owned.102 For the Kalingas, everybody has a common right to a common economic base. Commonwealth and early years of the Philippine Republic. Pursuant to the Regalian Doctrine
Thus, as a rule, rights and obligations to the land are shared in common. first introduced to our system by Spain through the Royal Decree of 13 February 1894 or the
Maura Law, the government passed laws to legitimize the wholesale landgrabbing and provide
for easy titling or grant of lands to migrant homesteaders within the traditional areas of the
ICCs."109
Although highly bent on communal ownership, customary law on land also sanctions individual
ownership. The residential lots and terrace rice farms are governed by a limited system of
individual ownership. It is limited because while the individual owner has the right to use and
dispose of the property, he does not possess all the rights of an exclusive and full owner as Senator Flavier further declared:
defined under our Civil Code.103 Under Kalinga customary law, the alienation of individually-
owned land is strongly discouraged except in marriage and succession and except to meet
sudden financial needs due to sickness, death in the family, or loss of crops.104 Moreover, and
to be alienated should first be offered to a clan-member before any village-member can "The IPs are the offsprings and heirs of the peoples who have first inhabited and cared for the
purchase it, and in no case may land be sold to a non-member of the ili.105 land long before any central government was established. Their ancestors had territories over
which they ruled themselves and related with other tribes. These territories- the land- include
people, their dwelling, the mountains, the water, the air, plants, forest and the animals. This is
their environment in its totality. Their existence as indigenous peoples is manifested in their own
Land titles do not exist in the indigenous peoples' economic and social system. The concept of lives through political, economic, socio-cultural and spiritual practices. The IPs culture is the
individual land ownership under the civil law is alien to them. Inherently colonial in origin, our living and irrefutable proof to this.
national land laws and governmental policies frown upon indigenous claims to ancestral lands.
Communal ownership is looked upon as inferior, if not inexistent.106
Their survival depends on securing or acquiring land rights; asserting their rights to it; and
depending on it. Otherwise, IPs shall cease to exist as distinct peoples."110
III. THE IPRA IS A NOVEL PIECE OF LEGISLATION.

To recognize the rights of the indigenous peoples effectively, Senator Flavier proposed a bill
A. The Legislative History of the IPRA based on two postulates: (1) the concept of native title; and (2) the principle of parens patriae.

It was to address the centuries-old neglect of the Philippine indigenous peoples that the Tenth According to Senator Flavier, "[w]hile our legal tradition subscribes to the Regalian Doctrine
Congress of the Philippines, by their joint efforts, passed and approved R.A. No. 8371, the reinstated in Section 2, Article XII of the 1987 Constitution," our "decisional laws" and
Indigenous Peoples Rights Act (IPRA) of 1997. The law was a consolidation of two Bills- Senate jurisprudence passed by the State have "made exception to the doctrine." This exception was
Bill No. 1728 and House Bill No. 9125. first laid down in the case of Cariño v. Insular Government where:

Principally sponsored by Senator Juan M. Flavier,107 Senate Bill No. 1728 was a consolidation "x x x the court has recognized long occupancy of land by an indigenous member of the cultural
of four proposed measures referred to the Committees on Cultural Communities, Environment communities as one of private ownership, which, in legal concept, is termed "native title." This
and Natural Resources, Ways and Means, as well as Finance. It adopted almost en toto the ruling has not been overturned. In fact, it was affirmed in subsequent cases."111
comprehensive version of Senate Bill Nos. 1476 and 1486 which was a result of six regional
consultations and one national consultation with indigenous peoples nationwide.108 At the
Second Regular Session of the Tenth Congress, Senator Flavier, in his sponsorship speech,
gave a background on the situation of indigenous peoples in the Philippines, to wit: Following Cariño, the State passed Act No. 926, Act No. 2874, C.A. No. 141, P.D. 705, P.D.
410, P.D. 1529, R.A. 6734 (the Organic Act for the Autonomous Region of Muslim Mindanao).
These laws, explicitly or implicitly, and liberally or restrictively, recognized "native title" or "private
right" and the existence of ancestral lands and domains. Despite the passage of these laws,
"The Indigenous Cultural Communities, including the Bangsa Moro, have long suffered from the however, Senator Flavier continued:
dominance and neglect of government controlled by the majority. Massive migration of their
Christian brothers to their homeland shrunk their territory and many of the tribal Filipinos were
pushed to the hinterlands. Resisting the intrusion, dispossessed of their ancestral land and with
the massive exploitation of their natural resources by the elite among the migrant population, "x x x the executive department of government since the American occupation has not
they became marginalized. And the government has been an indispensable party to this implemented the policy. In fact, it was more honored in its breach than in its observance, its
insidious conspiracy against the Indigenous Cultural Communities (ICCs). It organized and wanton disregard shown during the period unto the Commonwealth and the early years of the

13
Philippine Republic when government organized and supported massive resettlement of the IV. THE PROVISIONS OF THE IPRA DO NOT CONTRAVENE THE CONSTITUTION.
people to the land of the ICCs."

A. Ancestral Domains and Ancestral Lands are the Private Property of Indigenous Peoples and
Senate Bill No. 1728 seeks to genuinely recognize the IPs right to own and possess their Do Not Constitute Part of the Land of the Public Domain.
ancestral land. The bill was prepared also under the principle of parens patriae inherent in the
supreme power of the State and deeply embedded in Philippine legal tradition. This principle
mandates that persons suffering from serious disadvantage or handicap, which places them in a
position of actual inequality in their relation or transaction with others, are entitled to the The IPRA grants to ICCs/IPs a distinct kind of ownership over ancestral domains and ancestral
protection of the State. lands. Ancestral lands are not the same as ancestral domains. These are defined in Section 3
[a] and [b] of the Indigenous Peoples Right Act, viz:

Senate Bill No. 1728 was passed on Third Reading by twenty-one (21) Senators voting in favor
and none against, with no abstention.112 "Sec. 3 a) Ancestral Domains. - Subject to Section 56 hereof, refer to all areas generally
belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources
therein, held under a claim of ownership, occupied or possessed by ICCs/IPs by themselves or
through their ancestors, communally or individually since time immemorial, continuously to the
House Bill No. 9125 was sponsored by Rep. Zapata, Chairman of the Committee on Cultural present except when interrupted by war, force majeure or displacement by force, deceit, stealth
Communities. It was originally authored and subsequently presented and defended on the floor or as a consequence of government projects or any other voluntary dealings entered into by
by Rep. Gregorio Andolana of North Cotabato.113 government and private individuals/corporations, and which are necessary to ensure their
economic, social and cultural welfare. It shall include ancestral lands, forests, pasture,
residential, agricultural, and other lands individually owned whether alienable and disposable or
otherwise, hunting grounds, burial grounds, worship areas, bodies of water, mineral and other
Rep. Andolana's sponsorhip speech reads as follows: natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs but from
which they traditionally had access to for their subsistence and traditional activities, particularly
the home ranges of ICCs/IPs who are still nomadic and/or shifting cultivators;
"This Representation, as early as in the 8th Congress, filed a bill of similar implications that
would promote, recognize the rights of indigenous cultural communities within the framework of
national unity and development. b) Ancestral Lands.- Subject to Section 56 hereof, refers to land occupied, possessed and
utilized by individuals, families and clans who are members of the ICCs/IPs since time
immemorial, by themselves or through their predecessors-in-interest, under claims of individual
Apart from this, Mr. Speaker, is our obligation, the government's obligation to assure and or traditional group ownership, continuously, to the present except when interrupted by war,
ascertain that these rights shall be well-preserved and the cultural traditions as well as the force majeure or displacement by force, deceit, stealth, or as a consequence of government
indigenous laws that remained long before this Republic was established shall be preserved and projects and other voluntary dealings entered into by government and private
promoted. There is a need, Mr. Speaker, to look into these matters seriously and early approval individuals/corporations, including, but not limited to, residential lots, rice terraces or paddies,
of the substitute bill shall bring into reality the aspirations, the hope and the dreams of more than private forests, swidden farms and tree lots."
12 million Filipinos that they be considered in the mainstream of the Philippine society as we
fashion for the year 2000." 114
Ancestral domains are all areas belonging to ICCs/IPs held under a claim of ownership,
occupied or possessed by ICCs/IPs by themselves or through their ancestors, communally or
Rep. Andolana stressed that H.B. No. 9125 is based on the policy of preservation as mandated individually since time immemorial, continuously until the present, except when interrupted by
in the Constitution. He also emphasized that the rights of IPs to their land was enunciated in war, force majeure or displacement by force, deceit, stealth or as a consequence of government
Cariño v. Insular Government which recognized the fact that they had vested rights prior to the projects or any other voluntary dealings with government and/or private individuals or
establishment of the Spanish and American regimes.115 corporations. Ancestral domains comprise lands, inland waters, coastal areas, and natural
resources therein and includes ancestral lands, forests, pasture, residential, agricultural, and
other lands individually owned whether alienable or not, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural resources. They also include lands
After exhaustive interpellation, House Bill No. 9125, and its corresponding amendments, was which may no longer be exclusively occupied by ICCs/IPs but from which they traditionally had
approved on Second Reading with no objections. access to for their subsistence and traditional activities, particularly the home ranges of ICCs/IPs
who are still nomadic and/or shifting cultivators.116

14
Ancestral lands are lands held by the ICCs/IPs under the same conditions as ancestral domains
except that these are limited to lands and that these lands are not merely occupied and
possessed but are also utilized by the ICCs/IPs under claims of individual or traditional group Native title is defined as:
ownership. These lands include but are not limited to residential lots, rice terraces or paddies,
private forests, swidden farms and tree lots.117
"Sec. 3 [l]. Native Title- refers to pre-conquest rights to lands and domains which, as far back as
memory reaches, have been held under a claim of private ownership by ICCs/IPs, have never
The procedures for claiming ancestral domains and lands are similar to the procedures been public lands and are thus indisputably presumed to have been held that way since before
embodied in Department Administrative Order (DAO) No. 2, series of 1993, signed by then the Spanish Conquest."126
Secretary of the Department of Environment and Natural Resources (DENR) Angel Alcala.118
DAO No. 2 allowed the delineation of ancestral domains by special task forces and ensured the
issuance of Certificates of Ancestral Land Claims (CALC's) and Certificates of Ancestral Domain
Native title refers to ICCs/IPs' preconquest rights to lands and domains held under a claim of
Claims (CADC's) to IPs.
private ownership as far back as memory reaches. These lands are deemed never to have been
public lands and are indisputably presumed to have been held that way since before the Spanish
Conquest. The rights of ICCs/IPs to their ancestral domains (which also include ancestral lands)
The identification and delineation of these ancestral domains and lands is a power conferred by by virtue of native title shall be recognized and respected.127 Formal recognition, when solicited
the IPRA on the National Commission on Indigenous Peoples (NCIP).119 The guiding principle by ICCs/IPs concerned, shall be embodied in a Certificate of Ancestral Domain Title (CADT),
in identification and delineation is self-delineation.120 This means that the ICCs/IPs have a which shall recognize the title of the concerned ICCs/IPs over the territories identified and
decisive role in determining the boundaries of their domains and in all the activities pertinent delineated.128
thereto.121

Like a torrens title, a CADT is evidence of private ownership of land by native title. Native title,
The procedure for the delineation and recognition of ancestral domains is set forth in Sections however, is a right of private ownership peculiarly granted to ICCs/IPs over their ancestral lands
51 and 52 of the IPRA. The identification, delineation and certification of ancestral lands is in and domains. The IPRA categorically declares ancestral lands and domains held by native title
Section 53 of said law. as never to have been public land. Domains and lands held under native title are, therefore,
indisputably presumed to have never been public lands and are private.

Upon due application and compliance with the procedure provided under the law and upon
finding by the NCIP that the application is meritorious, the NCIP shall issue a Certificate of (a) Cariño v. Insular Government129
Ancestral Domain Title (CADT) in the name of the community concerned.122 The allocation of
lands within the ancestral domain to any individual or indigenous corporate (family or clan)
claimants is left to the ICCs/IPs concerned to decide in accordance with customs and
The concept of native title in the IPRA was taken from the 1909 case of Cariño v. Insular
traditions.123 With respect to ancestral lands outside the ancestral domain, the NCIP issues a
Government.130 Cariño firmly established a concept of private land title that existed irrespective
Certificate of Ancestral Land Title (CALT).124
of any royal grant from the State.

CADT's and CALT's issued under the IPRA shall be registered by the NCIP before the Register
In 1903, Don Mateo Cariño, an Ibaloi, sought to register with the land registration court 146
of Deeds in the place where the property is situated.125
hectares of land in Baguio Municipality, Benguet Province. He claimed that this land had been
possessed and occupied by his ancestors since time immemorial; that his grandfather built
fences around the property for the holding of cattle and that his father cultivated some parts of
(1) Right to Ancestral Domains and Ancestral Lands: How Acquired the land. Cariño inherited the land in accordance with Igorot custom. He tried to have the land
adjusted under the Spanish land laws, but no document issued from the Spanish Crown.131 In
1901, Cariño obtained a possessory title to the land under the Spanish Mortgage Law.132 The
North American colonial government, however, ignored his possessory title and built a public
The rights of the ICCs/IPs to their ancestral domains and ancestral lands may be acquired in two road on the land prompting him to seek a Torrens title to his property in the land registration
modes: (1) by native title over both ancestral lands and domains; or (2) by torrens title under the court. While his petition was pending, a U.S. military reservation133 was proclaimed over his
Public Land Act and the Land Registration Act with respect to ancestral lands only. land and, shortly thereafter, a military detachment was detailed on the property with orders to
keep cattle and trespassers, including Cariño, off the land.134

(2) The Concept of Native Title

15
In 1904, the land registration court granted Cariño's application for absolute ownership to the law shall be enacted in said islands which shall deprive any person of life, liberty, or property
land. Both the Government of the Philippine Islands and the U.S. Government appealed to the without due process of law, or deny to any person therein the equal protection of the laws.' In the
C.F.I. of Benguet which reversed the land registration court and dismissed Cariño's application. light of the declaration that we have quoted from section 12, it is hard to believe that the United
The Philippine Supreme Court135 affirmed the C.F.I. by applying the Valenton ruling. Cariño States was ready to declare in the next breath that "any person" did not embrace the inhabitants
took the case to the U.S. Supreme Court.136 On one hand, the Philippine government invoked of Benguet, or that it meant by "property" only that which had become such by ceremonies of
the Regalian doctrine and contended that Cariño failed to comply with the provisions of the which presumably a large part of the inhabitants never had heard, and that it proposed to treat
Royal Decree of June 25, 1880, which required registration of land claims within a limited period as public land what they, by native custom and by long association,- of the profoundest factors in
of time. Cariño, on the other, asserted that he was the absolute owner of the land jure gentium, human thought,- regarded as their own."139
and that the land never formed part of the public domain.

The Court went further:


In a unanimous decision written by Justice Oliver Wendell Holmes, the U.S. Supreme Court
held:

"Every presumption is and ought to be against the government in a case like the present. It
might, perhaps, be proper and sufficient to say that when, as far back as testimony or memory
"It is true that Spain, in its earlier decrees, embodied the universal feudal theory that all lands goes, the land has been held by individuals under a claim of private ownership, it will be
were held from the Crown, and perhaps the general attitude of conquering nations toward presumed to have been held in the same way from before the Spanish conquest, and never to
people not recognized as entitled to the treatment accorded to those in the same zone of have been public land. Certainly in a case like this, if there is doubt or ambiguity in the Spanish
civilization with themselves. It is true, also, that in legal theory, sovereignty is absolute, and that, law, we ought to give the applicant the benefit of the doubt."140
as against foreign nations, the United States may assert, as Spain asserted, absolute power. But
it does not follow that, as against the inhabitants of the Philippines, the United States asserts
that Spain had such power. When theory is left on one side, sovereignty is a question of
strength, and may vary in degree. How far a new sovereign shall insist upon the theoretical The court thus laid down the presumption of a certain title held (1) as far back as testimony or
relation of the subjects to the head in the past, and how far it shall recognize actual facts, are memory went, and (2) under a claim of private ownership. Land held by this title is presumed to
matters for it to decide."137 "never have been public land."

The U.S. Supreme Court noted that it need not accept Spanish doctrines. The choice was with Against this presumption, the U.S. Supreme Court analyzed the Spanish decrees upheld in the
the new colonizer. Ultimately, the matter had to be decided under U.S. law. 1904 decision of Valenton v. Murciano. The U.S. Supreme Court found no proof that the Spanish
decrees did not honor native title. On the contrary, the decrees discussed in Valenton appeared
to recognize that the natives owned some land, irrespective of any royal grant. The Regalian
doctrine declared in the preamble of the Recopilacion was all "theory and discourse" and it was
The Cariño decision largely rested on the North American constitutionalist's concept of "due observed that titles were admitted to exist beyond the powers of the Crown, viz:
process" as well as the pronounced policy "to do justice to the natives."138 It was based on the
strong mandate extended to the Islands via the Philippine Bill of 1902 that "No law shall be
enacted in said islands which shall deprive any person of life, liberty, or property without due
process of law, or deny to any person therein the equal protection of the laws." The court "If the applicant's case is to be tried by the law of Spain, we do not discover such clear proof that
declared: it was bad by that law as to satisfy us that he does not own the land. To begin with, the older
decrees and laws cited by the counsel for the plaintiff in error seem to indicate pretty clearly that
the natives were recognized as owning some lands, irrespective of any royal grant. In other
words, Spain did not assume to convert all the native inhabitants of the Philippines into
"The acquisition of the Philippines was not like the settlement of the white race in the United trespassers or even into tenants at will. For instance, Book 4, title 12, Law 14 of the the
States. Whatever consideration may have been shown to the North American Indians, the Recopilacion de Leyes de las Indias, cited for a contrary conclusion in Valenton v. Murciano, 3
dominant purpose of the whites in America was to occupy land. It is obvious that, however Philippine 537, while it commands viceroys and others, when it seems proper, to call for the
stated, the reason for our taking over the Philippines was different. No one, we suppose, would exhibition of grants, directs them to confirm those who hold by good grants or justa prescripcion.
deny that, so far as consistent with paramount necessities, our first object in the internal It is true that it begins by the characteristic assertion of feudal overlordship and the origin of all
administration of the islands is to do justice to the natives, not to exploit their country for private titles in the King or his predecessors. That was theory and discourse. The fact was that titles
gain. By the Organic Act of July 1, 1902, chapter 1369, section 12 (32 Statutes at Large, 691), were admitted to exist that owed nothing to the powers of Spain beyond this recognition in their
all the property and rights acquired there by the United States are to be administered 'for the books." (Emphasis supplied).141
benefit of the inhabitants thereof.' It is reasonable to suppose that the attitude thus assumed by
the United States with regard to what was unquestionably its own is also its attitude in deciding
what it will claim for its own. The same statute made a bill of rights, embodying the safeguards of
the Constitution, and, like the Constitution, extends those safeguards to all. It provides that 'no

16
The court further stated that the Spanish "adjustment" proceedings never held sway over an article in the Philippine Law Journal entitled Native Title, Private Right and Tribal Land
unconquered territories. The wording of the Spanish laws were not framed in a manner as to Law.146 This article was made after Professor Lynch visited over thirty tribal communities
convey to the natives that failure to register what to them has always been their own would throughout the country and studied the origin and development of Philippine land laws.147 He
mean loss of such land. The registration requirement was "not to confer title, but simply to discussed Cariño extensively and used the term "native title" to refer to Cariño's title as
establish it;" it was "not calculated to convey to the mind of an Igorot chief the notion that ancient discussed and upheld by the U.S. Supreme Court in said case.
family possessions were in danger, if he had read every word of it."

(b) Indian Title


By recognizing this kind of title, the court clearly repudiated the doctrine of Valenton. It was frank
enough, however, to admit the possibility that the applicant might have been deprived of his land
under Spanish law because of the inherent ambiguity of the decrees and concomitantly, the
various interpretations which may be given them. But precisely because of the ambiguity and of In a footnote in the same article, Professor Lynch stated that the concept of "native title" as
the strong "due process mandate" of the Constitution, the court validated this kind of title.142 defined by Justice Holmes in Cariño "is conceptually similar to "aboriginal title" of the American
This title was sufficient, even without government administrative action, and entitled the holder to Indians.148 This is not surprising, according to Prof. Lynch, considering that during the
a Torrens certificate. Justice Holmes explained: American regime, government policy towards ICCs/IPs was consistently made in reference to
native Americans.149 This was clearly demonstrated in the case of Rubi v. Provincial Board of
Mindoro.150

"It will be perceived that the rights of the applicant under the Spanish law present a problem not
without difficulties for courts of a legal tradition. We have deemed it proper on that account to
notice the possible effect of the change of sovereignty and the act of Congress establishing the In Rubi, the Provincial Board of Mindoro adopted a Resolution authorizing the provincial
fundamental principles now to be observed. Upon a consideration of the whole case we are of governor to remove the Mangyans from their domains and place them in a permanent
the opinion that law and justice require that the applicant should be granted what he seeks, and reservation in Sitio Tigbao, Lake Naujan. Any Mangyan who refused to comply was to be
should not be deprived of what, by the practice and belief of those among whom he lived, was imprisoned. Rubi and some Mangyans, including one who was imprisoned for trying to escape
his property, through a refined interpretation of an almost forgotten law of Spain."143 from the reservation, filed for habeas corpus claiming deprivation of liberty under the Board
Resolution. This Court denied the petition on the ground of police power. It upheld government
policy promoting the idea that a permanent settlement was the only successful method for
educating the Mangyans, introducing civilized customs, improving their health and morals, and
Thus, the court ruled in favor of Cariño and ordered the registration of the 148 hectares in protecting the public forests in which they roamed.151 Speaking through Justice Malcolm, the
Baguio Municipality in his name.144 court said:

Examining Cariño closer, the U.S. Supreme Court did not categorically refer to the title it upheld "Reference was made in the President's instructions to the Commission to the policy adopted by
as "native title." It simply said: the United States for the Indian Tribes. The methods followed by the Government of the
Philippine Islands in its dealings with the so-called non-Christian people is said, on argument, to
be practically identical with that followed by the United States Government in its dealings with
the Indian tribes. Valuable lessons, it is insisted, can be derived by an investigation of the
"The Province of Benguet was inhabited by a tribe that the Solicitor-General, in his argument, American-Indian policy.
characterized as a savage tribe that never was brought under the civil or military government of
the Spanish Crown. It seems probable, if not certain, that the Spanish officials would not have
granted to anyone in that province the registration to which formerly the plaintiff was entitled by
the Spanish Laws, and which would have made his title beyond question good. Whatever may From the beginning of the United States, and even before, the Indians have been treated as "in
have been the technical position of Spain it does not follow that, in the view of the United States, a state of pupilage." The recognized relation between the Government of the United States and
he had lost all rights and was a mere trespasser when the present government seized his land. the Indians may be described as that of guardian and ward. It is for the Congress to determine
The argument to that effect seems to amount to a denial of native titles through an important part when and how the guardianship shall be terminated. The Indians are always subject to the
of the Island of Luzon, at least, for the want of ceremonies which the Spaniards would not have plenary authority of the United States.152
permitted and had not the power to enforce."145

x x x.
This is the only instance when Justice Holmes used the term "native title" in the entire length of
the Cariño decision. It is observed that the widespread use of the term "native title" may be
traced to Professor Owen James Lynch, Jr., a Visiting Professor at the University of the
Philippines College of Law from the Yale University Law School. In 1982, Prof. Lynch published As to the second point, the facts in the Standing Bear case and the Rubi case are not exactly
identical. But even admitting similarity of facts, yet it is known to all that Indian reservations do

17
exist in the United States, that Indians have been taken from different parts of the country and
placed on these reservations, without any previous consultation as to their own wishes, and that,
when once so located, they have been made to remain on the reservation for their own good In the establishment of these relations, the rights of the original inhabitants were, in no instance,
and for the general good of the country. If any lesson can be drawn from the Indian policy of the entirely disregarded; but were necessarily, to a considerable extent, impaired. They were
United States, it is that the determination of this policy is for the legislative and executive admitted to be the rightful occupants of the soil, with a legal as well as just claim to retain
branches of the government and that when once so decided upon, the courts should not possession of it, and to use it according to their own discretion; but their rights to complete
interfere to upset a carefully planned governmental system. Perhaps, just as many forceful sovereignty, as independent nations, were necessarily diminished, and their power to dispose of
reasons exist for the segregation of the Manguianes in Mindoro as existed for the segregation of the soil at their own will, to whomsoever they pleased, was denied by the fundamental principle
the different Indian tribes in the United States."153 that discovery gave exclusive title to those who made it.

Rubi applied the concept of Indian land grants or reservations in the Philippines. An Indian While the different nations of Europe respected the right of the natives as occupants, they
reservation is a part of the public domain set apart by proper authority for the use and asserted the ultimate dominion to be in themselves; and claimed and exercised, as a
occupation of a tribe or tribes of Indians.154 It may be set apart by an act of Congress, by treaty, consequence of this ultimate dominion, a power to grant the soil, while yet in possession of the
or by executive order, but it cannot be established by custom and prescription.155 natives. These grants have been understood by all to convey a title to the grantees, subject only
to the Indian right of occupancy."161

Indian title to land, however, is not limited to land grants or reservations. It also covers the
"aboriginal right of possession or occupancy."156 The aboriginal right of possession depends on Thus, the discoverer of new territory was deemed to have obtained the exclusive right to acquire
the actual occupancy of the lands in question by the tribe or nation as their ancestral home, in Indian land and extinguish Indian titles. Only to the discoverer- whether to England, France,
the sense that such lands constitute definable territory occupied exclusively by the particular Spain or Holland- did this right belong and not to any other nation or private person. The mere
tribe or nation.157 It is a right which exists apart from any treaty, statute, or other governmental acquisition of the right nonetheless did not extinguish Indian claims to land. Rather, until the
action, although in numerous instances treaties have been negotiated with Indian tribes, discoverer, by purchase or conquest, exercised its right, the concerned Indians were recognized
recognizing their aboriginal possession and delimiting their occupancy rights or settling and as the "rightful occupants of the soil, with a legal as well as just claim to retain possession of it."
adjusting their boundaries.158 Grants made by the discoverer to her subjects of lands occupied by the Indians were held to
convey a title to the grantees, subject only to the Indian right of occupancy. Once the discoverer
purchased the land from the Indians or conquered them, it was only then that the discoverer
gained an absolute title unrestricted by Indian rights.
American jurisprudence recognizes the Indians' or native Americans' rights to land they have
held and occupied before the "discovery" of the Americas by the Europeans. The earliest
definitive statement by the U.S. Supreme Court on the nature of aboriginal title was made in
1823 in Johnson & Graham's Lessee v. M'Intosh.159 The court concluded, in essence, that a grant of Indian lands by Indians could not convey a title
paramount to the title of the United States itself to other parties, saying:

In Johnson, the plaintiffs claimed the land in question under two (2) grants made by the chiefs of
two (2) Indian tribes. The U.S. Supreme Court refused to recognize this conveyance, the "It has never been contended that the Indian title amounted to nothing. Their right of possession
plaintiffs being private persons. The only conveyance that was recognized was that made by the has never been questioned. The claim of government extends to the complete ultimate title,
Indians to the government of the European discoverer. Speaking for the court, Chief Justice charged with this right of possession, and to the exclusive power of acquiring that right."162
Marshall pointed out that the potentates of the old world believed that they had made ample
compensation to the inhabitants of the new world by bestowing civilization and Christianity upon
them; but in addition, said the court, they found it necessary, in order to avoid conflicting
It has been said that the history of America, from its discovery to the present day, proves the
settlements and consequent war, to establish the principle that discovery gives title to the
universal recognition of this principle.163
government by whose subjects, or by whose authority, the discovery was made, against all other
European governments, which title might be consummated by possession.160 The exclusion of
all other Europeans gave to the nation making the discovery the sole right of acquiring the soil
from the natives and establishing settlements upon it. As regards the natives, the court further The Johnson doctrine was a compromise. It protected Indian rights and their native lands without
stated that: having to invalidate conveyances made by the government to many U.S. citizens.164

"Those relations which were to exist between the discoverer and the natives were to be Johnson was reiterated in the case of Worcester v. Georgia.165 In this case, the State of
regulated by themselves. The rights thus acquired being exclusive, no other power could Georgia enacted a law requiring all white persons residing within the Cherokee nation to obtain a
interpose between them. license or permit from the Governor of Georgia; and any violation of the law was deemed a high

18
misdemeanor. The plaintiffs, who were white missionaries, did not obtain said license and were The Cherokee nation, then, is a distinct community, occupying its own territory, with boundaries
thus charged with a violation of the Act. accurately described, in which the laws of Georgia can have no force, and which the citizens of
Georgia have no right to enter but with the assent of the Cherokees themselves or in conformity
with treaties and with the acts of Congress. The whole intercourse between the United States
and this nation is, by our Constitution and laws, vested in the government of the United
The U.S. Supreme Court declared the Act as unconstitutional for interfering with the treaties States."168
established between the United States and the Cherokee nation as well as the Acts of Congress
regulating intercourse with them. It characterized the relationship between the United States
government and the Indians as:
The discovery of the American continent gave title to the government of the discoverer as
against all other European governments. Designated as the naked fee,169 this title was to be
consummated by possession and was subject to the Indian title of occupancy. The discoverer
"The Indian nations were, from their situation, necessarily dependent on some foreign potentate acknowledged the Indians' legal and just claim to retain possession of the land, the Indians
for the supply of their essential wants, and for their protection from lawless and injurious being the original inhabitants of the land. The discoverer nonetheless asserted the exclusive
intrusions into their country. That power was naturally termed their protector. They had been right to acquire the Indians' land- either by purchase, "defensive" conquest, or cession- and in so
arranged under the protection of Great Britain; but the extinguishment of the British power in doing, extinguish the Indian title. Only the discoverer could extinguish Indian title because it
their neighborhood, and the establishment of that of the United States in its place, led naturally alone asserted ultimate dominion in itself. Thus, while the different nations of Europe respected
to the declaration, on the part of the Cherokees, that they were under the protection of the the rights of the natives as occupants, they all asserted the ultimate dominion and title to be in
United States, and of no other power. They assumed the relation with the United States which themselves.170
had before subsisted with Great Britain.

As early as the 19th century, it became accepted doctrine that although fee title to the lands
This relation was that of a nation claiming and receiving the protection of one more powerful, not occupied by the Indians when the colonists arrived became vested in the sovereign- first the
that of individuals abandoning their national character, and submitting as subjects to the laws of discovering European nation and later the original 13 States and the United States- a right of
a master."166 occupancy in the Indian tribes was nevertheless recognized. The Federal Government continued
the policy of respecting the Indian right of occupancy, sometimes called Indian title, which it
accorded the protection of complete ownership.171 But this aboriginal Indian interest simply
It was the policy of the U.S. government to treat the Indians as nations with distinct territorial constitutes "permission" from the whites to occupy the land, and means mere possession not
boundaries and recognize their right of occupancy over all the lands within their domains. Thus: specifically recognized as ownership by Congress.172 It is clear that this right of occupancy
based upon aboriginal possession is not a property right.173 It is vulnerable to affirmative action
by the federal government who, as sovereign, possessed exclusive power to extinguish the right
of occupancy at will.174 Thus, aboriginal title is not the same as legal title. Aboriginal title rests
"From the commencement of our government Congress has passed acts to regulate trade and on actual, exclusive and continuous use and occupancy for a long time.175 It entails that land
intercourse with the Indians; which treat them as nations, respect their rights, and manifest a firm owned by Indian title must be used within the tribe, subject to its laws and customs, and cannot
purpose to afford that protection which treaties stipulate. All these acts, and especially that of be sold to another sovereign government nor to any citizen.176 Such title as Indians have to
1802, which is still in force, manifestly consider the several Indian nations as distinct political possess and occupy land is in the tribe, and not in the individual Indian; the right of individual
communities, having territorial boundaries, within which their authority is exclusive, and having a Indians to share in the tribal property usually depends upon tribal membership, the property of
right to all the lands within those boundaries, which is not only acknowledged, but guaranteed by the tribe generally being held in communal ownership.177
the United States.

As a rule, Indian lands are not included in the term "public lands," which is ordinarily used to
x x x. designate such lands as are subject to sale or other disposal under general laws.178 Indian land
which has been abandoned is deemed to fall into the public domain.179 On the other hand, an
Indian reservation is a part of the public domain set apart for the use and occupation of a tribe of
Indians.180 Once set apart by proper authority, the reservation ceases to be public land, and
"The Indian nations had always been considered as distinct, independent political communities,
until the Indian title is extinguished, no one but Congress can initiate any preferential right on, or
retaining their original natural rights, as the undisputed possessors of the soil from time
restrict the nation's power to dispose of, them.181
immemorial, with the single exception of that imposed by irresistible power, which excluded them
from intercourse with any other European potentate than the first discoverer of the coast of the
particular region claimed: and this was a restriction which those European potentates imposed
on themselves, as well as on the Indians. The very term "nation," so generally applied to them, The American judiciary struggled for more than 200 years with the ancestral land claims of
means "a people distinct from others." x x x.167 indigenous Americans.182 And two things are clear. First, aboriginal title is recognized. Second,
indigenous property systems are also recognized. From a legal point of view, certain benefits
can be drawn from a comparison of Philippine IPs to native Americans.183 Despite the

19
similarities between native title and aboriginal title, however, there are at present some (3) The Option of Securing a Torrens Title to the Ancestral Land Indicates that the Land is
misgivings on whether jurisprudence on American Indians may be cited authoritatively in the Private.
Philippines. The U.S. recognizes the possessory rights of the Indians over their land; title to the
land, however, is deemed to have passed to the U.S. as successor of the discoverer. The
aboriginal title of ownership is not specifically recognized as ownership by action authorized by
Congress.184 The protection of aboriginal title merely guards against encroachment by persons The private character of ancestral lands and domains as laid down in the IPRA is further
other than the Federal Government.185 Although there are criticisms against the refusal to strengthened by the option given to individual ICCs/IPs over their individually-owned ancestral
recognize the native Americans' ownership of these lands,186 the power of the State to lands. For purposes of registration under the Public Land Act and the Land Registration Act, the
extinguish these titles has remained firmly entrenched.187 IPRA expressly converts ancestral land into public agricultural land which may be disposed of by
the State. The necessary implication is that ancestral land is private. It, however, has to be first
converted to public agricultural land simply for registration purposes. To wit:

Under the IPRA, the Philippine State is not barred form asserting sovereignty over the ancestral
domains and ancestral lands.188 The IPRA, however, is still in its infancy and any similarities
between its application in the Philippines vis-à-vis American Jurisprudence on aboriginal title will "Sec. 12. Option to Secure Certificate of Title Under Commonwealth Act 141, as amended, or
depend on the peculiar facts of each case. the Land Registration Act 496- Individual members of cultural communities, with respect to their
individually-owned ancestral lands who, by themselves or through their predecessors-in-interest,
have been in continuous possession and occupation of the same in the concept of owner since
time immemorial or for a period of not less than thirty (30) years immediately preceding the
(c) Why the Cariño doctrine is unique approval of this Act and uncontested by the members of the same ICCs/IPs shall have the
option to secure title to their ancestral lands under the provisions of Commonwealth Act 141, as
amended, or the Land Registration Act 496.
In the Philippines, the concept of native title first upheld in Cariño and enshrined in the IPRA
grants ownership, albeit in limited form, of the land to the ICCs/IPs. Native title presumes that
the land is private and was never public. Cariño is the only case that specifically and For this purpose, said individually-owned ancestral lands, which are agricultural in character and
categorically recognizes native title. The long line of cases citing Cariño did not touch on native actually used for agricultural, residential, pasture, and tree farming purposes, including those
title and the private character of ancestral domains and lands. Cariño was cited by the with a slope of eighteen percent (18%) or more, are hereby classified as alienable and
succeeding cases to support the concept of acquisitive prescription under the Public Land Act disposable agricultural lands.
which is a different matter altogether. Under the Public Land Act, land sought to be registered
must be public agricultural land. When the conditions specified in Section 48 [b] of the Public
Land Act are complied with, the possessor of the land is deemed to have acquired, by operation
of law, a right to a grant of the land.189 The land ceases to be part of the public domain,190 ipso The option granted under this section shall be exercised within twenty (20) years from the
jure,191 and is converted to private property by the mere lapse or completion of the prescribed approval of this Act."196
statutory period.

ICCs/IPs are given the option to secure a torrens certificate of title over their individually-owned
It was only in the case of Oh Cho v. Director of Lands192 that the court declared that the rule ancestral lands. This option is limited to ancestral lands only, not domains, and such lands must
that all lands that were not acquired from the government, either by purchase or grant, belong to be individually, not communally, owned.
the public domain has an exception. This exception would be any land that should have been in
the possession of an occupant and of his predecessors-in-interest since time immemorial. It is
this kind of possession that would justify the presumption that the land had never been part of Ancestral lands that are owned by individual members of ICCs/IPs who, by themselves or
the public domain or that it had been private property even before the Spanish conquest.193 Oh through their predecessors-in-interest, have been in continuous possession and occupation of
Cho, however, was decided under the provisions of the Public Land Act and Cariño was cited to the same in the concept of owner since time immemorial197 or for a period of not less than 30
support the applicant's claim of acquisitive prescription under the said Act. years, which claims are uncontested by the members of the same ICCs/IPs, may be registered
under C.A. 141, otherwise known as the Public Land Act, or Act 496, the Land Registration Act.
For purposes of registration, the individually-owned ancestral lands are classified as alienable
All these years, Cariño had been quoted out of context simply to justify long, continuous, open and disposable agricultural lands of the public domain, provided, they are agricultural in
and adverse possession in the concept of owner of public agricultural land. It is this long, character and are actually used for agricultural, residential, pasture and tree farming purposes.
continuous, open and adverse possession in the concept of owner of thirty years both for These lands shall be classified as public agricultural lands regardless of whether they have a
ordinary citizens194 and members of the national cultural minorities195 that converts the land slope of 18% or more.
from public into private and entitles the registrant to a torrens certificate of title.

20
The classification of ancestral land as public agricultural land is in compliance with the "Sec. 44. Any natural-born citizen of the Philippines who is not the owner of more than twenty-
requirements of the Public Land Act and the Land Registration Act. C.A. 141, the Public Land four hectares and who since July fourth, 1926 or prior thereto, has continuously occupied and
Act, deals specifically with lands of the public domain.198 Its provisions apply to those lands cultivated, either by himself or through his predecessors-in-interest, a tract or tracts of
"declared open to disposition or concession" x x x "which have not been reserved for public or agricultural public lands subject to disposition, or who shall have paid the real estate tax thereon
quasi-public purposes, nor appropriated by the Government, nor in any manner become private while the same has not been occupied by any person shall be entitled, under the provisions of
property, nor those on which a private right authorized and recognized by this Act or any other this chapter, to have a free patent issued to him for such tract or tracts of such land not to
valid law x x x or which having been reserved or appropriated, have ceased to be so."199 Act exceed twenty-four hectares.
496, the Land Registration Act, allows registration only of private lands and public agricultural
lands. Since ancestral domains and lands are private, if the ICC/IP wants to avail of the benefits
of C.A. 141 and Act 496, the IPRA itself converts his ancestral land, regardless of whether the
land has a slope of eighteen per cent (18%) or over,200 from private to public agricultural land A member of the national cultural minorities who has continuously occupied and cultivated,
for proper disposition. either by himself or through his predecessors-in-interest, a tract or tracts of land, whether
disposable or not since July 4, 1955, shall be entitled to the right granted in the preceding
paragraph of this section: Provided, That at the time he files his free patent application he is not
the owner of any real property secured or disposable under the provision of the Public Land
The option to register land under the Public Land Act and the Land Registration Act has Law.203
nonetheless a limited period. This option must be exercised within twenty (20) years from
October 29, 1997, the date of approval of the IPRA.
x x x.

