National Patrimony

BAYLOSIS, FERNANDEZ, FRANCISCO, ORO, TRINIDAD
ARTICLE XII
NATIONAL ECONOMY AND PATRIMONY
Sec. 1. GOALS OF THE NATIONAL ECONOMY
Q: What is the three-fold goal of the national
economy: (Sec.1 Par.1)
The goals of national economy are:
More equitable distribution of
opportunities, income and wealth;
Sustained increase in the amount of goods
and services produced by the nation for the
benefit of the people; and
Expanding productivity, as the key to
raising the quality of life for all, especially
the underpriviledged.

Q: What is the national policy on
industrialization and agricultural development?
A: What is envisioned is not necessarily
agriculturally related industrialization but rather
industrialization that is a result of releasing
through agrarian reform capital locked up in land.
This therefore is necessarily related to the article on
social justice. Moreover, this does not mean a hard-
bound rule that agricultural development must
have priority over industrialization. What is
envisioned is a flexible and rational relationship
between the two as dictated by the common good.

(Sec.1 Par.2) The State shall promote
industrialization and full employment.
based on sound agricultural development
and agrarian reform;
through industries that make full and
efficient use of human and natural
resources which are competitive in both
domestic and foreign markets.
However, the State shall protect Filipino
enterprises against unfair foreign
competition and trade practices.
(Sec.1. Par.3) In the pursuit of these goals, all
sectors of the economy and all regions of the
country shall be given optimum opportunity to
develop. (Role of Private Enterprises) Private
enterprises, including corporations, cooperatives,
and similar collective organizations, shall be
encouraged to broaden the base of their ownership

Section 2. REGALIAN DOCTRINE
(Sec.2. Par. 1)
- 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 resources shall be under the full control and
supervision of the State.
The State may directly 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 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 measure and limit of the grant.
(Sec.2. Par. 2) 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.
(Sec.2. Par. 3) 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
fish- workers in rivers, lakes, bays, and lagoons.

(Sec.2 Par. 4) The President may enter into
agreements with foreign-owned corporations
involving either technical or financial assistance for
large-scale exploration, development, and
utilization of minerals, petroleum, and other
mineral oils according to the general terms and
conditions provided by law, based on real
contributions to the economic growth and general
welfare of the country.
In such agreements, the State shall promote the
development and use of local scientific and
technical resources.
(Sec.2 Par. 5)
The President shall notify the Congress of every
contract entered into in accordance with this
provision, within thirty days from its execution.

1. THE REGALIAN DOCTRINE
Q: What is the regalian doctrine?
A: In public law, the distinction is made between
imperium and dominium.
Imperium Dominium
Government authority
possessed by the State
which is appropriately
embraced in
sovereignty.

The capacity of the State
to own and acquire
property.
Also refers to lands held
by the government in a
proprietary character:
can provide for the
exploitation and use of
lands and other natural
resources.

Dominium is the foundation of the early Spanish
decrees embracing the feudal theory of jura regalia
that all lands were held from the Crown and the
foundation of the first paragraph of Sec. 2 as well.
As adopted in a republican system, however, the
medieval concept of jura regalia has been stripped
of regalia overtones: ownership in the vested state,
not in the head of the State be he President or
Prime minister.

Q: What is the consequence of the regalia doctrine
of Section 2?
A: Any person claiming ownership of a portion of
the public domain must be able to show title from
the state according to any of the recognized modes
of acquisition of title.

2. Limits imposed on jura regalia
Q: What are the limits imposed by jura regalia.
A: The following are the limits imposed by Sec. 2:
Only agricultural lands of the public
domain may be alienated;
Exploration, development and utilization of
natural resources shall be under the full
control and supervision of the state either
by directly undertaking such EDU or
through co-production, joint venture or
production sharing agreements;
All agreements with qualified private sector
may be for a period not exceeding 25 years,
renewable for another 25 years;
The use and enjoyment of the marine
wealth of the archipelagic waters, territorial
sea, territorial sea, and exclusive economic
zone shall be reserved for Filipino citizens;
and
Utilization of natural resources in rivers,
lakes, bays and lagoons may be allowed on
a small scale to Filipino citizens or
cooperatives.