Thus, ancestral lands and ancestral domains are not part of the lands of the public domain. They
are private and belong to the ICCs/IPs. Section 3 of Article XII on National Economy and
Patrimony of the 1987 Constitution classifies lands of the public domain into four categories: (a) "Sec. 48. The following described citizens of the Philippines, occupying lands of the public
agricultural, (b) forest or timber, (c) mineral lands, and (d) national parks. Section 5 of the same domain or claiming to own any such lands or an interest therein, but whose titles have not been
Article XII mentions ancestral lands and ancestral domains but it does not classify them under perfected or completed, may apply to the Court of First Instance of the province where the land
any of the said four categories. To classify them as public lands under any one of the four is located for confirmation of their claims and the issuance of a certificate of title therefor, under
classes will render the entire IPRA law a nullity. The spirit of the IPRA lies in the distinct concept the Land Registration Act, to wit:
of ancestral domains and ancestral lands. The IPRA addresses the major problem of the
ICCs/IPs which is loss of land. Land and space are of vital concern in terms of sheer survival of
the ICCs/IPs.201 (a) [perfection of Spanish titles] xxx.

The 1987 Constitution mandates the State to "protect the rights of indigenous cultural (b) Those who by themselves or through their predecessors-in-interest have been in open,
communities to their ancestral lands" and that "Congress provide for the applicability of continuous, exclusive, and notorious possession and occupation of agricultural lands of the
customary laws x x x in determining the ownership and extent of ancestral domain."202 It is the public domain, under a bona fide claim of acquisition or ownership, for at least thirty years
recognition of the ICCs/IPs distinct rights of ownership over their ancestral domains and lands immediately preceding the filing of the application for confirmation of title except when prevented
that breathes life into this constitutional mandate. by war or force majeure. These shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be entitled to a certificate of title under the
provisions of this Chapter.
B. The right of ownership and possession by the ICCs/IPs of their ancestral domains is a limited
form of ownership and does not include the right to alienate the same.
(c) Members of the national cultural minorities who by themselves or through their predecessors-
in-interest have been in open, continuous, exclusive and notorious possession and occupation of
Registration under the Public Land Act and Land Registration Act recognizes the concept of lands of the public domain suitable to agriculture, whether disposable or not, under a bona fide
ownership under the civil law. This ownership is based on adverse possession for a specified claim of ownership for at least 30 years shall be entitled to the rights granted in sub-section (b)
period, and harkens to Section 44 of the Public Land Act on administrative legalization (free hereof."204
patent) of imperfect or incomplete titles and Section 48 (b) and (c) of the same Act on the judicial
confirmation of imperfect or incomplete titles. Thus:
Registration under the foregoing provisions presumes that the land was originally public
agricultural land but because of adverse possession since July 4, 1955 (free patent) or at least
thirty years (judicial confirmation), the land has become private. Open, adverse, public and
continuous possession is sufficient, provided, the possessor makes proper application therefor.

21
The possession has to be confirmed judicially or administratively after which a torrens title is
issued.
Communal rights to the land are held not only by the present possessors of the land but extends
to all generations of the ICCs/IPs, past, present and future, to the domain. This is the reason
why the ancestral domain must be kept within the ICCs/IPs themselves. The domain cannot be
A torrens title recognizes the owner whose name appears in the certificate as entitled to all the transferred, sold or conveyed to other persons. It belongs to the ICCs/IPs as a community.
rights of ownership under the civil law. The Civil Code of the Philippines defines ownership in
Articles 427, 428 and 429. This concept is based on Roman Law which the Spaniards
introduced to the Philippines through the Civil Code of 1889. Ownership, under Roman Law,
may be exercised over things or rights. It primarily includes the right of the owner to enjoy and Ancestral lands are also held under the indigenous concept of ownership. The lands are
dispose of the thing owned. And the right to enjoy and dispose of the thing includes the right to communal. These lands, however, may be transferred subject to the following limitations: (a)
receive from the thing what it produces,205 the right to consume the thing by its use,206 the only to the members of the same ICCs/IPs; (b) in accord with customary laws and traditions; and
right to alienate, encumber, transform or even destroy the thing owned,207 and the right to (c) subject to the right of redemption of the ICCs/IPs for a period of 15 years if the land was
exclude from the possession of the thing owned by any other person to whom the owner has not transferred to a non-member of the ICCs/IPs.
transmitted such thing.208

Following the constitutional mandate that "customary law govern property rights or relations in
1. The Indigenous Concept of Ownership and Customary Law. determining the ownership and extent of ancestral domains,"216 the IPRA, by legislative fiat,
introduces a new concept of ownership. This is a concept that has long existed under customary
law.217

Ownership of ancestral domains by native title does not entitle the ICC/IP to a torrens title but to
a Certificate of Ancestral Domain Title (CADT). The CADT formally recognizes the indigenous
concept of ownership of the ICCs/IPs over their ancestral domain. Thus: Custom, from which customary law is derived, is also recognized under the Civil Code as a
source of law.218 Some articles of the Civil Code expressly provide that custom should be
applied in cases where no codal provision is applicable.219 In other words, in the absence of
any applicable provision in the Civil Code, custom, when duly proven, can define rights and
"Sec. 5. Indigenous concept of ownership.- Indigenous concept of ownership sustains the view liabilities.220
that ancestral domains and all resources found therein shall serve as the material bases of their
cultural integrity. The indigenous concept of ownership generally holds that ancestral domains
are the ICCs/IPs private but community property which belongs to all generations and therefore
cannot be sold, disposed or destroyed. It likewise covers sustainable traditional resource rights." Customary law is a primary, not secondary, source of rights under the IPRA and uniquely
applies to ICCs/IPs. Its recognition does not depend on the absence of a specific provision in the
civil law. The indigenous concept of ownership under customary law is specifically
acknowledged and recognized, and coexists with the civil law concept and the laws on land
The right of ownership and possession of the ICCs/IPs to their ancestral domains is held under titling and land registration.221
the indigenous concept of ownership. This concept maintains the view that ancestral domains
are the ICCs/IPs private but community property. It is private simply because it is not part of the
public domain. But its private character ends there. The ancestral domain is owned in common
by the ICCs/IPs and not by one particular person. The IPRA itself provides that areas within the To be sure, the indigenous concept of ownership exists even without a paper title. The CADT is
ancestral domains, whether delineated or not, are presumed to be communally held.209 These merely a "formal recognition" of native title. This is clear from Section 11 of the IPRA, to wit:
communal rights, however, are not exactly the same as co-ownership rights under the Civil
Code.210 Co-ownership gives any co-owner the right to demand partition of the property held in
common. The Civil Code expressly provides that "no co-owner shall be obliged to remain in the
"Sec. 11. Recognition of Ancestral Domain Rights.- The rights of ICCs/IPs to their ancestral
co-ownership." Each co-owner may demand at any time the partition of the thing in common,
domains by virtue of Native Title shall be recognized and respected. Formal recognition, when
insofar as his share is concerned.211 To allow such a right over ancestral domains may be
solicited by ICCs/IPs concerned shall be embodied in a Certificate of Ancestral Domain Title,
destructive not only of customary law of the community but of the very community itself.212
which shall recognize the title of the concerned ICCs/IPs over the territories identified and
delineated."

Communal rights over land are not the same as corporate rights over real property, much less
corporate condominium rights. A corporation can exist only for a maximum of fifty (50) years
The moral import of ancestral domain, native land or being native is "belongingness" to the land,
subject to an extension of another fifty years in any single instance.213 Every stockholder has
being people of the land- by sheer force of having sprung from the land since time beyond recall,
the right to disassociate himself from the corporation.214 Moreover, the corporation itself may be
and the faithful nurture of the land by the sweat of one's brow. This is fidelity of usufructuary
dissolved voluntarily or involuntarily.215
relation to the land- the possession of stewardship through perduring, intimate tillage, and the

22
mutuality of blessings between man and land; from man, care for land; from the land, e) Right to Regulate the Entry of Migrants.- Right to regulate the entry of migrant settlers and
sustenance for man.222 organizations into their domains;

C. Sections 7 (a), 7 (b) and 57 of the IPRA Do Not Violate the Regalian Doctrine Enshrined in f) Right to Safe and Clean Air and Water.-For this purpose, the ICCs/IPs shall have access to
Section 2, Article XII of the 1987 Constitution. integrated systems for the management of their inland waters and air space;

1. The Rights of ICCs/IPs Over Their Ancestral Domains and Lands g) Right to Claim Parts of Reservations.- The right to claim parts of the ancestral domains which
have been reserved for various purposes, except those reserved and intended for common and
public welfare and service;

The IPRA grants the ICCs/IPs several rights over their ancestral domains and ancestral lands.
Section 7 provides for the rights over ancestral domains:
h) Right to Resolve Conflict.- Right to resolve land conflicts in accordance with customary laws
of the area where the land is located, and only in default thereof shall the complaints be
submitted to amicable settlement and to the Courts of Justice whenever necessary."
"Sec. 7. Rights to Ancestral Domains.- The rights of ownership and possession of ICCs/IPs to
their ancestral domains shall be recognized and protected. Such rights include:

Section 8 provides for the rights over ancestral lands:


a) Right of Ownership.- The right to claim ownership over lands, bodies of water traditionally and
actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains; "Sec. 8. Rights to Ancestral Lands.- The right of ownership and possession of the ICCs/IPs to
their ancestral lands shall be recognized and protected.

b) Right to Develop Lands and Natural Resources.- Subject to Section 56 hereof, the right to
develop, control and use lands and territories traditionally occupied, owned, or used; to manage a) Right to transfer land/property.- Such right shall include the right to transfer land or property
and conserve natural resources within the territories and uphold the responsibilities for future rights to/among members of the same ICCs/IPs, subject to customary laws and traditions of the
generations; to benefit and share the profits from allocation and utilization of the natural community concerned.
resources found therein; the right to negotiate the terms and conditions for the exploration of
natural resources in the areas for the purpose of ensuring ecological, environmental protection
and the conservation measures, pursuant to national and customary laws; the right to an
informed and intelligent participation in the formulation and implementation of any project, b) Right to Redemption.- In cases where it is shown that the transfer of land/property rights by
government or private, that will affect or impact upon the ancestral domains and to receive just virtue of any agreement or devise, to a non-member of the concerned ICCs/IPs is tainted by the
and fair compensation for any damages which they may sustain as a result of the project; and vitiated consent of the ICCs/IPs, or is transferred for an unconscionable consideration or price,
the right to effective measures by the government to prevent any interference with, alienation the transferor ICC/IP shall have the right to redeem the same within a period not exceeding
and encroachment upon these rights;" fifteen (15) years from the date of transfer."

c) Right to Stay in the Territories.- The right to stay in the territory and not to be removed Section 7 (a) defines the ICCs/IPs the right of ownership over their ancestral domains which
therefrom. No ICCs/IPs will be relocated without their free and prior informed consent, nor covers (a) lands, (b) bodies of water traditionally and actually occupied by the ICCs/IPs, (c)
through any means other than eminent domain. x x x; sacred places, (d) traditional hunting and fishing grounds, and (e) all improvements made by
them at any time within the domains. The right of ownership includes the following rights: (1) the
right to develop lands and natural resources; (b) the right to stay in the territories; (c) the right to
resettlement in case of displacement; (d) the right to regulate the entry of migrants; (e) the right
d) Right in Case of Displacement.- In case displacement occurs as a result of natural to safe and clean air and water; (f) the right to claim parts of the ancestral domains as
catastrophes, the State shall endeavor to resettle the displaced ICCs/IPs in suitable areas where reservations; and (g) the right to resolve conflict in accordance with customary laws.
they can have temporary life support systems: x x x;

23
Section 8 governs their rights to ancestral lands. Unlike ownership over the ancestral domains, All lands of the public domain and all natural resources- waters, minerals, coal, petroleum, and
Section 8 gives the ICCs/IPs also the right to transfer the land or property rights to members of other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
the same ICCs/IPs or non-members thereof. This is in keeping with the option given to ICCs/IPs fauna, and other natural resources- are owned by the State. The Constitution provides that in the
to secure a torrens title over the ancestral lands, but not to domains. exploration, development and utilization of these natural resources, the State exercises full
control and supervision, and may undertake the same in four (4) modes:

2. The Right of ICCs/IPs to Develop Lands and Natural Resources Within the Ancestral Domains
Does Not Deprive the State of Ownership Over the Natural Resources and Control and 1. The State may directly undertake such activities; or
Supervision in their Development and Exploitation.

2. The State may enter into co-production, joint venture or production-sharing agreements with
The Regalian doctrine on the ownership, management and utilization of natural resources is Filipino citizens or qualified corporations;
declared in Section 2, Article XII of the 1987 Constitution, viz:

3. Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens;
"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 exploration, development, and utilization of natural 4. For the large-scale exploration, development and utilization of minerals, petroleum and other
resources shall be under the full control and supervision of the State. The State may directly mineral oils, the President may enter into agreements with foreign-owned corporations involving
undertake such activities, or, it may enter into co-production, joint venture, or production-sharing technical or financial assistance.
agreements with Filipino citizens, or corporations or associations at least sixty per centum of
whose capital is owned by such citizens. Such agreements may be for a period not exceeding
twenty-five years, renewable for not more than twenty-five years, and under such terms and As owner of the natural resources, the State is accorded primary power and responsibility in the
conditions as may be provided by law. In cases of water rights for irrigation, water supply, exploration, development and utilization of these natural resources. The State may directly
fisheries, water supply, fisheries, or industrial uses other than the development of water power, undertake the exploitation and development by itself, or, it may allow participation by the private
beneficial use may be the measure and limit of the grant. sector through co-production,224 joint venture,225 or production-sharing agreements.226 These
agreements may be for a period of 25 years, renewable for another 25 years. The State, through
Congress, may allow the small-scale utilization of natural resources by Filipino citizens. For the
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and large-scale exploration of these resources, specifically minerals, petroleum and other mineral
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens. oils, the State, through the President, may enter into technical and financial assistance
agreements with foreign-owned corporations.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens,
as well as cooperative fish farming, with priority to subsistence fishermen and fishworkers in Under the Philippine Mining Act of 1995, (R.A. 7942) and the People's Small-Scale Mining Act of
rivers, lakes, bays, and lagoons. 1991 (R.A. 7076) the three types of agreements, i.e., co-production, joint venture or production-
sharing, may apply to both large-scale227 and small-scale mining.228 "Small-scale mining"
refers to "mining activities which rely heavily on manual labor using simple implements and
methods and do not use explosives or heavy mining equipment."229
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 Examining the IPRA, there is nothing in the law that grants to the ICCs/IPs ownership over the
country. In such agreements, the state shall promote the development and use of local scientific natural resources within their ancestral domains. The right of ICCs/IPs in their ancestral domains
and technical resources. includes ownership, but this "ownership" is expressly defined and limited in Section 7 (a) as:

The President shall notify the Congress of every contract entered into in accordance with this "Sec. 7. a) Right of ownership- The right to claim ownership over lands, bodies of water
provision, within thirty days from its execution."223 traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing
grounds, and all improvements made by them at any time within the domains;"

24
Rule III of the Implementing Rules goes beyond the parameters of Section 7 (b) of the law and is
contrary to Section 2, Article XII of the 1987 Constitution.
The ICCs/IPs are given the right to claim ownership over "lands, bodies of water traditionally and
actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains." It will be noted that this
enumeration does not mention bodies of water not occupied by the ICCs/IPs, minerals, coal, (b) The Small-Scale Utilization of Natural Resources In Sec. 7 (b) of the IPRA Is Allowed Under
wildlife, flora and fauna in the traditional hunting grounds, fish in the traditional fishing grounds, Paragraph 3, Section 2 of Article XII of the Constitution.
forests or timber in the sacred places, etc. and all other natural resources found within the
ancestral domains. Indeed, the right of ownership under Section 7 (a) does not cover "waters,
minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests
Ownership over natural resources remain with the State and the IPRA in Section 7 (b) merely
or timber, wildlife, flora and fauna and all other natural resources" enumerated in Section 2,
grants the ICCs/IPs the right to manage them, viz:
Article XII of the 1987 Constitution as belonging to the State.

"Sec. 7 (b) Right to Develop Lands and Natural Resources.- Subject to Section 56 hereof, right
The non-inclusion of ownership by the ICCs/IPs over the natural resources in Section 7(a)
to develop, control and use lands and territories traditionally occupied, owned, or used; to
complies with the Regalian doctrine.
manage and conserve natural resources within the territories and uphold the responsibilities for
future generations; to benefit and share the profits from allocation and utilization of the natural
resources found therein; the right to negotiate the terms and conditions for the exploration of
(a) Section 1, Part II, Rule III of the Implementing Rules Goes Beyond the Parameters of Sec. 7 natural resources in the areas for the purpose of ensuring ecological, environmental protection
(a) of the IPRA And is Unconstitutional. and the conservation measures, pursuant to national and customary laws; the right to an
informed and intelligent participation in the formulation and implementation of any project,
government or private, that will affect or impact upon the ancestral domains and to receive just
and fair compensation for any damages which they may sustain as a result of the project; and
The Rules Implementing the IPRA230 in Section 1, Part II, Rule III reads: the right to effective measures by the government to prevent any interference with, alienation
and encroachment upon these rights;"

"Section 1. Rights of Ownership. ICCs/IPs have rights of ownership over lands, waters, and
natural resources and all improvements made by them at any time within the ancestral domains/ The right to develop lands and natural resources under Section 7 (b) of the IPRA enumerates
lands. These rights shall include, but not limited to, the right over the fruits, the right to possess, the following rights:
the right to use, right to consume, right to exclude and right to recover ownership, and the rights
or interests over land and natural resources. The right to recover shall be particularly applied to
lands lost through fraud or any form or vitiated consent or transferred for an unconscionable
price." a) the right to develop, control and use lands and territories traditionally occupied;

Section 1 of the Implementing Rules gives the ICCs/IPs rights of ownership over "lands, waters b) the right to manage and conserve natural resources within the territories and uphold the
and natural resources." The term "natural resources" is not one of those expressly mentioned in responsibilities for future generations;
Section 7 (a) of the law. Our Constitution and jurisprudence clearly declare that the right to claim
ownership over land does not necessarily include the right to claim ownership over the natural
resources found on or under the land.231 The IPRA itself makes a distinction between land and
c) the right to benefit and share the profits from the allocation and utilization of the natural
natural resources. Section 7 (a) speaks of the right of ownership only over the land within the
resources found therein;
ancestral domain. It is Sections 7 (b) and 57 of the law that speak of natural resources, and
these provisions, as shall be discussed later, do not give the ICCs/IPs the right of ownership
over these resources.
d) the right to negotiate the terms and conditions for the exploration of natural resources for the
purpose of ensuring ecological, environmental protection and the conservation measures,
pursuant to national and customary laws;
The constitutionality of Section 1, Part II, Rule III of the Implementing Rules was not specifically
and categorically challenged by petitioners. Petitioners actually assail the constitutionality of the
Implementing Rules in general.232 Nevertheless, to avoid any confusion in the implementation
of the law, it is necessary to declare that the inclusion of "natural resources" in Section 1, Part II, e) the right to an informed and intelligent participation in the formulation and implementation of
any project, government or private, that will affect or impact upon the ancestral domains and to

25
receive just and fair compensation for any damages which they may sustain as a result of the to its own decision-making process, has agreed to allow such operation: Provided finally, That
project; the NCIP may exercise visitorial powers and take appropriate action to safeguard the rights of
the ICCs/IPs under the same contract."

f) the right to effective measures by the government to prevent any interference with, alienation
and encroachment upon these rights.233 Section 57 speaks of the "harvesting, extraction, development or exploitation of natural
resources within ancestral domains" and "gives the ICCs/IPs 'priority rights' therein." The terms
"harvesting, extraction, development or exploitation" of any natural resources within the
ancestral domains obviously refer to large-scale utilization. It is utilization not merely for
Ownership over the natural resources in the ancestral domains remains with the State and the subsistence but for commercial or other extensive use that require technology other than manual
ICCs/IPs are merely granted the right to "manage and conserve" them for future generations, labor.236 The law recognizes the probability of requiring a non-member of the ICCs/IPs to
"benefit and share" the profits from their allocation and utilization, and "negotiate the terms and participate in the development and utilization of the natural resources and thereby allows such
conditions for their exploration" for the purpose of "ensuring ecological and environmental participation for a period of not more than 25 years, renewable for another 25 years. This may
protection and conservation measures." It must be noted that the right to negotiate the terms and be done on condition that a formal written agreement be entered into by the non-member and
conditions over the natural resources covers only their exploration which must be for the members of the ICCs/IPs.
purpose of ensuring ecological and environmental protection of, and conservation measures in
the ancestral domain. It does not extend to the exploitation and development of natural
resources.
Section 57 of the IPRA does not give the ICCs/IPs the right to "manage and conserve" the
natural resources. Instead, the law only grants the ICCs/IPs "priority rights" in the development
or exploitation thereof. Priority means giving preference. Having priority rights over the natural
Simply stated, the ICCs/IPs' rights over the natural resources take the form of management or resources does not necessarily mean ownership rights. The grant of priority rights implies that
stewardship. For the ICCs/IPs may use these resources and share in the profits of their there is a superior entity that owns these resources and this entity has the power to grant
utilization or negotiate the terms for their exploration. At the same time, however, the ICCs/IPs preferential rights over the resources to whosoever itself chooses.
must ensure that the natural resources within their ancestral domains are conserved for future
generations and that the "utilization" of these resources must not harm the ecology and
environment pursuant to national and customary laws.234
Section 57 is not a repudiation of the Regalian doctrine. Rather, it is an affirmation of the said
doctrine that all natural resources found within the ancestral domains belong to the State. It
incorporates by implication the Regalian doctrine, hence, requires that the provision be read in
The limited rights of "management and use" in Section 7 (b) must be taken to contemplate small- the light of Section 2, Article XII of the 1987 Constitution. Interpreting Section 2, Article XII of the
scale utilization of natural resources as distinguished from large-scale. Small-scale utilization of 1987 Constitution237 in relation to Section 57 of IPRA, the State, as owner of these natural
natural resources is expressly allowed in the third paragraph of Section 2, Article XII of the resources, may directly undertake the development and exploitation of the natural resources by
Constitution "in recognition of the plight of forest dwellers, gold panners, marginal fishermen and itself, or in the alternative, it may recognize the priority rights of the ICCs/IPs as owners of the
others similarly situated who exploit our natural resources for their daily sustenance and land on which the natural resources are found by entering into a co-production, joint venture, or
survival."235 Section 7 (b) also expressly mandates the ICCs/IPs to manage and conserve production-sharing agreement with them. The State may likewise enter into any of said
these resources and ensure environmental and ecological protection within the domains, which agreements with a non-member of the ICCs/IPs, whether natural or juridical, or enter into
duties, by their very nature, necessarily reject utilization in a large-scale. agreements with foreign-owned corporations involving either technical or financial assistance for
the large-scale exploration, development and utilization of minerals, petroleum, and other
mineral oils, or allow such non-member to participate in its agreement with the ICCs/IPs. If the
(c) The Large-Scale Utilization of Natural Resources In Section 57 of the IPRA Is Allowed Under State decides to enter into an agreement with a non-ICC/IP member, the National Commission
Paragraphs 1 and 4, Section 2, Article XII of the 1987 Constitution. on Indigenous Peoples (NCIP) shall ensure that the rights of the ICCs/IPs under the agreement
shall be protected. The agreement shall be for a period of 25 years, renewable for another 25
years.

Section 57 of the IPRA provides:

To reiterate, in the large-scale utilization of natural resources within the ancestral domains, the
State, as owner of these resources, has four (4) options: (1) it may, of and by itself, directly
"Sec. 57. Natural Resources within Ancestral Domains.- The ICCs/IPs shall have priority rights in undertake the development and exploitation of the natural resources; or (2) it may recognize the
the harvesting, extraction, development or exploitation of any natural resources within the priority rights of the ICCs/IPs by entering into an agreement with them for such development and
ancestral domains. A non-member of the ICCs/IPs concerned may be allowed to take part in the exploitation; or (3) it may enter into an agreement with a non-member of the ICCs/IPs, whether
development and utilization of the natural resources for a period of not exceeding twenty-five natural or juridical, local or foreign; or (4) it may allow such non-member to participate in the
(25) years renewable for not more than twenty-five (25) years: Provided, That a formal and agreement with the ICCs/IPs.
written agreement is entered into with the ICCs/IPs concerned or that the community, pursuant

26
The rights granted by the IPRA to the ICCs/IPs over the natural resources in their ancestral V. THE IPRA IS A RECOGNITION OF OUR ACTIVE PARTICIPATION IN THE INDIGENOUS
domains merely gives the ICCs/IPs, as owners and occupants of the land on which the INTERNATIONAL MOVEMENT.
resources are found, the right to the small-scale utilization of these resources, and at the same
time, a priority in their large-scale development and exploitation. Section 57 does not mandate
the State to automatically give priority to the ICCs/IPs. The State has several options and it is
within its discretion to choose which option to pursue. Moreover, there is nothing in the law that The indigenous movement can be seen as the heir to a history of anti-imperialism stretching
gives the ICCs/IPs the right to solely undertake the large-scale development of the natural back to prehistoric times. The movement received a massive impetus during the 1960's from two
resources within their domains. The ICCs/IPs must undertake such endeavour always under sources. First, the decolonization of Asia and Africa brought into the limelight the possibility of
State supervision or control. This indicates that the State does not lose control and ownership peoples controlling their own destinies. Second, the right of self-determination was enshrined in
over the resources even in their exploitation. Sections 7 (b) and 57 of the law simply give due the UN Declaration on Human Rights.238 The rise of the civil rights movement and anti-racism
respect to the ICCs/IPs who, as actual occupants of the land where the natural resources lie, brought to the attention of North American Indians, Aborigines in Australia, and Maori in New
have traditionally utilized these resources for their subsistence and survival. Zealand the possibility of fighting for fundamental rights and freedoms.

Neither is the State stripped of ownership and control of the natural resources by the following In 1974 and 1975, international indigenous organizations were founded,239 and during the
provision: 1980's, indigenous affairs were on the international agenda. The people of the Philippine
Cordillera were the first Asians to take part in the international indigenous movement. It was the
Cordillera People's Alliance that carried out successful campaigns against the building of the
Chico River Dam in 1981-82 and they have since become one of the best-organized indigenous
"Section 59. Certification Precondition.- All departments and other governmental agencies shall bodies in the world.240
henceforth be strictly enjoined from issuing, renewing or granting any concession, license or
lease, or entering into any production-sharing agreement. without prior certification from the
NCIP that the area affected does not overlap with any ancestral domain. Such certification shall
only be issued after a field-based investigation is conducted by the Ancestral Domains Office of Presently, there is a growing concern for indigenous rights in the international scene. This came
the area concerned: Provided, That no certification shall be issued by the NCIP without the free as a result of the increased publicity focused on the continuing disrespect for indigenous human
and prior informed and written consent of the ICCs/IPs concerned: Provided, further, That no rights and the destruction of the indigenous peoples' environment, together with the national
department, government agency or government-owned or -controlled corporation may issue new governments' inability to deal with the situation.241 Indigenous rights came as a result of both
concession, license, lease, or production sharing agreement while there is a pending application human rights and environmental protection, and have become a part of today's priorities for the
for a CADT: Provided, finally, That the ICCs/IPs shall have the right to stop or suspend, in international agenda.242
accordance with this Act, any project that has not satisfied the requirement of this consultation
process."
International institutions and bodies have realized the necessity of applying policies, programs
and specific rules concerning IPs in some nations. The World Bank, for example, first adopted a
Concessions, licenses, lease or production-sharing agreements for the exploitation of natural policy on IPs as a result of the dismal experience of projects in Latin America.243 The World
resources shall not be issued, renewed or granted by all departments and government agencies Bank now seeks to apply its current policy on IPs to some of its projects in Asia. This policy has
without prior certification from the NCIP that the area subject of the agreement does not overlap provided an influential model for the projects of the Asian Development Bank.244
with any ancestral domain. The NCIP certification shall be issued only after a field-based
investigation shall have been conducted and the free and prior informed written consent of the
ICCs/IPs obtained. Non-compliance with the consultation requirement gives the ICCs/IPs the The 1987 Philippine Constitution formally recognizes the existence of ICCs/IPs and declares as
right to stop or suspend any project granted by any department or government agency. a State policy the promotion of their rights within the framework of national unity and
development.245 The IPRA amalgamates the Philippine category of ICCs with the international
category of IPs,246 and is heavily influenced by both the International Labor Organization (ILO)
As its subtitle suggests, this provision requires as a precondition for the issuance of any Convention 169 and the United Nations (UN) Draft Declaration on the Rights of Indigenous
concession, license or agreement over natural resources, that a certification be issued by the Peoples.247
NCIP that the area subject of the agreement does not lie within any ancestral domain. The
provision does not vest the NCIP with power over the other agencies of the State as to
determine whether to grant or deny any concession or license or agreement. It merely gives the ILO Convention No. 169 is entitled the "Convention Concerning Indigenous and Tribal Peoples
NCIP the authority to ensure that the ICCs/IPs have been informed of the agreement and that in Independent Countries"248 and was adopted on June 27, 1989. It is based on the Universal
their consent thereto has been obtained. Note that the certification applies to agreements over Declaration of Human Rights, the International Covenant on Economic, Social and Cultural
natural resources that do not necessarily lie within the ancestral domains. For those that are Rights, the International Covenant on Civil and Political Rights, and many other international
found within the said domains, Sections 7(b) and 57 of the IPRA apply.

27
instruments on the prevention of discrimination.249 ILO Convention No. 169 revised the
"Convention Concerning the Protection and Integration of Indigenous and Other Tribal and
Semi-Tribal Populations in Independent Countries" (ILO No. 107) passed on June 26, 1957. Cruz vs Secretary of DENR
Developments in international law made it appropriate to adopt new international standards on
indigenous peoples "with a view to removing the assimilationist orientation of the earlier Natural Resources and Environmental Law; Constitutional Law; IPRA; Regalian Doctrine
standards," and recognizing the aspirations of these peoples to exercise control over their own
institutions, ways of life and economic development."250
GR. No. 135385, Dec. 6, 2000

CONCLUSION
FACTS:

Petitioners Isagani Cruz and Cesar Europa filed a suit for prohibition and mandamus as citizens
The struggle of the Filipinos throughout colonial history had been plagued by ethnic and religious
and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371,
differences. These differences were carried over and magnified by the Philippine government
otherwise known as the Indigenous People’s Rights Act of 1997 (IPRA) and its implementing rules
through the imposition of a national legal order that is mostly foreign in origin or derivation.251
and regulations (IRR). The petitioners assail certain provisions of the IPRA and its IRR on the
Largely unpopulist, the present legal system has resulted in the alienation of a large sector of
ground that these amount to an unlawful deprivation of the State’s ownership over lands of the
society, specifically, the indigenous peoples. The histories and cultures of the indigenes are
public domain as well as minerals and other natural resources therein, in violation of the regalian
relevant to the evolution of Philippine culture and are vital to the understanding of contemporary
doctrine embodied in section 2, Article XII of the Constitution.
problems.252 It is through the IPRA that an attempt was made by our legislators to understand
Filipino society not in terms of myths and biases but through common experiences in the course
of history. The Philippines became a democracy a centennial ago and the decolonization
process still continues. If the evolution of the Filipino people into a democratic society is to truly ISSUE:
proceed democratically, i.e., if the Filipinos as a whole are to participate fully in the task of
continuing democratization,253 it is this Court's duty to acknowledge the presence of indigenous Do the provisions of IPRA contravene the Constitution?
and customary laws in the country and affirm their co-existence with the land laws in our national
legal system.
HELD:

With the foregoing disquisitions, I vote to uphold the constitutionality of the Indigenous Peoples No, the provisions of IPRA do not contravene the Constitution. Examining the IPRA, there is
Rights Act of 1997. nothing in the law that grants to the ICCs/IPs ownership over the natural resources within their
ancestral domain. Ownership over the natural resources in the ancestral domains remains with
the State and the rights granted by the IPRA to the ICCs/IPs over the natural resources in their
ancestral domains merely gives them, as owners and occupants of the land on which the
resources are found, the right to the small scale utilization of these resources, and at the same
time, a priority in their large scale development and exploitation.

Additionally, ancestral lands and ancestral domains are not part of the lands of the public domain.
They are private lands and belong to the ICCs/IPs by native title, which is a concept of private land
title that existed irrespective of any royal grant from the State. However, the right of ownership
and possession by the ICCs/IPs of their ancestral domains is a limited form of ownership and does
not include the right to alienate the same.

28
EN BANC "(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP as
may be agreed upon by the parties, to be paid according to progress of works on a unit price/lump
sum basis for items of work to be agreed upon, subject to price escalation, retention and other
terms and conditions provided for in Presidential Decree No. 1594. All the financing required for
G.R. No. 133250 July 9, 2002 such works shall be provided by PEA.

FRANCISCO I. CHAVEZ, petitioner, xxx


vs.

PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, (iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in
respondents. favor of PEA, all of the rights, title, interest and participation of CDCP in and to all the areas of
land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have not yet been sold,
transferred or otherwise disposed of by CDCP as of said date, which areas consist of
CARPIO, J.: approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473) square meters in the
Financial Center Area covered by land pledge No. 5 and approximately Three Million Three
Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of
reclaimed areas at varying elevations above Mean Low Water Level located outside the Financial
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a Center Area and the First Neighborhood Unit."3
temporary restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for
brevity) to disclose all facts on PEA's then on-going renegotiations with Amari Coastal Bay and
Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition
further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation. On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting
and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road
and Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen
thousand eight hundred ninety four (1,915,894) square meters." Subsequently, on April 9, 1988,
The Facts the Register of Deeds of the Municipality of Parañaque issued Transfer Certificates of Title Nos.
7309, 7311, and 7312, in the name of PEA, covering the three reclaimed islands known as the
"Freedom Islands" located at the southern portion of the Manila-Cavite Coastal Road, Parañaque
City. The Freedom Islands have a total land area of One Million Five Hundred Seventy Eight
On November 20, 1973, the government, through the Commissioner of Public Highways, signed
Thousand Four Hundred and Forty One (1,578,441) square meters or 157.841 hectares.
a contract with the Construction and Development Corporation of the Philippines ("CDCP" for
brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The contract also included
the construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to
carry out all the works in consideration of fifty percent of the total reclaimed land. On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a
private corporation, to develop the Freedom Islands. The JVA also required the reclamation of an
additional 250 hectares of submerged areas surrounding these islands to complete the
configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
PEA and AMARI entered into the JVA through negotiation without public bidding.4 On April 28,
creating PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged
1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA.5 On June 8,
areas," and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands."1 On the
1995, then President Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved
same date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the
the JVA.6
"lands reclaimed in the foreshore and offshore of the Manila Bay"2 under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP).

On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in
the Senate and denounced the JVA as the "grandmother of all scams." As a result, the Senate
On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend
Committee on Government Corporations and Public Enterprises, and the Committee on
its contract with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate
PEA." Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December 29,
Committees reported the results of their investigation in Senate Committee Report No. 560 dated
1981, which stated:
September 16, 1997.7 Among the conclusions of their report are: (1) the reclaimed lands PEA
seeks to transfer to AMARI under the JVA are lands of the public domain which the government
has not classified as alienable lands and therefore PEA cannot alienate these lands; (2) the
certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.

29
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that
No. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate on "constitutional and statutory grounds the renegotiated contract be declared null and void."14
Committee Report No. 560. The members of the Legal Task Force were the Secretary of Justice,8
the Chief Presidential Legal Counsel,9 and the Government Corporate Counsel.10 The Legal
Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.11 The Issues

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were The issues raised by petitioner, PEA15 and AMARI16 are as follows:
on-going renegotiations between PEA and AMARI under an order issued by then President Fidel
V. Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo
and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA. I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND
ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;

On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with
Application for the Issuance of a Temporary Restraining Order and Preliminary Injunction II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
docketed as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the petition "for PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the case before the
proper court."12

III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF


ADMINISTRATIVE REMEDIES;
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the instant
Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos
in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
the terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III,
of the 1987 Constitution on the right of the people to information on matters of public concern.
Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation of Section
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL
3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain
INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;
to private corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of
pesos in properties of the State that are of public dominion.

VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR
THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE
After several motions for extension of time,13 PEA and AMARI filed their Comments on October
RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND
19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract;
(b) for issuance of a temporary restraining order; and (c) to set the case for hearing on oral
argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF
the Court denied in a Resolution dated June 22, 1999. WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.

In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the
parties to file their respective memoranda. The Court's Ruling

On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended First issue: whether the principal reliefs prayed for in the petition are moot and academic because
JVA," for brevity). On May 28, 1999, the Office of the President under the administration of then of subsequent events.
President Joseph E. Estrada approved the Amended JVA.

30
The petition prays that PEA publicly disclose the "terms and conditions of the on-going Amended JVA constitute the consideration for the purchase. Neither AMARI nor PEA can claim
negotiations for a new agreement." The petition also prays that the Court enjoin PEA from judicial confirmation of their titles because the lands covered by the Amended JVA are newly
"privately entering into, perfecting and/or executing any new agreement with AMARI." reclaimed or still to be reclaimed. Judicial confirmation of imperfect title requires open, continuous,
exclusive and notorious occupation of agricultural lands of the public domain for at least thirty
years since June 12, 1945 or earlier. Besides, the deadline for filing applications for judicial
confirmation of imperfect title expired on December 31, 1987.20
PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner
on June 21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed
upon in the renegotiations. Thus, PEA has satisfied petitioner's prayer for a public disclosure of
the renegotiations. Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now Lastly, there is a need to resolve immediately the constitutional issue raised in this petition
moot because PEA and AMARI have already signed the Amended JVA on March 30, 1999. because of the possible transfer at any time by PEA to AMARI of title and ownership to portions
Moreover, the Office of the President has approved the Amended JVA on May 28, 1999. of the reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the latter's
seventy percent proportionate share in the reclaimed areas as the reclamation progresses. The
Amended JVA even allows AMARI to mortgage at any time the entire reclaimed area to raise
financing for the reclamation project.21
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-
tracking the signing and approval of the Amended JVA before the Court could act on the issue.
Presidential approval does not resolve the constitutional issue or remove it from the ambit of
judicial review. Second issue: whether the petition merits dismissal for failing to observe the principle governing
the hierarchy of courts.

We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President
cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
still to implement the Amended JVA. The prayer to enjoin the signing of the Amended JVA on Court. The principle of hierarchy of courts applies generally to cases involving factual questions.
constitutional grounds necessarily includes preventing its implementation if in the meantime PEA As it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant
and AMARI have signed one in violation of the Constitution. Petitioner's principal basis in assailing case, however, raises constitutional issues of transcendental importance to the public.22 The
the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution, which Court can resolve this case without determining any factual issue related to the case. Also, the
prohibits the government from alienating lands of the public domain to private corporations. If the instant case is a petition for mandamus which falls under the original jurisdiction of the Court under
Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin its Section 5, Article VIII of the Constitution. We resolve to exercise primary jurisdiction over the
implementation, and if already implemented, to annul the effects of such unconstitutional contract. instant case.

The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title Third issue: whether the petition merits dismissal for non-exhaustion of administrative remedies.
and ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a
single private corporation. It now becomes more compelling for the Court to resolve the issue to
insure the government itself does not violate a provision of the Constitution intended to safeguard
the national patrimony. Supervening events, whether intended or accidental, cannot prevent the PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain
Court from rendering a decision if there is a grave violation of the Constitution. In the instant case, information without first asking PEA the needed information. PEA claims petitioner's direct resort
if the Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title to the Court violates the principle of exhaustion of administrative remedies. It also violates the rule
and ownership of alienable lands of the public domain in the name of AMARI. Even in cases where that mandamus may issue only if there is no other plain, speedy and adequate remedy in the
supervening events had made the cases moot, the Court did not hesitate to resolve the legal or ordinary course of law.
constitutional issues raised to formulate controlling principles to guide the bench, bar, and the
public.17
PEA distinguishes the instant case from Tañada v. Tuvera23 where the Court granted the petition
for mandamus even if the petitioners there did not initially demand from the Office of the President
Also, the instant petition is a case of first impression. All previous decisions of the Court involving the publication of the presidential decrees. PEA points out that in Tañada, the Executive
Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973 Department had an affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of
Constitution,18 covered agricultural lands sold to private corporations which acquired the lands Commonwealth Act No. 63825 to publish the presidential decrees. There was, therefore, no need
from private parties. The transferors of the private corporations claimed or could claim the right to for the petitioners in Tañada to make an initial demand from the Office of the President. In the
judicial confirmation of their imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. instant case, PEA claims it has no affirmative statutory duty to disclose publicly information about
141" for brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle of
reclaimed lands and submerged areas for non-agricultural purposes by purchase under PD No. exhaustion of administrative remedies to the instant case in view of the failure of petitioner here
1084 (charter of PEA) and Title III of CA No. 141. Certain undertakings by AMARI under the to demand initially from PEA the needed information.

31
agencies or instrumentalities, if the issues raised are of 'paramount public interest,' and if they
'immediately affect the social, economic and moral well being of the people.'
The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation.
Under Section 79 of the Government Auditing Code,26 the disposition of government lands to
private parties requires public bidding. PEA was under a positive legal duty to disclose to the public
the terms and conditions for the sale of its lands. The law obligated PEA to make this public Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when
disclosure even without demand from petitioner or from anyone. PEA failed to make this public the proceeding involves the assertion of a public right, such as in this case. He invokes several
disclosure because the original JVA, like the Amended JVA, was the result of a negotiated decisions of this Court which have set aside the procedural matter of locus standi, when the
contract, not of a public bidding. Considering that PEA had an affirmative statutory duty to make subject of the case involved public interest.
the public disclosure, and was even in breach of this legal duty, petitioner had the right to seek
direct judicial intervention.
xxx

Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative
remedies does not apply when the issue involved is a purely legal or constitutional question.27
In Tañada v. Tuvera, the Court asserted that when the issue concerns a public right and the object
The principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in
of mandamus is to obtain the enforcement of a public duty, the people are regarded as the real
view of the constitutional ban prohibiting the alienation of lands of the public domain to private
parties in interest; and because it is sufficient that petitioner is a citizen and as such is interested
corporations. We rule that the principle of exhaustion of administrative remedies does not apply in
in the execution of the laws, he need not show that he has any legal or special interest in the result
the instant case.
of the action. In the aforesaid case, the petitioners sought to enforce their right to be informed on
matters of public concern, a right then recognized in Section 6, Article IV of the 1973 Constitution,
in connection with the rule that laws in order to be valid and enforceable must be published in the
Fourth issue: whether petitioner has locus standi to bring this suit Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing,
the Court declared that the right they sought to be enforced 'is a public right recognized by no less
than the fundamental law of the land.'

PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his
constitutional right to information without a showing that PEA refused to perform an affirmative
duty imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he Legaspi v. Civil Service Commission, while reiterating Tañada, further declared that 'when a
will suffer any concrete injury because of the signing or implementation of the Amended JVA. mandamus proceeding involves the assertion of a public right, the requirement of personal interest
Thus, there is no actual controversy requiring the exercise of the power of judicial review. is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the general 'public'
which possesses the right.'

The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA
to comply with its constitutional duties. There are two constitutional issues involved here. First is Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been
the right of citizens to information on matters of public concern. Second is the application of a involved under the questioned contract for the development, management and operation of the
constitutional provision intended to insure the equitable distribution of alienable lands of the public Manila International Container Terminal, 'public interest [was] definitely involved considering the
domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly important role [of the subject contract] . . . in the economic development of the country and the
information on the sale of government lands worth billions of pesos, information which the magnitude of the financial consideration involved.' We concluded that, as a consequence, the
Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to disclosure provision in the Constitution would constitute sufficient authority for upholding the
prevent PEA from alienating hundreds of hectares of alienable lands of the public domain in petitioner's standing.
violation of the Constitution, compelling PEA to comply with a constitutional duty to the nation.

Similarly, the instant petition is anchored on the right of the people to information and access to
Moreover, the petition raises matters of transcendental importance to the public. In Chavez v. official records, documents and papers — a right guaranteed under Section 7, Article III of the
PCGG,28 the Court upheld the right of a citizen to bring a taxpayer's suit on matters of 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of the
transcendental importance to the public, thus - satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's legal
standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we rule that
the petition at bar should be allowed."

"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the Marcoses is
an issue of 'transcendental importance to the public.' He asserts that ordinary taxpayers have a
right to initiate and prosecute actions questioning the validity of acts or orders of government

32
We rule that since the instant petition, brought by a citizen, involves the enforcement of
constitutional rights - to information and to the equitable diffusion of natural resources - matters of
transcendental public importance, the petitioner has the requisite locus standi. PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to
information is limited to "definite propositions of the government." PEA maintains the right does
not include access to "intra-agency or inter-agency recommendations or communications during
the stage when common assertions are still in the process of being formulated or are in the
Fifth issue: whether the constitutional right to information includes official information on on-going 'exploratory stage'."
negotiations before a final agreement.

Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before
Section 7, Article III of the Constitution explains the people's right to information on matters of the closing of the transaction. To support its contention, AMARI cites the following discussion in
public concern in this manner: the 1986 Constitutional Commission:

"Sec. 7. The right of the people to information on matters of public concern shall be recognized. "Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts,
Access to official records, and to documents, and papers pertaining to official acts, transactions, agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
or decisions, as well as to government research data used as basis for policy development, shall consummation of the contract, or does he refer to the contract itself?
be afforded the citizen, subject to such limitations as may be provided by law." (Emphasis
supplied)

Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can cover both steps
leading to a contract and already a consummated contract, Mr. Presiding Officer.
The State policy of full transparency in all transactions involving public interest reinforces the
people's right to information on matters of public concern. This State policy is expressed in Section
28, Article II of the Constitution, thus:
Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the
transaction.

"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a
policy of full public disclosure of all its transactions involving public interest." (Emphasis supplied)
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.

These twin provisions of the Constitution seek to promote transparency in policy-making and in
the operations of the government, as well as provide the people sufficient information to exercise Mr. Suarez: Thank you."32 (Emphasis supplied)
effectively other constitutional rights. These twin provisions are essential to the exercise of
freedom of expression. If the government does not disclose its official acts, transactions and
decisions to citizens, whatever citizens say, even if expressed without any restraint, will be
AMARI argues there must first be a consummated contract before petitioner can invoke the right.
speculative and amount to nothing. These twin provisions are also essential to hold public officials
Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade
"at all times x x x accountable to the people,"29 for unless citizens have the proper information,
the quality of decision-making in government agencies. Government officials will hesitate to
they cannot hold public officials accountable for anything. Armed with the right information, citizens
express their real sentiments during deliberations if there is immediate public dissemination of
can participate in public discussions leading to the formulation of government policies and their
their discussions, putting them under all kinds of pressure before they decide.
effective implementation. An informed citizenry is essential to the existence and proper functioning
of any democracy. As explained by the Court in Valmonte v. Belmonte, Jr.30 –

We must first distinguish between information the law on public bidding requires PEA to disclose
publicly, and information the constitutional right to information requires PEA to release to the
"An essential element of these freedoms is to keep open a continuing dialogue or process of
public. Before the consummation of the contract, PEA must, on its own and without demand from
communication between the government and the people. It is in the interest of the State that the
anyone, disclose to the public matters relating to the disposition of its property. These include the
channels for free political discussion be maintained to the end that the government may perceive
size, location, technical description and nature of the property being disposed of, the terms and
and be responsive to the people's will. Yet, this open dialogue can be effective only to the extent
conditions of the disposition, the parties qualified to bid, the minimum price and similar information.
that the citizenry is informed and thus able to formulate its will intelligently. Only when the
PEA must prepare all these data and disclose them to the public at the start of the disposition
participants in the discussion are aware of the issues and have access to information relating
process, long before the consummation of the contract, because the Government Auditing Code
thereto can such bear fruit."

33
requires public bidding. If PEA fails to make this disclosure, any citizen can demand from PEA this
information at any time during the bidding process.
The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and
other documents attached to such reports or minutes, all relating to the JVA. However, the right
Information, however, on on-going evaluation or review of bids or proposals being undertaken by to information does not compel PEA to prepare lists, abstracts, summaries and the like relating to
the bidding or review committee is not immediately accessible under the right to information. While the renegotiation of the JVA.34 The right only affords access to records, documents and papers,
the evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on which means the opportunity to inspect and copy them. One who exercises the right must copy
the bids or proposals. However, once the committee makes its official recommendation, there the records, documents and papers at his expense. The exercise of the right is also subject to
arises a "definite proposition" on the part of the government. From this moment, the public's right reasonable regulations to protect the integrity of the public records and to minimize disruption to
to information attaches, and any citizen can access all the non-proprietary information leading to government operations, like rules specifying when and how to conduct the inspection and
such definite proposition. In Chavez v. PCGG,33 the Court ruled as follows: copying.35

"Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the The right to information, however, does not extend to matters recognized as privileged information
PCGG and its officers, as well as other government representatives, to disclose sufficient public under the separation of powers.36 The right does not also apply to information on military and
information on any proposed settlement they have decided to take up with the ostensible owners diplomatic secrets, information affecting national security, and information on investigations of
and holders of ill-gotten wealth. Such information, though, must pertain to definite propositions of crimes by law enforcement agencies before the prosecution of the accused, which courts have
the government, not necessarily to intra-agency or inter-agency recommendations or long recognized as confidential.37 The right may also be subject to other limitations that Congress
communications during the stage when common assertions are still in the process of being may impose by law.
formulated or are in the "exploratory" stage. There is need, of course, to observe the same
restrictions on disclosure of information in general, as discussed earlier – such as on matters
involving national security, diplomatic or foreign relations, intelligence and other classified
information." (Emphasis supplied) There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either
Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission house of Congress,38 are recognized as confidential. This kind of information cannot be pried
understood that the right to information "contemplates inclusion of negotiations leading to the open by a co-equal branch of government. A frank exchange of exploratory ideas and
consummation of the transaction." Certainly, a consummated contract is not a requirement for the assessments, free from the glare of publicity and pressure by interested parties, is essential to
exercise of the right to information. Otherwise, the people can never exercise the right if no protect the independence of decision-making of those tasked to exercise Presidential, Legislative
contract is consummated, and if one is consummated, it may be too late for the public to expose and Judicial power.39 This is not the situation in the instant case.
its defects.1âwphi1.nêt

We rule, therefore, that the constitutional right to information includes official information on on-
Requiring a consummated contract will keep the public in the dark until the contract, which may going negotiations before a final contract. The information, however, must constitute definite
be grossly disadvantageous to the government or even illegal, becomes a fait accompli. This propositions by the government and should not cover recognized exceptions like privileged
negates the State policy of full transparency on matters of public concern, a situation which the information, military and diplomatic secrets and similar matters affecting national security and
framers of the Constitution could not have intended. Such a requirement will prevent the citizenry public order.40 Congress has also prescribed other limitations on the right to information in several
from participating in the public discussion of any proposed contract, effectively truncating a basic legislations.41
right enshrined in the Bill of Rights. We can allow neither an emasculation of a constitutional right,
nor a retreat by the State of its avowed "policy of full disclosure of all its transactions involving
public interest."
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed
or to be reclaimed, violate the Constitution.

The right covers three categories of information which are "matters of public concern," namely: (1)
official records; (2) documents and papers pertaining to official acts, transactions and decisions;
and (3) government research data used in formulating policies. The first category refers to any The Regalian Doctrine
document that is part of the public records in the custody of government agencies or officials. The
second category refers to documents and papers recording, evidencing, establishing, confirming,
supporting, justifying or explaining official acts, transactions or decisions of government agencies
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian
or officials. The third category refers to research data, whether raw, collated or processed, owned
doctrine which holds that the State owns all lands and waters of the public domain. Upon the
by the government and used in formulating government policies.

34
Spanish conquest of the Philippines, ownership of all "lands, territories and possessions" in the Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
Philippines passed to the Spanish Crown.42 The King, as the sovereign ruler and representative
of the people, acquired and owned all lands and territories in the Philippines except those he
disposed of by grant or sale to private individuals.
"Art. 339. Property of public dominion is –

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the
State, in lieu of the King, as the owner of all lands and waters of the public domain. The Regalian 1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed
doctrine is the foundation of the time-honored principle of land ownership that "all lands that were by the State, riverbanks, shores, roadsteads, and that of a similar character;
not acquired from the Government, either by purchase or by grant, belong to the public domain."43
Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950,
incorporated the Regalian doctrine. 2. That belonging exclusively to the State which, without being of general public use, is employed
in some public service, or in the development of the national wealth, such as walls, fortresses, and
other works for the defense of the territory, and mines, until granted to private individuals."
Ownership and Disposition of Reclaimed Lands

Property devoted to public use referred to property open for use by the public. In contrast, property
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and devoted to public service referred to property used for some specific public service and open only
disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission to those authorized to use the property.
enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the Property of public dominion referred not only to property devoted to public use, but also to property
sale, of reclaimed lands of the government to corporations and individuals. On November 7, 1936, not so used but employed to develop the national wealth. This class of property constituted
the National Assembly passed Commonwealth Act No. 141, also known as the Public Land Act, property of public dominion although employed for some economic or commercial activity to
which authorized the lease, but not the sale, of reclaimed lands of the government to corporations increase the national wealth.
and individuals. CA No. 141 continues to this day as the general law governing the classification
and disposition of lands of the public domain.

Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion
into private property, to wit:
The Spanish Law of Waters of 1866 and the Civil Code of 1889

"Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the territory, shall become a part of the private property of the State."
the maritime zone of the Spanish territory belonged to the public domain for public use.44 The
Spanish Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which provided
as follows:
This provision, however, was not self-executing. The legislature, or the executive department
pursuant to law, must declare the property no longer needed for public use or territorial defense
before the government could lease or alienate the property to private parties.45
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by
the provinces, pueblos or private persons, with proper permission, shall become the property of
the party constructing such works, unless otherwise provided by the terms of the grant of
authority." Act No. 1654 of the Philippine Commission

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of
the reclamation, provided the government issued the necessary permit and did not reserve reclaimed and foreshore lands. The salient provisions of this law were as follows:
ownership of the reclaimed land to the State.

35
"Section 1. The control and disposition of the foreshore as defined in existing law, and the title to "Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and
all Government or public lands made or reclaimed by the Government by dredging or filling or Natural Resources, shall from time to time classify the lands of the public domain into –
otherwise throughout the Philippine Islands, shall be retained by the Government without prejudice
to vested rights and without prejudice to rights conceded to the City of Manila in the Luneta
Extension.
(a) Alienable or disposable,

Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or
reclaimed by the Government by dredging or filling or otherwise to be divided into lots or blocks, (b) Timber, and
with the necessary streets and alleyways located thereon, and shall cause plats and plans of such
surveys to be prepared and filed with the Bureau of Lands.
(c) Mineral lands, x x x.

(b) Upon completion of such plats and plans the Governor-General shall give notice to the public
that such parts of the lands so made or reclaimed as are not needed for public purposes will be Sec. 7. For the purposes of the government and disposition of alienable or disposable public lands,
leased for commercial and business purposes, x x x. the Governor-General, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall from time to time declare what lands are open to disposition or concession under
this Act."
xxx

Sec. 8. Only those lands shall be declared open to disposition or concession which have been
(e) The leases above provided for shall be disposed of to the highest and best bidder therefore, officially delimited or classified x x x.
subject to such regulations and safeguards as the Governor-General may by executive order
prescribe." (Emphasis supplied)
xxx

Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government. The Act also vested in the government control and disposition of foreshore lands. Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall
Private parties could lease lands reclaimed by the government only if these lands were no longer be classified as suitable for residential purposes or for commercial, industrial, or other productive
needed for public purpose. Act No. 1654 mandated public bidding in the lease of government purposes other than agricultural purposes, and shall be open to disposition or concession, shall
reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other be disposed of under the provisions of this chapter, and not otherwise.
public lands which the government could sell to private parties, these reclaimed lands were
available only for lease to private parties.

Sec. 56. The lands disposable under this title shall be classified as follows:

Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No.
1654 did not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish
Law of Waters. Lands reclaimed from the sea by private parties with government permission (a) Lands reclaimed by the Government by dredging, filling, or other means;
remained private lands.

(b) Foreshore;
Act No. 2874 of the Philippine Legislature

(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.46 lakes or rivers;
The salient provisions of Act No. 2874, on reclaimed lands, were as follows:

(d) Lands not included in any of the foregoing classes.

36
x x x. Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section
5 of the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of to
private parties by lease only and not otherwise, as soon as the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural Resources, shall declare that the Dispositions under the 1935 Constitution
same are not necessary for the public service and are open to disposition under this chapter. The
lands included in class (d) may be disposed of by sale or lease under the provisions of this Act."
(Emphasis supplied)
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The
1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that –

Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain
into x x x alienable or disposable"47 lands. Section 7 of the Act empowered the Governor-General
to "declare what lands are open to disposition or concession." Section 8 of the Act limited alienable "Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
or disposable lands only to those lands which have been "officially delimited and classified." petroleum, and other mineral oils, all forces of potential energy and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization shall
be limited to citizens of the Philippines or to corporations or associations at least sixty per centum
of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or
Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as concession at the time of the inauguration of the Government established under this Constitution.
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands, Natural resources, with the exception of public agricultural land, shall not be alienated, and no
however, must be suitable for residential, commercial, industrial or other productive non- license, concession, or lease for the exploitation, development, or utilization of any of the natural
agricultural purposes. These provisions vested upon the Governor-General the power to classify resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-
inalienable lands of the public domain into disposable lands of the public domain. These provisions five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other
also empowered the Governor-General to classify further such disposable lands of the public than the development of water power, in which cases beneficial use may be the measure and limit
domain into government reclaimed, foreshore or marshy lands of the public domain, as well as of the grant." (Emphasis supplied)
other non-agricultural lands.

The 1935 Constitution barred the alienation of all natural resources except public agricultural
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain lands, which were the only natural resources the State could alienate. Thus, foreshore lands,
classified as government reclaimed, foreshore and marshy lands "shall be disposed of to private considered part of the State's natural resources, became inalienable by constitutional fiat,
parties by lease only and not otherwise." The Governor-General, before allowing the lease of these available only for lease for 25 years, renewable for another 25 years. The government could
lands to private parties, must formally declare that the lands were "not necessary for the public alienate foreshore lands only after these lands were reclaimed and classified as alienable
service." Act No. 2874 reiterated the State policy to lease and not to sell government reclaimed, agricultural lands of the public domain. Government reclaimed and marshy lands of the public
foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No. 1654. domain, being neither timber nor mineral lands, fell under the classification of public agricultural
Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable lands.50 However, government reclaimed and marshy lands, although subject to classification as
or disposable lands of the public domain that the government could not sell to private parties. disposable public agricultural lands, could only be leased and not sold to private parties because
of Act No. 2874.

The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public service. The prohibition on private parties from acquiring ownership of government reclaimed and marshy
This is the reason the government prohibited the sale, and only allowed the lease, of these lands lands of the public domain was only a statutory prohibition and the legislature could therefore
to private parties. The State always reserved these lands for some future public service. remove such prohibition. The 1935 Constitution did not prohibit individuals and corporations from
acquiring government reclaimed and marshy lands of the public domain that were classified as
agricultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution
provided as follows:
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy
lands into other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d)
were the only lands for non-agricultural purposes the government could sell to private parties.
Thus, under Act No. 2874, the government could not sell government reclaimed, foreshore and "Section 2. No private corporation or association may acquire, lease, or hold public agricultural
marshy lands to private parties, unless the legislature passed a law allowing their sale.49 lands in excess of one thousand and twenty four hectares, nor may any individual acquire such

37
lands by purchase in excess of one hundred and forty hectares, or by lease in excess of one Sec. 7. For the purposes of the administration and disposition of alienable or disposable public
thousand and twenty-four hectares, or by homestead in excess of twenty-four hectares. Lands lands, the President, upon recommendation by the Secretary of Agriculture and Commerce, shall
adapted to grazing, not exceeding two thousand hectares, may be leased to an individual, private from time to time declare what lands are open to disposition or concession under this Act.
corporation, or association." (Emphasis supplied)

Sec. 8. Only those lands shall be declared open to disposition or concession which have been
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act officially delimited and classified and, when practicable, surveyed, and which have not been
No. 2874 to open for sale to private parties government reclaimed and marshy lands of the public reserved for public or quasi-public uses, nor appropriated by the Government, nor in any manner
domain. On the contrary, the legislature continued the long established State policy of retaining become private property, nor those on which a private right authorized and recognized by this Act
for the government title and ownership of government reclaimed and marshy lands of the public or any other valid law may be claimed, or which, having been reserved or appropriated, have
domain. ceased to be so. x x x."

Commonwealth Act No. 141 of the Philippine National Assembly Thus, before the government could alienate or dispose of lands of the public domain, the President
must first officially classify these lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these lands for public or quasi-public
uses.
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known
as the Public Land Act, which compiled the then existing laws on lands of the public domain. CA
No. 141, as amended, remains to this day the existing general law governing the classification
and disposition of lands of the public domain other than timber and mineral lands.51 The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of
the public domain, are as follows:

Section 6 of CA No. 141 empowers the President to classify lands of the public domain into
"alienable or disposable"52 lands of the public domain, which prior to such classification are "Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is
inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the President intended to be used for residential purposes or for commercial, industrial, or other productive
to "declare what lands are open to disposition or concession." Section 8 of CA No. 141 states that purposes other than agricultural, and is open to disposition or concession, shall be disposed of
the government can declare open for disposition or concession only lands that are "officially under the provisions of this chapter and not otherwise.
delimited and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:

Sec. 59. The lands disposable under this title shall be classified as follows:
"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce,
shall from time to time classify the lands of the public domain into –
(a) Lands reclaimed by the Government by dredging, filling, or other means;

(a) Alienable or disposable,


(b) Foreshore;

(b) Timber, and


(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable
lakes or rivers;
(c) Mineral lands,

(d) Lands not included in any of the foregoing classes.


and may at any time and in like manner transfer such lands from one class to another,53 for the
purpose of their administration and disposition.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be,
to any person, corporation, or association authorized to purchase or lease public lands for
agricultural purposes. x x x.

38
The State policy prohibiting the sale to private parties of government reclaimed, foreshore and
marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore lands,
to private parties by lease only and not otherwise, as soon as the President, upon recommendation however, became a constitutional edict under the 1935 Constitution. Foreshore lands became
by the Secretary of Agriculture, shall declare that the same are not necessary for the public service inalienable as natural resources of the State, unless reclaimed by the government and classified
and are open to disposition under this chapter. The lands included in class (d) may be disposed as agricultural lands of the public domain, in which case they would fall under the classification of
of by sale or lease under the provisions of this Act." (Emphasis supplied) government reclaimed lands.

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands
Act No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable of the public domain continued to be only leased and not sold to private parties.56 These lands
lands of the public domain. All these lands are intended for residential, commercial, industrial or remained sui generis, as the only alienable or disposable lands of the public domain the
other non-agricultural purposes. As before, Section 61 allowed only the lease of such lands to government could not sell to private parties.
private parties. The government could sell to private parties only lands falling under Section 59 (d)
of CA No. 141, or those lands for non-agricultural purposes not classified as government
reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands,
however, became inalienable under the 1935 Constitution which only allowed the lease of these Since then and until now, the only way the government can sell to private parties government
lands to qualified private parties. reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law
authorizing such sale. CA No. 141 does not authorize the President to reclassify government
reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands
classified under Section 59 (d) are the only alienable or disposable lands for non-agricultural
Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for purposes that the government could sell to private parties.
residential, commercial, industrial or other productive purposes other than agricultural "shall be
disposed of under the provisions of this chapter and not otherwise." Under Section 10 of CA No.
141, the term "disposition" includes lease of the land. Any disposition of government reclaimed,
foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under
IX, Title III of CA No. 141,54 unless a subsequent law amended or repealed these provisions. Section 59 that the government previously transferred to government units or entities could be
sold to private parties. Section 60 of CA No. 141 declares that –

In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of
Appeals,55 Justice Reynato S. Puno summarized succinctly the law on this matter, as follows: "Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary
of Agriculture and Natural Resources, be reasonably necessary for the purposes for which such
sale or lease is requested, and shall not exceed one hundred and forty-four hectares: Provided,
however, That this limitation shall not apply to grants, donations, or transfers made to a province,
"Foreshore lands are lands of public dominion intended for public use. So too are lands reclaimed municipality or branch or subdivision of the Government for the purposes deemed by said entities
by the government by dredging, filling, or other means. Act 1654 mandated that the control and conducive to the public interest; but the land so granted, donated, or transferred to a province,
disposition of the foreshore and lands under water remained in the national government. Said law municipality or branch or subdivision of the Government shall not be alienated, encumbered, or
allowed only the 'leasing' of reclaimed land. The Public Land Acts of 1919 and 1936 also declared otherwise disposed of in a manner affecting its title, except when authorized by Congress: x x x."
that the foreshore and lands reclaimed by the government were to be "disposed of to private (Emphasis supplied)
parties by lease only and not otherwise." Before leasing, however, the Governor-General, upon
recommendation of the Secretary of Agriculture and Natural Resources, had first to determine that
the land reclaimed was not necessary for the public service. This requisite must have been met
before the land could be disposed of. But even then, the foreshore and lands under water were The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority
not to be alienated and sold to private parties. The disposition of the reclaimed land was only by required in Section 56 of Act No. 2874.
lease. The land remained property of the State." (Emphasis supplied)

One reason for the congressional authority is that Section 60 of CA No. 141 exempted government
As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained units and entities from the maximum area of public lands that could be acquired from the State.
in effect at present." These government units and entities should not just turn around and sell these lands to private
parties in violation of constitutional or statutory limitations. Otherwise, the transfer of lands for non-
agricultural purposes to government units and entities could be used to circumvent constitutional
limitations on ownership of alienable or disposable lands of the public domain. In the same
manner, such transfers could also be used to evade the statutory prohibition in CA No. 141 on the

39
sale of government reclaimed and marshy lands of the public domain to private parties. Section
60 of CA No. 141 constitutes by operation of law a lien on these lands.57
x x x.

In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA
No. 141, Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide Art. 422. Property of public dominion, when no longer intended for public use or for public service,
as follows: shall form part of the patrimonial property of the State."

"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public Again, the government must formally declare that the property of public dominion is no longer
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now the needed for public use or public service, before the same could be classified as patrimonial property
Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of such of the State.59 In the case of government reclaimed and marshy lands of the public domain, the
authority, the Director of Lands shall give notice by public advertisement in the same manner as declaration of their being disposable, as well as the manner of their disposition, is governed by the
in the case of leases or sales of agricultural public land, x x x. applicable provisions of CA No. 141.

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to the Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those
highest bidder. x x x." (Emphasis supplied) properties of the State which, without being for public use, are intended for public service or the
"development of the national wealth." Thus, government reclaimed and marshy lands of the State,
even if not employed for public use or public service, if developed to enhance the national wealth,
are classified as property of public dominion.
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of
alienable or disposable lands of the public domain.58

Dispositions under the 1973 Constitution

Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish
Law of Waters of 1866. Private parties could still reclaim portions of the sea with government
permission. However, the reclaimed land could become private land only if classified as alienable The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian
agricultural land of the public domain open to disposition under CA No. 141. The 1935 Constitution doctrine. Section 8, Article XIV of the 1973 Constitution stated that –
prohibited the alienation of all natural resources except public agricultural lands.

"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils,
The Civil Code of 1950 all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines
belong to the State. With the exception of agricultural, industrial or commercial, residential, and
resettlement lands of the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or utilization of any of the
The Civil Code of 1950 readopted substantially the definition of property of public dominion found natural resources shall be granted for a period exceeding twenty-five years, renewable for not
in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that – more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases, beneficial use may be
the measure and the limit of the grant." (Emphasis supplied)
"Art. 420. The following things are property of public dominion:

The 1973 Constitution prohibited the alienation of all natural resources with the exception of
"agricultural, industrial or commercial, residential, and resettlement lands of the public domain." In
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
contrast, the 1935 Constitution barred the alienation of all natural resources except "public
constructed by the State, banks, shores, roadsteads, and others of similar character;
agricultural lands." However, the term "public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the public domain.60
If the land of public domain were neither timber nor mineral land, it would fall under the
(2) Those which belong to the State, without being for public use, and are intended for some public classification of agricultural land of the public domain. Both the 1935 and 1973 Constitutions,
service or for the development of the national wealth. therefore, prohibited the alienation of all natural resources except agricultural lands of the public
domain.

40
(c) To provide for, operate or administer such service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.
The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals
who were citizens of the Philippines. Private corporations, even if wholly owned by Philippine
citizens, were no longer allowed to acquire alienable lands of the public domain unlike in the 1935
Constitution. Section 11, Article XIV of the 1973 Constitution declared that – Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for
which it is created, have the following powers and functions:

"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of land of the (a)To prescribe its by-laws.
public domain which may be developed, held or acquired by, or leased to, any qualified individual,
corporation, or association, and the conditions therefor. No private corporation or association may
hold alienable lands of the public domain except by lease not to exceed one thousand hectares in
xxx
area nor may any citizen hold such lands by lease in excess of five hundred hectares or acquire
by purchase, homestead or grant, in excess of twenty-four hectares. No private corporation or
association may hold by lease, concession, license or permit, timber or forest lands and other
timber or forest resources in excess of one hundred thousand hectares. However, such area may (i) To hold lands of the public domain in excess of the area permitted to private corporations by
be increased by the Batasang Pambansa upon recommendation of the National Economic and statute.
Development Authority." (Emphasis supplied)

(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal,
Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public ditch, flume x x x.
domain only through lease. Only individuals could now acquire alienable lands of the public
domain, and private corporations became absolutely barred from acquiring any kind of alienable
land of the public domain. The constitutional ban extended to all kinds of alienable lands of the
public domain, while the statutory ban under CA No. 141 applied only to government reclaimed, xxx
foreshore and marshy alienable lands of the public domain.

(o) To perform such acts and exercise such functions as may be necessary for the attainment of
PD No. 1084 Creating the Public Estates Authority the purposes and objectives herein specified." (Emphasis supplied)

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.
creating PEA, a wholly government owned and controlled corporation with a special charter. Foreshore areas are those covered and uncovered by the ebb and flow of the tide.61 Submerged
Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers: areas are those permanently under water regardless of the ebb and flow of the tide.62 Foreshore
and submerged areas indisputably belong to the public domain63 and are inalienable unless
reclaimed, classified as alienable lands open to disposition, and further declared no longer needed
for public service.
"Sec. 4. Purpose. The Authority is hereby created for the following purposes:

The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the
(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other means, public domain did not apply to PEA since it was then, and until today, a fully owned government
or to acquire reclaimed land; corporation. The constitutional ban applied then, as it still applies now, only to "private corporations
and associations." PD No. 1084 expressly empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private corporations by statute." Thus, PEA can hold title
to private lands, as well as title to lands of the public domain.
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and
all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled
and/or operated by the government;
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public
domain, there must be legislative authority empowering PEA to sell these lands. This legislative
authority is necessary in view of Section 60 of CA No.141, which states –

41
domain only through lease. As in the 1935 and 1973 Constitutions, the general law governing the
lease to private corporations of reclaimed, foreshore and marshy alienable lands of the public
"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or domain is still CA No. 141.
branch or subdivision of the Government shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by Congress; x x x." (Emphasis
supplied)
The Rationale behind the Constitutional Ban

Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and
submerged alienable lands of the public domain. Nevertheless, any legislative authority granted The rationale behind the constitutional ban on corporations from acquiring, except through lease,
to PEA to sell its reclaimed alienable lands of the public domain would be subject to the alienable lands of the public domain is not well understood. During the deliberations of the 1986
constitutional ban on private corporations from acquiring alienable lands of the public domain. Constitutional Commission, the commissioners probed the rationale behind this ban, thus:
Hence, such legislative authority could only benefit private individuals.

"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says:
Dispositions under the 1987 Constitution

`No private corporation or association may hold alienable lands of the public domain except by
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian lease, not to exceed one thousand hectares in area.'
doctrine. The 1987 Constitution declares that all natural resources are "owned by the State," and
except for alienable agricultural lands of the public domain, natural resources cannot be alienated.
Sections 2 and 3, Article XII of the 1987 Constitution state that –
If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the
1973 Constitution. In effect, it prohibits private corporations from acquiring alienable public lands.
But it has not been very clear in jurisprudence what the reason for this is. In some of the cases
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, decided in 1982 and 1983, it was indicated that the purpose of this is to prevent large landholdings.
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural Is that the intent of this provision?
resources are owned by the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State. x x x.
MR. VILLEGAS: I think that is the spirit of the provision.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the
lands, and national parks. Agricultural lands of the public domain may be further classified by law
Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a chapel stood
according to the uses which they may be devoted. Alienable lands of the public domain shall be
because the Supreme Court said it would be in violation of this." (Emphasis supplied)
limited to agricultural lands. Private corporations or associations may not hold such alienable lands
of the public domain except by lease, for a period not exceeding twenty-five years, renewable for
not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the
Philippines may lease not more than five hundred hectares, or acquire not more than twelve In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:
hectares thereof by purchase, homestead, or grant.

"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands
Taking into account the requirements of conservation, ecology, and development, and subject to by private corporations is to equitably diffuse land ownership or to encourage 'owner-cultivatorship
the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the and the economic family-size farm' and to prevent a recurrence of cases like the instant case.
public domain which may be acquired, developed, held, or leased and the conditions therefor." Huge landholdings by corporations or private persons had spawned social unrest."
(Emphasis supplied)

However, if the constitutional intent is to prevent huge landholdings, the Constitution could have
The 1987 Constitution continues the State policy in the 1973 Constitution banning private simply limited the size of alienable lands of the public domain that corporations could acquire. The
corporations from acquiring any kind of alienable land of the public domain. Like the 1973 Constitution could have followed the limitations on individuals, who could acquire not more than
Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the public

42
24 hectares of alienable lands of the public domain under the 1973 Constitution, and not more
than 12 hectares under the 1987 Constitution.
PEA confirms that the Amended JVA involves "the development of the Freedom Islands and
further reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently
reclaim another 350 hectares x x x."66
If the constitutional intent is to encourage economic family-size farms, placing the land in the name
of a corporation would be more effective in preventing the break-up of farmlands. If the farmland
is registered in the name of a corporation, upon the death of the owner, his heirs would inherit
shares in the corporation instead of subdivided parcels of the farmland. This would prevent the In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of
continuing break-up of farmlands into smaller and smaller plots from one generation to the next. the 750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay.

In actual practice, the constitutional ban strengthens the constitutional limitation on individuals
from acquiring more than the allowed area of alienable lands of the public domain. Without the Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's
constitutional ban, individuals who already acquired the maximum area of alienable lands of the "actual cost" in partially reclaiming the Freedom Islands. AMARI will also complete, at its own
public domain could easily set up corporations to acquire more alienable public lands. An individual expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation
could own as many corporations as his means would allow him. An individual could even hide his costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will
ownership of a corporation by putting his nominees as stockholders of the corporation. The share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which
corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by is defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common
individuals of alienable lands of the public domain. areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be issued in the
name of AMARI. Section 5.2 (c) of the Amended JVA provides that –

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only
a limited area of alienable land of the public domain to a qualified individual. This constitutional "x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
intent is safeguarded by the provision prohibiting corporations from acquiring alienable lands of conveyance of the title pertaining to AMARI's Land share based on the Land Allocation Plan. PEA,
the public domain, since the vehicle to circumvent the constitutional intent is removed. The when requested in writing by AMARI, shall then cause the issuance and delivery of the proper
available alienable public lands are gradually decreasing in the face of an ever-growing population. certificates of title covering AMARI's Land Share in the name of AMARI, x x x; provided, that if
The most effective way to insure faithful adherence to this constitutional intent is to grant or sell more than seventy percent (70%) of the titled area at any given time pertains to AMARI, PEA shall
alienable lands of the public domain only to individuals. This, it would seem, is the practical benefit deliver to AMARI only seventy percent (70%) of the titles pertaining to AMARI, until such time
arising from the constitutional ban. when a corresponding proportionate area of additional land pertaining to PEA has been titled."
(Emphasis supplied)

The Amended Joint Venture Agreement


Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares
of reclaimed land which will be titled in its name.

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three
properties, namely:
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture
PEA's statutory authority, rights and privileges to reclaim foreshore and submerged areas in
Manila Bay. Section 3.2.a of the Amended JVA states that –
1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard
in Paranaque and Las Pinas, Metro Manila, with a combined titled area of 1,578,441 square
meters;"
"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby granting
the Joint Venture the full and exclusive right, authority and privilege to undertake the Project in
2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and accordance with the Master Development Plan."

3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to regularize The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and
the configuration of the reclaimed area."65 its supplemental agreement dated August 9, 1995.

43
are classified as alienable and disposable lands of the public domain."69 The Legal Task Force
concluded that –
The Threshold Issue

"D. Conclusion
The threshold issue is whether AMARI, a private corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view
of Sections 2 and 3, Article XII of the 1987 Constitution which state that:
Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of
ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of which
PEA, as owner, may validly convey the same to any qualified person without violating the
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral Constitution or any statute.
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. x x x.
The constitutional provision prohibiting private corporations from holding public land, except by
lease (Sec. 3, Art. XVII,70 1987 Constitution), does not apply to reclaimed lands whose ownership
has passed on to PEA by statutory grant."
xxx

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private Bay are part of the "lands of the public domain, waters x x x and other natural resources" and
corporations or associations may not hold such alienable lands of the public domain except by consequently "owned by the State." As such, foreshore and submerged areas "shall not be
lease, x x x."(Emphasis supplied) alienated," unless they are classified as "agricultural lands" of the public domain. The mere
reclamation of these areas by PEA does not convert these inalienable natural resources of the
State into alienable or disposable lands of the public domain. There must be a law or presidential
proclamation officially classifying these reclaimed lands as alienable or disposable and open to
Classification of Reclaimed Foreshore and Submerged Areas
disposition or concession. Moreover, these reclaimed lands cannot be classified as alienable or
disposable if the law has reserved them for some public or quasi-public use.71

PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its Memorandum,67 PEA admits that –
Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."72 The President has the authority
to classify inalienable lands of the public domain into alienable or disposable lands of the public
"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department
and disposable lands of the public domain: attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine
Government for use as the Chancery of the Philippine Embassy. Although the Chancery had
transferred to another location thirteen years earlier, the Court still ruled that, under Article 42274
of the Civil Code, a property of public dominion retains such character until formally declared
'Sec. 59. The lands disposable under this title shall be classified as follows: otherwise. The Court ruled that –

(a) Lands reclaimed by the government by dredging, filling, or other means; "The fact that the Roppongi site has not been used for a long time for actual Embassy service
does not automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481
x x x.'" (Emphasis supplied) [1975]. A property continues to be part of the public domain, not available for private appropriation
or ownership 'until there is a formal declaration on the part of the government to withdraw it from
being such' (Ignacio v. Director of Lands, 108 Phil. 335 [1960]." (Emphasis supplied)

Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365
admitted in its Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for
lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19,

44
1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of
the 157.84 hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April land ownership that "all lands that were not acquired from the government, either by purchase or
9, 1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and by grant, belong to the public domain."77
7312 in the name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of
certificates of title corresponding to land patents. To this day, these certificates of title are still in
the name of PEA.
Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on
the disposition of public lands. In particular, CA No. 141 requires that lands of the public domain
must first be classified as alienable or disposable before the government can alienate them. These
PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the lands must not be reserved for public or quasi-public purposes.78 Moreover, the contract between
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as CDCP and the government was executed after the effectivity of the 1973 Constitution which barred
alienable or disposable lands of the public domain. PD No. 1085 and President Aquino's issuance private corporations from acquiring any kind of alienable land of the public domain. This contract
of a land patent also constitute a declaration that the Freedom Islands are no longer needed for could not have converted the Freedom Islands into private lands of a private corporation.
public service. The Freedom Islands are thus alienable or disposable lands of the public domain,
open to disposition or concession to qualified parties.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the
reclamation of areas under water and revested solely in the National Government the power to
At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed reclaim lands. Section 1 of PD No. 3-A declared that –
the Freedom Islands although subsequently there were partial erosions on some areas. The
government had also completed the necessary surveys on these islands. Thus, the Freedom
Islands were no longer part of Manila Bay but part of the land mass. Section 3, Article XII of the
1987 Constitution classifies lands of the public domain into "agricultural, forest or timber, mineral "The provisions of any law to the contrary notwithstanding, the reclamation of areas under water,
lands, and national parks." Being neither timber, mineral, nor national park lands, the reclaimed whether foreshore or inland, shall be limited to the National Government or any person authorized
Freedom Islands necessarily fall under the classification of agricultural lands of the public domain. by it under a proper contract. (Emphasis supplied)
Under the 1987 Constitution, agricultural lands of the public domain are the only natural resources
that the State may alienate to qualified private parties. All other natural resources, such as the
seas or bays, are "waters x x x owned by the State" forming part of the public domain, and are x x x."
inalienable pursuant to Section 2, Article XII of the 1987 Constitution.