Q: What is the nature of reclaimed foreshore and
submerged lands?
A: They are lands of the public domain and, unless
classified as alienable, may not be disposed of.

THE IPRA CASE CRUZ V. SEC. OF DENR, et
al. G.R. No. 135385, December 6, 2006
Petitioners Isagani Cruz and Cesar Europa brought
this suit for prohibition and mandamus, assailing
constitutionality of certain provisions of Republic
Act 8371, otherwise known as the Indigenous
Peoples Rights Act of 1997. And its Implementing
Rules and Regulations.
Some provisions of the IPRA amount to an
unlawful deprivation of the States ownersip over
lands of the public domain as well as minerals and
other natural resources therein, in violation of the

regalia doctrine embodies in Sec 2, Article XII of the
Constitution:
1. Section 3(a) defines the extent and
coverage of ancestral domains, Section 3(b)
defines ancestral lands
2. Section 5, Ancestral domains, inalienable
public lands, bodies of water, mineral and other
resources found within ancestral domains are
private but community property of the
indigenous peoples
3. Section 6 defines composition of ancestral
domains and ancestral lands
4. Section 7 rights of IPs over ancestral
domains
5. Section 8 rights of IPs over ancestral lands
6. Section 57 which provides for priority rights
of IPs in benefits over natural resources within
the areas they claim, right to enter into
agreements with non-IPs for a period not
exceeding 25 years, renewable for not more
than 25 years
7. Section 58 which gives IPs responsibility
over the area they claim
Petitioner also contends that all encompassing
definition of ancestral domains and ancestral
lands violate rights of private landowners
Petitioners question provision of the IPRA defining
the powers and jurisdiction of the NCIP and
making customary law applicable to the settlement
of disputes involving ancestral domains and
ancestral lands on the ground that these provisions
violate the due process clause.
- Section 51-53, 59, process of delineation and
recognition of AD, vest on NCIP the sole
authority to delineate AD and AL
- Section 52 Upon certification from NCIP
that a particular area is an AD, the
jurisdiction of other officials over said land
terminates
- Section 63, customary law shall be applied
first, in case of doubt / ambiguity in the
interpretation thereof shall be resolved in
favor of the IPs
- Customary law shall be used
- Section 66 NCIP has jurisdiction over all
claims and disputes involving rights of the
IPs
Petitioners assail validity of Rule VII, Part II,
Section 1 of the NCIP administrative order #1,
series of 1998, which provides that the
administrative relation of the NCIP to the office of
the president is characterized as a lateral but
autonomous relationship for purposes of policy
and program coordination.
After due deliberation on the petition, the members
of the court voted, the votes were equally divided 7
to 7, the necessary majority was not obtained, the
case was redeliberated upon. After redeliberation,
voting remained the same. Pursuant to Tule 56,
Section 7, of the rules of civil procedure, the
petition is DISMISSED.

PUNO provisions of the IPRA do not contravene
the constitution
- Ancestral domains 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 through
their ancestors, communally or individually since
time immemorial
- Ancestral lands refers to lands occupied,
possessed and utilized by individuals, families and
clans who are members of the ICCs/IPs since time
immemorial, by themselves or through their
predecessor-in-interest, under claims of individual
or traditional group ownership, continuously to the
present
- Native title refers to pre-conquest rights to
lands and domains which, as far bak as memory
reaches, have been held under a claim of private
ownership by ICCs/IPs, have never been public
lands
- Carino v. Insular government Carino was
awarded his land. The decision largely rested on
the North American constitutionalists concept of
due process as well as the pronounced policy to
do justice to the natives, Carino is the only case
that specifically and categorically recognizes native
title
- In light of the Carino case, AL and AD are
not part of the lands of public domain, they are
private
- Public domain: agricultural, forest or
timber, mineral lands and national parks

- Examining the IPRA, there is nothing in the
law that grants to the ICCs/IPs ownership over the
natural resources within their ancestral domains
- ICCs/IPs are merely granted the right to
manage and conserve them for future
generations, benefit and share the profits from
their allocation utilization, and negotiate the terms
and conditions for their exploration for the
purpose of ensuring ecological environmental
protection and conservation measures
stewardship

4. Filipinization and Utilization of Natural
Resources
Q: Who are qualified to take part in the
exploration, development and utilization of
natural resources?
A: Filipino citizens, and corporations or
associations at least sixty per cent of whose capital
is owned by Filipino citizens are qualified to take
part in exploration, development, and utilization of
natural resources. (Note: however, that as to
marine wealth only Filipino citizens is qualified.
This is also true of natural resources in rivers, bays,
lakes, and lagoons, but with allowance for
cooperatives.) But subject to the strict limitations in
the last two paragraphs of Section 2 the State may
enter into service with foreign owned corporations.