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of
AMARI claims that the Freedom Islands are private lands because CDCP, then a private areas under water could now be undertaken only by the National Government or by a person
corporation, reclaimed the islands under a contract dated November 20, 1973 with the contracted by the National Government. Private parties may reclaim from the sea only under a
Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866, contract with the National Government, and no longer by grant or permission as provided in
argues that "if the ownership of reclaimed lands may be given to the party constructing the works, Section 5 of the Spanish Law of Waters of 1866.
then it cannot be said that reclaimed lands are lands of the public domain which the State may not
alienate."75 Article 5 of the Spanish Law of Waters reads as follows:

Executive Order No. 525, issued on February 14, 1979, designated PEA as the National
Government's implementing arm to undertake "all reclamation projects of the government," which
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by "shall be undertaken by the PEA or through a proper contract executed by it with any person or
the provinces, pueblos or private persons, with proper permission, shall become the property of entity." Under such contract, a private party receives compensation for reclamation services
the party constructing such works, unless otherwise provided by the terms of the grant of rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of
authority." (Emphasis supplied) the reclaimed land, subject to the constitutional ban on private corporations from acquiring
alienable lands of the public domain. The reclaimed land can be used as payment in kind only if
the reclaimed land is first classified as alienable or disposable land open to disposition, and then
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea declared no longer needed for public service.
only with "proper permission" from the State. Private parties could own the reclaimed land only if
not "otherwise provided by the terms of the grant of authority." This clearly meant that no one
could reclaim from the sea without permission from the State because the sea is property of public The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares
dominion. It also meant that the State could grant or withhold ownership of the reclaimed land which are still submerged and forming part of Manila Bay. There is no legislative or Presidential
because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a act classifying these submerged areas as alienable or disposable lands of the public domain open
private person reclaiming from the sea without permission from the State could not acquire to disposition. These submerged areas are not covered by any patent or certificate of title. There
ownership of the reclaimed land which would remain property of public dominion like the sea it can be no dispute that these submerged areas form part of the public domain, and in their present

45
state are inalienable and outside the commerce of man. Until reclaimed from the sea, these
submerged areas are, under the Constitution, "waters x x x owned by the State," forming part of
the public domain and consequently inalienable. Only when actually reclaimed from the sea can (1) x x x
these submerged areas be classified as public agricultural lands, which under the Constitution are
the only natural resources that the State may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially classify these lands as alienable or
xxx
disposable lands open to disposition. Thereafter, the government may declare these lands no
longer needed for public service. Only then can these reclaimed lands be considered alienable or
disposable lands of the public domain and within the commerce of man.
(4) Exercise supervision and control over forest lands, alienable and disposable public lands,
mineral resources and, in the process of exercising such control, impose appropriate taxes, fees,
charges, rentals and any such form of levy and collect such revenues for the exploration,
The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable
development, utilization or gathering of such resources;
lands open to disposition is necessary because PEA is tasked under its charter to undertake public
services that require the use of lands of the public domain. Under Section 5 of PD No. 1084, the
functions of PEA include the following: "[T]o own or operate railroads, tramways and other kinds
of land transportation, x x x; [T]o construct, maintain and operate such systems of sanitary sewers xxx
as may be necessary; [T]o construct, maintain and operate such storm drains as may be
necessary." PEA is empowered to issue "rules and regulations as may be necessary for the proper
use by private parties of any or all of the highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus, part of the reclaimed foreshore (14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits,
and submerged lands held by the PEA would actually be needed for public use or service since concessions, lease agreements and such other privileges concerning the development,
many of the functions imposed on PEA by its charter constitute essential public services. exploration and utilization of the country's marine, freshwater, and brackish water and over all
aquatic resources of the country and shall continue to oversee, supervise and police our natural
resources; cancel or cause to cancel such privileges upon failure, non-compliance or violations of
any regulation, order, and for all other causes which are in furtherance of the conservation of
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible natural resources and supportive of the national interest;
for integrating, directing, and coordinating all reclamation projects for and on behalf of the National
Government." The same section also states that "[A]ll reclamation projects shall be approved by
the President upon recommendation of the PEA, and shall be undertaken by the PEA or through
a proper contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in (15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public
relation to PD No. 3-A and PD No.1084, PEA became the primary implementing agency of the domain and serve as the sole agency responsible for classification, sub-classification, surveying
National Government to reclaim foreshore and submerged lands of the public domain. EO No. 525 and titling of lands in consultation with appropriate agencies."80 (Emphasis supplied)
recognized PEA as the government entity "to undertake the reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests."79 Since large portions of these
reclaimed lands would obviously be needed for public service, there must be a formal declaration As manager, conservator and overseer of the natural resources of the State, DENR exercises
segregating reclaimed lands no longer needed for public service from those still needed for public "supervision and control over alienable and disposable public lands." DENR also exercises
service.1âwphi1.nêt "exclusive jurisdiction on the management and disposition of all lands of the public domain." Thus,
DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay,
should be reclaimed or not. This means that PEA needs authorization from DENR before PEA can
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned undertake reclamation projects in Manila Bay, or in any part of the country.
by the PEA," could not automatically operate to classify inalienable lands into alienable or
disposable lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of
the public domain would automatically become alienable once reclaimed by PEA, whether or not DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.
classified as alienable or disposable. Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under
Sections 681 and 782 of CA No. 141. Once DENR decides that the reclaimed lands should be so
classified, it then recommends to the President the issuance of a proclamation classifying the
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, lands as alienable or disposable lands of the public domain open to disposition. We note that then
vests in the Department of Environment and Natural Resources ("DENR" for brevity) the following DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance
powers and functions: with the Revised Administrative Code and Sections 6 and 7 of CA No. 141.

"Sec. 4. Powers and Functions. The Department shall:

46
In short, DENR is vested with the power to authorize the reclamation of areas under water, while
PEA is vested with the power to undertake the physical reclamation of areas under water, whether
directly or through private contractors. DENR is also empowered to classify lands of the public PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA
domain into alienable or disposable lands subject to the approval of the President. On the other to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that –
hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.

"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the contract for
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not the reclamation and construction of the Manila-Cavite Coastal Road Project between the Republic
make the reclaimed lands alienable or disposable lands of the public domain, much less of the Philippines and the Construction and Development Corporation of the Philippines dated
patrimonial lands of PEA. Likewise, the mere transfer by the National Government of lands of the November 20, 1973 and/or any other contract or reclamation covering the same area is hereby
public domain to PEA does not make the lands alienable or disposable lands of the public domain, transferred, conveyed and assigned to the ownership and administration of the Public Estates
much less patrimonial lands of PEA. Authority established pursuant to PD No. 1084; Provided, however, That the rights and interests
of the Construction and Development Corporation of the Philippines pursuant to the aforesaid
contract shall be recognized and respected.

Absent two official acts – a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed
by PEA remain inalienable lands of the public domain. Only such an official classification and Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations of
formal declaration can convert reclaimed lands into alienable or disposable lands of the public the Republic of the Philippines (Department of Public Highways) arising from, or incident to, the
domain, open to disposition under the Constitution, Title I and Title III83 of CA No. 141 and other aforesaid contract between the Republic of the Philippines and the Construction and Development
applicable laws.84 Corporation of the Philippines.

PEA's Authority to Sell Reclaimed Lands In consideration of the foregoing transfer and assignment, the Public Estates Authority shall issue
in favor of the Republic of the Philippines the corresponding shares of stock in said entity with an
issued value of said shares of stock (which) shall be deemed fully paid and non-assessable.

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain,
the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act.
PEA, citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or The Secretary of Public Highways and the General Manager of the Public Estates Authority shall
subdivision of the government "shall not be alienated, encumbered, or otherwise disposed of in a execute such contracts or agreements, including appropriate agreements with the Construction
manner affecting its title, except when authorized by Congress: x x x."85 (Emphasis by PEA) and Development Corporation of the Philippines, as may be necessary to implement the above.

In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, Special land patent/patents shall be issued by the Secretary of Natural Resources in favor of the
which states that – Public Estates Authority without prejudice to the subsequent transfer to the contractor or his
assignees of such portion or portions of the land reclaimed or to be reclaimed as provided for in
the above-mentioned contract. On the basis of such patents, the Land Registration Commission
shall issue the corresponding certificate of title." (Emphasis supplied)
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government
is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the
government by the following: x x x."
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -

Thus, the Court concluded that a law is needed to convey any real property belonging to the
Government. The Court declared that - "Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be
responsible for its administration, development, utilization or disposition in accordance with the
provisions of Presidential Decree No. 1084. Any and all income that the PEA may derive from the
sale, lease or use of reclaimed lands shall be used in accordance with the provisions of
"It is not for the President to convey real property of the government on his or her own sole will. Presidential Decree No. 1084."
Any such conveyance must be authorized and approved by a law enacted by the Congress. It
requires executive and legislative concurrence." (Emphasis supplied)

47
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code,
lands. PD No. 1085 merely transferred "ownership and administration" of lands reclaimed from the government is required to sell valuable government property through public bidding. Section
Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA "shall belong to or be 79 of PD No. 1445 mandates that –
owned by PEA." EO No. 525 expressly states that PEA should dispose of its reclaimed lands "in
accordance with the provisions of Presidential Decree No. 1084," the charter of PEA.
"Section 79. When government property has become unserviceable for any cause, or is no longer
needed, it shall, upon application of the officer accountable therefor, be inspected by the head of
PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in, the agency or his duly authorized representative in the presence of the auditor concerned and, if
subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled found to be valueless or unsaleable, it may be destroyed in their presence. If found to be valuable,
and/or operated by the government."87 (Emphasis supplied) There is, therefore, legislative it may be sold at public auction to the highest bidder under the supervision of the proper committee
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public on award or similar body in the presence of the auditor concerned or other authorized
domain. PEA may sell to private parties its patrimonial properties in accordance with the PEA representative of the Commission, after advertising by printed notice in the Official Gazette, or for
charter free from constitutional limitations. The constitutional ban on private corporations from not less than three consecutive days in any newspaper of general circulation, or where the value
acquiring alienable lands of the public domain does not apply to the sale of PEA's patrimonial of the property does not warrant the expense of publication, by notices posted for a like period in
lands. at least three public places in the locality where the property is to be sold. In the event that the
public auction fails, the property may be sold at a private sale at such price as may be fixed by the
same committee or body concerned and approved by the Commission."
PEA may also sell its alienable or disposable lands of the public domain to private individuals
since, with the legislative authority, there is no longer any statutory prohibition against such sales
and the constitutional ban does not apply to individuals. PEA, however, cannot sell any of its It is only when the public auction fails that a negotiated sale is allowed, in which case the
alienable or disposable lands of the public domain to private corporations since Section 3, Article Commission on Audit must approve the selling price.90 The Commission on Audit implements
XII of the 1987 Constitution expressly prohibits such sales. The legislative authority benefits only Section 79 of the Government Auditing Code through Circular No. 89-29691 dated January 27,
individuals. Private corporations remain barred from acquiring any kind of alienable land of the 1989. This circular emphasizes that government assets must be disposed of only through public
public domain, including government reclaimed lands. auction, and a negotiated sale can be resorted to only in case of "failure of public auction."

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore
PEA to the "contractor or his assignees" (Emphasis supplied) would not apply to private and submerged alienable lands of the public domain. Private corporations are barred from bidding
corporations but only to individuals because of the constitutional ban. Otherwise, the provisions of at the auction sale of any kind of alienable land of the public domain.
PD No. 1085 would violate both the 1973 and 1987 Constitutions.

PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA
The requirement of public auction in the sale of reclaimed lands imposed a condition that the winning bidder should reclaim another 250 hectares of submerged
areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional
reclaimed areas in favor of the winning bidder.92 No one, however, submitted a bid. On December
23, 1994, the Government Corporate Counsel advised PEA it could sell the Freedom Islands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to through negotiation, without need of another public bidding, because of the failure of the public
disposition, and further declared no longer needed for public service, PEA would have to conduct bidding on December 10, 1991.93
a public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63
and 67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding
a public auction.88 Special Patent No. 3517 expressly states that the patent is issued by authority
of the Constitution and PD No. 1084, "supplemented by Commonwealth Act No. 141, as However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the
amended." This is an acknowledgment that the provisions of CA No. 141 apply to the disposition additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim another
of reclaimed alienable lands of the public domain unless otherwise provided by law. Executive 350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area to 750
Order No. 654,89 which authorizes PEA "to determine the kind and manner of payment for the hectares.94 The failure of public bidding on December 10, 1991, involving only 407.84 hectares,95
transfer" of its assets and properties, does not exempt PEA from the requirement of public auction. is not a valid justification for a negotiated sale of 750 hectares, almost double the area publicly
EO No. 654 merely authorizes PEA to decide the mode of payment, whether in kind and in auctioned. Besides, the failure of public bidding happened on December 10, 1991, more than
installment, but does not authorize PEA to dispense with public auction. three years before the signing of the original JVA on April 25, 1995. The economic situation in the
country had greatly improved during the intervening period.

48
Reclamation under the BOT Law and the Local Government Code legislative authority allowing such conveyance. This is the only way these provisions of the BOT
Law and the Local Government Code can avoid a direct collision with Section 3, Article XII of the
1987 Constitution.
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear:
"Private corporations or associations may not hold such alienable lands of the public domain
except by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and Registration of lands of the public domain
AMARI as legislative authority to sell reclaimed lands to private parties, recognizes the
constitutional ban. Section 6 of RA No. 6957 states –
Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands." This theory is
"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance of any echoed by AMARI which maintains that the "issuance of the special patent leading to the eventual
infrastructure projects undertaken through the build-operate-and-transfer arrangement or any of issuance of title takes the subject land away from the land of public domain and converts the
its variations pursuant to the provisions of this Act, the project proponent x x x may likewise be property into patrimonial or private property." In short, PEA and AMARI contend that with the
repaid in the form of a share in the revenue of the project or other non-monetary payments, such issuance of Special Patent No. 3517 and the corresponding certificates of titles, the 157.84
as, but not limited to, the grant of a portion or percentage of the reclaimed land, subject to the hectares comprising the Freedom Islands have become private lands of PEA. In support of their
constitutional requirements with respect to the ownership of the land: x x x." (Emphasis supplied) theory, PEA and AMARI cite the following rulings of the Court:

A private corporation, even one that undertakes the physical reclamation of a government BOT 1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –
project, cannot acquire reclaimed alienable lands of the public domain in view of the constitutional
ban.
"Once the patent was granted and the corresponding certificate of title was issued, the land ceased
to be part of the public domain and became private property over which the Director of Lands has
Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local neither control nor jurisdiction."
governments in land reclamation projects to pay the contractor or developer in kind consisting of
a percentage of the reclaimed land, to wit:
2. Lee Hong Hok v. David,98 where the Court declared -

"Section 302. Financing, Construction, Maintenance, Operation, and Management of


Infrastructure Projects by the Private Sector. x x x
"After the registration and issuance of the certificate and duplicate certificate of title based on a
public land patent, the land covered thereby automatically comes under the operation of Republic
Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio Tengco v. Heirs of
xxx Jose Aliwalas,99 where the Court ruled -

In case of land reclamation or construction of industrial estates, the repayment plan may consist "While the Director of Lands has the power to review homestead patents, he may do so only so
of the grant of a portion or percentage of the reclaimed land or the industrial estate constructed." long as the land remains part of the public domain and continues to be under his exclusive control;
but once the patent is registered and a certificate of title is issued, the land ceases to be part of
the public domain and becomes private property over which the Director of Lands has neither
control nor jurisdiction."
Although Section 302 of the Local Government Code does not contain a proviso similar to that of
the BOT Law, the constitutional restrictions on land ownership automatically apply even though
not expressly mentioned in the Local Government Code.
4. Manalo v. Intermediate Appellate Court,100 where the Court held –

Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a
corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the "When the lots in dispute were certified as disposable on May 19, 1971, and free patents were
contractor or developer is an individual, portions of the reclaimed land, not exceeding 12 issued covering the same in favor of the private respondents, the said lots ceased to be part of
hectares96 of non-agricultural lands, may be conveyed to him in ownership in view of the the public domain and, therefore, the Director of Lands lost jurisdiction over the same."

49
5.Republic v. Court of Appeals,101 where the Court stated – "NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in
conformity with the provisions of Presidential Decree No. 1084, supplemented by Commonwealth
Act No. 141, as amended, there are hereby granted and conveyed unto the Public Estates
Authority the aforesaid tracts of land containing a total area of one million nine hundred fifteen
"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a land thousand eight hundred ninety four (1,915,894) square meters; the technical description of which
grant to the Mindanao Medical Center, Bureau of Medical Services, Department of Health, of the are hereto attached and made an integral part hereof." (Emphasis supplied)
whole lot, validly sufficient for initial registration under the Land Registration Act. Such land grant
is constitutive of a 'fee simple' title or absolute title in favor of petitioner Mindanao Medical Center.
Thus, Section 122 of the Act, which governs the registration of grants or patents involving public
lands, provides that 'Whenever public lands in the Philippine Islands belonging to the Government Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD
of the United States or to the Government of the Philippines are alienated, granted or conveyed No. 1084. Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of
to persons or to public or private corporations, the same shall be brought forthwith under the alienable lands of the public domain that are transferred to government units or entities. Section
operation of this Act (Land Registration Act, Act 496) and shall become registered lands.'" 60 of CA No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of
the registered land even if not annotated on the certificate of title.104 Alienable lands of the public
domain held by government entities under Section 60 of CA No. 141 remain public lands because
they cannot be alienated or encumbered unless Congress passes a law authorizing their
The first four cases cited involve petitions to cancel the land patents and the corresponding disposition. Congress, however, cannot authorize the sale to private corporations of reclaimed
certificates of titles issued to private parties. These four cases uniformly hold that the Director of alienable lands of the public domain because of the constitutional ban. Only individuals can benefit
Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land from such law.
automatically comes under the Torrens System. The fifth case cited involves the registration under
the Torrens System of a 12.8-hectare public land granted by the National Government to
Mindanao Medical Center, a government unit under the Department of Health. The National
Government transferred the 12.8-hectare public land to serve as the site for the hospital buildings The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141
and other facilities of Mindanao Medical Center, which performed a public service. The Court does not automatically convert alienable lands of the public domain into private or patrimonial
affirmed the registration of the 12.8-hectare public land in the name of Mindanao Medical Center lands. The alienable lands of the public domain must be transferred to qualified private parties, or
under Section 122 of Act No. 496. This fifth case is an example of a public land being registered to government entities not tasked to dispose of public lands, before these lands can become
under Act No. 496 without the land losing its character as a property of public dominion. private or patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress can
declare lands of the public domain as private or patrimonial lands in the hands of a government
agency tasked to dispose of public lands. This will allow private corporations to acquire directly
from government agencies limitless areas of lands which, prior to such law, are concededly public
In the instant case, the only patent and certificates of title issued are those in the name of PEA, a lands.
wholly government owned corporation performing public as well as proprietary functions. No
patent or certificate of title has been issued to any private party. No one is asking the Director of
Lands to cancel PEA's patent or certificates of title. In fact, the thrust of the instant petition is that
PEA's certificates of title should remain with PEA, and the land covered by these certificates, being Under EO No. 525, PEA became the central implementing agency of the National Government to
alienable lands of the public domain, should not be sold to a private corporation. reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that –

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or "EXECUTIVE ORDER NO. 525
public ownership of the land. Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the recognized modes of acquiring
ownership. Registration does not give the registrant a better right than what the registrant had
prior to the registration.102 The registration of lands of the public domain under the Torrens Designating the Public Estates Authority as the Agency Primarily Responsible for all Reclamation
system, by itself, cannot convert public lands into private lands.103 Projects

Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the Whereas, there are several reclamation projects which are ongoing or being proposed to be
alienable land of the public domain automatically becomes private land cannot apply to undertaken in various parts of the country which need to be evaluated for consistency with national
government units and entities like PEA. The transfer of the Freedom Islands to PEA was made programs;
subject to the provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by
then President Aquino, to wit:

50
Whereas, there is a need to give further institutional support to the Government's declared policy Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as
to provide for a coordinated, economical and efficient reclamation of lands; well as "any and all kinds of lands." PEA can hold both lands of the public domain and private
lands. Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are
transferred to PEA and issued land patents or certificates of title in PEA's name does not
automatically make such lands private.
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited to the
National Government or any person authorized by it under proper contract;

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private
lands will sanction a gross violation of the constitutional ban on private corporations from acquiring
Whereas, a central authority is needed to act on behalf of the National Government which shall any kind of alienable land of the public domain. PEA will simply turn around, as PEA has now done
ensure a coordinated and integrated approach in the reclamation of lands; under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still
to be reclaimed lands to a single private corporation in only one transaction. This scheme will
effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a government intended to diffuse equitably the ownership of alienable lands of the public domain among
corporation to undertake reclamation of lands and ensure their maximum utilization in promoting Filipinos, now numbering over 80 million strong.
public welfare and interests; and

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain
Whereas, Presidential Decree No. 1416 provides the President with continuing authority to since PEA can "acquire x x x any and all kinds of lands." This will open the floodgates to
reorganize the national government including the transfer, abolition, or merger of functions and corporations and even individuals acquiring hundreds of hectares of alienable lands of the public
offices. domain under the guise that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country - creating the very evil
that the constitutional ban was designed to prevent. This will completely reverse the clear direction
of constitutional development in this country. The 1935 Constitution allowed private corporations
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the to acquire not more than 1,024 hectares of public lands.105 The 1973 Constitution prohibited
powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416, do hereby private corporations from acquiring any kind of public land, and the 1987 Constitution has
order and direct the following: unequivocally reiterated this prohibition.

Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating, The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No.
directing, and coordinating all reclamation projects for and on behalf of the National Government. 1529, automatically become private lands is contrary to existing laws. Several laws authorize lands
All reclamation projects shall be approved by the President upon recommendation of the PEA, of the public domain to be registered under the Torrens System or Act No. 496, now PD No. 1529,
and shall be undertaken by the PEA or through a proper contract executed by it with any person without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of PD
or entity; Provided, that, reclamation projects of any national government agency or entity No. 1529, respectively, provide as follows:
authorized under its charter shall be undertaken in consultation with the PEA upon approval of the
President.

Act No. 496

x x x ."

"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of
the Philippine Islands are alienated, granted, or conveyed to persons or the public or private
As the central implementing agency tasked to undertake reclamation projects nationwide, with corporations, the same shall be brought forthwith under the operation of this Act and shall become
authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged registered lands."
with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or
sold by PEA are not private lands, in the same manner that DENR, when it disposes of other
alienable lands, does not dispose of private lands but alienable lands of the public domain. Only
when qualified private parties acquire these lands will the lands become private lands. In the hands PD No. 1529
of the government agency tasked and authorized to dispose of alienable of disposable lands of
the public domain, these lands are still public, not private lands.

51
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government alienated, Register of Deeds to issue in the name of the National Government new certificates of title
granted or conveyed to any person, the same shall be brought forthwith under the operation of covering such expropriated lands. Section 85 of PD No. 1529 states –
this Decree." (Emphasis supplied)

"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is
Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. expropriated or taken by eminent domain, the National Government, province, city or municipality,
1529 includes conveyances of public lands to public corporations. or any other agency or instrumentality exercising such right shall file for registration in the proper
Registry a certified copy of the judgment which shall state definitely by an adequate description,
the particular property or interest expropriated, the number of the certificate of title, and the nature
of the public use. A memorandum of the right or interest taken shall be made on each certificate
Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, of title by the Register of Deeds, and where the fee simple is taken, a new certificate shall be
or branch or subdivision of the Government," as provided in Section 60 of CA No. 141, may be issued in favor of the National Government, province, city, municipality, or any other agency or
registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such registration, instrumentality exercising such right for the land so taken. The legal expenses incident to the
however, is expressly subject to the condition in Section 60 of CA No. 141 that the land "shall not memorandum of registration or issuance of a new certificate of title shall be for the account of the
be alienated, encumbered or otherwise disposed of in a manner affecting its title, except when authority taking the land or interest therein." (Emphasis supplied)
authorized by Congress." This provision refers to government reclaimed, foreshore and marshy
lands of the public domain that have been titled but still cannot be alienated or encumbered unless
expressly authorized by Congress. The need for legislative authority prevents the registered land
of the public domain from becoming private land that can be disposed of to qualified private parties. Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.

The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be
registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states – AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands
or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA "is not a sale but a joint venture with a stipulation for reimbursement of the original
cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government under its 1973 contract with the Republic." Whether the Amended JVA is a sale or a joint venture,
is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the the fact remains that the Amended JVA requires PEA to "cause the issuance and delivery of the
government by the following: certificates of title conveying AMARI's Land Share in the name of AMARI."107

(1) x x x This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that
private corporations "shall not hold such alienable lands of the public domain except by lease."
The transfer of title and ownership to AMARI clearly means that AMARI will "hold" the reclaimed
(2) For property belonging to the Republic of the Philippines, but titled in the name of any political lands other than by lease. The transfer of title and ownership is a "disposition" of the reclaimed
subdivision or of any corporate agency or instrumentality, by the executive head of the agency or lands, a transaction considered a sale or alienation under CA No. 141,108 the Government
instrumentality." (Emphasis supplied) Auditing Code,109 and Section 3, Article XII of the 1987 Constitution.

Thus, private property purchased by the National Government for expansion of a public wharf may The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas
be titled in the name of a government corporation regulating port operations in the country. Private form part of the public domain and are inalienable. Lands reclaimed from foreshore and
property purchased by the National Government for expansion of an airport may also be titled in submerged areas also form part of the public domain and are also inalienable, unless converted
the name of the government agency tasked to administer the airport. Private property donated to pursuant to law into alienable or disposable lands of the public domain. Historically, lands
a municipality for use as a town plaza or public school site may likewise be titled in the name of reclaimed by the government are sui generis, not available for sale to private parties unlike other
the municipality.106 All these properties become properties of the public domain, and if already alienable public lands. Reclaimed lands retain their inherent potential as areas for public use or
registered under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or public service. Alienable lands of the public domain, increasingly becoming scarce natural
provision in any existing law for the de-registration of land from the Torrens System. resources, are to be distributed equitably among our ever-growing population. To insure such
equitable distribution, the 1973 and 1987 Constitutions have barred private corporations from
acquiring any kind of alienable land of the public domain. Those who attempt to dispose of
inalienable natural resources of the State, or seek to circumvent the constitutional ban on
Private lands taken by the Government for public use under its power of eminent domain become alienation of lands of the public domain to private corporations, do so at their own risk.
unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the

52
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this
last issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of
We can now summarize our conclusions as follows: factual matters.

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint
these lands to private corporations but may not sell or transfer ownership of these lands to private Venture Agreement which is hereby declared NULL and VOID ab initio.
corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership
limitations in the 1987 Constitution and existing laws.

SO ORDERED.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources
of the public domain until classified as alienable or disposable lands open to disposition and
declared no longer needed for public service. The government can make such classification and
declaration only after PEA has reclaimed these submerged areas. Only then can these lands
qualify as agricultural lands of the public domain, which are the only natural resources the FRANCISCO I. CHAVEZ v. PUBLIC ESTATES AUTHORITY, GR No. 133250, 2002-07-09
government can alienate. In their present state, the 592.15 hectares of submerged areas are
inalienable and outside the commerce of man.
Facts:

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34
hectares110 of the Freedom Islands, such transfer is void for being contrary to Section 3, Article On November 20, 1973, the government, through the Commissioner of Public Highways, signed
XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of a contract with the Construction and Development Corporation of the Philippines ("CDCP" for
alienable land of the public domain. brevity) to reclaim certain foreshore and offshore areas of Manila Ba... y

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares111 of On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article creating PEA.
XII of the 1987 Constitution which prohibits the alienation of natural resources other than
agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the
government can classify the reclaimed lands as alienable or disposable, and further declare them
no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the On the same date, then President Marcos issued Presidential Decree No. 1085 transferring to
public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which PEA the "lands reclaimed in the foreshore and offshore of the Manila Bay"[2] under the Manila-
prohibits private corporations from acquiring any kind of alienable land of the public domain. Cavite Coastal Road and Reclamation Project (MCCRRP).

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a
Under Article 1409112 of the Civil Code, contracts whose "object or purpose is contrary to law," private corporation, to develop the Freedom Islands.
or whose "object is outside the commerce of men," are "inexistent and void from the beginning."
The Court must perform its duty to defend and uphold the Constitution, and therefore declares the
Amended JVA null and void ab initio.
Issues:

Seventh issue: whether the Court is the proper forum to raise the issue of whether the Amended
WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE
JVA is grossly disadvantageous to the government.
TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED,
VIOLATE THE 1987 CONSTITUTION

53
The threshold issue is whether AMARI, a private corporation, can acquire and own under the 2. That belonging exclusively to the State which, without being of general public use, is employed
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view in some public service, or in the development of the national wealth, such as walls, fortresses, and
of Sections 2 and 3, Article XII of the 1987 Constitution which state that: other works for the defense of the territory, and... mines, until granted to private individuals."

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral This provision, however, was not self-executing. The legislature, or the executive department
oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other pursuant to law, must declare the property no longer needed for public use or territorial defense
natural resources are owned by the State. With the... exception of agricultural lands, all other before the government could lease or alienate the property to private... parties
natural resources shall not be alienated.

Act No. 1654 of the Philippine Commission


Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public domain except by
lease, x x x."(Emphasis... supplied)
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of
reclaimed and foreshore lands. The salient provisions of this law were as follows:

Ruling:
"Section 1. The control and disposition of the foreshore as defined in existing law, and the title to
all Government or public lands made or reclaimed by the Government by dredging or filling or
In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and otherwise throughout the
submerged areas for... non-agricultural purposes by purchase under PD No. 1084 (charter of PEA)
and Title III of CA No. 141. Certain undertakings by AMARI under the Amended JVA constitute
the consideration for the purchase.
Philippine Islands, shall be retained by the Government without prejudice to vested rights and
without prejudice to rights conceded to the City of Manila in the Luneta Extension.

Neither AMARI nor PEA can claim... judicial confirmation of their titles because the lands covered
by the Amended JVA are newly reclaimed or still to be reclaimed.
Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government.

The Spanish Law of Waters of 1866 and the Civil Code of 1889
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866.

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by
the provinces, pueblos or private persons, with proper permission, shall become the property of
the party constructing such works, unless otherwise provided by the... terms of the grant of Act No. 2874 of the Philippine Legislature
authority."

On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.[46]
Article 339 of the Civil Code of 1889 defined property of public dominion as follows: The salient provisions of Act No. 2874, on reclaimed lands, were as follows:

"Art. 339. Property of public dominion is "Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and
Natural Resources, shall from time to time classify the lands of the public domain into

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores, roadsteads, and that of a similar character; (a)Alienable or disposable

54
(b) Timber, and

(Emphasis supplied)

(c) Mineral lands, x x x.

These provisions vested upon the Governor-General the power to classify inalienable lands of the
public domain into disposable lands of the public domain
Sec. 7. For the purposes of the government and disposition of alienable or disposable public lands,
the Governor-General, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall from time to time... declare what lands are open to disposition or concession
under this Act." Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain
classified as government reclaimed, foreshore and marshy lands "shall be disposed of to private
parties by lease only and not otherwise."

Sec. 8. Only those lands shall be declared open to disposition or concession which have been
officially delimited or classified
The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public service.

Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall
be classified as suitable for residential purposes or for commercial, industrial, or other productive
purposes other than agricultural purposes,... and shall be open to disposition or concession, shall Dispositions under the 1935 Constitution
be disposed of under the provisions of this chapter, and not otherwise.

The 1935 Constitution barred the alienation of all natural resources except public agricultural
Sec. 56. The lands disposable under this title shall be classified as follows: lands, which were the only natural resources the State could alienate.

(a) Lands reclaimed by the Government by dredging, filling, or other means; Thus, foreshore lands, considered part of the State's natural resources, became inalienable by...
constitutional fiat, available only for lease for 25 years, renewable for another 25 years.

(b) Foreshore;
The prohibition on private parties from acquiring ownership of government reclaimed and marshy
lands of the public domain was only a statutory prohibition and the legislature could therefore
remove such prohibition. The 1935 Constitution did not prohibit individuals and... corporations from
(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable acquiring government reclaimed and marshy lands of the public domain that were classified as
lakes or rivers; agricultural lands under existing public land laws.

(d) Lands not included in any of the foregoing classes. Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act
No. 2874 to open for sale to private parties government reclaimed and marshy lands of the public
domain.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of to
private parties by lease only and not otherwise, as soon as the Governor-General, upon
recommendation by the Secretary of Agriculture and Commonwealth Act No. 141 of the Philippine National Assembly

Natural Resources, shall declare that the same are not necessary for the public service and are CA No. 141, as amended, remains to this day the existing general law... governing the
open to disposition under this chapter. The lands included in class (d) may be disposed of by sale classification and disposition of lands of the public domain other than timber and mineral lands
or lease under the provisions of this Act."

55
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.
"alienable or disposable Foreshore areas are those covered and uncovered by the ebb and flow of the tide

Thus, before the government could alienate or dispose of lands of the public domain, the President Submerged areas are those... permanently under water regardless of the ebb and flow of the tide.
must first officially classify these lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these lands... for public or quasi-public
uses.
Thus, PEA can hold title to private lands, as well as... title to lands of the public domain.

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of
Act No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public
lands of the public domain. domain, there must be legislative authority empowering PEA to sell these lands.

Foreshore lands are lands of public dominion intended for public use. So too are lands reclaimed Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and
by the government by dredging, filling, or other means. Act 1654 mandated that the control and submerged alienable lands of the public domain.
disposition of the foreshore and lands under water remained in the... national government.

Nevertheless, any legislative authority granted to PEA to sell its reclaimed alienable lands of the
Since then and until now, the only way the government can sell to private parties government public domain would be... subject to the constitutional ban on private corporations from acquiring
reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law alienable lands of the public domain.
authorizing such sale.

Dispositions under the 1987 Constitution... he 1987 Constitution, like the 1935 and 1973
The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority Constitutions before it, has adopted the Regalian doctrine.
required in Section 56 of Act No. 2874.

The Rationale behind the Constitutional Ban


Again, the government must formally declare that the property of public dominion is no longer
needed for public use or public service, before the same could be classified as patrimonial property
of the State Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands
by private corporations is to equitably diffuse land ownership or to encourage 'owner-cultivatorship
and the economic family-size farm' and to prevent a... recurrence of cases like the instant case.
The 1973 Constitution prohibited the alienation of all natural resources with the exception of Huge landholdings by corporations or private persons had spawned social unrest.
"agricultural, industrial or commercial, residential, and resettlement lands of the public domain."

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only
The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals a limited area of alienable land of the public domain to a qualified individual. This constitutional
who were citizens of the Philippines. Private corporations, even if wholly owned by Philippine intent is safeguarded by the provision prohibiting corporations from... acquiring alienable lands of
citizens, were no longer allowed to acquire alienable lands of the public... domain unlike in the the public domain, since the vehicle to circumvent the constitutional intent is removed.
1935 Constitution.

The Amended Joint Venture Agreement


Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public
domain only through lease

56
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of
the 750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay. PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of
areas under water could now be undertaken only by the National Government or by a person
contracted by the National Government.

Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares
of reclaimed land which will be titled in its name.
The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares
which are still submerged and forming part of Manila Bay. There is no legislative or Presidential
act classifying these submerged areas as alienable or disposable lands of... the public domain
Classification of Reclaimed Foreshore and Submerged Areas open to disposition.

PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned
alienable or disposable lands of the public domain. by the PEA," could not automatically operate to classify inalienable lands into alienable or
disposable lands of the public domain.

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila
Bay are part of the "lands of the public domain, waters x x x and other natural resources" and As manager, conservator and overseer of the natural resources of the State, DENR exercises
consequently "owned by the State." "supervision and control over alienable and disposable public lands." DENR also exercises
"exclusive jurisdiction on the management and disposition of all lands of the public... domain."

As such, foreshore and submerged areas


DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.

"shall not be alienated," unless they are classified as "agricultural lands" of the public domain. The
mere reclamation of these areas by PEA does not convert these inalienable natural resources of In short, DENR is vested with the power to authorize the reclamation of areas under water, while
the State into alienable or disposable lands of the public domain PEA is vested with the power to undertake the physical reclamation of areas under water, whether
directly or through private contractors.

Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."[72] The President has the... Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not
authority to classify inalienable lands of the public domain into alienable or disposable lands of the make the reclaimed lands alienable or disposable lands of the public domain, much less
public domain, pursuant to Section 6 of CA No. 141. patrimonial lands of PEA.

PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the Absent two official acts a classification that these lands are alienable or disposable and open to
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as disposition and a declaration that these lands are not needed for public service, lands reclaimed
alienable or disposable lands of the public domain. by PEA remain inalienable lands of the public domain.

The Freedom Islands are thus alienable or disposable lands of the public domain, open to PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA
disposition or concession to qualified... parties. to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977,... There is no express
authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed lands. PD No. 1085
merely transferred "ownership and administration" of lands reclaimed from Manila Bay to PEA,
while EO No. 525 declared that lands reclaimed by PEA
Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on
the disposition of public lands. In particular, CA No. 141 requires that lands of the public domain
must first be classified as alienable or disposable before the government... can alienate them.
"shall belong to or be owned by PEA."

57
We can now summarize our conclusions as follows:

PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government." The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain.

There is, therefore, legislative authority granted to PEA to sell its lands, whether patrimonial or
alienable lands of the public domain. PEA may lease these lands to private corporations but may not... sell or transfer ownership of
these lands to private corporations.

PEA may sell to private parties its patrimonial... properties in accordance with the PEA charter
free from constitutional limitations. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of
the public domain until classified as alienable or disposable lands open to disposition and declared
no longer needed for public service.

The constitutional ban on private corporations from acquiring alienable lands of the public domain
does not apply to the sale of PEA's patrimonial lands.
In their present state, the 592.15... hectares of submerged areas are inalienable and outside the
commerce of man.

PEA may also sell its alienable or disposable lands of the public domain to private individuals
since, with the legislative authority, there is no longer any statutory prohibition against such sales
and the constitutional ban does not apply to individuals. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34
hectares[110] of the Freedom Islands, such transfer is void for being contrary to Section 3,... Article
XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of
alienable land of the public domain.
PEA, however, cannot sell any of its alienable or disposable lands of the public domain to private
corporations since Section 3, Article XII of the 1987 Constitution expressly prohibits such sales.

Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares[111] of
still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2,... Article
Registration of lands of the public domain XII of the 1987 Constitution which prohibits the alienation of natural resources other than
agricultural lands of the public domain.

Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands." WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint
Venture Agreement which is hereby declared NULL and VOID ab... initio.
In the instant case, the only patent and certificates of title issued are those in the name of PEA, a
wholly government owned corporation performing public as well as proprietary functions.
Principles:

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or
public ownership of the land. The Regalian doctrine is the foundation of the time-honored principle of land ownership... that "all
lands that were not acquired from the Government, either by purchase or by grant, belong to the
public domain."
Registration is not a mode of acquiring ownership but is merely evidence of ownership previously
conferred by any of the recognized modes of... acquiring ownership.
Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950,...
incorporated the Regalian doctrine.

58
(d) Lands not included in any of the foregoing classes.

Sections 6, 7 and 8 of CA No. 141 read as follows

Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be,
to any person, corporation, or association authorized to purchase or lease public lands for
"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce, agricultural purposes. x x x
shall from time to time classify the lands of the public domain into

Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of
(a) Alienable or disposable,... (b) Timber, and to private parties by lease only and not otherwise, as soon as the President, upon recommendation
by the Secretary of Agriculture,... shall declare that the same are not necessary for the public
service and are open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act."
(c) Mineral lands,... and may at any time and in like manner transfer such lands from one class to
another,[53] for the purpose of their administration and disposition.

Sections 2 and 3, Article XII of the 1987 Constitution state that


Sec. 7. For the purposes of the administration and disposition of alienable or disposable public
lands, the President, upon recommendation by the Secretary of Agriculture and Commerce, shall
from time to time declare what lands are open to... disposition or concession under this Act. "Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils,
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State.
Sec. 8. Only those lands shall be declared open to disposition or concession which have been
officially delimited and classified and, when practicable, surveyed, and which have not been
reserved for public or quasi-public... uses, nor appropriated by the Government, nor in any manner With the exception of agricultural lands, all other natural resources shall not be alienated. The
become private property, nor those on which a private right authorized and recognized by this Act exploration, development, and utilization of natural resources shall be under the full control and
or any other valid law may be claimed, or which, having been reserved or appropriated, have supervision of the State. x x x.
ceased to be so. x x... x."
Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
lands, and national parks. Agricultural lands of the public domain may be further classified by law
according to the uses which they may be devoted.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of
the public domain, are as follows: Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of the public domain except by lease, for a period
not exceeding twenty-five years, renewable for not more than twenty-five... years, and not to
exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five
"Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is
hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or
intended to be used for residential purposes or for commercial, industrial, or other productive
grant.
purposes other than agricultural, and is open... to disposition or concession, shall be disposed of
under the provisions of this chapter and not otherwise. aking into account the requirements of conservation, ecology, and development, and subject to
the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the
public domain which may be acquired, developed, held, or leased... and the conditions therefor."
Sec. 59. The lands disposable under this title shall be classified as follows:
Like the 1973 Constitution, the 1987 Constitution allows private corporations to hold... alienable
(a) Lands reclaimed by the Government by dredging, filling, or other means; lands of the public domain only through lease.

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable
lakes or rivers;

59
FIRST DIVISION On April 25, 1985, petitioner Edna T. Collado filed with the land registration court an application
for registration of a parcel of land with an approximate area of 1,200,766 square meters or
120.0766 hectares ("Lot" for brevity). The Lot is situated in Barangay San Isidro (formerly known
as Boso-boso), Antipolo, Rizal, and covered by Survey Plan Psu-162620. Attached to the
G. R. No. 107764 October 4, 2002 application was the technical description of the Lot as Lot Psu-162620 signed by Robert C.
Pangyarihan, Officer-in-Charge of the Survey Division, Bureau of Lands, which stated, "[t]his
survey is inside IN-12 Mariquina Watershed." On March 24, 1986, petitioner Edna T. Collado filed
EDNA COLLADO, BERNARDINA TAWAS, JORETO C. TORRES, an Amended Application to include additional co-applicants.4 Subsequently, more applicants
joined (collectively referred to as "petitioners" for brevity).5
JOSE AMO, SERGIO L. MONTEALEGRE, VICENTE C. TORRES,

JOSEPH L. NUÑEZ, GLORIA SERRANO, DANILO FABREGAS, FERNANDO T. TORRES,


The Republic of the Philippines, through the Solicitor General, and the Municipality of Antipolo,
LUZ G. TUBUNGBANUA, CARIDAD T. TUTANA, JOSE C. TORRES, JR., through its Municipal Attorney and the Provincial Fiscal of Rizal, filed oppositions to petitioners’
application. In due course, the land registration court issued an order of general default against
IMELDA CAYLALUAD, ROSALIE TUTANA, NORMA ASTORIAS, MYRNA M. LANCION, the whole world with the exception of the oppositors.

NORBERTO CAMILOTE, CECILIA MACARANAS, PEDRO BRIONES,

REMEDIOS BANTIGUE, DANTE L. MONTEALEGRE, AIDA T. GADON, ARMANDO T. TORRES Petitioners alleged that they have occupied the Lot since time immemorial. Their possession has
and FIDELITO ECO, petitioners, been open, public, notorious and in the concept of owners. The Lot was surveyed in the name of
Sesinando Leyva, one of their predecessors-in-interest, as early as March 22, 1902. Petitioners
vs. declared the Lot for taxation purposes and paid all the corresponding real estate taxes. According
to them, there are now twenty-five co-owners in pro-indiviso shares of five hectares each. During
COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, thru the Director of Lands,
the hearings, petitioners submitted evidence to prove that there have been nine transfers of rights
respondents,
among them and their predecessors-in-interest, as follows:
BOCKASANJO ISF AWARDEES ASSOCIATION, INC.,

LITA MENDOZA, MORADO PREFIDIGNO, TERESITA CRUZ


"1. SESINANDO LEYVA was the earliest known predecessor-in-interest of the Applicants who
and CALOMA MOISES, respondents/intervernors. was in actual, open, notorious and continuous possession of the property in the concept of owner.
He had the property surveyed in his name on 22 March 1902 (Exhibit "W" and "W-1" testimonies
of J. Torres on 16 December 1987 and Mariano Leyva on 29 December 1987).

DECISION

2. DIOSDADO LEYVA, is the son of Sesinando Leyva, who inherited the property. He had the
property resurveyed in his name on May 21-28, 1928 (Exhibit "X" and "X-1"; testimony of Mariano
CARPIO, J.: Leyva, a son of Diosdado Leyva).

The Case 3. GREGORIO CAMANTIQUE bought the property from Diosdado Leyva before the Japanese
Occupation of the Philippines during World War II. He owned and possessed the property until
1958. He declared the property for tax purposes, the latest of which was under Tax Declaration
No. 7182 issued on 3 February 1957 (Exhibit "I" and testimony of Mariano Leyva, supra).
This Petition1 seeks to set aside the Decision of the Court of Appeals,2 dated June 22, 1992, in
CA-G.R. SP No. 25597, which declared null and void the Decision3 dated January 30, 1991 of the
Regional Trial Court of Antipolo, Rizal, Branch 71, in LRC No. 269-A, LRC Rec. No. N-59179,
confirming the imperfect title of petitioners over a parcel of land. 4. ANGELINA REYNOSO, bought the property from Gregorio Camantique by virtue of a Deed of
Sale on 3 February 1958 (Exhibit "H"). During the ownership of the property by Angelina Reynoso,
Mariano Leyva the grandson of Sesinando Leyva, the previous owner, attended to the farm.
(Testimony of Mariano Leyva, supra). Angelina Reynoso declared the property in her name under
The Facts
Tax Declaration No. 7189 in 4 February 1958, under Tax Declaration No. 8775 on 3 August 1965,
under Tax Declaration No. 16945 on 15 December 1975, and under Tax Declaration No. 03-06145
on 25 June 1978.

60
the applicants and their predecessor-in-interest since time immemorial and said possession had
been testified to by witnesses Jimmy Torres, Mariano Leyva, Sergio Montealegre, Jose Amo and
5. MYRNA TORRES bought the property from Angelina Reynoso on 16 October 1982 through a one Chona who were all cross-examined by Counsel for Oppositor Republic of the Philippines.
Deed of Sale (Exhibit "G").

Evidence was likewise presented that said property was declared for taxation purposes in the
6. EDNA COLLADO bought the property from Myrna Torres in a Deed of Sale dated 28 April 1984 names of the previous owners and the corresponding taxes were paid by the Applicants and the
(Exhibit "P-1" to "P-3"). previous owners and said property was planted to fruit bearing trees; portions to palay and portions
used for grazing purposes.

7. Additional owners BERNARDINA TAWAS, JORETO TORRES, JOSE AMO, VICENTE


TORRES and SERGIO MONTEALEGRE who bought portions of the property from Edna Collado To the mind of the Court, Applicants have presented sufficient evidence to establish registrable
through a Deed of Sale on 6 November 1985 (Exhibit "Q" to "Q-3"). title over said property applied for by them.

8. And more additional Owners JOSEPH NUNEZ, DIOSDADO ARENOS, DANILO FABREGAS, On the claim that the property applied for is within the Marikina Watershed, the Court can only add
FERNANDO TORRES, LUZ TUBUNGBANUA, CARIDAD TUTANA, JOSE TORRES JR., that all Presidential Proclamations like the Proclamation setting aside the Marikina Watershed are
RODRIGO TUTANA, ROSALIE TUTANA, NORMA ASTORIAS, MYRNA LANCION, CHONA subject to "private rights."
MARCIANO, CECILIA MACARANAS, PEDRO BRIONES, REMEDIOS BANTIQUE, DANTE
MONTEALEGRE, ARMANDO TORRES, AIDA GADON and AMELIA M. MALAPAD bought
portions of the property in a Deed of Sale on 12 May 1986 (Exhibit "S" to "S-3").
In the case of Municipality of Santiago vs. Court of Appeals, 120 SCRA 734, 1983 "private rights"
is proof of acquisition through (sic) among means of acquisition of public lands.

9. Co-owners DIOSDADO ARENOS, RODRIGO TUTANA, CHONA MARCIANO and AMELIA


MALAPAD jointly sold their shares to new OWNERS GLORIA R. SERRANO, IMELDA
CAYLALUAD, NORBERTO CAMILOTE and FIDELITO ECO through a Deed of Sale dated 18 In the case of Director of Lands vs. Reyes, 68 SCRA 193-195, by "private rights" means that
January 1987 (Exhibit "T" to "T-9")."6 applicant should show clear and convincing evidence that the property in question was acquired
by applicants or their ancestors either by composition title from the Spanish government or by
Possessory Information title, or any other means for the acquisition of public lands xxx"
(underscoring supplied).
During the hearing on January 9, 1991, only the assistant provincial prosecutor appeared without
the Solicitor General. For failure of the oppositors to present their evidence, the land registration
court issued an order considering the case submitted for decision based on the evidence of the
petitioners. The court later set aside the order and reset the hearing to January 14, 1991 for the The Court believes that from the evidence presented as above stated, Applicants have acquired
presentation of the evidence of the oppositors. On this date, counsel for oppositors failed to appear private rights to which the Presidential Proclamation setting aside the Marikina Watershed should
again despite due notice. Hence, the court again issued an order submitting the case for decision be subject to such private rights.
based on the evidence of the petitioners.

At any rate, the Court notes that evidence was presented by the applicants that as per Certification
The Trial Court’s Ruling issued by the Bureau of Forest Development dated March 18, 1980, the area applied for was
verified to be within the area excluded from the operation of the Marikina Watershed Lands
Executive Order No. 33 dated July 26, 1904 per Proclamation No. 1283 promulgated on June 21,
1974 which established the Boso-boso Town Site Reservation, amended by Proclamation No.
After appraisal of the evidence submitted by petitioners, the land registration court held that 1637 dated April 18, 1977 known as the Lungsod Silangan Townsite Reservation. (Exhibit "K")."7
petitioners had adduced sufficient evidence to establish their registrable rights over the Lot.
Accordingly, the court rendered a decision confirming the imperfect title of petitioners. We quote
the pertinent portions of the court’s decision, as follows:
In a motion dated April 5, 1991, received by the Solicitor General on April 6, 1991, petitioners
alleged that the decision dated January 30, 1991 confirming their title had become final after the
Solicitor General received a copy of the decision on February 18, 1991. Petitioners prayed that
"From the evidence presented, the Court finds that from the testimony of the witnesses presented the land registration court order the Land Registration Authority to issue the necessary decree in
by the Applicants, the property applied for is in actual, open, public and notorious possession by their favor over the Lot.

61
An applicant, like the private respondents herein, for registration of a parcel of land bears the
burden of overcoming the presumption that the land sought to be registered forms part of the
On April 11, 1991, the Solicitor General inquired from the Provincial Prosecutor of Rizal whether public domain (Director of Lands vs. Aquino, 192 SCRA 296).
the land registration court had already rendered a decision and if so, whether the Provincial
Prosecutor would recommend an appeal. However, the Provincial Prosecutor failed to answer the
query.
A positive Act of government is needed to declassify a public land and to convert it into alienable
or disposable land for agricultural or other purposes (Republic vs. Bacas, 176 SCRA 376).

According to the Solicitor General, he received on April 23, 1991 a copy of the land registration
court’s decision dated January 30, 1991, and not on February 18, 1991 as alleged by petitioners
in their motion. In the case at bar, the private respondents failed to present any evidence whatsoever that the land
applied for as described in Psu-162620 has been segregated from the bulk of the public domain
and declared by competent authority to be alienable and disposable. Worse, the technical
description of Psu-162620 signed by Robert C. Pangyarihan, Officer-in-Charge, Survey Division,
In the meantime, on May 7, 1991, the land registration court issued an order directing the Land Bureau of Lands, which was attached to the application of private respondents, categorically
Regulation Authority to issue the corresponding decree of registration in favor of the petitioners. stated that "This survey is inside IN-12 Mariquina Watershed.""

On August 6, 1991, the Solicitor General filed with the Court of Appeals a Petition for Annulment That the land in question is within the Marikina Watershed Reservation is confirmed by the
of Judgment pursuant to Section 9(2) of BP Blg. 129 on the ground that there had been no clear Administrator of the National Land Titles and Deeds in a Report, dated March 2, 1988, submitted
showing that the Lot had been previously classified as alienable and disposable making it subject to the respondent Court in LR Case No. 269-A. These documents readily and effectively negate
to private appropriation. the allegation in private respondent Collado’s application that "said parcel of land known as Psu-
162620 is not covered by any form of title, nor any public land application and are not within any
government reservation (Par. 8, Application; Emphasis supplied). The respondent court could not
have missed the import of these vital documents which are binding upon the courts inasmuch as
On November 29, 1991, Bockasanjo ISF Awardees Association, Inc., an association of holders of
it is the exclusive prerogative of the Executive Department to classify public lands. They should
certificates of stewardship issued by the Department of Environment and Natural Resources
have forewarned the respondent judge from assuming jurisdiction over the case.
("DENR" for brevity) under its Integrated Social Forestry Program ("ISF" for brevity), filed with the
Court of Appeals a Motion for Leave to Intervene and to Admit Petition-In-Intervention. They
likewise opposed the registration and asserted that the Lot, which is situated inside the Marikina
Watershed Reservation, is inalienable. They claimed that they are the actual occupants of the Lot "x x x inasmuch as the said properties applied for by petitioners are part of the public domain, it is
pursuant to the certificates of stewardship issued by the DENR under the ISF for tree planting the Director of Lands who has jurisdiction in the disposition of the same (subject to the approval
purposes. of the Secretary of Natural Resources and Environment), and not the courts. x x x Even assuming
that petitioners did have the said properties surveyed even before the same was declared to be
part of the Busol Forest Reservation, the fact remains that it was so converted into a forest
reservation, thus it is with more reason that this action must fail. Forest lands are inalienable and
The Court of Appeals granted the motion to intervene verbally during the preliminary conference
possession thereof, no matter how long, cannot convert the same into private property. And courts
held on April 6, 1992. During the preliminary conference, all the parties as represented by their
are without jurisdiction to adjudicate lands within the forest zone. (Heirs of Gumangan vs. Court
respective counsels agreed that the only issue for resolution was whether the Lot in question is
of Appeals. 172 SCRA 563; Emphasis supplied).
part of the public domain.8

Needless to say, a final judgment may be annulled on the ground of lack of jurisdiction, fraud or
The Court of Appeals’ Ruling
that it is contrary to law (Panlilio vs. Garcia, 119 SCRA 387, 391) and a decision rendered without
jurisdiction is a total nullity and may be struck down at any time (Suarez vs. Court of Appeals, 186
SCRA 339)."9
In a decision dated June 22, 1992, the Court of Appeals granted the petition and declared null and
void the decision dated January 30, 1991 of the land registration court. The Court of Appeals
explained thus:
Hence, the instant petition.

"Under the Regalian Doctrine, which is enshrined in the 1935 (Art. XIII, Sec. 1), 1973 (Art. XIV,
The Issues
Sec. 8), and 1987 Constitution (Art. XII, Sec. 2), all lands of the public domain belong to the State.

62
the presumption of law then prevailing under the Philippine Bill of 1902 and Public Land Act No.
926 was that the land possessed and claimed by individuals as their own are agricultural lands
The issues raised by petitioners are restated as follows: and therefore alienable and disposable. They conclude that private rights were vested on
Sesinando Leyva before the issuance of EO 33, thus excluding the Lot from the Marikina
Watershed Reservation.
I

Petitioners’ arguments find no basis in law.


WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN
REVERSING THE DECISION OF THE TRIAL COURT GRANTING THE APPLICATION OF THE
PETITIONERS FOR CONFIRMATION OF TITLE; The Regalian Doctrine: An Overview

II Under the Regalian Doctrine, all lands not otherwise appearing to be clearly within private
ownership are presumed to belong to the State.11 The Spaniards first introduced the doctrine to
the Philippines through the Laws of the Indies and the Royal Cedulas, specifically, Law 14, Title
12, Book 4 of the Novisima Recopilacion de Leyes de las Indias12 which laid the foundation that
WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN
"all lands that were not acquired from the Government, either by purchase or by grant, belong to
GIVING DUE COURSE TO THE PETITION FOR ANNULMENT OF JUDGMENT FILED BY THE
the public domain."13 Upon the Spanish conquest of the Philippines, ownership of all "lands,
REPUBLIC LONG AFTER THE DECISION OF THE TRIAL COURT HAD BECOME FINAL;
territories and possessions" in the Philippines passed to the Spanish Crown.14

III
The Laws of the Indies were followed by the Ley Hipotecaria or the Mortgage Law of 1893. The
Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as
possessory claims. The Royal Decree of 1894 or the "Maura Law" partly amended the Mortgage
WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN Law as well as the Law of the Indies. The Maura Law was the last Spanish land law promulgated
GIVING DUE COURSE TO THE INTERVENORS’ PETITION FOR INTERVENTION WHICH WAS in the Philippines. It required the "adjustment" or registration of all agricultural lands, otherwise the
FILED OUT OF TIME OR LONG AFTER THE DECISION OF THE TRIAL COURT HAD BECOME lands would revert to the state.15
FINAL.

Four years later, Spain ceded to the government of the United States all rights, interests and
The Court’s Ruling claims over the national territory of the Philippine Islands through the Treaty of Paris of December
10, 1898. In 1903, the United States colonial government, through the Philippine Commission,
passed Act No. 926, the first Public Land Act, which was described as follows:

The petition is bereft of merit.

"Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine
Bill of 1902. The law governed the disposition of lands of the public domain. It prescribed rules
First Issue: whether petitioners have registrable title over the Lot. and regulations for the homesteading, selling and leasing of portions of the public domain of the
Philippine Islands, and prescribed the terms and conditions to enable persons to perfect their titles
to public lands in the Islands. It also provided for the "issuance of patents to certain native settlers
There is no dispute that Executive Order No. 33 ("EO 33" for brevity) dated July 26, 190410 upon public lands," for the establishment of town sites and sale of lots therein, for the completion
established the Marikina Watershed Reservation ("MWR" for brevity) situated in the Municipality of imperfect titles, and for the cancellation or confirmation of Spanish concessions and grants in
of Antipolo, Rizal. Petitioners even concede that the Lot, described as Lot Psu-162620, is inside the Islands." In short, the Public Land Act operated on the assumption that title to public lands in
the technical, literal description of the MWR. However, the main thrust of petitioners’ claim over the Philippine Islands remained in the government; and that the government’s title to public land
the Lot is that "all Presidential proclamations like the proclamation setting aside the Marikina sprung from the Treaty of Paris and other subsequent treaties between Spain and the United
Watershed Reservation are subject to private rights." They point out that EO 33 contains a saving States. The term "public land" referred to all lands of the public domain whose title still remained
clause that the reservations are "subject to existing private rights, if any there be." Petitioners in the government and are thrown open to private appropriation and settlement, and excluded the
contend that their claim of ownership goes all the way back to 1902, when their known patrimonial property of the government and the friar lands."16
predecessor-in-interest, Sesinando Leyva, laid claim and ownership over the Lot. They claim that

63
Nation". The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article XII25 on
"National Economy and Patrimony".
Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land
Act No. 926, mere possession by private individuals of lands creates the legal presumption that
the lands are alienable and disposable.
Both the 1935 and 1973 Constitutions prohibited the alienation of all natural resources except
agricultural lands of the public domain. The 1987 Constitution readopted this policy. Indeed, all
lands of the public domain as well as all natural resources enumerated in the Philippine
Act 2874, the second Public Land Act, superseded Act No. 926 in 1919. After the passage of the Constitution belong to the State.
1935 Constitution, Commonwealth Act No. 141 ("CA 141" for brevity) amended Act 2874 in 1936.
CA 141, as amended, remains to this day as the existing general law governing the classification
and disposition of lands of the public domain other than timber and mineral lands.17
Watershed Reservation is a Natural Resource

In the meantime, in order to establish a system of registration by which recorded title becomes
absolute, indefeasible and imprescriptible, the legislature passed Act 496, otherwise known as the The term "natural resource" includes "not only timber, gas, oil coal, minerals, lakes, and
Land Registration Act, which took effect on February 1, 1903. Act 496 placed all registered lands submerged lands, but also, features which supply a human need and contribute to the health,
in the Philippines under the Torrens system.18 The Torrens system requires the government to welfare, and benefit of a community, and are essential to the well-being thereof and proper
issue a certificate of title stating that the person named in the title is the owner of the property enjoyment of property devoted to park and recreational purposes."26
described therein, subject to liens and encumbrances annotated on the title or reserved by law.
The certificate of title is indefeasible and imprescriptible and all claims to the parcel of land are
quieted upon issuance of the certificate.19 PD 1529, known as the Property Registration Decree
In Sta. Rosa Realty Development Corp. vs. Court of Appeals, et al.,27 the Court had occasion to
enacted on June 11, 1978,20 amended and updated Act 496.
discourse on watershed areas. The Court resolved the issue of whether the parcel of land which
the Department of Environment and Natural Resources had assessed to be a watershed area is
exempt from the coverage of RA No. 6657 or the Comprehensive Agrarian Reform Law ("CARL"
The 1935, 1973, 1987 Philippine Constitutions for brevity).28 The Court defined watershed as "an area drained by a river and its tributaries and
enclosed by a boundary or divide which separates it from adjacent watersheds." However, the
Court also recognized that:

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the
state, in lieu of the King, as the owner of all lands and waters of the public domain.21 Justice
Reynato S. Puno, in his separate opinion in Cruz vs. Secretary of Environment and Natural "The definition does not exactly depict the complexities of a watershed. The most important
Resources,22 explained thus: product of a watershed is water which is one of the most important human necessit(ies). The
protection of watershed ensures an adequate supply of water for future generations and the control
of flashfloods that not only damage property but also cause loss of lives. Protection of watersheds
is an "intergenerational" responsibility that needs to be answered now."
"One of the fixed and dominating objectives of the 1935 Constitutional Convention was the
nationalization and conservation of the natural resources of the country. There was an
overwhelming sentiment in the Convention in favor of the principle of state ownership of natural
resources and the adoption of the Regalian doctrine. State ownership of natural resources was Article 67 of the Water Code of the Philippines (PD 1067) provides:
seen as a necessary starting point to secure recognition of the state’s power to control their
disposition, exploitation, development, or utilization. The delegates to the Constitutional
Convention very well knew that the concept of State ownership of land and natural resources was
"Art. 67. Any watershed or any area of land adjacent to any surface water or overlying any ground
introduced by the Spaniards, however, they were not certain whether it was continued and applied
water may be declared by the Department of Natural Resources as a protected area. Rules and
by the Americans. To remove all doubts, the Convention approved the provision in the Constitution
Regulations may be promulgated by such Department to prohibit or control such activities by the
affirming the Regalian doctrine."
owners or occupants thereof within the protected area which may damage or cause the
deterioration of the surface water or ground water or interfere with the investigation, use, control,
protection, management or administration of such waters."
Thus, Section 1, Article XIII23 of the 1935 Constitution, on "Conservation and Utilization of Natural
Resources" barred the alienation of all natural resources except public agricultural lands, which
were the only natural resources the State could alienate. The 1973 Constitution reiterated the
The Court in Sta. Rosa Realty also recognized the need to protect watershed areas and took note
Regalian doctrine in Section 8, Article XIV24 on the "National Economy and the Patrimony of the
of the report of the Ecosystems Research and Development Bureau (ERDB), a research arm of

64
the DENR, regarding the environmental assessment of the Casile and Kabanga-an river First. An applicant for confirmation of imperfect title bears the burden of proving that he meets the
watersheds involved in that case. That report concluded as follows: requirements of Section 48 of CA 141, as amended. He must overcome the presumption that the
land he is applying for is part of the public domain and that he has an interest therein sufficient to
warrant registration in his name arising from an imperfect title. An imperfect title may have been
derived from old Spanish grants such as a titulo real or royal grant, a concession especial or
"The Casile barangay covered by CLOA in question is situated in the heartland of both watersheds. special grant, a composicion con el estado or adjustment title, or a titulo de compra or title through
Considering the barangays proximity to the Matangtubig waterworks, the activities of the farmers purchase.29 Or, that he has had continuous, open and notorious possession and occupation of
which are in conflict with proper soil and water conservation practices jeopardize and endanger agricultural lands of the public domain under a bona fide claim of ownership for at least thirty years
the vital waterworks. Degradation of the land would have double edge detrimental effects. On the preceding the filing of his application as provided by Section 48 (b) CA 141.
Casile side this would mean direct siltation of the Mangumit river which drains to the water
impounding reservoir below. On the Kabanga-an side, this would mean destruction of forest covers
which acts as recharged areas of the Matangtubig springs. Considering that the people have little
if no direct interest in the protection of the Matangtubig structures they couldn’t care less even if it Originally, Section 48(b) of CA 141 provided for possession and occupation of lands of the public
would be destroyed. domain since July 26, 1894. This was superseded by RA 1942 which provided for a simple thirty-
year prescriptive period of occupation by an applicant for judicial confirmation of an imperfect title.
The same, however, has already been amended by Presidential Decree No. 1073, approved on
January 25, 1977, the law prevailing at the time petitioners’ application for registration was filed
The Casile and Kabanga-an watersheds can be considered a most vital life support system to on April 25, 1985.30 As amended, Section 48 (b) now reads:
thousands of inhabitants directly and indirectly affected by it. From these watersheds come the
natural God-given precious resource – water. x x x

"(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the public
Clearing and tilling of the lands are totally inconsistent with sound watershed management. More domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately
so, the introduction of earth disturbing activities like road building and erection of permanent preceding the filing of the application for confirmation of title, except when prevented by wars or
infrastructures. Unless the pernicious agricultural activities of the Casile farmers are immediately force majeure. Those shall be conclusively presumed to have performed all the conditions
stopped, it would not be long before these watersheds would cease to be of value. The impact of essential to a Government grant and shall be entitled to a certificate of title under the provisions
watershed degradation threatens the livelihood of thousands of people dependent upon it. Toward of this chapter."
this, we hope that an acceptable comprehensive watershed development policy and program be
immediately formulated and implemented before the irreversible damage finally happens."

Interpreting Section 48 (b) of CA 141, the Court stated that the Public Land Act requires that the
applicant must prove the following:
The Court remanded the case to the Department of Agriculture and Adjudication Board or DARAB
to re-evaluate and determine the nature of the parcels of land involved in order to resolve the issue
of its coverage by the CARL.
"(a) that the land is alienable public land and (b) that his open, continuous, exclusive and notorious
possession and occupation of the same must either be since time immemorial or for the period
prescribed in the Public Land Act. When the conditions set by law are complied with, the possessor
Sta. Rosa Realty gives us a glimpse of the dangers posed by the misuse of natural resources of the land, by operation of law, acquires a right to a grant, a government grant, without the
such as watershed reservations which are akin to forest zones. Population growth and necessity of a certificate of title being issued."31
industrialization have taken a heavy toll on the environment. Environmental degradation from
unchecked human activities could wreak havoc on the lives of present and future generations.
Hence, by constitutional fiat, natural resources remain to this day inalienable properties of the
State. Petitioners do not claim to have documentary title over the Lot. Their right to register the Lot is
predicated mainly upon continuous possession since 1902.

Viewed under this legal and factual backdrop, did petitioners acquire, as they vigorously argue,
private rights over the parcel of land prior to the issuance of EO 33 segregating the same as a Clearly, petitioners were unable to acquire a valid and enforceable right or title because of the
watershed reservation? failure to complete the required period of possession, whether under the original Section 48 (b) of
CA 141 prior to the issuance of EO 33, or under the amendment by RA 1942 and PD 1073.

The answer is in the negative.


There is no proof that prior to the issuance of EO 33 in 1904, petitioners had acquired ownership
or title to the Lot either by deed or by any other mode of acquisition from the State, as for instance

65
by acquisitive prescription. As of 1904, Sesinando Leyva had only been in possession for two the corresponding real estate taxes [which are] accepted by the government, and [his] occupancy
years. Verily, petitioners have not possessed the parcel of land in the manner and for the number and possession [is] continuous, open and unmolested and recognized by the government.
of years required by law for the confirmation of imperfect title. Prescinding from this premise, petitioners urge that the 25-year possession by petitioner Gordula
from 1944 to 1969, albeit five (5) years short of the 30-year possession required under
Commonwealth Act (C.A.) No. 141, as amended, is enough to vest upon petitioner Gordula the
"private rights" recognized and respected in Proclamation No. 573.
Second, assuming that the Lot was alienable and disposable land prior to the issuance of EO 33
in 1904, EO 33 reserved the Lot as a watershed. Since then, the Lot became non-disposable and
inalienable public land. At the time petitioners filed their application on April 25, 1985, the Lot has
been reserved as a watershed under EO 33 for 81 years prior to the filing of petitioners’ application. The case law does not support this submission. In Director of Lands vs. Reyes, we held that a
settler claiming the protection of "private rights" to exclude his land from a military or forest
reservation must show "x x x by clear and convincing evidence that the property in question was
acquired by [any] x x x means for the acquisition of public lands."
The period of occupancy after the issuance of EO 33 in 1904 could no longer be counted because
as a watershed reservation, the Lot was no longer susceptible of occupancy, disposition,
conveyance or alienation. Section 48 (b) of CA 141, as amended, applies exclusively to alienable
and disposable public agricultural land. Forest lands, including watershed reservations, are In fine, one claiming "private rights" must prove that he has complied with C.A. No. 141, as
excluded. It is axiomatic that the possession of forest lands or other inalienable public lands cannot amended, otherwise known as the Public Land Act, which prescribes the substantive as well as
ripen into private ownership. In Municipality of Santiago, Isabela vs. Court of Appeals,32 the Court the procedural requirements for acquisition of public lands. This law requires at least thirty (30)
declared that inalienable public lands - years of open, continuous, exclusive and notorious possession and possession of agricultural
lands of the public domain, under a bona fide claim of acquisition, immediately preceding the filing
of the application for free patent. The rationale for the 30-year period lies in the presumption that
the land applied for pertains to the State, and that the occupants and/or possessors claim an
"x x x cannot be acquired by acquisitive prescription. Prescription, both acquisitive and extinctive, interest therein only by virtue of their imperfect title or continuous, open and notorious possession."
does not run against the State.

Next, petitioners argue that assuming no private rights had attached to the Lot prior to EO 33 in
‘The possession of public land, however long the period may have extended, never confers title 1904, the President of the Philippines had subsequently segregated the Lot from the public domain
thereto upon the possessor because the statute of limitations with regard to public land does not and made the Lot alienable and disposable when he issued Proclamation No. 1283 on June 21,
operate against the State, unless the occupant can prove possession and occupation of the same 1974. Petitioners contend that Proclamation No. 1283 expressly excluded an area of 3,780
under claim of ownership for the required number of years to constitute a grant from the State.’ " hectares from the MWR and made the area part of the Boso-boso Townsite Reservation.
Petitioners assert that Lot Psu-162620 is a small part of this excluded town site area. Petitioners
further contend that town sites are considered alienable and disposable under CA 141.
Third, Gordula vs. Court of Appeals33 is in point. In Gordula, petitioners did not contest the nature
of the land. They admitted that the land lies in the heart of the Caliraya-Lumot River Forest
Reserve, which Proclamation No. 573 classified as inalienable. The petitioners in Gordula Proclamation No. 1283 reads thus:
contended, however, that Proclamation No. 573 itself recognizes private rights of landowners prior
to the reservation. They claim to have established their private rights to the subject land. The Court
ruled:
"PROCLAMATION NO. 1283

"We do not agree. No public land can be acquired by private persons without any grant, express
or implied from the government; it is indispensable that there be a showing of a title from the state. EXCLUDING FROM THE OPERATION EXECUTIVE ORDER NO. 33, DATED JULY 26, 1904,
The facts show that petitioner Gordula did not acquire title to the subject land prior to its reservation AS AMENDED BY EXECUTIVE ORDERS NOS. 14 AND 16, BOTH SERIES OF 1915, WHICH
under Proclamation No. 573. He filed his application for free patent only in January, 1973, more ESTABLISHED THE WATERSHED RESERVATION SITUATED IN THE MUNICIPALITY OF
than three (3) years after the issuance of Proclamation No. 573 in June, 1969. At that time, the ANTIPOLO, PROVINCE OF RIZAL, ISLAND OF LUZON, A CERTAIN PORTION OF THE LAND
land, as part of the Caliraya-Lumot River Forest Reserve, was no longer open to private ownership EMBRACED THEREIN AND RESERVING THE SAME, TOGETHER WITH THE ADJACENT
as it has been classified as public forest reserve for the public good. PARCEL OF LAND OF THE PUBLIC DOMAIN, FOR TOWNSITE PURPOSES UNDER THE
PROVISIONS OF CHAPTER XI OF THE PUBLIC LAND ACT.

Nonetheless, petitioners insist that the term, "private rights," in Proclamation No. 573, should not
be interpreted as requiring a title. They opine that it suffices if the claimant "had occupied and Upon recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the
cultivated the property for so many number of years, declared the land for taxation purposes, [paid] authority vested in me by law, I, FERDINAND E. MARCOS, President of the Philippines, do

66
hereby, exclude from the operation of Executive Order No. 33 dated July 26, 1904, as amended
by Executive Orders Nos. 14 and 16, both series of 1915, which established the Watershed
Reservation situated in the Municipality of Antipolo, Province of Rizal, Island of Luzon, certain IN WITNESS WHEREOF, I Have hereunto set my hand and caused the seal of the Republic of
portions of land embraced therein and reserve the same, together with the adjacent parcel of land the Philippines to be affixed.
of the public domain, for townsite purposes under the provisions of Chapter XI of the Public Land
Act, subject to private rights, if any there be, and to future subdivision survey in accordance with
the development plan to be prepared and approved by the Department of Local Government and
Done in the City of Manila, this 21st day of June, in the year of Our Lord, nineteen hundred and
Community Development, which parcels are more particularly described as follows:
seventy-four.

Lot A (Part of Watershed Reservation)


(Sgd.) FERDINAND E. MARCOS

President
A parcel of land (Lot A of Proposed Poor Man’s Baguio, being a portion of the Marikina Watershed,
Republic of the Philippines"
IN-2), situated in the municipality of Antipolo, Province of Rizal, Island of Luzon, beginning at a
point marked "1" on sketch plan, being N-74’-30 E, 8480.00 meters more or less, from BLLM 1,
Antipolo, Rizal; thence N 33’ 28 W 1575.00 m. to point 2; thence N 40’ 26 W 1538.50 m. to point
3; thence N 30’ 50W 503.17 m. to point 4; thence N 75’ 02 W 704.33 m. to point 5; thence N 14’ Proclamation No. 1283 has since been amended by Proclamation No. 1637 issued on April 18,
18 W 1399.39 m. to point 6; thence N 43’ 25 W 477.04 m. to point 7; thence N 71’ 38 W 458.36 1977. Proclamation No. 1637 revised the area and location of the proposed townsite. According
m. to point 8; thence N 31’ 05 W 1025.00 m. to point 9; thence Due North 490.38 m. to point 10; to then DENR Secretary Victor O. Ramos, Proclamation No. 1637 excluded Lot A (of which the
thence Due North 1075.00 m. to point 11; thence Due East 1000.00 m. to point 12; thence Due Lot claimed by petitioners is part) for townsite purposes and reverted it to MWR coverage.34
East 1000.00 m. to point 13; thence Due East 1000.00 m. to point 14; thence Due East 1000.00 Proclamation No. 1637 reads:
m. to point 15; thence Due East 1000.00 m. to point 16; thence Due East 1000.00 m. to point 17;
thence Due East 1075.00 m. to point 18; thence Due South 1000.00 m. to point 19; thence Due
South 1000.00 m. to point 20; thence Due South 1000.00 m. to point 21; thence Due South
1000.00 m. to point 22; thence Due South 1000.00 m. to point 23; thence Due South 1000.00 m. "PROCLAMATION NO. 1637
to point 24; thence Due South 1075.00 m. to point 25; thence Due West 1000.00 m. to point 26;
thence Due West 1000.00 m. to point 27; thence Due West 636.56 m. to point of beginning.
Containing an area of three thousand seven hundred eighty (3,780) Hectares, more or less. AMENDING PROCLAMATION NO. 1283, DATED JUNE 21, 1974, WHICH ESTABLISHED THE
TOWNSITE RESERVATION IN THE MUNICIPALITIES OF ANTIPOLO AND SAN MATEO,
PROVINCE OF RIZAL, ISLAND OF LUZON BY INCREASING THE AREA AND REVISING THE
Lot B (Alienable and Disposable Land) TECHNICAL DESCRIPTION OF THE LAND EMBRACED THEREIN, AND REVOKING
PROCLAMATION NO. 765 DATED OCTOBER 26, 1970 THAT RESERVED PORTIONS OF THE
AREA AS RESETTLEMENT SITE.

A parcel of land (Lot B of Proposed Poor Man’s Baguio, being a portion of alienable and disposable
portion of public domain) situated in the municipality of Antipolo, Province of Rizal, Island of Luzon.
Beginning at a point marked "1" on sketch plan being N 74’ 30 E., 8430.00 m., more or less, from Upon recommendation of the Secretary of Natural Resources and pursuant to the authority vested
BLLM 1. Antipolo, Rizal; thence Due West 363.44 m. to point 2; thence Due West 1000.00 m. to in me by law, I, FERDINAND E. MARCOS, President of the Philippines, do hereby amend
point 3; thence Due West 100.00 m. to point 4; thence Due West 1000.00 m. to point 5; thence Proclamation No. 1283, dated June 21, 1974 which established the townsite reservation in the
Due West 1075.00 m. to point 6; thence Due North 1000.00 m. to point 7; thence Due North municipalities of Antipolo and San Mateo, Province of Rizal, Island of Luzon, by increasing the
1000.00 m. to point 8; thence Due North 1000.00 m. to point 9; thence Due North 1000.00 m. to area and revising the technical descriptions of the land embraced therein, subject to private rights,
point 10; thence Due North 1000.00 m. to point 11; thence Due North 509.62 m. to point 12; thence if any there be, which parcel of land is more particularly described as follows:
S. 31’ 05 E 1025.00 m. to point 13; thence S 71’ 38 E 458.36 m. to point 14; thence S 43’ 25 E
477.04 m. to point 15; thence S 14’ 18 E 1399.39 m. to point 16; thence S 75’ 02 E 704.33 m. to
point 17; thence S. 30’ 50 E 503.17 m. to point 18; thence S 40’ 26 E 1538.50 m. to point 19; (Proposed Lungsod Silangan Townsite)
thence s 33’ 23 e 1575.00 m to point of beginning. Containing an area of one thousand two
hundred twenty five (1,225) Hectares, more or less.

A PARCEL OF LAND (Proposed Lungsod Silangan Townsite Reservation amending the area
under SWO-41762 establishing the Bagong Silangan Townsite Reservation) situated in the
Note: All data are approximate and subject to change based on future survey. Municipalities of Antipolo, San Mateo, and Montalban, Province of Rizal, Island of Luzon. Bounded
on the E., along lines 1-2-3-4-5-6-7-8-9-10-11-12-13-14-15-16-17-18-19-20-21-22-23 by the

67
Marikina Watershed Reservation (IN-12); on the S., along lines 23-24-25 by the portion of Antipolo; REGION IV
on the W., along lines 25-26-27-28-29-30 by the Municipalities of Montalban, San Mateo; and on
the N., along lines 30-31-32-33-34-35-36-37-38-39-40-41-42-43-44 by the Angat Watershed EL – AL Building
Reservation. Beginning at a point marked "1" on the Topographic Maps with the Scale of 1:50,000
which is the identical corner 38 IN-12, Marikina Watershed Reservation. 100 Quezon Avenue, Quezon City

xxx xxx xxx MAR 18 1986

NOTE: All data are approximate and subject to change based on future survey. VERIFICATION ON THE STATUS OF LAND:

Proclamation No. 765 dated October 26, 1970, which covered areas entirely within the herein TO WHOM IT MAY CONCERN:
Lungsod Silangan Townsite, is hereby revoked accordingly.