Alienation of Natural Resources
1. General Rule: All natural resources CANNOT
be alienated
2. Exception: Agricultural lands

SANTA ROSA MINING CO. V. LEIDO, JR. G.R.
No. L-49109 December 1, 1987
Petitioner, Santa Rosa Mining Co. assails validity of
Presidential Decree No 1214 which requires holders
of subsisting and valid patentable mining claims
located under the provisions of the Philippine Bill
of 1902 to file a mining lease application within one
year from the approval of the decree.
Petitioner accordingly filed a mining lease
application, but under protest
Petitioner contends that its 50 mining claims had
already been declared as its own private and
exclusive property by a judgment of the CFI. Also,
that they already had a vested right over its mining
claims even before PD1214
Respondents claim that petitioner did not exhaust
all administrative remedies. They also cited the
pendency of petitioners appeal with the office of
the president, of the ruling of the respondent
secretary of natural resources which stated that 44
of the mining claims were void for lack of valid tie
points as required under the Philippine Bill of
1902, and that all the mining claims have been
abandoned and cancelled for petitioners non
compliance.
ISSUE: W/N property right is absolute
Decision: Property right is not absolute but
is merely a possessory right. Petitioners
claims are still unpatented. They can be lost
through abandonment of forfeiture or they
may be revoked for valid legal grounds.
W/N PD1214 is unconstitutional
Decision: PD1214 is constitutional. It is a
valid exercise of the sovereign power of the
state, as owner, over lands of public domain
of which petitioners mining claims still
form a part, and over the patrimony of the
nation, which mineral deposits are a
valuable asset.
Mere location does not mean absolute ownership
over the land / mining claim, to rule otherwise
would imply that location is all that is needed to
acquire and maintain rights over a located mining
claim. The locator should faithfully and
consistently comply with the requirements for
annual work and improvements in the located
mining claim.

SAN MIGUEL CORPORATION V. COURT
APPEALS G.R. NO. 57667, May 28, 1990
Petitioner San Miguel Corporation who purchased
Lot 684 from Silverio Perez, seeks the reversal of
the decision of the Court of Appeals denying its
application for registration of the said land in view
of its failure to show entitlement thereto.
The Solicitor General opposed and appealed the
application contending that the land in question is
part of public domain and that petitioner being a
private corporation is disqualified from holding
alienable lands of the public domain. In this case,

petitioner claims that its predecessor-in-interest
had open, exclusive and undisputed possession of
the land in question based on documentary
evidence of tax declarations and receipts, and
testimonial evidence of vendor Silverio Perez.
Issue: Whether or not the evidence presented by
the petitioner is sufficient to warrant a ruling that
petitioner and/or its predecessor-in-interest has a
registrable right over Lot 684.
SC: No, a prescription can only transform public
land into private land if it is alienable land. Open,
exclusive and undisputed possession of alienable
public land for the period prescribed by law creates
the legal fiction whereby the land, upon completion
of the requisite period of 30 years ceases to be
public land and becomes private property.
However, it must be CONCLUSIVELY
ESTABLISHED. This quantum of proof is necessary
to avoid erroneous validation of actually fictitious
claims of possession over the property in dispute.
Perezs documentary evidence of tax declarations
and receipts are not conclusive evidence of
ownership or right of possession over a piece of
land but mere indicia of a claim of ownership. They
only become strong evidence of ownership of land
acquired by prescription when accompanied by
proof of actual possession. Also, the testimony of
vendor Silverio Perez as proof of actual possession
is weak and was not corroborated by other
witnesses.