This is to certify that the tract of land situated in Barangay San Isidro, Antipolo, Rizal, containing
IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of an area of 1,269,766 square meters, as shown and described on the reverse side hereof, surveyed
the Philippines to be affixed. by Geodetic Engineer Telesforo Cabading for Angelina C. Reynoso, is verified to be within the
area excluded from the operation of Marikina Watershed Reservation established under Executive
Order No. 33 dated July 26, 1904 per Proclamation No. 1283, promulgated on June 21, 1974,
which established the Boso-Boso Townsite Reservation, amended by proclamation No. 1637
Done in the City of Manila, this 18th day of April, in the year of Our Lord, nineteen hundred and dated April 18, 1977 known as Lungsod Silangan Townsite Reservation.
seventy-seven.

Subject area also falls within the bounds of Bagong Lipunan Site under P.D. 1396 dated June 2,
(Sgd.) FERDINAND E. MARCOS 1978 under the sole jurisdiction of the Ministry of Human Settlements, to the exclusion of any other
government agencies.
President of the Philippines"

This verification is made upon the request of the Chief, Legal Staff, R-4 as contained in his internal
A positive act (e.g., an official proclamation) of the Executive Department is needed to declassify memorandum dated March 18, 1986.
land which had been earlier classified as a watershed reservation and to convert it into alienable
or disposable land for agricultural or other purposes.35 Unless and until the land classified as such
is released in an official proclamation so that it may form part of the disposable agricultural lands
of the public domain, the rules on confirmation of imperfect title do not apply.36 Verified by:

The principal document presented by petitioners to prove the private character of the Lot is the (Sgd) ROMEO C. PASCUBILLO
Certification of the Bureau of Forest Development dated March 18, 1986 that the Lot is excluded
from the Marikina Watershed (Exh. R). The Certification reads: Cartographer II

"Republic of the Philippines Checked by:

Ministry of Natural Resources


(Sgd) ARMENDO R. CRUZ

BUREAU OF FOREST DEVELOPMENT Supervising Cartographer

68
more particularly described in Psu-162620, which is within the Marikina Watershed Reservation
under Executive Order No. 33 dated July 2, 1904 which established the Marikina Watershed
ATTESTED: Reservation (IN-12) x x x.

(Sgd) LUIS G. DACANAY "x x x

Chief, Forest Engineering & Infrastructure Section"

"That the land sought to be registered is not a private property of the Registration Applicant but
part of the public domain, not subjected to disposition and is covered by Proclamation No. 585 for
The above certification on which petitioners rely that a reclassification had occurred, and that the Integrated Social Forestry Program hence, L.R.C. No. 269-A is recommended for rejection
Lot is covered by the reclassification, is contradicted by several documents submitted by the (Underlining supplied)." Copy of the letter is attached herewith as Annex "3" and made an integral
Solicitor General before the land registration court. part hereof."

The Solicitor General submitted to the land registration court a Report37 dated March 2, 1988, Lastly, the Solicitor General pointed out that attached to petitioner Edna T. Collado’s [as original
signed by Administrator Teodoro G. Bonifacio of the then National Land Titles and Deeds applicant] application is the technical description39 of the Lot signed by Robert C. Pangyarihan,
Registration Administration, confirming that the Lot described in Psu-162620 forms part of the Officer-in-Charge of the Survey Division of the Bureau of Lands. This technical description
MWR. He thus recommended the dismissal of the application for registration. The Report states: categorically stated that the Lot "is inside IN-12 Mariquina Watershed."

"COMES NOW the Administrator of the National Land Titles and Deeds Registration Commission The evidence of record thus appears unsatisfactory and insufficient to show clearly and positively
and to this Honorable Court respectfully reports that: that the Lot had been officially released from the Marikina Watershed Reservation to form part of
the alienable and disposable lands of the public domain. We hold that once a parcel of land is
included within a watershed reservation duly established by Executive Proclamation, as in the
1. A parcel of land described in plan Psu-162620 situated in the Barrio of San Isidro, Municipality instant case, a presumption arises that the land continues to be part of such Reservation until
of Antipolo, Province of Rizal, is applied for registration of title in the case at bar. clear and convincing evidence of subsequent declassification is shown.

2. After plotting plan Psu-162620 in our Municipal Index Map it was found that a portion of the SW, It is obvious, based on the facts on record that neither petitioners nor their predecessors-in-interest
described as Lot 3 in plan Psu-173790 was previously the subject of registration in Land Reg. have been in open, continuous, exclusive and notorious possession and occupation of the Lot for
Case No. N-9578, LRC Record No. N-55948 and was issued Decree No. N-191242 on April 4, at least thirty years immediately preceding the filing of the application for confirmation of title. Even
1986 in the name of Apolonia Garcia, et al., pursuant to the Decision and Order for Issuance of if they submitted sufficient proof that the Lot had been excluded from the MWR upon the issuance
the Decree dated February 8, 1984 and March 6, 1984, respectively, and the remaining portion of of Proclamation No. 1283 on June 21, 1974, petitioners’ possession as of the filing of their
plan Psu-162620 is inside IN-12, Marikina Watershed. x x x application on April 25, 1985 would have been only eleven years counted from the issuance of the
proclamation in 1974. The result will not change even if we tack in the two years Sesinando Leyva
allegedly possessed the Lot from 1902 until the issuance of EO 33 in 1904. Petitioners’ case falters
even more because of the issuance of Proclamation No. 1637 on April 18, 1977. According to then
"WHEREFORE, this matter is respectfully submitted to the Honorable Court for its information and DENR Secretary Victor Ramos, Proclamation No. 1637 reverted Lot A or the townsite reservation,
guidance with the recommendation that the application in the instant proceedings be dismissed, where petitioners' Lot is supposedly situated, back to the MWR.
after due hearing (Underlining supplied)."

Finally, it is of no moment if the areas of the MWR are now fairly populated and vibrant
Likewise, in a letter38 dated November 11, 1991, the Deputy Land Inspector, DENR, Region IV, communities as claimed by petitioners. The following ruling may be applied to this case by
Community Environment and Natural Resources Office, Antipolo, Rizal, similarly confirmed that analogy:
the Lot is within the MWR. The letter states:

"A forested area classified as forest land of the public domain does not lose such classification
"That the land sought to be registered is situated at San Isidro (Boso-boso), Antipolo, Rizal, with simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified
an area of ONE HUNDRED TWENTY SIX POINT ZERO SEVEN SIXTY SIX (126.0766) hectares, as forest land may actually be covered with grass or planted to crops by kaingin cultivators or

69
other farmers. "Forest lands" do not have to be on mountains or in out of the way places. Swampy "The Land Registration Court has no jurisdiction over non-registrable properties, such as public
areas covered by mangrove trees, nipa palms and other trees growing in brackish or sea water navigable rivers which are parts of the public domain, and cannot validly adjudge the registration
may also be classified as forest land. The classification is descriptive of its legal nature or status of title in favor of private applicant. Hence, the judgment of the Court of First Instance of Pampanga
and does not have to be descriptive of what the land actually looks like. Unless and until the land as regards the Lot No. 2 of certificate of Title No. 15856 in the name of petitioners may be attacked
classified as "forest" is released in an official proclamation to that effect so that it may form part of at any time, either directly or collaterally, by the State which is not bound by any prescriptive period
the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title provided for by the Statute of Limitations."
do not apply."40

We also hold that environmental consequences in this case override concerns over technicalities
Second Issue: Whether the petition for annulment of judgment and rules of procedure.

should have been given due course. In Republic vs. De los Angeles,44 which involved the registration of public lands, specifically parts
of the sea, the Court rejected the principle of res judicata and estoppel to silence the Republic’s
claim over public lands. The Court said:

Petitioners fault the Court of Appeals for giving due course to the Republic’s petition for annulment
of judgment which was filed long after the decision of the land registration court had allegedly
become final and executory. The land registration court rendered its decision on January 30, 1991 "It should be noted further that the doctrine of estoppel or laches does not apply when the
and the Solicitor General received a copy of the decision on April 23, 1991.41 Petitioners point out Government sues as a sovereign or asserts governmental rights, nor does estoppel or laches
that the Solicitor General filed with the Court of Appeals the petition for annulment of judgment validate an act that contravenes law or public policy, and that res judicata is to be disregarded if
invoking Section 9(2) of BP Blg. 12942 only on August 6, 1991, after the decision had supposedly its application would involve the sacrifice of justice to technicality."
become final and executory. Moreover, petitioners further point out that the Solicitor General filed
the petition for annulment after the land registration court issued its order of May 6, 1991 directing
the Land Registration Authority to issue the corresponding decree of registration.
The Court further held that "the right of reversion or reconveyance to the State of the public
properties registered and which are not capable of private appropriation or private acquisition does
not prescribe."
The Solicitor General sought the annulment of the decision on the ground that the land registration
court had no jurisdiction over the case, specifically, over the Lot which was not alienable and
disposable. The Solicitor General maintained that the decision was null and void.
Third issue: Whether the petition-in-intervention is proper.

Petitioners argue that the remedy of annulment of judgment is no longer available because it is
barred by the principle of res judicata. They insist that the land registration court had jurisdiction The Bockasanjo ISF Awardees Association, Inc., an association of holders of certificates of
over the case which involves private land. They also argue that the Republic is estopped from stewardship issued by the DENR under its Integrated Social Forestry Program, filed with the Court
questioning the land registration court’s jurisdiction considering that the Republic participated in of Appeals on November 29, 1991 a Motion for Leave to Intervene and to Admit Petition-In-
the proceedings before the court. Intervention.

It is now established that the Lot, being a watershed reservation, is not alienable and disposable According to intervenors, they are the actual occupants of the Lot which petitioners sought to
public land. The evidence of the petitioners do not clearly and convincingly show that the Lot, register. Aware that the parcels of land which their forefathers had occupied, developed and tilled
described as Lot Psu-162620, ceased to be a portion of the area classified as a watershed belong to the Government, they filed a petition with then President Corazon C. Aquino and then
reservation of the public domain. Any title to the Lot is void ab initio. In view of this, the alleged DENR Secretary Fulgencio S. Factoran, to award the parcels of land to them.
procedural infirmities attending the filing of the petition for annulment of judgment are immaterial
since the land registration court never acquired jurisdiction over the Lot. All proceedings of the
land registration court involving the Lot are therefore null and void. Secretary Factoran directed the Director of Forest Management Bureau to take steps for the
segregation of the aforementioned area from the MWR for development under the DENR’s ISF
Programs. Subsequently, then President Aquino issued Proclamation No. 585 dated June 5, 1990
We apply our ruling in Martinez vs. Court of Appeals,43 as follows: excluding 1,430 hectares from the operation of EO 33 and placed the same under the DENR’s
Integrated Social Forestry Program. Proclamation No. 585 reads:

70
PROCLAMATION NO. 585 Pursuant to Proclamation No. 585, the chief of the ISF Unit, acting through the Regional Executive
Director of the DENR (Region IV), issued sometime between the years 1989 to 1991 certificates
of stewardship contracts to bona fide residents of the barangays mentioned in the proclamation
as qualified recipients of the ISF programs. Among those awarded were intervenors. The
AMENDING FURTHER EXECUTIVE ORDER NO. 33, DATED JULY 26, 1904 WHICH certificates of stewardship are actually contracts of lease granted by the DENR to actual occupants
ESTABLISHED THE MARIKINA WATERSHED RESERVATION (IN-12) AS AMENDED, BY of parcels of land under its ISF programs for a period of twenty-five (25) years, renewable for
EXCLUDING CERTAIN PORTIONS OF LANDS EMBRACED THEREIN SITUATED AT SITIOS another twenty-five (25) years.45 The DENR awarded contracts of stewardship to ISF participants
BOSOBOSO, KILINGAN, VETERANS, BARANGAYS SAN JOSEPH AND PAENAAN, in Barangay San Isidro (or Boso-boso) and the other barangays based on the Inventory of Forest
MUNICIPALITY OF ANTIPOLO, PROVINCE OF RIZAL, ISLAND OF LUZON. Occupants the DENR had conducted.46

Upon recommendation of the Secretary of Environment and Natural Resources and pursuant to According to intervenors, they learned only on July 31, 1991 about the pendency of LRC Case
the authority vested in me by law, I, CORAZON C. AQUINO, President of the Philippines, do No. 269-A before the Regional Trial Court of Antipolo, Rizal. On August 8, 1991, they filed a Motion
hereby exclude from the operation of Executive Order No. 33, which established the Marikina for Leave to Intervene and to Admit Opposition in Intervention before the land registration court to
Watershed Reservation, certain parcel of land of the public domain embraced therein situated in assert their rights and to protect their interests.
Sitios Bosoboso, Veterans, Kilingan and Barangay San Joseph and Paenaan, Municipality of
Antipolo, Province of Rizal and place the same under the Integrated Social Forestry Program of
the Department of Environment and Natural Resources in accordance with existing laws, rules
and regulations, which parcel of land is more particularly described as follows: However, shortly after the filing of their opposition, intervenors learned that the land registration
court had already rendered a decision on January 30, 1991 confirming petitioners’ imperfect title.
Intervenors’ counsel received a copy of the decision on August 9, 1991.
"A PARCEL OF LAND, within the Marikina Watershed Reservation situated in the Municipality of
Antipolo, Province of Rizal, beginning at point "1" on plan, being identical to corner 1 of Marikina
Watershed Reservation; thence On August 14, 1991, intervenors filed a motion to vacate judgment and for new trial before the
land registration court. According to intervenors, the land registration court could not act on its
motions due to the restraining order issued by the Court of Appeals on August 8, 1991, enjoining
the land registration court from executing its decision, as prayed for by the Solicitor General in its
xxx xxx xxx petition for annulment of judgment. The intervenors were thus constrained to file a petition for
intervention before the Court of Appeals which allowed the same.

Containing an area of One Thousand Four Hundred Thirty (1,430) Hectares.


Rule 19 of the 1997 Rules of Civil Procedure47 provides in pertinent parts:

All other lands covered and embraced under Executive Order No. 33 as amended, not otherwise
affected by this Proclamation, shall remain in force and effect. Section 1. Who may intervene. – A person who has a legal interest in the matter in litigation, or in
the success of either of the parties, or an interest against both, or is so situated as to be adversely
affected by a distribution or other disposition of property in the custody of the court, or an officer
IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of thereof may, with leave of court, be allowed to intervene in the action. The Court shall consider
the Philippines to be affixed. whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the
original parties, and whether or not the inertvenor’s rights may be fully protected in a separate
proceeding.

Done in the City of Manila, this 5th day of June, in the year of Our Lord, nineteen hundred and
ninety.
Sec. 2. Time to intervene. – The motion to intervene may be filed at any time before rendition of
judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion
and served on the original parties.
(Sgd.) CORAZON C. AQUINO

President of the Philippines"

71
As a rule, intervention is allowed "before rendition of judgment by the trial court," as Section 2,
Rule 19 expressly provides. However, the Court has recognized exceptions to this rule in the
interest of substantial justice. Mago vs. Court of Appeals48 reiterated the ruling in Director of
Lands vs. Court of Appeals, where the Court allowed the motions for intervention even when the
case had already reached this Court. Thus, in Mago the Court held that:

"It is quite clear and patent that the motions for intervention filed by the movants at this stage of
the proceedings where trial had already been concluded x x x and on appeal x x x the same
affirmed by the Court of Appeals and the instant petition for certiorari to review said judgment is
already submitted for decision by the Supreme Court, are obviously and, manifestly late, beyond
the period prescribed under x x x Section 2, Rule 12 of the rules of Court.

But Rule 12 of the Rules of Court, like all other Rules therein promulgated, is simply a rule of
procedure, the whole purpose and object of which is to make the powers of the Court fully and
completely available for justice. The purpose of procedure is not to thwart justice. Its proper aim
is to facilitate the application of justice to the rival claims of contending parties. It was created not
to hinder and delay but to facilitate and promote the administration of justice. It does not constitute
the thing itself which courts are always striving to secure to litigants. It is designed as the means
best adopted to obtain that thing. In other words, it is a means to an end."

To be sure, the Court of Appeals did not pass upon the actual status of intervenors in relation to
the Lot as this was not in issue. Neither was the validity of the certificates of stewardship contracts
which intervenors allegedly possessed inquired into considering this too was not in issue. In fact,
intervenors did not specifically seek any relief apart from a declaration that the Lot in question
remains inalienable land of the public domain. We cannot fault the Court of Appeals for allowing
the intervention, if only to provide the rival groups a peaceful venue for ventilating their sides. This
case has already claimed at least five lives due to the raging dispute between the rival camps of
the petitioners on one side and those of the DENR awardees on the other. It also spawned a
number of criminal cases between the two rival groups including malicious mischief, robbery and
arson. A strict application of the rules would blur this bigger, far more important picture.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated June 22, 1992
declaring null and void the Decision dated January 30, 1991 of Branch 71, Regional Trial Court of
Antipolo, Rizal, in LRC No. 269-A, LRC Rec. No. N-59179 is AFFIRMED.

SO ORDERED.

72
CARPIO-MORALES, J.:

EN BANC

The present petition for mandamus and prohibition assails the constitutionality of Republic Act No.
7942,5 otherwise known as the PHILIPPINE MINING ACT OF 1995, along with the Implementing
G.R. No. 127882 January 27, 2004 Rules and Regulations issued pursuant thereto, Department of Environment and Natural
Resources (DENR) Administrative Order 96-40, and of the Financial and Technical Assistance
Agreement (FTAA) entered into on March 30, 1995 by the Republic of the Philippines and WMC
(Philippines), Inc. (WMCP), a corporation organized under Philippine laws.
LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC., represented by its Chairman F'LONG MIGUEL
M. LUMAYONG, WIGBERTO E. TAÑADA, PONCIANO BENNAGEN, JAIME TADEO, RENATO
R. CONSTANTINO, JR., F'LONG AGUSTIN M. DABIE, ROBERTO P. AMLOY, RAQIM L. DABIE,
SIMEON H. DOLOJO, IMELDA M. GANDON, LENY B. GUSANAN, MARCELO L. GUSANAN, On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No. 2796
QUINTOL A. LABUAYAN, LOMINGGES D. LAWAY, BENITA P. TACUAYAN, minors JOLY L. authorizing the DENR Secretary to accept, consider and evaluate proposals from foreign-owned
BUGOY, represented by his father UNDERO D. BUGOY, ROGER M. DADING, represented by corporations or foreign investors for contracts or agreements involving either technical or financial
his father ANTONIO L. DADING, ROMY M. LAGARO, represented by his father TOTING A. assistance for large-scale exploration, development, and utilization of minerals, which, upon
LAGARO, MIKENY JONG B. LUMAYONG, represented by his father MIGUEL M. LUMAYONG, appropriate recommendation of the Secretary, the President may execute with the foreign
RENE T. MIGUEL, represented by his mother EDITHA T. MIGUEL, ALDEMAR L. SAL, proponent. In entering into such proposals, the President shall consider the real contributions to
represented by his father DANNY M. SAL, DAISY RECARSE, represented by her mother LYDIA the economic growth and general welfare of the country that will be realized, as well as the
S. SANTOS, EDWARD M. EMUY, ALAN P. MAMPARAIR, MARIO L. MANGCAL, ALDEN S. development and use of local scientific and technical resources that will be promoted by the
TUSAN, AMPARO S. YAP, VIRGILIO CULAR, MARVIC M.V.F. LEONEN, JULIA REGINA proposed contract or agreement. Until Congress shall determine otherwise, large-scale mining,
CULAR, GIAN CARLO CULAR, VIRGILIO CULAR, JR., represented by their father VIRGILIO for purpose of this Section, shall mean those proposals for contracts or agreements for mineral
CULAR, PAUL ANTONIO P. VILLAMOR, represented by his parents JOSE VILLAMOR and resources exploration, development, and utilization involving a committed capital investment in a
ELIZABETH PUA-VILLAMOR, ANA GININA R. TALJA, represented by her father MARIO JOSE single mining unit project of at least Fifty Million Dollars in United States Currency (US
B. TALJA, SHARMAINE R. CUNANAN, represented by her father ALFREDO M. CUNANAN, $50,000,000.00).7
ANTONIO JOSE A. VITUG III, represented by his mother ANNALIZA A. VITUG, LEAN D.
NARVADEZ, represented by his father MANUEL E. NARVADEZ, JR., ROSERIO MARALAG
LINGATING, represented by her father RIO OLIMPIO A. LINGATING, MARIO JOSE B. TALJA,
DAVID E. DE VERA, MARIA MILAGROS L. SAN JOSE, SR., SUSAN O. BOLANIO, OND, LOLITA On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942 to "govern the
G. DEMONTEVERDE, BENJIE L. NEQUINTO,1 ROSE LILIA S. ROMANO, ROBERTO S. exploration, development, utilization and processing of all mineral resources."8 R.A. No. 7942
VERZOLA, EDUARDO AURELIO C. REYES, LEAN LOUEL A. PERIA, represented by his father defines the modes of mineral agreements for mining operations,9 outlines the procedure for their
ELPIDIO V. PERIA,2 GREEN FORUM PHILIPPINES, GREEN FORUM WESTERN VISAYAS, filing and approval,10 assignment/transfer11 and withdrawal,12 and fixes their terms.13 Similar
(GF-WV), ENVIRONMETAL LEGAL ASSISTANCE CENTER (ELAC), PHILIPPINE KAISAHAN provisions govern financial or technical assistance agreements.14
TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN (KAISAHAN),3
KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN
(KAISAHAN), PARTNERSHIP FOR AGRARIAN REFORM and RURAL DEVELOPMENT
The law prescribes the qualifications of contractors15 and grants them certain rights, including
SERVICES, INC. (PARRDS), PHILIPPINE PART`NERSHIP FOR THE DEVELOPMENT OF
timber,16 water17 and easement18 rights, and the right to possess explosives.19 Surface owners,
HUMAN RESOURCES IN THE RURAL AREAS, INC. (PHILDHRRA), WOMEN'S LEGAL
occupants, or concessionaires are forbidden from preventing holders of mining rights from
BUREAU (WLB), CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, INC. (CADI),
entering private lands and concession areas.20 A procedure for the settlement of conflicts is
UPLAND DEVELOPMENT INSTITUTE (UDI), KINAIYAHAN FOUNDATION, INC., SENTRO NG
likewise provided for.21
ALTERNATIBONG LINGAP PANLIGAL (SALIGAN), LEGAL RIGHTS AND NATURAL
RESOURCES CENTER, INC. (LRC), petitioners,

vs. The Act restricts the conditions for exploration,22 quarry23 and other24 permits. It regulates the
transport, sale and processing of minerals,25 and promotes the development of mining
VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF ENVIRONMENT AND NATURAL
communities, science and mining technology,26 and safety and environmental protection.27
RESOURCES (DENR), HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCES BUREAU
(MGB-DENR), RUBEN TORRES, EXECUTIVE SECRETARY, and WMC (PHILIPPINES), INC.4
respondents.
The government's share in the agreements is spelled out and allocated,28 taxes and fees are
imposed,29 incentives granted.30 Aside from penalizing certain acts,31 the law likewise specifies
grounds for the cancellation, revocation and termination of agreements and permits.32
DECISION

73
On April 9, 1995, 30 days following its publication on March 10, 1995 in Malaya and Manila Times, x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
two newspapers of general circulation, R.A. No. 7942 took effect.33 Shortly before the effectivity Act No. 7942, the latter being unconstitutional in that it violates Sec. 1, Art. III of the Constitution;
of R.A. No. 7942, however, or on March 30, 1995, the President entered into an FTAA with WMCP
covering 99,387 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North
Cotabato.34
IV

On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order
(DAO) No. 95-23, s. 1995, otherwise known as the Implementing Rules and Regulations of R.A. x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
No. 7942. This was later repealed by DAO No. 96-40, s. 1996 which was adopted on December Act No. 7942, the latter being unconstitutional in that it allows enjoyment by foreign citizens as
20, 1996. well as fully foreign owned corporations of the nation's marine wealth contrary to Section 2,
paragraph 2 of Article XII of the Constitution;

On January 10, 1997, counsels for petitioners sent a letter to the DENR Secretary demanding that
the DENR stop the implementation of R.A. No. 7942 and DAO No. 96-40,35 giving the DENR V
fifteen days from receipt36 to act thereon. The DENR, however, has yet to respond or act on
petitioners' letter.37
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it allows priority to foreign and fully foreign
Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a owned corporations in the exploration, development and utilization of mineral resources contrary
temporary restraining order. They allege that at the time of the filing of the petition, 100 FTAA to Article XII of the Constitution;
applications had already been filed, covering an area of 8.4 million hectares,38 64 of which
applications are by fully foreign-owned corporations covering a total of 5.8 million hectares, and
at least one by a fully foreign-owned mining company over offshore areas.39 VI

Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction: x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it allows the inequitable sharing of wealth
contrary to Sections [sic] 1, paragraph 1, and Section 2, paragraph 4[,] [Article XII] of the
I Constitution;

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic VII
Act No. 7942, the latter being unconstitutional in that it allows fully foreign owned corporations to
explore, develop, utilize and exploit mineral resources in a manner contrary to Section 2,
paragraph 4, Article XII of the Constitution; x x x in recommending approval of and implementing the Financial and Technical Assistance
Agreement between the President of the Republic of the Philippines and Western Mining
Corporation Philippines Inc. because the same is illegal and unconstitutional.40
II

They pray that the Court issue an order:


x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it allows the taking of private property without
the determination of public use and for just compensation; (a) Permanently enjoining respondents from acting on any application for Financial or Technical
Assistance Agreements;

III

74
(b) Declaring the Philippine Mining Act of 1995 or Republic Act No. 7942 as unconstitutional and
null and void;
It bears stressing that this case has not been rendered moot either by the transfer and registration
of the FTAA to a Filipino-owned corporation or by the non-issuance of a temporary restraining
order or a preliminary injunction to stay the above-said July 23, 2002 decision of the Office of the
(c) Declaring the Implementing Rules and Regulations of the Philippine Mining Act contained in President.53 The validity of the transfer remains in dispute and awaits final judicial determination.
DENR Administrative Order No. 96-40 and all other similar administrative issuances as This assumes, of course, that such transfer cures the FTAA's alleged unconstitutionality, on which
unconstitutional and null and void; and question judgment is reserved.

(d) Cancelling the Financial and Technical Assistance Agreement issued to Western Mining WMCP also points out that the original claimowners of the major mineralized areas included in the
Philippines, Inc. as unconstitutional, illegal and null and void.41 WMCP FTAA, namely, Sagittarius, Tampakan Mining Corporation, and Southcot Mining
Corporation, are all Filipino-owned corporations,54 each of which was a holder of an approved
Mineral Production Sharing Agreement awarded in 1994, albeit their respective mineral claims
were subsumed in the WMCP FTAA;55 and that these three companies are the same companies
Impleaded as public respondents are Ruben Torres, the then Executive Secretary, Victor O.
that consolidated their interests in Sagittarius to whom WMC sold its 100% equity in WMCP.56
Ramos, the then DENR Secretary, and Horacio Ramos, Director of the Mines and Geosciences
WMCP concludes that in the event that the FTAA is invalidated, the MPSAs of the three
Bureau of the DENR. Also impleaded is private respondent WMCP, which entered into the
corporations would be revived and the mineral claims would revert to their original claimants.57
assailed FTAA with the Philippine Government. WMCP is owned by WMC Resources International
Pty., Ltd. (WMC), "a wholly owned subsidiary of Western Mining Corporation Holdings Limited, a
publicly listed major Australian mining and exploration company."42 By WMCP's information, "it is
a 100% owned subsidiary of WMC LIMITED."43 These circumstances, while informative, are hardly significant in the resolution of this case, it
involving the validity of the FTAA, not the possible consequences of its invalidation.

Respondents, aside from meeting petitioners' contentions, argue that the requisites for judicial
inquiry have not been met and that the petition does not comply with the criteria for prohibition and Of the above-enumerated seven grounds cited by petitioners, as will be shown later, only the first
mandamus. Additionally, respondent WMCP argues that there has been a violation of the rule on and the last need be delved into; in the latter, the discussion shall dwell only insofar as it questions
hierarchy of courts. the effectivity of E. O. No. 279 by virtue of which order the questioned FTAA was forged.

After petitioners filed their reply, this Court granted due course to the petition. The parties have I
since filed their respective memoranda.

Before going into the substantive issues, the procedural questions posed by respondents shall
WMCP subsequently filed a Manifestation dated September 25, 2002 alleging that on January 23, first be tackled.
2001, WMC sold all its shares in WMCP to Sagittarius Mines, Inc. (Sagittarius), a corporation
organized under Philippine laws.44 WMCP was subsequently renamed "Tampakan Mineral
Resources Corporation."45 WMCP claims that at least 60% of the equity of Sagittarius is owned
by Filipinos and/or Filipino-owned corporations while about 40% is owned by Indophil Resources REQUISITES FOR JUDICIAL REVIEW
NL, an Australian company.46 It further claims that by such sale and transfer of shares, "WMCP
has ceased to be connected in any way with WMC."47
When an issue of constitutionality is raised, this Court can exercise its power of judicial review
only if the following requisites are present:
By virtue of such sale and transfer, the DENR Secretary, by Order of December 18, 2001,48
approved the transfer and registration of the subject FTAA from WMCP to Sagittarius. Said Order,
however, was appealed by Lepanto Consolidated Mining Co. (Lepanto) to the Office of the
(1) The existence of an actual and appropriate case;
President which upheld it by Decision of July 23, 2002.49 Its motion for reconsideration having
been denied by the Office of the President by Resolution of November 12, 2002,50 Lepanto filed
a petition for review51 before the Court of Appeals. Incidentally, two other petitions for review
related to the approval of the transfer and registration of the FTAA to Sagittarius were recently (2) A personal and substantial interest of the party raising the constitutional question;
resolved by this Court.52

75
(3) The exercise of judicial review is pleaded at the earliest opportunity; and Public respondents maintain that petitioners, being strangers to the FTAA, cannot sue either or
both contracting parties to annul it.71 In other words, they contend that petitioners are not real
parties in interest in an action for the annulment of contract.
(4) The constitutional question is the lis mota of the case. 58

Public respondents' contention fails. The present action is not merely one for annulment of contract
but for prohibition and mandamus. Petitioners allege that public respondents acted without or in
Respondents claim that the first three requisites are not present. excess of jurisdiction in implementing the FTAA, which they submit is unconstitutional. As the case
involves constitutional questions, this Court is not concerned with whether petitioners are real
parties in interest, but with whether they have legal standing. As held in Kilosbayan v. Morato:72
Section 1, Article VIII of the Constitution states that "(j)udicial power includes the duty of the courts
of justice to settle actual controversies involving rights which are legally demandable and
enforceable." The power of judicial review, therefore, is limited to the determination of actual cases x x x. "It is important to note . . . that standing because of its constitutional and public policy
and controversies.59 underpinnings, is very different from questions relating to whether a particular plaintiff is the real
party in interest or has capacity to sue. Although all three requirements are directed towards
ensuring that only certain parties can maintain an action, standing restrictions require a partial
An actual case or controversy means an existing case or controversy that is appropriate or ripe consideration of the merits, as well as broader policy concerns relating to the proper role of the
for determination, not conjectural or anticipatory,60 lest the decision of the court would amount to judiciary in certain areas.["] (FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328
an advisory opinion.61 The power does not extend to hypothetical questions62 since any attempt [1985])
at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions
unrelated to actualities.63
Standing is a special concern in constitutional law because in some cases suits are brought not
by parties who have been personally injured by the operation of a law or by official action taken,
"Legal standing" or locus standi has been defined as a personal and substantial interest in the but by concerned citizens, taxpayers or voters who actually sue in the public interest. Hence, the
case such that the party has sustained or will sustain direct injury as a result of the governmental question in standing is whether such parties have "alleged such a personal stake in the outcome
act that is being challenged,64 alleging more than a generalized grievance.65 The gist of the of the controversy as to assure that concrete adverseness which sharpens the presentation of
question of standing is whether a party alleges "such personal stake in the outcome of the issues upon which the court so largely depends for illumination of difficult constitutional questions."
controversy as to assure that concrete adverseness which sharpens the presentation of issues (Baker v. Carr, 369 U.S. 186, 7 L.Ed.2d 633 [1962].)
upon which the court depends for illumination of difficult constitutional questions."66 Unless a
person is injuriously affected in any of his constitutional rights by the operation of statute or
ordinance, he has no standing.67 As earlier stated, petitioners meet this requirement.

Petitioners traverse a wide range of sectors. Among them are La Bugal B'laan Tribal Association, The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-40 likewise fulfills
Inc., a farmers and indigenous people's cooperative organized under Philippine laws representing the requisites of justiciability. Although these laws were not in force when the subject FTAA was
a community actually affected by the mining activities of WMCP, members of said cooperative,68 entered into, the question as to their validity is ripe for adjudication.
as well as other residents of areas also affected by the mining activities of WMCP.69 These
petitioners have standing to raise the constitutionality of the questioned FTAA as they allege a
personal and substantial injury. They claim that they would suffer "irremediable displacement"70
as a result of the implementation of the FTAA allowing WMCP to conduct mining activities in their The WMCP FTAA provides:
area of residence. They thus meet the appropriate case requirement as they assert an interest
adverse to that of respondents who, on the other hand, insist on the FTAA's validity.
14.3 Future Legislation

In view of the alleged impending injury, petitioners also have standing to assail the validity of E.O.
No. 279, by authority of which the FTAA was executed.
Any term and condition more favourable to Financial &Technical Assistance Agreement
contractors resulting from repeal or amendment of any existing law or regulation or from the
enactment of a law, regulation or administrative order shall be considered a part of this Agreement.

76
It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain provisions that are more favorable Prohibition is a preventive remedy.74 It seeks a judgment ordering the defendant to desist from
to WMCP, hence, these laws, to the extent that they are favorable to WMCP, govern the FTAA. continuing with the commission of an act perceived to be illegal.75

In addition, R.A. No. 7942 explicitly makes certain provisions apply to pre-existing agreements. The petition for prohibition at bar is thus an appropriate remedy. While the execution of the contract
itself may be fait accompli, its implementation is not. Public respondents, in behalf of the
Government, have obligations to fulfill under said contract. Petitioners seek to prevent them from
fulfilling such obligations on the theory that the contract is unconstitutional and, therefore, void.
SEC. 112. Non-impairment of Existing Mining/Quarrying Rights. – x x x That the provisions of
Chapter XIV on government share in mineral production-sharing agreement and of Chapter XVI
on incentives of this Act shall immediately govern and apply to a mining lessee or contractor unless
the mining lessee or contractor indicates his intention to the secretary, in writing, not to avail of The propriety of a petition for prohibition being upheld, discussion of the propriety of the
said provisions x x x Provided, finally, That such leases, production-sharing agreements, financial mandamus aspect of the petition is rendered unnecessary.
or technical assistance agreements shall comply with the applicable provisions of this Act and its
implementing rules and regulations.
HIERARCHY OF COURTS

As there is no suggestion that WMCP has indicated its intention not to avail of the provisions of
Chapter XVI of R.A. No. 7942, it can safely be presumed that they apply to the WMCP FTAA.
The contention that the filing of this petition violated the rule on hierarchy of courts does not
likewise lie. The rule has been explained thus:

Misconstruing the application of the third requisite for judicial review – that the exercise of the
review is pleaded at the earliest opportunity – WMCP points out that the petition was filed only
almost two years after the execution of the FTAA, hence, not raised at the earliest opportunity. Between two courts of concurrent original jurisdiction, it is the lower court that should initially pass
upon the issues of a case. That way, as a particular case goes through the hierarchy of courts, it
is shorn of all but the important legal issues or those of first impression, which are the proper
subject of attention of the appellate court. This is a procedural rule borne of experience and
The third requisite should not be taken to mean that the question of constitutionality must be raised adopted to improve the administration of justice.
immediately after the execution of the state action complained of. That the question of
constitutionality has not been raised before is not a valid reason for refusing to allow it to be raised
later.73 A contrary rule would mean that a law, otherwise unconstitutional, would lapse into
constitutionality by the mere failure of the proper party to promptly file a case to challenge the This Court has consistently enjoined litigants to respect the hierarchy of courts. Although this Court
same. has concurrent jurisdiction with the Regional Trial Courts and the Court of Appeals to issue writs
of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give a party unrestricted freedom of choice of court forum. The resort to this
Court's primary jurisdiction to issue said writs shall be allowed only where the redress desired
PROPRIETY OF PROHIBITION AND MANDAMUS cannot be obtained in the appropriate courts or where exceptional and compelling circumstances
justify such invocation. We held in People v. Cuaresma that:

Before the effectivity in July 1997 of the Revised Rules of Civil Procedure, Section 2 of Rule 65
read: A becoming regard for judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's
original jurisdiction to issue these writs should be allowed only where there are special and
SEC. 2. Petition for prohibition. – When the proceedings of any tribunal, corporation, board, or important reasons therefor, clearly and specifically set out in the petition. This is established policy.
person, whether exercising functions judicial or ministerial, are without or in excess of its or his It is a policy necessary to prevent inordinate demands upon the Court's time and attention which
jurisdiction, or with grave abuse of discretion, and there is no appeal or any other plain, speedy, are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified crowding of the Court's docket x x x.76 [Emphasis supplied.]
petition in the proper court alleging the facts with certainty and praying that judgment be rendered
commanding the defendant to desist from further proceeding in the action or matter specified
therein.

77
The repercussions of the issues in this case on the Philippine mining industry, if not the national twenty-five years, renewable for not more than twenty-five years, and under such terms and
economy, as well as the novelty thereof, constitute exceptional and compelling circumstances to conditions as may be provided by law. In cases of water rights for irrigation, water supply, fisheries,
justify resort to this Court in the first instance. or industrial uses other than the development of water power, beneficial use may be the measure
and limit of the grant.

In all events, this Court has the discretion to take cognizance of a suit which does not satisfy the
requirements of an actual case or legal standing when paramount public interest is involved.77 The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and
When the issues raised are of paramount importance to the public, this Court may brush aside exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
technicalities of procedure.78

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens,
II as well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in
rivers, lakes, bays, and lagoons.

Petitioners contend that E.O. No. 279 did not take effect because its supposed date of effectivity
came after President Aquino had already lost her legislative powers under the Provisional The President may enter into agreements with foreign-owned corporations involving either
Constitution. 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
And they likewise claim that the WMC FTAA, which was entered into pursuant to E.O. No. 279, resources.
violates Section 2, Article XII of the Constitution because, among other reasons:

The President shall notify the Congress of every contract entered into in accordance with this
(1) It allows foreign-owned companies to extend more than mere financial or technical assistance provision, within thirty days from its execution.
to the State in the exploitation, development, and utilization of minerals, petroleum, and other
mineral oils, and even permits foreign owned companies to "operate and manage mining
activities."
THE SPANISH REGIME AND THE REGALIAN DOCTRINE

(2) It allows foreign-owned companies to extend both technical and financial assistance, instead
of "either technical or financial assistance." The first sentence of Section 2 embodies the Regalian doctrine or jura regalia. Introduced by Spain
into these Islands, this feudal concept is based on the State's power of dominium, which is the
capacity of the State to own or acquire property.79
To appreciate the import of these issues, a visit to the history of the pertinent constitutional
provision, the concepts contained therein, and the laws enacted pursuant thereto, is in order.
In its broad sense, the term "jura regalia" refers to royal rights, or those rights which the King has
by virtue of his prerogatives. In Spanish law, it refers to a right which the sovereign has over
anything in which a subject has a right of property or propriedad. These were rights enjoyed during
Section 2, Article XII reads in full: feudal times by the king as the sovereign.

Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, The theory of the feudal system was that title to all lands was originally held by the King, and while
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural the use of lands was granted out to others who were permitted to hold them under certain
resources are owned by the State. With the exception of agricultural lands, all other natural conditions, the King theoretically retained the title. By fiction of law, the King was regarded as the
resources shall not be alienated. The exploration, development, and utilization of natural original proprietor of all lands, and the true and only source of title, and from him all lands were
resources shall be under the full control and supervision of the State. The State may directly held. The theory of jura regalia was therefore nothing more than a natural fruit of conquest.80
undertake such activities or it may enter into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or associations at least sixty per centum of
whose capital is owned by such citizens. Such agreements may be for a period not exceeding

78
The Philippines having passed to Spain by virtue of discovery and conquest,81 earlier Spanish x x x.
decrees declared that "all lands were held from the Crown."82

The discovery of minerals in the ground by one who has a valid mineral location perfects his claim
The Regalian doctrine extends not only to land but also to "all natural wealth that may be found in and his location not only against third persons, but also against the Government. x x x. [Italics in
the bowels of the earth."83 Spain, in particular, recognized the unique value of natural resources, the original.]
viewing them, especially minerals, as an abundant source of revenue to finance its wars against
other nations.84 Mining laws during the Spanish regime reflected this perspective.85
The Regalian doctrine and the American system, therefore, differ in one essential respect. Under
the Regalian theory, mineral rights are not included in a grant of land by the state; under the
THE AMERICAN OCCUPATION AND THE CONCESSION REGIME American doctrine, mineral rights are included in a grant of land by the government.91

By the Treaty of Paris of December 10, 1898, Spain ceded "the archipelago known as the Section 21 also made possible the concession (frequently styled "permit", license" or "lease")92
Philippine Islands" to the United States. The Philippines was hence governed by means of organic system.93 This was the traditional regime imposed by the colonial administrators for the
acts that were in the nature of charters serving as a Constitution of the occupied territory from exploitation of natural resources in the extractive sector (petroleum, hard minerals, timber, etc.).94
1900 to 1935.86 Among the principal organic acts of the Philippines was the Act of Congress of
July 1, 1902, more commonly known as the Philippine Bill of 1902, through which the United States
Congress assumed the administration of the Philippine Islands.87 Section 20 of said Bill reserved
the disposition of mineral lands of the public domain from sale. Section 21 thereof allowed the free Under the concession system, the concessionaire makes a direct equity investment for the
and open exploration, occupation and purchase of mineral deposits not only to citizens of the purpose of exploiting a particular natural resource within a given area.95 Thus, the concession
Philippine Islands but to those of the United States as well: amounts to complete control by the concessionaire over the country's natural resource, for it is
given exclusive and plenary rights to exploit a particular resource at the point of extraction.96 In
consideration for the right to exploit a natural resource, the concessionaire either pays rent or
royalty, which is a fixed percentage of the gross proceeds.97
Sec. 21. That all valuable mineral deposits in public lands in the Philippine Islands, both surveyed
and unsurveyed, are hereby declared to be free and open to exploration, occupation and
purchase, and the land in which they are found, to occupation and purchase, by citizens of the
United States or of said Islands: Provided, That when on any lands in said Islands entered and Later statutory enactments by the legislative bodies set up in the Philippines adopted the
occupied as agricultural lands under the provisions of this Act, but not patented, mineral deposits contractual framework of the concession.98 For instance, Act No. 2932,99 approved on August
have been found, the working of such mineral deposits is forbidden until the person, association, 31, 1920, which provided for the exploration, location, and lease of lands containing petroleum
or corporation who or which has entered and is occupying such lands shall have paid to the and other mineral oils and gas in the Philippines, and Act No. 2719,100 approved on May 14,
Government of said Islands such additional sum or sums as will make the total amount paid for 1917, which provided for the leasing and development of coal lands in the Philippines, both utilized
the mineral claim or claims in which said deposits are located equal to the amount charged by the the concession system.101
Government for the same as mineral claims.

THE 1935 CONSTITUTION AND THE NATIONALIZATION OF NATURAL RESOURCES


Unlike Spain, the United States considered natural resources as a source of wealth for its nationals
and saw fit to allow both Filipino and American citizens to explore and exploit minerals in public
lands, and to grant patents to private mineral lands.88 A person who acquired ownership over a By the Act of United States Congress of March 24, 1934, popularly known as the Tydings-McDuffie
parcel of private mineral land pursuant to the laws then prevailing could exclude other persons, Law, the People of the Philippine Islands were authorized to adopt a constitution.102 On July 30,
even the State, from exploiting minerals within his property.89 Thus, earlier jurisprudence90 held 1934, the Constitutional Convention met for the purpose of drafting a constitution, and the
that: Constitution subsequently drafted was approved by the Convention on February 8, 1935.103 The
Constitution was submitted to the President of the United States on March 18, 1935.104 On March
23, 1935, the President of the United States certified that the Constitution conformed substantially
A valid and subsisting location of mineral land, made and kept up in accordance with the provisions with the provisions of the Act of Congress approved on March 24, 1934.105 On May 14, 1935, the
of the statutes of the United States, has the effect of a grant by the United States of the present Constitution was ratified by the Filipino people.106
and exclusive possession of the lands located, and this exclusive right of possession and
enjoyment continues during the entire life of the location. x x x.
The 1935 Constitution adopted the Regalian doctrine, declaring all natural resources of the
Philippines, including mineral lands and minerals, to be property belonging to the State.107 As

79
adopted in a republican system, the medieval concept of jura regalia is stripped of royal overtones The same Section 1, Article XIII also adopted the concession system, expressly permitting the
and ownership of the land is vested in the State.108 State to grant licenses, concessions, or leases for the exploitation, development, or utilization of
any of the natural resources. Grants, however, were limited to Filipinos or entities at least 60% of
the capital of which is owned by Filipinos.lawph!l.ne+

Section 1, Article XIII, on Conservation and Utilization of Natural Resources, of the 1935
Constitution provided:
The swell of nationalism that suffused the 1935 Constitution was radically diluted when on
November 1946, the Parity Amendment, which came in the form of an "Ordinance Appended to
the Constitution," was ratified in a plebiscite.112 The Amendment extended, from July 4, 1946 to
SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, July 3, 1974, the right to utilize and exploit our natural resources to citizens of the United States
coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources and business enterprises owned or controlled, directly or indirectly, by citizens of the United
of the Philippines belong to the State, and their disposition, exploitation, development, or utilization States:113
shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease,
or concession at the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land, shall not be Notwithstanding the provision of section one, Article Thirteen, and section eight, Article Fourteen,
alienated, and no license, concession, or lease for the exploitation, development, or utilization of of the foregoing Constitution, during the effectivity of the Executive Agreement entered into by the
any of the natural resources shall be granted for a period exceeding twenty-five years, except as President of the Philippines with the President of the United States on the fourth of July, nineteen
to water rights for irrigation, water supply, fisheries, or industrial uses other than the development hundred and forty-six, pursuant to the provisions of Commonwealth Act Numbered Seven hundred
of water power, in which cases beneficial use may be the measure and the limit of the grant. and thirty-three, but in no case to extend beyond the third of July, nineteen hundred and seventy-
four, the disposition, exploitation, development, and utilization of all agricultural, timber, and
mineral lands of the public domain, waters, minerals, coals, petroleum, and other mineral oils, all
forces and sources of potential energy, and other natural resources of the Philippines, and the
The nationalization and conservation of the natural resources of the country was one of the fixed operation of public utilities, shall, if open to any person, be open to citizens of the United States
and dominating objectives of the 1935 Constitutional Convention.109 One delegate relates: and to all forms of business enterprise owned or controlled, directly or indirectly, by citizens of the
United States in the same manner as to, and under the same conditions imposed upon, citizens
of the Philippines or corporations or associations owned or controlled by citizens of the Philippines.
There was an overwhelming sentiment in the Convention in favor of the principle of state
ownership of natural resources and the adoption of the Regalian doctrine. State ownership of
natural resources was seen as a necessary starting point to secure recognition of the state's power The Parity Amendment was subsequently modified by the 1954 Revised Trade Agreement, also
to control their disposition, exploitation, development, or utilization. The delegates of the known as the Laurel-Langley Agreement, embodied in Republic Act No. 1355.114
Constitutional Convention very well knew that the concept of State ownership of land and natural
resources was introduced by the Spaniards, however, they were not certain whether it was
continued and applied by the Americans. To remove all doubts, the Convention approved the
provision in the Constitution affirming the Regalian doctrine. THE PETROLEUM ACT OF 1949 AND THE CONCESSION SYSTEM

The adoption of the principle of state ownership of the natural resources and of the Regalian In the meantime, Republic Act No. 387,115 also known as the Petroleum Act of 1949, was
doctrine was considered to be a necessary starting point for the plan of nationalizing and approved on June 18, 1949.
conserving the natural resources of the country. For with the establishment of the principle of state
ownership of the natural resources, it would not be hard to secure the recognition of the power of
the State to control their disposition, exploitation, development or utilization.110
The Petroleum Act of 1949 employed the concession system for the exploitation of the nation's
petroleum resources. Among the kinds of concessions it sanctioned were exploration and
exploitation concessions, which respectively granted to the concessionaire the exclusive right to
The nationalization of the natural resources was intended (1) to insure their conservation for explore for116 or develop117 petroleum within specified areas.
Filipino posterity; (2) to serve as an instrument of national defense, helping prevent the extension
to the country of foreign control through peaceful economic penetration; and (3) to avoid making
the Philippines a source of international conflicts with the consequent danger to its internal security
and independence.111 Concessions may be granted only to duly qualified persons118 who have sufficient finances,
organization, resources, technical competence, and skills necessary to conduct the operations to
be undertaken.119

80
Nevertheless, the Government reserved the right to undertake such work itself.120 This
proceeded from the theory that all natural deposits or occurrences of petroleum or natural gas in
public and/or private lands in the Philippines belong to the State.121 Exploration and exploitation Victorio Mario A. Dimagiba, Chief Legal Officer of the Bureau of Energy Development, analyzed
concessions did not confer upon the concessionaire ownership over the petroleum lands and the benefits and drawbacks of the concession system insofar as it applied to the petroleum
petroleum deposits.122 However, they did grant concessionaires the right to explore, develop, industry:
exploit, and utilize them for the period and under the conditions determined by the law.123

Advantages of Concession. Whether it emphasizes income tax or royalty, the most positive aspect
Concessions were granted at the complete risk of the concessionaire; the Government did not of the concession system is that the State's financial involvement is virtually risk free and
guarantee the existence of petroleum or undertake, in any case, title warranty.124 administration is simple and comparatively low in cost. Furthermore, if there is a competitive
allocation of the resource leading to substantial bonuses and/or greater royalty coupled with a
relatively high level of taxation, revenue accruing to the State under the concession system may
compare favorably with other financial arrangements.
Concessionaires were required to submit information as maybe required by the Secretary of
Agriculture and Natural Resources, including reports of geological and geophysical examinations,
as well as production reports.125 Exploration126 and exploitation127 concessionaires were also
required to submit work programs.lavvphi1.net Disadvantages of Concession. There are, however, major negative aspects to this system.
Because the Government's role in the traditional concession is passive, it is at a distinct
disadvantage in managing and developing policy for the nation's petroleum resource. This is true
for several reasons. First, even though most concession agreements contain covenants requiring
Exploitation concessionaires, in particular, were obliged to pay an annual exploitation tax,128 the diligence in operations and production, this establishes only an indirect and passive control of the
object of which is to induce the concessionaire to actually produce petroleum, and not simply to host country in resource development. Second, and more importantly, the fact that the host country
sit on the concession without developing or exploiting it.129 These concessionaires were also does not directly participate in resource management decisions inhibits its ability to train and
bound to pay the Government royalty, which was not less than 12½% of the petroleum produced employ its nationals in petroleum development. This factor could delay or prevent the country from
and saved, less that consumed in the operations of the concessionaire.130 Under Article 66, R.A. effectively engaging in the development of its resources. Lastly, a direct role in management is
No. 387, the exploitation tax may be credited against the royalties so that if the concessionaire usually necessary in order to obtain a knowledge of the international petroleum industry which is
shall be actually producing enough oil, it would not actually be paying the exploitation tax.131 important to an appreciation of the host country's resources in relation to those of other
countries.142

Failure to pay the annual exploitation tax for two consecutive years,132 or the royalty due to the
Government within one year from the date it becomes due,133 constituted grounds for the Other liabilities of the system have also been noted:
cancellation of the concession. In case of delay in the payment of the taxes or royalty imposed by
the law or by the concession, a surcharge of 1% per month is exacted until the same are paid.134

x x x there are functional implications which give the concessionaire great economic power arising
from its exclusive equity holding. This includes, first, appropriation of the returns of the
As a rule, title rights to all equipment and structures that the concessionaire placed on the land undertaking, subject to a modest royalty; second, exclusive management of the project; third,
belong to the exploration or exploitation concessionaire.135 Upon termination of such concession, control of production of the natural resource, such as volume of production, expansion, research
the concessionaire had a right to remove the same.136 and development; and fourth, exclusive responsibility for downstream operations, like processing,
marketing, and distribution. In short, even if nominally, the state is the sovereign and owner of the
natural resource being exploited, it has been shorn of all elements of control over such natural
resource because of the exclusive nature of the contractual regime of the concession. The
The Secretary of Agriculture and Natural Resources was tasked with carrying out the provisions
concession system, investing as it does ownership of natural resources, constitutes a consistent
of the law, through the Director of Mines, who acted under the Secretary's immediate supervision
inconsistency with the principle embodied in our Constitution that natural resources belong to the
and control.137 The Act granted the Secretary the authority to inspect any operation of the
state and shall not be alienated, not to mention the fact that the concession was the bedrock of
concessionaire and to examine all the books and accounts pertaining to operations or conditions
the colonial system in the exploitation of natural resources.143
related to payment of taxes and royalties.138

Eventually, the concession system failed for reasons explained by Dimagiba:


The same law authorized the Secretary to create an Administration Unit and a Technical
Board.139 The Administration Unit was charged, inter alia, with the enforcement of the provisions
of the law.140 The Technical Board had, among other functions, the duty to check on the
performance of concessionaires and to determine whether the obligations imposed by the Act and
its implementing regulations were being complied with.141

81
Notwithstanding the good intentions of the Petroleum Act of 1949, the concession system could operations.153 The contractor provides all necessary services and technology and the requisite
not have properly spurred sustained oil exploration activities in the country, since it assumed that financing, performs the exploration work obligations, and assumes all exploration risks such that
such a capital-intensive, high risk venture could be successfully undertaken by a single individual if no petroleum is produced, it will not be entitled to reimbursement.154 Once petroleum in
or a small company. In effect, concessionaires' funds were easily exhausted. Moreover, since the commercial quantity is discovered, the contractor shall operate the field on behalf of the
concession system practically closed its doors to interested foreign investors, local capital was government.155
stretched to the limits. The old system also failed to consider the highly sophisticated technology
and expertise required, which would be available only to multinational companies.144

P.D. No. 87 prescribed minimum terms and conditions for every service contract.156 It also
granted the contractor certain privileges, including exemption from taxes and payment of tariff
A shift to a new regime for the development of natural resources thus seemed imminent. duties,157 and permitted the repatriation of capital and retention of profits abroad.158

PRESIDENTIAL DECREE NO. 87, THE 1973 CONSTITUTION AND THE SERVICE CONTRACT Ostensibly, the service contract system had certain advantages over the concession regime.159
SYSTEM It has been opined, though, that, in the Philippines, our concept of a service contract, at least in
the petroleum industry, was basically a concession regime with a production-sharing element.160

The promulgation on December 31, 1972 of Presidential Decree No. 87,145 otherwise known as
The Oil Exploration and Development Act of 1972 signaled such a transformation. P.D. No. 87 On January 17, 1973, then President Ferdinand E. Marcos proclaimed the ratification of a new
permitted the government to explore for and produce indigenous petroleum through "service Constitution.161 Article XIV on the National Economy and Patrimony contained provisions similar
contracts."146 to the 1935 Constitution with regard to Filipino participation in the nation's natural resources.
Section 8, Article XIV thereof provides:

"Service contracts" is a term that assumes varying meanings to different people, and it has carried
many names in different countries, like "work contracts" in Indonesia, "concession agreements" in Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
Africa, "production-sharing agreements" in the Middle East, and "participation agreements" in forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong
Latin America.147 A functional definition of "service contracts" in the Philippines is provided as to the State. With the exception of agricultural, industrial or commercial, residential and
follows: resettlement lands of the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or utilization of any of the
natural resources shall be granted for a period exceeding twenty-five years, renewable for not
more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
A service contract is a contractual arrangement for engaging in the exploitation and development industrial uses other than the development of water power, in which cases beneficial use may be
of petroleum, mineral, energy, land and other natural resources by which a government or its the measure and the limit of the grant.
agency, or a private person granted a right or privilege by the government authorizes the other
party (service contractor) to engage or participate in the exercise of such right or the enjoyment of
the privilege, in that the latter provides financial or technical resources, undertakes the exploitation
or production of a given resource, or directly manages the productive enterprise, operations of the While Section 9 of the same Article maintained the Filipino-only policy in the enjoyment of natural
exploration and exploitation of the resources or the disposition of marketing or resources.148 resources, it also allowed Filipinos, upon authority of the Batasang Pambansa, to enter into service
contracts with any person or entity for the exploration or utilization of natural resources.

In a service contract under P.D. No. 87, service and technology are furnished by the service
contractor for which it shall be entitled to the stipulated service fee.149 The contractor must be Sec. 9. The disposition, exploration, development, exploitation, or utilization of any of the natural
technically competent and financially capable to undertake the operations required in the resources of the Philippines shall be limited to citizens, or to corporations or associations at least
contract.150 sixty per centum of which is owned by such citizens. The Batasang Pambansa, in the national
interest, may allow such citizens, corporations or associations to enter into service contracts for
financial, technical, management, or other forms of assistance with any person or entity for the
exploration, or utilization of any of the natural resources. Existing valid and binding service
Financing is supposed to be provided by the Government to which all petroleum produced contracts for financial, technical, management, or other forms of assistance are hereby recognized
belongs.151 In case the Government is unable to finance petroleum exploration operations, the as such. [Emphasis supplied.]
contractor may furnish services, technology and financing, and the proceeds of sale of the
petroleum produced under the contract shall be the source of funds for payment of the service fee
and the operating expenses due the contractor.152 The contractor shall undertake, manage and
execute petroleum operations, subject to the government overseeing the management of the

82
The concept of service contracts, according to one delegate, was borrowed from the methods Thus, virtually the entire range of the country's natural resources –from petroleum and minerals to
followed by India, Pakistan and especially Indonesia in the exploration of petroleum and mineral geothermal energy, from public lands and forest resources to fishery products – was well covered
oils.162 The provision allowing such contracts, according to another, was intended to "enhance by apparent legal authority to engage in the direct participation or involvement of foreign persons
the proper development of our natural resources since Filipino citizens lack the needed capital or corporations (otherwise disqualified) in the exploration and utilization of natural resources
and technical know-how which are essential in the proper exploration, development and through service contracts.175
exploitation of the natural resources of the country."163

THE 1987 CONSTITUTION AND TECHNICAL OR FINANCIAL ASSISTANCE AGREEMENTS


The original idea was to authorize the government, not private entities, to enter into service
contracts with foreign entities.164 As finally approved, however, a citizen or private entity could
be allowed by the National Assembly to enter into such service contract.165 The prior approval of
the National Assembly was deemed sufficient to protect the national interest.166 Notably, none of After the February 1986 Edsa Revolution, Corazon C. Aquino took the reins of power under a
the laws allowing service contracts were passed by the Batasang Pambansa. Indeed, all of them revolutionary government. On March 25, 1986, President Aquino issued Proclamation No. 3,176
were enacted by presidential decree. promulgating the Provisional Constitution, more popularly referred to as the Freedom Constitution.
By authority of the same Proclamation, the President created a Constitutional Commission
(CONCOM) to draft a new constitution, which took effect on the date of its ratification on February
2, 1987.177
On March 13, 1973, shortly after the ratification of the new Constitution, the President promulgated
Presidential Decree No. 151.167 The law allowed Filipino citizens or entities which have acquired
lands of the public domain or which own, hold or control such lands to enter into service contracts
for financial, technical, management or other forms of assistance with any foreign persons or entity The 1987 Constitution retained the Regalian doctrine. The first sentence of Section 2, Article XII
for the exploration, development, exploitation or utilization of said lands.168 states: "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."

Presidential Decree No. 463,169 also known as The Mineral Resources Development Decree of
1974, was enacted on May 17, 1974. Section 44 of the decree, as amended, provided that a
lessee of a mining claim may enter into a service contract with a qualified domestic or foreign Like the 1935 and 1973 Constitutions before it, the 1987 Constitution, in the second sentence of
contractor for the exploration, development and exploitation of his claims and the processing and the same provision, prohibits the alienation of natural resources, except agricultural lands.
marketing of the product thereof.

The third sentence of the same paragraph is new: "The exploration, development and utilization
Presidential Decree No. 704170 (The Fisheries Decree of 1975), approved on May 16, 1975, of natural resources shall be under the full control and supervision of the State." The constitutional
allowed Filipinos engaged in commercial fishing to enter into contracts for financial, technical or policy of the State's "full control and supervision" over natural resources proceeds from the
other forms of assistance with any foreign person, corporation or entity for the production, storage, concept of jura regalia, as well as the recognition of the importance of the country's natural
marketing and processing of fish and fishery/aquatic products.171 resources, not only for national economic development, but also for its security and national
defense.178 Under this provision, the State assumes "a more dynamic role" in the exploration,
development and utilization of natural resources.179

Presidential Decree No. 705172 (The Revised Forestry Code of the Philippines), approved on May
19, 1975, allowed "forest products licensees, lessees, or permitees to enter into service contracts
for financial, technical, management, or other forms of assistance . . . with any foreign person or Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitutions authorizing
entity for the exploration, development, exploitation or utilization of the forest resources."173 the State to grant licenses, concessions, or leases for the exploration, exploitation, development,
or utilization of natural resources. By such omission, the utilization of inalienable lands of public
domain through "license, concession or lease" is no longer allowed under the 1987
Constitution.180
Yet another law allowing service contracts, this time for geothermal resources, was Presidential
Decree No. 1442,174 which was signed into law on June 11, 1978. Section 1 thereof authorized
the Government to enter into service contracts for the exploration, exploitation and development
of geothermal resources with a foreign contractor who must be technically and financially capable Having omitted the provision on the concession system, Section 2 proceeded to introduce
of undertaking the operations required in the service contract. "unfamiliar language":181

83
The State may directly undertake such activities or it may enter into co-production, joint venture, Second, the size of the activities: only large-scale exploration, development, and utilization is
or production-sharing agreements with Filipino citizens, or corporations or associations at least allowed. The term "large-scale usually refers to very capital-intensive activities."183
sixty per centum of whose capital is owned by such citizens.

Third, the natural resources subject of the activities is restricted to minerals, petroleum and other
Consonant with the State's "full supervision and control" over natural resources, Section 2 offers mineral oils, the intent being to limit service contracts to those areas where Filipino capital may
the State two "options."182 One, the State may directly undertake these activities itself; or two, it not be sufficient.184
may enter into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or entities at least 60% of whose capital is owned by such citizens.
Fourth, consistency with the provisions of statute. The agreements must be in accordance with
the terms and conditions provided by law.
A third option is found in the third paragraph of the same section:

Fifth, Section 2 prescribes certain standards for entering into such agreements. The agreements
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, must be based on real contributions to economic growth and general welfare of the country.
as well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in
rivers, lakes, bays, and lagoons.
Sixth, the agreements must contain rudimentary stipulations for the promotion of the development
and use of local scientific and technical resources.
While the second and third options are limited only to Filipino citizens or, in the case of the former,
to corporations or associations at least 60% of the capital of which is owned by Filipinos, a fourth
allows the participation of foreign-owned corporations. The fourth and fifth paragraphs of Section
2 provide: Seventh, the notification requirement. The President shall notify Congress of every financial or
technical assistance agreement entered into within thirty days from its execution.

The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development, and utilization of Finally, the scope of the agreements. While the 1973 Constitution referred to "service contracts
minerals, petroleum, and other mineral oils according to the general terms and conditions provided for financial, technical, management, or other forms of assistance" the 1987 Constitution provides
by law, based on real contributions to the economic growth and general welfare of the country. In for "agreements. . . involving either financial or technical assistance." It bears noting that the
such agreements, the State shall promote the development and use of local scientific and technical phrases "service contracts" and "management or other forms of assistance" in the earlier
resources. constitution have been omitted.

The President shall notify the Congress of every contract entered into in accordance with this By virtue of her legislative powers under the Provisional Constitution,185 President Aquino, on
provision, within thirty days from its execution. July 10, 1987, signed into law E.O. No. 211 prescribing the interim procedures in the processing
and approval of applications for the exploration, development and utilization of minerals. The
omission in the 1987 Constitution of the term "service contracts" notwithstanding, the said E.O.
still referred to them in Section 2 thereof:
Although Section 2 sanctions the participation of foreign-owned corporations in the exploration,
development, and utilization of natural resources, it imposes certain limitations or conditions to
agreements with such corporations.
Sec. 2. Applications for the exploration, development and utilization of mineral resources, including
renewal applications and applications for approval of operating agreements and mining service
contracts, shall be accepted and processed and may be approved x x x. [Emphasis supplied.]
First, the parties to FTAAs. Only the President, in behalf of the State, may enter into these
agreements, and only with corporations. By contrast, under the 1973 Constitution, a Filipino
citizen, corporation or association may enter into a service contract with a "foreign person or
entity." The same law provided in its Section 3 that the "processing, evaluation and approval of all mining
applications . . . operating agreements and service contracts . . . shall be governed by Presidential
Decree No. 463, as amended, other existing mining laws, and their implementing rules and
regulations. . . ."

84
As earlier stated, on the 25th also of July 1987, the President issued E.O. No. 279 by authority of In a co-production agreement (CA),198 the Government provides inputs to the mining operations
which the subject WMCP FTAA was executed on March 30, 1995. other than the mineral resource,199 while in a joint venture agreement (JVA), where the
Government enjoys the greatest participation, the Government and the JVA contractor organize a
company with both parties having equity shares.200 Aside from earnings in equity, the
Government in a JVA is also entitled to a share in the gross output.201 The Government may
On March 3, 1995, President Ramos signed into law R.A. No. 7942. Section 15 thereof declares enter into a CA202 or JVA203 with one or more contractors. The Government's share in a CA or
that the Act "shall govern the exploration, development, utilization, and processing of all mineral JVA is set out in Section 81 of the law:
resources." Such declaration notwithstanding, R.A. No. 7942 does not actually cover all the modes
through which the State may undertake the exploration, development, and utilization of natural
resources.
The share of the Government in co-production and joint venture agreements shall be negotiated
by the Government and the contractor taking into consideration the: (a) capital investment of the
project, (b) the risks involved, (c) contribution of the project to the economy, and (d) other factors
The State, being the owner of the natural resources, is accorded the primary power and that will provide for a fair and equitable sharing between the Government and the contractor. The
responsibility in the exploration, development and utilization thereof. As such, it may undertake Government shall also be entitled to compensations for its other contributions which shall be
these activities through four modes: agreed upon by the parties, and shall consist, among other things, the contractor's income tax,
excise tax, special allowance, withholding tax due from the contractor's foreign stockholders
arising from dividend or interest payments to the said foreign stockholders, in case of a foreign
The State may directly undertake such activities. national and all such other taxes, duties and fees as provided for under existing laws.

(2) The State may enter into co-production, joint venture or production-sharing agreements with All mineral agreements grant the respective contractors the exclusive right to conduct mining
Filipino citizens or qualified corporations. operations and to extract all mineral resources found in the contract area.204 A "qualified person"
may enter into any of the mineral agreements with the Government.205 A "qualified person" is

(3) Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens.
any citizen of the Philippines with capacity to contract, or a corporation, partnership, association,
or cooperative organized or authorized for the purpose of engaging in mining, with technical and
financial capability to undertake mineral resources development and duly registered in accordance
(4) For the large-scale exploration, development and utilization of minerals, petroleum and other with law at least sixty per centum (60%) of the capital of which is owned by citizens of the
mineral oils, the President may enter into agreements with foreign-owned corporations involving Philippines x x x.206
technical or financial assistance.186

The fourth mode involves "financial or technical assistance agreements." An FTAA is defined as
Except to charge the Mines and Geosciences Bureau of the DENR with performing researches "a contract involving financial or technical assistance for large-scale exploration, development,
and surveys,187 and a passing mention of government-owned or controlled corporations,188 R.A. and utilization of natural resources."207 Any qualified person with technical and financial capability
No. 7942 does not specify how the State should go about the first mode. The third mode, on the to undertake large-scale exploration, development, and utilization of natural resources in the
other hand, is governed by Republic Act No. 7076189 (the People's Small-Scale Mining Act of Philippines may enter into such agreement directly with the Government through the DENR.208
1991) and other pertinent laws.190 R.A. No. 7942 primarily concerns itself with the second and For the purpose of granting an FTAA, a legally organized foreign-owned corporation (any
fourth modes. corporation, partnership, association, or cooperative duly registered in accordance with law in
which less than 50% of the capital is owned by Filipino citizens)209 is deemed a "qualified
person."210
Mineral production sharing, co-production and joint venture agreements are collectively classified
by R.A. No. 7942 as "mineral agreements."191 The Government participates the least in a mineral
production sharing agreement (MPSA). In an MPSA, the Government grants the contractor192 Other than the difference in contractors' qualifications, the principal distinction between mineral
the exclusive right to conduct mining operations within a contract area193 and shares in the gross agreements and FTAAs is the maximum contract area to which a qualified person may hold or be
output.194 The MPSA contractor provides the financing, technology, management and personnel granted.211 "Large-scale" under R.A. No. 7942 is determined by the size of the contract area, as
necessary for the agreement's implementation.195 The total government share in an MPSA is the opposed to the amount invested (US $50,000,000.00), which was the standard under E.O. 279.
excise tax on mineral products under Republic Act No. 7729,196 amending Section 151(a) of the
National Internal Revenue Code, as amended.197

85
Like a CA or a JVA, an FTAA is subject to negotiation.212 The Government's contributions, in the
form of taxes, in an FTAA is identical to its contributions in the two mineral agreements, save that
in an FTAA: It bears noting that there is nothing in E.O. No. 200 that prevents a law from taking effect on a
date other than – even before – the 15-day period after its publication. Where a law provides for
its own date of effectivity, such date prevails over that prescribed by E.O. No. 200. Indeed, this is
the very essence of the phrase "unless it is otherwise provided" in Section 1 thereof. Section 1,
The collection of Government share in financial or technical assistance agreement shall E.O. No. 200, therefore, applies only when a statute does not provide for its own date of effectivity.
commence after the financial or technical assistance agreement contractor has fully recovered its
pre-operating expenses, exploration, and development expenditures, inclusive.213

What is mandatory under E.O. No. 200, and what due process requires, as this Court held in
Tañada v. Tuvera,217 is the publication of the law for without such notice and publication, there
III would be no basis for the application of the maxim "ignorantia legis n[eminem] excusat." It would
be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of
which he had no notice whatsoever, not even a constructive one.
Having examined the history of the constitutional provision and statutes enacted pursuant thereto,
a consideration of the substantive issues presented by the petition is now in order.
While the effectivity clause of E.O. No. 279 does not require its publication, it is not a ground for
its invalidation since the Constitution, being "the fundamental, paramount and supreme law of the
nation," is deemed written in the law.218 Hence, the due process clause,219 which, so Tañada
THE EFFECTIVITY OF EXECUTIVE ORDER NO. 279
held, mandates the publication of statutes, is read into Section 8 of E.O. No. 279. Additionally,
Section 1 of E.O. No. 200 which provides for publication "either in the Official Gazette or in a
newspaper of general circulation in the Philippines," finds suppletory application. It is significant to
Petitioners argue that E.O. No. 279, the law in force when the WMC FTAA was executed, did not note that E.O. No. 279 was actually published in the Official Gazette220 on August 3, 1987.
come into effect.

From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200, and Tañada v.
E.O. No. 279 was signed into law by then President Aquino on July 25, 1987, two days before the Tuvera, this Court holds that E.O. No. 279 became effective immediately upon its publication in
opening of Congress on July 27, 1987.214 Section 8 of the E.O. states that the same "shall take the Official Gazette on August 3, 1987.
effect immediately." This provision, according to petitioners, runs counter to Section 1 of E.O. No.
200,215 which provides:
That such effectivity took place after the convening of the first Congress is irrelevant. At the time
President Aquino issued E.O. No. 279 on July 25, 1987, she was still validly exercising legislative
SECTION 1. Laws shall take effect after fifteen days following the completion of their publication powers under the Provisional Constitution.221 Article XVIII (Transitory Provisions) of the 1987
either in the Official Gazette or in a newspaper of general circulation in the Philippines, unless it is Constitution explicitly states:
otherwise provided.216 [Emphasis supplied.]

Sec. 6. The incumbent President shall continue to exercise legislative powers until the first
On that premise, petitioners contend that E.O. No. 279 could have only taken effect fifteen days Congress is convened.
after its publication at which time Congress had already convened and the President's power to
legislate had ceased.
The convening of the first Congress merely precluded the exercise of legislative powers by
President Aquino; it did not prevent the effectivity of laws she had previously enacted.
Respondents, on the other hand, counter that the validity of E.O. No. 279 was settled in Miners
Association of the Philippines v. Factoran, supra. This is of course incorrect for the issue in Miners
Association was not the validity of E.O. No. 279 but that of DAO Nos. 57 and 82 which were issued
There can be no question, therefore, that E.O. No. 279 is an effective, and a validly enacted,
pursuant thereto.
statute.

Nevertheless, petitioners' contentions have no merit.


THE CONSTITUTIONALITY OF THE WMCP FTAA

86
MR. VILLEGAS. That is right.

Petitioners submit that, in accordance with the text of Section 2, Article XII of the Constitution,
FTAAs should be limited to "technical or financial assistance" only. They observe, however, that,
contrary to the language of the Constitution, the WMCP FTAA allows WMCP, a fully foreign-owned SR. TAN. So those are the safeguards[?]
mining corporation, to extend more than mere financial or technical assistance to the State, for it
permits WMCP to manage and operate every aspect of the mining activity. 222
MR. VILLEGAS. Yes. There was no law at all governing service contracts before.

Petitioners' submission is well-taken. It is a cardinal rule in the interpretation of constitutions that


the instrument must be so construed as to give effect to the intention of the people who adopted
SR. TAN. Thank you, Madam President.230 [Emphasis supplied.]
it.223 This intention is to be sought in the constitution itself, and the apparent meaning of the words
is to be taken as expressing it, except in cases where that assumption would lead to absurdity,
ambiguity, or contradiction.224 What the Constitution says according to the text of the provision,
therefore, compels acceptance and negates the power of the courts to alter it, based on the WMCP also cites the following statements of Commissioners Gascon, Garcia, Nolledo and Tadeo
postulate that the framers and the people mean what they say.225 Accordingly, following the literal who alluded to service contracts as they explained their respective votes in the approval of the
text of the Constitution, assistance accorded by foreign-owned corporations in the large-scale draft Article:
exploration, development, and utilization of petroleum, minerals and mineral oils should be limited
to "technical" or "financial" assistance only.

MR. GASCON. Mr. Presiding Officer, I vote no primarily because of two reasons: One, the
provision on service contracts. I felt that if we would constitutionalize any provision on service
WMCP nevertheless submits that the word "technical" in the fourth paragraph of Section 2 of E.O. contracts, this should always be with the concurrence of Congress and not guided only by a
No. 279 encompasses a "broad number of possible services," perhaps, "scientific and/or general law to be promulgated by Congress. x x x.231 [Emphasis supplied.]
technological in basis."226 It thus posits that it may also well include "the area of management or
operations . . . so long as such assistance requires specialized knowledge or skills, and are related
to the exploration, development and utilization of mineral resources."227
x x x.

This Court is not persuaded. As priorly pointed out, the phrase "management or other forms of
assistance" in the 1973 Constitution was deleted in the 1987 Constitution, which allows only MR. GARCIA. Thank you.
"technical or financial assistance." Casus omisus pro omisso habendus est. A person, object or
thing omitted from an enumeration must be held to have been omitted intentionally.228 As will be
shown later, the management or operation of mining activities by foreign contractors, which is the I vote no. x x x.
primary feature of service contracts, was precisely the evil that the drafters of the 1987 Constitution
sought to eradicate.

Service contracts are given constitutional legitimization in Section 3, even when they have been
proven to be inimical to the interests of the nation, providing as they do the legal loophole for the
Respondents insist that "agreements involving technical or financial assistance" is just another exploitation of our natural resources for the benefit of foreign interests. They constitute a serious
term for service contracts. They contend that the proceedings of the CONCOM indicate "that negation of Filipino control on the use and disposition of the nation's natural resources, especially
although the terminology 'service contract' was avoided [by the Constitution], the concept it with regard to those which are nonrenewable.232 [Emphasis supplied.]
represented was not." They add that "[t]he concept is embodied in the phrase 'agreements
involving financial or technical assistance.'"229 And point out how members of the CONCOM
referred to these agreements as "service contracts." For instance:
xxx

SR. TAN. Am I correct in thinking that the only difference between these future service contracts
and the past service contracts under Mr. Marcos is the general law to be enacted by the legislature MR. NOLLEDO. While there are objectionable provisions in the Article on National Economy and
and the notification of Congress by the President? That is the only difference, is it not? Patrimony, going over said provisions meticulously, setting aside prejudice and personalities will
reveal that the article contains a balanced set of provisions. I hope the forthcoming Congress will
implement such provisions taking into account that Filipinos should have real control over our

87
economy and patrimony, and if foreign equity is permitted, the same must be subordinated to the indicative of a difference in purpose.235 If, as respondents suggest, the concept of "technical or
imperative demands of the national interest. financial assistance" agreements is identical to that of "service contracts," the CONCOM would
not have bothered to fit the same dog with a new collar. To uphold respondents' theory would
reduce the first to a mere euphemism for the second and render the change in phraseology
meaningless.
x x x.

An examination of the reason behind the change confirms that technical or financial assistance
It is also my understanding that service contracts involving foreign corporations or entities are agreements are not synonymous to service contracts.
resorted to only when no Filipino enterprise or Filipino-controlled enterprise could possibly
undertake the exploration or exploitation of our natural resources and that compensation under
such contracts cannot and should not equal what should pertain to ownership of capital. In other
words, the service contract should not be an instrument to circumvent the basic provision, that the [T]he Court in construing a Constitution should bear in mind the object sought to be accomplished
exploration and exploitation of natural resources should be truly for the benefit of Filipinos. by its adoption, and the evils, if any, sought to be prevented or remedied. A doubtful provision will
be examined in light of the history of the times, and the condition and circumstances under which
the Constitution was framed. The object is to ascertain the reason which induced the framers of
the Constitution to enact the particular provision and the purpose sought to be accomplished
Thank you, and I vote yes.233 [Emphasis supplied.] thereby, in order to construe the whole as to make the words consonant to that reason and
calculated to effect that purpose.236

x x x.
As the following question of Commissioner Quesada and Commissioner Villegas' answer shows
the drafters intended to do away with service contracts which were used to circumvent the
MR. TADEO. Nais ko lamang ipaliwanag ang aking boto. capitalization (60%-40%) requirement:

Matapos suriin ang kalagayan ng Pilipinas, ang saligang suliranin, pangunahin ang salitang MS. QUESADA. The 1973 Constitution used the words "service contracts." In this particular
"imperyalismo." Ang ibig sabihin nito ay ang sistema ng lipunang pinaghaharian ng iilang Section 3, is there a safeguard against the possible control of foreign interests if the Filipinos go
monopolyong kapitalista at ang salitang "imperyalismo" ay buhay na buhay sa National Economy into coproduction with them?
and Patrimony na nating ginawa. Sa pamamagitan ng salitang "based on," naroroon na ang free
trade sapagkat tayo ay mananatiling tagapagluwas ng hilaw na sangkap at tagaangkat ng yaring
produkto. Pangalawa, naroroon pa rin ang parity rights, ang service contract, ang 60-40 equity sa MR. VILLEGAS. Yes. In fact, the deletion of the phrase "service contracts" was our first attempt
natural resources. Habang naghihirap ang sambayanang Pilipino, ginagalugad naman ng mga to avoid some of the abuses in the past regime in the use of service contracts to go around the
dayuhan ang ating likas na yaman. Kailan man ang Article on National Economy and Patrimony 60-40 arrangement. The safeguard that has been introduced – and this, of course can be refined
ay hindi nagpaalis sa pagkaalipin ng ating ekonomiya sa kamay ng mga dayuhan. Ang solusyon – is found in Section 3, lines 25 to 30, where Congress will have to concur with the President on
sa suliranin ng bansa ay dalawa lamang: ang pagpapatupad ng tunay na reporma sa lupa at ang any agreement entered into between a foreign-owned corporation and the government involving
national industrialization. Ito ang tinatawag naming pagsikat ng araw sa Silangan. Ngunit ang mga technical or financial assistance for large-scale exploration, development and utilization of natural
landlords and big businessmen at ang mga komprador ay nagsasabi na ang free trade na ito, ang resources.237 [Emphasis supplied.]
kahulugan para sa amin, ay ipinipilit sa ating sambayanan na ang araw ay sisikat sa Kanluran.
Kailan man hindi puwedeng sumikat ang araw sa Kanluran. I vote no.234 [Emphasis supplied.]