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC
ESTATES AUTHORITY and AMARI COASTAL
BAY DEVELOPMENT CORPORATION (G.R.
No. 133250, November 11, 2003)

FACTS:
This petition asked the Court to legitimize a
government contract that conveyed to a private
entity 157.84 hectares of reclaimed public lands
along Roxas Boulevard in Metro Manila at the
negotiated price of P1,200 per square meter.
However, published reports place the market price
of land near that area at that time at a high of
P90,000 per square meter. The difference in price is
a staggering P140.16 billion, equivalent to the
budget of the entire Judiciary for seventeen years
and more than three times the Marcos Swiss
deposits that this Court forfeited in favor of the
government.

Public Estates Authority (PEA), under the JVA,
obligated itself to convey title and possession over
the Property, consisting of approximately One
Million Five Hundred Seventy Eight Thousand
Four Hundred Forty One (1,578,441) Square Meters
for a total consideration of One Billion Eight
Hundred Ninety Four Million One Hundred
Twenty Nine Thousand Two Hundred
(P1,894,129,200.00) Pesos, or a price of One
Thousand Two Hundred (P1,200.00) Pesos per
square meter.

ISSUE:
Whether or not stipulations in the Amended JVA
for the transfer to AMARI of lands, reclaimed or to
be reclaimed on portions of Manila Bay, violate the
Constitution?
RULING:
Submerged lands, like the waters (sea or bay)
above them, are part of the States inalienable
natural resources. Submerged lands are property of
public dominion, absolutely inalienable and
outside the commerce of man. This is also true with
respect to foreshore lands. Any sale of submerged
or foreshore lands is void being contrary to the
Constitution as it violates Section 2, Article XII. In
the instant case, the bulk of the lands subject of the
Amended JVA are still submerged lands even to
this very day, and therefore inalienable and outside
the commerce of man. Of the 750 hectares subject of
the Amended JVA, 592.15 hectares or 78% of the
total area are still submerged, permanently under
the waters of Manila Bay. Under the Amended
JVA, the PEA conveyed to Amari the submerged
lands even before their actual reclamation,
although the documentation of the deed of transfer
and issuance of the certificates of title would be
made only after actual reclamation. This Resolution
does not prejudice any innocent third party
purchaser of the reclaimed lands covered by the
Amended JVA. Neither the PEA nor Amari has
sold any portion of the reclaimed lands to third
parties. Title to the reclaimed lands remains with
the PEA. As held in the 9 July 2002 Decision, the
Amended JVA "violates glaringly Sections 2 and 3,
Article XII of the 1987 Constitution."