In a subsequent discussion, Commissioner Villegas allayed the fears of Commissioner Quesada


regarding the participation of foreign interests in Philippine natural resources, which was supposed
This Court is likewise not persuaded. to be restricted to Filipinos.

As earlier noted, the phrase "service contracts" has been deleted in the 1987 Constitution's Article MS. QUESADA. Another point of clarification is the phrase "and utilization of natural resources
on National Economy and Patrimony. If the CONCOM intended to retain the concept of service shall be under the full control and supervision of the State." In the 1973 Constitution, this was
contracts under the 1973 Constitution, it could have simply adopted the old terminology ("service limited to citizens of the Philippines; but it was removed and substituted by "shall be under the full
contracts") instead of employing new and unfamiliar terms ("agreements . . . involving either control and supervision of the State." Was the concept changed so that these particular resources
technical or financial assistance"). Such a difference between the language of a provision in a would be limited to citizens of the Philippines? Or would these resources only be under the full
revised constitution and that of a similar provision in the preceding constitution is viewed as

88
control and supervision of the State; meaning, noncitizens would have access to these natural If the Commissioner will remember, this removes the possibility for service contracts which we
resources? Is that the understanding? said yesterday were avenues used in the previous regime to go around the 60-40 requirement.238
[Emphasis supplied.]

MR. VILLEGAS. No, Mr. Vice-President, if the Commissioner reads the next sentence, it states:
The present Chief Justice, then a member of the CONCOM, also referred to this limitation in scope
in proposing an amendment to the 60-40 requirement:
Such activities may be directly undertaken by the State, or it may enter into co-production, joint
venture, production-sharing agreements with Filipino citizens.
MR. DAVIDE. May I be allowed to explain the proposal?

So we are still limiting it only to Filipino citizens.


MR. MAAMBONG. Subject to the three-minute rule, Madam President.

x x x.
MR. DAVIDE. It will not take three minutes.

MS. QUESADA. Going back to Section 3, the section suggests that:


The Commission had just approved the Preamble. In the Preamble we clearly stated that the
Filipino people are sovereign and that one of the objectives for the creation or establishment of a
government is to conserve and develop the national patrimony. The implication is that the national
The exploration, development, and utilization of natural resources… may be directly undertaken patrimony or our natural resources are exclusively reserved for the Filipino people. No alien must
by the State, or it may enter into co-production, joint venture or production-sharing agreement with be allowed to enjoy, exploit and develop our natural resources. As a matter of fact, that principle
. . . corporations or associations at least sixty per cent of whose voting stock or controlling interest proceeds from the fact that our natural resources are gifts from God to the Filipino people and it
is owned by such citizens. would be a breach of that special blessing from God if we will allow aliens to exploit our natural
resources.

Lines 25 to 30, on the other hand, suggest that in the large-scale exploration, development and
utilization of natural resources, the President with the concurrence of Congress may enter into I voted in favor of the Jamir proposal because it is not really exploitation that we granted to the
agreements with foreign-owned corporations even for technical or financial assistance. alien corporations but only for them to render financial or technical assistance. It is not for them to
enjoy our natural resources. Madam President, our natural resources are depleting; our population
is increasing by leaps and bounds. Fifty years from now, if we will allow these aliens to exploit our
I wonder if this part of Section 3 contradicts the second part. I am raising this point for fear that natural resources, there will be no more natural resources for the next generations of Filipinos. It
foreign investors will use their enormous capital resources to facilitate the actual exploitation or may last long if we will begin now. Since 1935 the aliens have been allowed to enjoy to a certain
exploration, development and effective disposition of our natural resources to the detriment of extent the exploitation of our natural resources, and we became victims of foreign dominance and
Filipino investors. I am not saying that we should not consider borrowing money from foreign control. The aliens are interested in coming to the Philippines because they would like to enjoy the
sources. What I refer to is that foreign interest should be allowed to participate only to the extent bounty of nature exclusively intended for Filipinos by God.
that they lend us money and give us technical assistance with the appropriate government permit.
In this way, we can insure the enjoyment of our natural resources by our own people.
And so I appeal to all, for the sake of the future generations, that if we have to pray in the Preamble
"to preserve and develop the national patrimony for the sovereign Filipino people and for the
MR. VILLEGAS. Actually, the second provision about the President does not permit foreign generations to come," we must at this time decide once and for all that our natural resources must
investors to participate. It is only technical or financial assistance – they do not own anything – but be reserved only to Filipino citizens.
on conditions that have to be determined by law with the concurrence of Congress. So, it is very
restrictive.
Thank you.239 [Emphasis supplied.]

89
The opinion of another member of the CONCOM is persuasive240 and leaves no doubt as to the The National Assembly may by law allow small scale utilization of natural resources by Filipino
intention of the framers to eliminate service contracts altogether. He writes: citizens.

Paragraph 4 of Section 2 specifies large-scale, capital-intensive, highly technological undertakings The National Assembly, may, by two-thirds vote of all its members by special law provide the terms
for which the President may enter into contracts with foreign-owned corporations, and enunciates and conditions under which a foreign-owned corporation may enter into agreements with the
strict conditions that should govern such contracts. x x x. government involving either technical or financial assistance for large-scale exploration,
development, or utilization of natural resources. [Emphasis supplied.]

This provision balances the need for foreign capital and technology with the need to maintain the
national sovereignty. It recognizes the fact that as long as Filipinos can formulate their own terms Sec. 3. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
in their own territory, there is no danger of relinquishing sovereignty to foreign interests. forces of potential energy, fisheries, forests, 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 exploration, development, and utilization of natural resources shall be under the
full control and supervision of the State. Such activities may be directly undertaken by the State,
Are service contracts allowed under the new Constitution? No. Under the new Constitution, foreign or it may enter into co-production, joint venture, production-sharing agreements with Filipino
investors (fully alien-owned) can NOT participate in Filipino enterprises except to provide: (1) citizens or corporations or associations at least sixty per cent of whose voting stock or controlling
Technical Assistance for highly technical enterprises; and (2) Financial Assistance for large-scale interest is owned by such citizens. Such agreements shall be for a period of twenty-five years,
enterprises. renewable for not more than twenty-five years, and under such term and conditions as may be
provided by law. In cases of water rights for irrigation, water supply, fisheries or industrial uses
other than the development for water power, beneficial use may be the measure and limit of the
The intent of this provision, as well as other provisions on foreign investments, is to prevent the grant.
practice (prevalent in the Marcos government) of skirting the 60/40 equation using the cover of
service contracts.241 [Emphasis supplied.]
The Congress may by law allow small-scale utilization of natural resources by Filipino citizens, as
well as cooperative fish farming in rivers, lakes, bays, and lagoons.
Furthermore, it appears that Proposed Resolution No. 496,242 which was the draft Article on
National Economy and Patrimony, adopted the concept of "agreements . . . involving either
technical or financial assistance" contained in the "Draft of the 1986 U.P. Law Constitution Project" The President with the concurrence of Congress, by special law, shall provide the terms and
(U.P. Law draft) which was taken into consideration during the deliberation of the CONCOM.243 conditions under which a foreign-owned corporation may enter into agreements with the
The former, as well as Article XII, as adopted, employed the same terminology, as the comparative government involving either technical or financial assistance for large-scale exploration,
table below shows: development, and utilization of natural resources. [Emphasis supplied.]

DRAFT OF THE UP LAW CONSTITUTION PROJECT PROPOSED RESOLUTION NO. Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils,
496 OF THE CONSTITUTIONAL COMMISSION ARTICLE XII OF THE 1987 CONSTITUTION 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
Sec. 1. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
resources shall not be alienated. The exploration, development, and utilization of natural
forces of potential energy, fisheries, flora and fauna and other natural resources of the Philippines
resources shall be under the full control and supervision of the State. The State may directly
are owned by the State. With the exception of agricultural lands, all other natural resources shall
undertake such activities or it may enter into co-production, joint venture, or production-sharing
not be alienated. The exploration, development and utilization of natural resources shall be under
agreements with Filipino citizens, or corporations or associations at least sixty per centum of
the full control and supervision of the State. Such activities may be directly undertaken by the
whose capital is owned by such citizens. Such agreements may be for a period not exceeding
state, or it may enter into co-production, joint venture, production sharing agreements with Filipino
twenty-five years, renewable for not more than twenty-five years, and under such terms and
citizens or corporations or associations sixty per cent of whose voting stock or controlling interest
conditions as may be provided by law. In case of water rights for irrigation, water supply, fisheries,
is owned by such citizens for a period of not more than twenty-five years, renewable for not more
or industrial uses other than the development of water power, beneficial use may be the measure
than twenty-five years and under such terms and conditions as may be provided by law. In case
and limit of the grant.
as to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, beneficial use may be the measure and limit of the grant.

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

90
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, 5. Ownership of equipment, machinery, fixed assets, and other properties remain with contractor
as well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in (Sec. 12, P.D. 87);
rivers, lakes, bays, and lagoons.

6. Repatriation of capital and retention of profits abroad guaranteed to the contractor (Sec. 13,
The President may enter into agreements with foreign-owned corporations involving either P.D. 87); and
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 7. While title to the petroleum discovered may nominally be in the name of the government, the
resources. [Emphasis supplied.] contractor has almost unfettered control over its disposition and sale, and even the domestic
requirements of the country is relegated to a pro rata basis (Sec. 8).

The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution. In short, our version of the service contract is just a rehash of the old concession regime x x x.
Some people have pulled an old rabbit out of a magician's hat, and foisted it upon us as a new
and different animal.

The insights of the proponents of the U.P. Law draft are, therefore, instructive in interpreting the
phrase "technical or financial assistance."
The service contract as we know it here is antithetical to the principle of sovereignty over our
natural resources restated in the same article of the [1973] Constitution containing the provision
for service contracts. If the service contractor happens to be a foreign corporation, the contract
In his position paper entitled Service Contracts: Old Wine in New Bottles?, Professor Pacifico A. would also run counter to the constitutional provision on nationalization or Filipinization, of the
Agabin, who was a member of the working group that prepared the U.P. Law draft, criticized exploitation of our natural resources.245 [Emphasis supplied. Underscoring in the original.]
service contracts for they "lodge exclusive management and control of the enterprise to the service
contractor, which is reminiscent of the old concession regime. Thus, notwithstanding the provision
of the Constitution that natural resources belong to the State, and that these shall not be alienated,
the service contract system renders nugatory the constitutional provisions cited."244 He Professor Merlin M. Magallona, also a member of the working group, was harsher in his reproach
elaborates: of the system:

Looking at the Philippine model, we can discern the following vestiges of the concession regime, x x x the nationalistic phraseology of the 1935 [Constitution] was retained by the [1973] Charter,
thus: but the essence of nationalism was reduced to hollow rhetoric. The 1973 Charter still provided
that the exploitation or development of the country's natural resources be limited to Filipino citizens
or corporations owned or controlled by them. However, the martial-law Constitution allowed them,
once these resources are in their name, to enter into service contracts with foreign investors for
1. Bidding of a selected area, or leasing the choice of the area to the interested party and then financial, technical, management, or other forms of assistance. Since foreign investors have the
negotiating the terms and conditions of the contract; (Sec. 5, P.D. 87) capital resources, the actual exploitation and development, as well as the effective disposition, of
the country's natural resources, would be under their direction, and control, relegating the Filipino
investors to the role of second-rate partners in joint ventures.
2. Management of the enterprise vested on the contractor, including operation of the field if
petroleum is discovered; (Sec. 8, P.D. 87)
Through the instrumentality of the service contract, the 1973 Constitution had legitimized at the
highest level of state policy that which was prohibited under the 1973 Constitution, namely: the
exploitation of the country's natural resources by foreign nationals. The drastic impact of [this]
3. Control of production and other matters such as expansion and development; (Sec. 8) constitutional change becomes more pronounced when it is considered that the active party to
any service contract may be a corporation wholly owned by foreign interests. In such a case, the
citizenship requirement is completely set aside, permitting foreign corporations to obtain actual
4. Responsibility for downstream operations – marketing, distribution, and processing may be with possession, control, and [enjoyment] of the country's natural resources.246 [Emphasis supplied.]
the contractor (Sec. 8);

91
Accordingly, Professor Agabin recommends that: Under the proposed provision, only technical assistance or financial assistance agreements may
be entered into, and only for large-scale activities. These are contract forms which recognize and
assert our sovereignty and ownership over natural resources since the foreign entity is just a pure
contractor and not a beneficial owner of our economic resources. The proposal recognizes the
Recognizing the service contract for what it is, we have to expunge it from the Constitution and need for capital and technology to develop our natural resources without sacrificing our
reaffirm ownership over our natural resources. That is the only way we can exercise effective sovereignty and control over such resources by the safeguard of a special law which requires two-
control over our natural resources. thirds vote of all the members of the Legislature. This will ensure that such agreements will be
debated upon exhaustively and thoroughly in the National Assembly to avert prejudice to the
nation.249 [Emphasis supplied.]
This should not mean complete isolation of the country's natural resources from foreign
investment. Other contract forms which are less derogatory to our sovereignty and control over
natural resources – like technical assistance agreements, financial assistance [agreements], co- The U.P. Law draft proponents viewed service contracts under the 1973 Constitution as grants of
production agreements, joint ventures, production-sharing – could still be utilized and adopted beneficial ownership of the country's natural resources to foreign owned corporations. While, in
without violating constitutional provisions. In other words, we can adopt contract forms which theory, the State owns these natural resources – and Filipino citizens, their beneficiaries – service
recognize and assert our sovereignty and ownership over natural resources, and where the foreign contracts actually vested foreigners with the right to dispose, explore for, develop, exploit, and
entity is just a pure contractor instead of the beneficial owner of our economic resources.247 utilize the same. Foreigners, not Filipinos, became the beneficiaries of Philippine natural
[Emphasis supplied.] resources. This arrangement is clearly incompatible with the constitutional ideal of nationalization
of natural resources, with the Regalian doctrine, and on a broader perspective, with Philippine
sovereignty.
Still another member of the working group, Professor Eduardo Labitag, proposed that:

The proponents nevertheless acknowledged the need for capital and technical know-how in the
2. Service contracts as practiced under the 1973 Constitution should be discouraged, instead the large-scale exploitation, development and utilization of natural resources – the second paragraph
government may be allowed, subject to authorization by special law passed by an extraordinary of the proposed draft itself being an admission of such scarcity. Hence, they recommended a
majority to enter into either technical or financial assistance. This is justified by the fact that as compromise to reconcile the nationalistic provisions dating back to the 1935 Constitution, which
presently worded in the 1973 Constitution, a service contract gives full control over the contract reserved all natural resources exclusively to Filipinos, and the more liberal 1973 Constitution,
area to the service contractor, for him to work, manage and dispose of the proceeds or production. which allowed foreigners to participate in these resources through service contracts. Such a
It was a subterfuge to get around the nationality requirement of the constitution.248 [Emphasis compromise called for the adoption of a new system in the exploration, development, and
supplied.] utilization of natural resources in the form of technical agreements or financial agreements which,
necessarily, are distinct concepts from service contracts.

In the annotations on the proposed Article on National Economy and Patrimony, the U.P. Law draft
summarized the rationale therefor, thus: The replacement of "service contracts" with "agreements… involving either technical or financial
assistance," as well as the deletion of the phrase "management or other forms of assistance,"
assumes greater significance when note is taken that the U.P. Law draft proposed other equally
crucial changes that were obviously heeded by the CONCOM. These include the abrogation of
5. The last paragraph is a modification of the service contract provision found in Section 9, Article the concession system and the adoption of new "options" for the State in the exploration,
XIV of the 1973 Constitution as amended. This 1973 provision shattered the framework of development, and utilization of natural resources. The proponents deemed these changes to be
nationalism in our fundamental law (see Magallona, "Nationalism and its Subversion in the more consistent with the State's ownership of, and its "full control and supervision" (a phrase also
Constitution"). Through the service contract, the 1973 Constitution had legitimized that which was employed by the framers) over, such resources. The Project explained:
prohibited under the 1935 constitution—the exploitation of the country's natural resources by
foreign nationals. Through the service contract, acts prohibited by the Anti-Dummy Law were
recognized as legitimate arrangements. Service contracts lodge exclusive management and
control of the enterprise to the service contractor, not unlike the old concession regime where the 3. In line with the State ownership of natural resources, the State should take a more active role
concessionaire had complete control over the country's natural resources, having been given in the exploration, development, and utilization of natural resources, than the present practice of
exclusive and plenary rights to exploit a particular resource and, in effect, having been assured of granting licenses, concessions, or leases – hence the provision that said activities shall be under
ownership of that resource at the point of extraction (see Agabin, "Service Contracts: Old Wine in the full control and supervision of the State. There are three major schemes by which the State
New Bottles"). Service contracts, hence, are antithetical to the principle of sovereignty over our could undertake these activities: first, directly by itself; second, by virtue of co-production, joint
natural resources, as well as the constitutional provision on nationalization or Filipinization of the venture, production sharing agreements with Filipino citizens or corporations or associations sixty
exploitation of our natural resources. per cent (60%) of the voting stock or controlling interests of which are owned by such citizens; or
third, with a foreign-owned corporation, in cases of large-scale exploration, development, or

92
utilization of natural resources through agreements involving either technical or financial
assistance only. x x x.
In the case of the other commissioners, Commissioner Nolledo himself clarified in his work that
the present charter prohibits service contracts.254 Commissioner Gascon was not totally averse
to foreign participation, but favored stricter restrictions in the form of majority congressional
At present, under the licensing concession or lease schemes, the government benefits from such concurrence.255 On the other hand, Commissioners Garcia and Tadeo may have veered to the
benefits only through fees, charges, ad valorem taxes and income taxes of the exploiters of our extreme side of the spectrum and their objections may be interpreted as votes against any foreign
natural resources. Such benefits are very minimal compared with the enormous profits reaped by participation in our natural resources whatsoever.
theses licensees, grantees, concessionaires. Moreover, some of them disregard the conservation
of natural resources and do not protect the environment from degradation. The proposed role of
the State will enable it to a greater share in the profits – it can also actively husband its natural
resources and engage in developmental programs that will be beneficial to them. WMCP cites Opinion No. 75, s. 1987,256 and Opinion No. 175, s. 1990257 of the Secretary of
Justice, expressing the view that a financial or technical assistance agreement "is no different in
concept" from the service contract allowed under the 1973 Constitution. This Court is not,
however, bound by this interpretation. When an administrative or executive agency renders an
4. Aside from the three major schemes for the exploration, development, and utilization of our opinion or issues a statement of policy, it merely interprets a pre-existing law; and the
natural resources, the State may, by law, allow Filipino citizens to explore, develop, utilize natural administrative interpretation of the law is at best advisory, for it is the courts that finally determine
resources in small-scale. This is in recognition of the plight of marginal fishermen, forest dwellers, what the law means.258
gold panners, and others similarly situated who exploit our natural resources for their daily
sustenance and survival.250

In any case, the constitutional provision allowing the President to enter into FTAAs with foreign-
owned corporations is an exception to the rule that participation in the nation's natural resources
Professor Agabin, in particular, after taking pains to illustrate the similarities between the two is reserved exclusively to Filipinos. Accordingly, such provision must be construed strictly against
systems, concluded that the service contract regime was but a "rehash" of the concession system. their enjoyment by non-Filipinos. As Commissioner Villegas emphasized, the provision is "very
"Old wine in new bottles," as he put it. The rejection of the service contract regime, therefore, is in restrictive."259 Commissioner Nolledo also remarked that "entering into service contracts is an
consonance with the abolition of the concession system. exception to the rule on protection of natural resources for the interest of the nation and, therefore,
being an exception, it should be subject, whenever possible, to stringent rules."260 Indeed,
exceptions should be strictly but reasonably construed; they extend only so far as their language
fairly warrants and all doubts should be resolved in favor of the general provision rather than the
In light of the deliberations of the CONCOM, the text of the Constitution, and the adoption of other
exception.261
proposed changes, there is no doubt that the framers considered and shared the intent of the U.P.
Law proponents in employing the phrase "agreements . . . involving either technical or financial
assistance."
With the foregoing discussion in mind, this Court finds that R.A. No. 7942 is invalid insofar as said
Act authorizes service contracts. Although the statute employs the phrase "financial and technical
agreements" in accordance with the 1987 Constitution, it actually treats these agreements as
While certain commissioners may have mentioned the term "service contracts" during the
service contracts that grant beneficial ownership to foreign contractors contrary to the fundamental
CONCOM deliberations, they may not have been necessarily referring to the concept of service
law.
contracts under the 1973 Constitution. As noted earlier, "service contracts" is a term that assumes
different meanings to different people.251 The commissioners may have been using the term
loosely, and not in its technical and legal sense, to refer, in general, to agreements concerning
natural resources entered into by the Government with foreign corporations. These loose Section 33, which is found under Chapter VI (Financial or Technical Assistance Agreement) of
statements do not necessarily translate to the adoption of the 1973 Constitution provision allowing R.A. No. 7942 states:
service contracts.

SEC. 33. Eligibility.—Any qualified person with technical and financial capability to undertake
It is true that, as shown in the earlier quoted portions of the proceedings in CONCOM, in response large-scale exploration, development, and utilization of mineral resources in the Philippines may
to Sr. Tan's question, Commissioner Villegas commented that, other than congressional enter into a financial or technical assistance agreement directly with the Government through the
notification, the only difference between "future" and "past" "service contracts" is the requirement Department. [Emphasis supplied.]
of a general law as there were no laws previously authorizing the same.252 However, such remark
is far outweighed by his more categorical statement in his exchange with Commissioner Quesada
that the draft article "does not permit foreign investors to participate" in the nation's natural
resources – which was exactly what service contracts did – except to provide "technical or financial "Exploration," as defined by R.A. No. 7942,
assistance."253

93
means the searching or prospecting for mineral resources by geological, geochemical or
geophysical surveys, remote sensing, test pitting, trending, drilling, shaft sinking, tunneling or any
other means for the purpose of determining the existence, extent, quantity and quality thereof and Finally, under the Act, an FTAA contractor warrants that it "has or has access to all the financing,
the feasibility of mining them for profit.262 managerial, and technical expertise. . . ."279 This suggests that an FTAA contractor is bound to
provide some management assistance – a form of assistance that has been eliminated and,
therefore, proscribed by the present Charter.

A legally organized foreign-owned corporation may be granted an exploration permit,263 which


vests it with the right to conduct exploration for all minerals in specified areas,264 i.e., to enter,
occupy and explore the same.265 Eventually, the foreign-owned corporation, as such permittee, By allowing foreign contractors to manage or operate all the aspects of the mining operation, the
may apply for a financial and technical assistance agreement.266 above-cited provisions of R.A. No. 7942 have in effect conveyed beneficial ownership over the
nation's mineral resources to these contractors, leaving the State with nothing but bare title
thereto.

"Development" is the work undertaken to explore and prepare an ore body or a mineral deposit
for mining, including the construction of necessary infrastructure and related facilities.267
Moreover, the same provisions, whether by design or inadvertence, permit a circumvention of the
constitutionally ordained 60%-40% capitalization requirement for corporations or associations
engaged in the exploitation, development and utilization of Philippine natural resources.
"Utilization" "means the extraction or disposition of minerals."268 A stipulation that the proponent
shall dispose of the minerals and byproducts produced at the highest price and more
advantageous terms and conditions as provided for under the implementing rules and regulations
is required to be incorporated in every FTAA.269 In sum, the Court finds the following provisions of R.A. No. 7942 to be violative of Section 2, Article
XII of the Constitution:

A foreign-owned/-controlled corporation may likewise be granted a mineral processing permit.270


"Mineral processing" is the milling, beneficiation or upgrading of ores or minerals and rocks or by (1) The proviso in Section 3 (aq), which defines "qualified person," to wit:
similar means to convert the same into marketable products.271

Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person
An FTAA contractor makes a warranty that the mining operations shall be conducted in for purposes of granting an exploration permit, financial or technical assistance agreement or
accordance with the provisions of R.A. No. 7942 and its implementing rules272 and for work mineral processing permit.
programs and minimum expenditures and commitments.273 And it obliges itself to furnish the
Government records of geologic, accounting, and other relevant data for its mining operation.274
(2) Section 23,280 which specifies the rights and obligations of an exploration permittee, insofar
as said section applies to a financial or technical assistance agreement,
"Mining operation," as the law defines it, means mining activities involving exploration, feasibility,
development, utilization, and processing.275
(3) Section 33, which prescribes the eligibility of a contractor in a financial or technical assistance
agreement;
The underlying assumption in all these provisions is that the foreign contractor manages the
mineral resources, just like the foreign contractor in a service contract.
(4) Section 35,281 which enumerates the terms and conditions for every financial or technical
assistance agreement;
Furthermore, Chapter XII of the Act grants foreign contractors in FTAAs the same auxiliary mining
rights that it grants contractors in mineral agreements (MPSA, CA and JV).276 Parenthetically,
Sections 72 to 75 use the term "contractor," without distinguishing between FTAA and mineral
(5) Section 39,282 which allows the contractor in a financial and technical assistance agreement
agreement contractors. And so does "holders of mining rights" in Section 76. A foreign contractor
to convert the same into a mineral production-sharing agreement;
may even convert its FTAA into a mineral agreement if the economic viability of the contract area
is found to be inadequate to justify large-scale mining operations,277 provided that it reduces its
equity in the corporation, partnership, association or cooperative to forty percent (40%).278

94
(6) Section 56,283 which authorizes the issuance of a mineral processing permit to a contractor
in a financial and technical assistance agreement;
There can be little doubt that the WMCP FTAA itself is a service contract.

The following provisions of the same Act are likewise void as they are dependent on the foregoing
provisions and cannot stand on their own: Section 1.3 of the WMCP FTAA grants WMCP "the exclusive right to explore, exploit, utilise[,]
process and dispose of all Minerals products and by-products thereof that may be produced from
the Contract Area."294 The FTAA also imbues WMCP with the following rights:

(1) Section 3 (g),284 which defines the term "contractor," insofar as it applies to a financial or
technical assistance agreement.
(b) to extract and carry away any Mineral samples from the Contract area for the purpose of
conducting tests and studies in respect thereof;

Section 34,285 which prescribes the maximum contract area in a financial or technical assistance
agreements;
(c) to determine the mining and treatment processes to be utilised during the
Development/Operating Period and the project facilities to be constructed during the Development
and Construction Period;
Section 36,286 which allows negotiations for financial or technical assistance agreements;

(d) have the right of possession of the Contract Area, with full right of ingress and egress and the
Section 37,287 which prescribes the procedure for filing and evaluation of financial or technical right to occupy the same, subject to the provisions of Presidential Decree No. 512 (if applicable)
assistance agreement proposals; and not be prevented from entry into private ands by surface owners and/or occupants thereof
when prospecting, exploring and exploiting for minerals therein;

Section 38,288 which limits the term of financial or technical assistance agreements;
xxx

Section 40,289 which allows the assignment or transfer of financial or technical assistance
agreements; (f) to construct roadways, mining, drainage, power generation and transmission facilities and all
other types of works on the Contract Area;

Section 41,290 which allows the withdrawal of the contractor in an FTAA;


(g) to erect, install or place any type of improvements, supplies, machinery and other equipment
relating to the Mining Operations and to use, sell or otherwise dispose of, modify, remove or
diminish any and all parts thereof;
The second and third paragraphs of Section 81,291 which provide for the Government's share in
a financial and technical assistance agreement; and

(h) enjoy, subject to pertinent laws, rules and regulations and the rights of third Parties, easement
rights and the use of timber, sand, clay, stone, water and other natural resources in the Contract
Section 90,292 which provides for incentives to contractors in FTAAs insofar as it applies to said
Area without cost for the purposes of the Mining Operations;
contractors;

xxx
When the parts of the statute are so mutually dependent and connected as conditions,
considerations, inducements, or compensations for each other, as to warrant a belief that the
legislature intended them as a whole, and that if all could not be carried into effect, the legislature
would not pass the residue independently, then, if some parts are unconstitutional, all the (i) have the right to mortgage, charge or encumber all or part of its interest and obligations under
provisions which are thus dependent, conditional, or connected, must fall with them.293 this Agreement, the plant, equipment and infrastructure and the Minerals produced from the
Mining Operations;

95
contracts over the exploration, development and utilization of natural resources. The execution of
the FTAA by the Philippine Government assures the Australian Government that the FTAA is in
x x x. 295 accordance with existing Philippine laws.300 [Emphasis and italics by private respondents.]

All materials, equipment, plant and other installations erected or placed on the Contract Area The invalidation of the subject FTAA, it is argued, would constitute a breach of said treaty which,
remain the property of WMCP, which has the right to deal with and remove such items within in turn, would amount to a violation of Section 3, Article II of the Constitution adopting the generally
twelve months from the termination of the FTAA.296 accepted principles of international law as part of the law of the land. One of these generally
accepted principles is pacta sunt servanda, which requires the performance in good faith of treaty
obligations.
Pursuant to Section 1.2 of the FTAA, WMCP shall provide "[all] financing, technology,
management and personnel necessary for the Mining Operations." The mining company binds
itself to "perform all Mining Operations . . . providing all necessary services, technology and Even assuming arguendo that WMCP is correct in its interpretation of the treaty and its assertion
financing in connection therewith,"297 and to "furnish all materials, labour, equipment and other that "the Philippines could not . . . deprive an Australian investor (like [WMCP]) of fair and equitable
installations that may be required for carrying on all Mining Operations."298> WMCP may make treatment by invalidating [WMCP's] FTAA without likewise nullifying the service contracts entered
expansions, improvements and replacements of the mining facilities and may add such new into before the enactment of RA 7942 . . .," the annulment of the FTAA would not constitute a
facilities as it considers necessary for the mining operations.299 breach of the treaty invoked. For this decision herein invalidating the subject FTAA forms part of
the legal system of the Philippines.301 The equal protection clause302 guarantees that such
decision shall apply to all contracts belonging to the same class, hence, upholding rather than
violating, the "fair and equitable treatment" stipulation in said treaty.
These contractual stipulations, taken together, grant WMCP beneficial ownership over natural
resources that properly belong to the State and are intended for the benefit of its citizens. These
stipulations are abhorrent to the 1987 Constitution. They are precisely the vices that the
fundamental law seeks to avoid, the evils that it aims to suppress. Consequently, the contract from One other matter requires clarification. Petitioners contend that, consistent with the provisions of
which they spring must be struck down. Section 2, Article XII of the Constitution, the President may enter into agreements involving "either
technical or financial assistance" only. The agreement in question, however, is a technical and
financial assistance agreement.
In arguing against the annulment of the FTAA, WMCP invokes the Agreement on the Promotion
and Protection of Investments between the Philippine and Australian Governments, which was
signed in Manila on January 25, 1995 and which entered into force on December 8, 1995. Petitioners' contention does not lie. To adhere to the literal language of the Constitution would
lead to absurd consequences.303 As WMCP correctly put it:

x x x. Article 2 (1) of said treaty states that it applies to investments whenever made and thus the
fact that [WMCP's] FTAA was entered into prior to the entry into force of the treaty does not x x x such a theory of petitioners would compel the government (through the President) to enter
preclude the Philippine Government from protecting [WMCP's] investment in [that] FTAA. into contract with two (2) foreign-owned corporations, one for financial assistance agreement and
Likewise, Article 3 (1) of the treaty provides that "Each Party shall encourage and promote with the other, for technical assistance over one and the same mining area or land; or to execute
investments in its area by investors of the other Party and shall [admit] such investments in two (2) contracts with only one foreign-owned corporation which has the capability to provide both
accordance with its Constitution, Laws, regulations and investment policies" and in Article 3 (2), it financial and technical assistance, one for financial assistance and another for technical
states that "Each Party shall ensure that investments are accorded fair and equitable treatment." assistance, over the same mining area. Such an absurd result is definitely not sanctioned under
The latter stipulation indicates that it was intended to impose an obligation upon a Party to afford the canons of constitutional construction.304 [Underscoring in the original.]
fair and equitable treatment to the investments of the other Party and that a failure to provide such
treatment by or under the laws of the Party may constitute a breach of the treaty. Simply stated,
the Philippines could not, under said treaty, rely upon the inadequacies of its own laws to deprive
an Australian investor (like [WMCP]) of fair and equitable treatment by invalidating [WMCP's] Surely, the framers of the 1987 Charter did not contemplate such an absurd result from their use
FTAA without likewise nullifying the service contracts entered into before the enactment of RA of "either/or." A constitution is not to be interpreted as demanding the impossible or the
7942 such as those mentioned in PD 87 or EO 279. impracticable; and unreasonable or absurd consequences, if possible, should be avoided.305
Courts are not to give words a meaning that would lead to absurd or unreasonable consequences
and a literal interpretation is to be rejected if it would be unjust or lead to absurd results.306 That
is a strong argument against its adoption.307 Accordingly, petitioners' interpretation must be
This becomes more significant in the light of the fact that [WMCP's] FTAA was executed not by a rejected.
mere Filipino citizen, but by the Philippine Government itself, through its President no less, which,
in entering into said treaty is assumed to be aware of the existing Philippine laws on service

96
The foregoing discussion has rendered unnecessary the resolution of the other issues raised by RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign owned
the petition. LA BUGAL B’LAAN TRIBAL ASSOCIATION INC., et. al. v. V. O. RAMOS, Secretary corporations to exploit the Philippine natural resources.
Department of Environment and Natural Resources; H. RAMOS, Director, Mines and Geosciences
Bureau (MGB-DENR); R. TORRES, Executive Secretary; and WMC (PHILIPPINES) INC. Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which states that ―All
lands of the public domain, waters, minerals, coal, petroleum, and other 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. The same section also states that,
The constitutional provision allowing the President to enter into FTAA is a exception to the rule ―the exploration and development and utilization of natural resources shall be under the full
that participation in the nation’s natural resources is reserved exclusively to Filipinos. Provision control and supervision of the State.
must be construed strictly against their enjoyment by non-Filipinos.
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution authorizing
RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the effectivity of RA 7942, the State to grant licenses, concessions, or leases for the exploration, exploitation, development,
or on March 30, 1995, the President signed a Financial and Technical Assistance Agreement or utilization of natural resources. By such omission, the utilization of inalienable lands of the public
(FTAA) with WMCP, a corporation organized under Philippine laws, covering close to 100,000 domain through license, concession or lease is no longer allowed under the 1987 Constitution.
hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. On August
15, 1995, the Environment Secretary Victor Ramos issued DENR Administrative Order 95-23, Under the concession system, the concessionaire makes a direct equity investment for the
which was later repealed by DENR Administrative Order 96-40, adopted on December 20, 1996. purpose of exploiting a particular natural resource within a given area. The concession amounts
to complete control by the concessionaire over the country‘s natural resource, for it is given
Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the government exclusive and plenary rights to exploit a particular resource at the point of extraction.
and WMCP be declared unconstitutional on ground that they allow fully foreign owned
corporations like WMCP to exploit, explore and develop Philippine mineral resources in The 1987 Constitution, moreover, has deleted the phrase ―management or other forms of
contravention of Article XII Section 2 paragraphs 2 and 4 of the Charter. assistance in the 1973 Charter. The present Constitution now allows only ―technical and financial
assistance. The management and the operation of the mining activities by foreign contractors, the
In January 2001, WMC – a publicly listed Australian mining and exploration company – sold its primary feature of the service contracts was precisely the evil the drafters of the 1987 Constitution
whole stake in WMCP to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which sought to avoid.
is owned by Indophil Resources, an Australian company. DENR approved the transfer and
registration of the FTAA in Sagittarius‘ name but Lepanto Consolidated assailed the same. The The constitutional provision allowing the President to enter into FTAAs is an exception to the rule
latter case is still pending before the Court of Appeals. that participation in the nation‘s natural resources is reserved exclusively to Filipinos. Accordingly,
such provision must be construed strictly against their enjoyment by non-Filipinos. Therefore, RA
EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to accept, 7942 is invalid insofar as the said act authorizes service contracts. Although the statute employs
consider and evaluate proposals from foreign owned corporations or foreign investors for contracts the phrase ―financial and technical agreements in accordance with the 1987 Constitution, its
or agreements involving wither technical or financial assistance for large scale exploration, pertinent provisions actually treat these agreements as service contracts that grant beneficial
development and utilization of minerals which upon appropriate recommendation of the (DENR) ownership to foreign contractors contrary to the fundamental law.
Secretary, the President may execute with the foreign proponent. WMCP likewise contended that
the annulment of the FTAA would violate a treaty between the Philippines and Australia which The underlying assumption in the provisions of the law is that the foreign contractor manages the
provides for the protection of Australian investments. mineral resources just like the foreign contractor in a service contract. By allowing foreign
contractors to manage or operate all the aspects of the mining operation, RA 7942 has, in effect,
conveyed beneficial ownership over the nation‘s mineral resources to these contractors, leaving
the State with nothing but bare title thereto.
ISSUES:
The same provisions, whether by design or inadvertence, permit a circumvention of the
constitutionally ordained 60-40% capitalization requirement for corporations or associations
engaged in the exploitation, development and utilization of Philippine natural resources.
1. Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-owned
corporations to exploit the Philippine mineral resources. 2. Whether or not the FTAA between the When parts of a statute are so mutually dependent and connected as conditions, considerations,
government and WMCP is a ―service contract that permits fully foreign owned companies to inducements or compensations for each other as to warrant a belief that the legislature intended
exploit the Philippine mineral resources. them as a whole, then if some parts are unconstitutional, all provisions that are thus dependent,
conditional or connected, must fail with them.

Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only to
HELD:
merely technical or financial assistance to the State for large scale exploration, development and
utilization of minerals, petroleum and other mineral oils.

First Issue: RA 7942 is Unconstitutional Second Issue: RP Government-WMCP FTAA is a Service Contract

97
The FTAA between he WMCP and the Philippine government is likewise unconstitutional since
the agreement itself is a service contract.

Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive right to
explore, exploit, utilize and dispose of all minerals and by-products that may be produced from the
contract area. Section 1.2 of the same agreement provides that EMCP shall provide all financing,
technology, management, and personnel necessary for the Mining Operations.

These contractual stipulations and related provisions in the FTAA taken together, grant WMCP
beneficial ownership over natural resources that properly belong to the State and are intended for
the benefit of its citizens. These stipulations are abhorrent to the 1987 Constitution. They are
precisely the vices that the fundamental law seeks to avoid, the evils that it aims to suppress.
Consequently, the contract from which they spring must be struck down.

WHEREFORE, the petition is GRANTED. The Court hereby declares unconstitutional and void:

(1) The following provisions of Republic Act No. 7942:

(a) The proviso in Section 3 (aq),

(b) Section 23,

(c) Section 33 to 41,

(d) Section 56,

(e) The second and third paragraphs of Section 81, and

(f) Section 90.

(2) All provisions of Department of Environment and Natural Resources Administrative Order 96-
40, s. 1996 which are not in conformity with this Decision, and

(3) The Financial and Technical Assistance Agreement between the Government of the Republic
of the Philippines and WMC Philippines, Inc.

SO ORDERED.

98

You might also like