Applying the Regalian Doctrine
The ownership of lands reclaimed from
foreshore and submerged areas is rooted in the
Regalian doctrine which holds that the State owns
all lands and waters of the public domain. Upon
the Spanish conquest of the Philippines, ownership
of all lands, territories and possessions in the
Philippines passed to the Spanish Crown. 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.
After the effectivity of the 1935
Constitution, government reclaimed and marshy
disposable lands of the public domain continued to
be only leased and not sold to private parties.
These lands remained sui generis, as the only
alienable or disposable lands of the public domain
the government could not sell to private parties.
Until now, the only way the government can sell to
private parties government reclaimed and marshy
disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. One
reason for the congressional authority before lands
under Section 59 of CA No. 141 previously
transferred to government units or entities could be
sold to private parties is that Section 60 of CA No.
141 exempted government units and entities from
the maximum area of public lands that could be
acquired from the State.
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, though any
legislative authority granted to PEA to sell its
reclaimed alienable lands of the public domain
would be subject to the constitutional ban on
private corporations from acquiring alienable lands
of the public domain, such legislative authority
could only benefit private individuals.
The rationale behind the constitutional ban
on corporations from acquiring, except through
lease, alienable lands of the public domain is not
well understood; 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; 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.
The mere reclamation of certain areas by
PEA does not convert these inalienable natural
resources of the State into alienable or disposable
lands of the public domainthere must be a law or
presidential proclamation officially classifying
these reclaimed lands as alienable or disposable
and open to disposition or concession.
PD No. 1085, coupled with President
Aquinos actual issuance of a special patent
covering the Freedom Islands, is equivalent to an
official proclamation classifying the Freedom
Islands as alienable or disposable lands of the
public domain, open to disposition or concession to
qualified parties.
Spanish Law of Waters of 1866; Under the
Spanish Law of Waters, a private person reclaiming
from the sea without permission from the State
could not acquire ownership of the reclaimed land
which would remain property of public dominion
like the sea it replaced.
Article 5 of the Spanish Law of Waters must be
read together with laws subsequently enacted on
the disposition of public lands.
There is no legislative or Presidential act
classifying the additional 592.15 hectares
submerged areas under the Amended JVA as
alienable or disposable lands of the public domain
open to dispositionthese areas form part of the
public domain, and in their present state are
inalienable and outside the commerce of man.
Under EO No. 525, in relation to PD No. 3-
A and PD No. 1084, PEA became the primary
implementing agency of the National Government
to reclaim foreshore and submerged lands of the
public domain.
Section 3 of EO No. 525, by declaring that
all lands reclaimed by PEA shall belong to or be
owned by PEA could not automatically operate to
classify inalienable lands into alienable or
disposable lands of the public domain.
As manager, conservator and overseer of
the natural resources of the State, DENR exercises
supervision and control over alienable and
disposable public lands. PEA needs authorization
from DENR before PEA can undertake reclamation
in Manila Bay, or in any part of the country; 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.
Absent two official actsa 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.
The constitutional ban on private
corporations from acquiring alienable lands of the
public domain does not apply to the sale of PEAs
patrimonial lands; While PEA may sell its alienable
or disposable lands of the public domain to private
individuals, it cannot sell any of its alienable or
disposable lands of the public domain to private
corporations.
The provision in PD No. 1085 stating that
portions of the reclaimed lands could be
transferred by PEA to the contractor or his
assignees would not apply to private corporations
but only to individuals because of the
constitutional ban.-
EO No. 654, which authorized PEA to
determine the kind and manner of payment for the
transfer of its assets and properties, does not
exempt PEA from the requirement of public
auction, but merely authorizes PEA to decide the
mode of payment, whether in kind or in
installment, but does not authorize PEA to
dispense with public auction.
At the public auction sale, only Philippine
citizens are qualified to bid for PEAs reclaimed
foreshore and submerged alienable lands of the
public domain.-
The failure of an earlier public bidding
involving only 407.84 hectares, is not a valid
justification for a subsequent negotiated sale of 750
hectares, almost double the area publicly
auctioned.
Under either the BOT Law or the Local
Government Code, the contractor or developer, if a
corporate entity, can only be paid with lease-holds
on portions of the reclaimed land, and if the
contractor or developer is an individual, portions
of the reclaimed land, not exceeding 12 hectares of
non-agricultural lands, may be conveyed to him in
ownership.
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.
Jurisprudence holding that upon the grant
of the patent or issuance of the certificate of title the
alienable land of the public domain automatically
becomes private land cannot apply to government
units and entities like PEA.
The grant of legislative authority to sell
public lands in accordance with Section 60 of CA
No. 141 does not automatically convert alienable
lands of the public domain into private or
patrimonial landsthe alienable lands of the
public domain must be transferred to qualified
private parties, or to government entities not
tasked to dispose of public lands, before these
lands can become private or patrimonial lands.
As the central implementing agency tasked
to undertake reclamation projects nationwide, with
authority to sell reclaimed lands, PEA took the
place of DENR as the government agency charged
with leasing or selling reclaimed lands of the public
domain.
The mere fact that alienable lands of the
public domain are transferred to PEA and issued
land patents or certificates of title in PEAs name
does not automatically make such lands private
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 any
kind of alienable land of the public domain.-
Whether the Amended JVA is a sale or a
joint venture, the fact remains that the Amended
JVA required PEA to cause the issuance and
delivery of the certificates of title conveying
AMARIs Land Share in the name of AMARI, a
stipulation contravening Section 3, Article XII of
the 1987 Constitutionthe transfer of title and
ownership to AMARI clearly means that AMARI
will hold the reclaimed lands other than by lease,
and the transfer of title and ownership is a
disposition of the reclaimed lands, a transaction
considered a sale or alienation under CA No. 141,
the Government Auditing Code, and Section 3,
Article XII of the 1987 Constitution.
Historically, lands reclaimed by the
government are sui generis, not available for sale to
private parties unlike other alienable public

landsreclaimed lands retain their inherent
potential as areas for public use or public service.

LAUREL V GARCIA G.R. NOS. 9203 & 9247,
JULY 25, 1990
In question in this case are four properties located
in Japan given by the Japanese government to the
Philippine government, under the Reparations
Agreement, as part of the indemnification for the
lives and property loss during World War II. These
are the Nampeidai property housing the current
Philippine embassy, the Kobe commercial property
used as a warehouse, the Kobe residential property
left vacant and Roponggi property. Under RA 1789,
the Reparations Law, these properties shall only be
made available to private sector by sale to Filipino
citizens or to 10 % Filipino owned companies.
President Aquino issued Order No. 296 entitling
non-Filipino citizens or entities to avail of the four
properties.
Petitions for prohibition seeking to enjoin
respondents from proceeding with the bidding of
the Roponggi property
Respondents aver that the subject property is not
under our laws but under Japanese laws, that
Roponggi has ceased to become property of public
dominion, that is has become patrimonial property
and that the intention to convert it to private use
has been manifested by overt acts such as the
transfer of embassy to Nampeidai, issuance of AOs
for the alienation of Japanese properties, issuance
of EO296, Enactment of CARP, holding of public
bidding, acknowledgement of the senate of
governments intention to remove Roponggi from
public purpose, the courts dismissal of petition in
Ojeda v. Bidding Committee
Issues:
o Can the Roponggi property and others of its
kinds be alienated by the Philippine govt?
o Does the CE, etc. have the authority and
jurisdiction to sell Roponggi property?
o Authority of the government to alienate the
Roponggi property and make it available for
the sale to non-Filipino citizens and entities
o Bidding procedures being discriminatory
against Filipino citizens by denying them right
to be informed

RULING:
1. Roponggi is of public dominion unless it is
convincingly shown that the property has become
patrimonial. The respondents failed to do this.
2. Roponggi property outside the commerce of man
3. The fact that the Roponggi property has not been
used for a long time does not automatically convert
it to patrimonial property
There is no formal declaration from the
government to withdraw it from being such
Abandonment cannot be inferred from non-use
alone, it must be a certain and positive act based on
correct legal premises
Lex situs rule is misplaced. The opinion does not
tackle the alienablity of the real properties
procured through reparations nor the existence in
what body of the authority to sell them
Petition granted
The Roponggi property is classified as property
belonging to the State and intended for some public
use. The president cannot convey valuable real
property of the government on her own will.
Considering the properties importance and values,
the laws on conversion and disposition of property
must be applied.
Disposition:
The petition for prohibition enjoining the
government from selling the properties is granted
and the temporary restraining order delaying the
sale is made temporary.

Q: Section 2 speaks of co-production, joint
venture, or production sharing agreements as
modes of exploration, development, and
utilization of inalienable lands. Does this
effectively exclude the lease system?
A: Yes, with respect to mineral and forest lands.
Agricultural lands may be subject of Lease. See
Section 3.

MINERS ASSOCIATION OF THE PHILIPPINES
vs. FACTORAN G.R NO. 98332, January 16, 1995
FACTS:

Former President Corazon Aquino issued
Executive Order Nos. 211 and 279 as par to her
interim legislative powers. Executive Order No. 211
prescribes the interim procedures in the processing
and approval of applications for the exploration,
development and utilization of minerals pursuant
to Section 2, Article XII of the 1987 Constitution.
Executive Order No. 279 authorizes the
Department of Natural Resources (DENR)
Secretary to negotiate and conclude joint venture,
co-production or production-sharing agreements
for the exploration, development, and utilization of
mineral resources.
Petitioner is an organization composed of
mining prospectors and claimowners or
claimholders questions the constitutionality of the
two administrative orders (DAO) issued by then
Secretary of DENR Fulgencio Factoran Jr. pursuant
to the abovementioned executive issuances.
Department Administrative Order No. 57 declares
all existing mining lease or agreements which are
granted after the effectivity of the 1987
Constitutionshall be converted into production-
sharing agreements within one (1) year from the
effectivity of these guidelines. In relation to this,
DAO No. 82 provides that a failure to submit Letter
of Intent (LOI) and Mineral Production-Sharing
Agreement (MPSA) within from the effectivity of
Department Administrative Order No. 57 shall
cause the abandonment of mining, quarry, and
sand and gravel claims.
Furthermore, it claims that the DAOs are
issued in excess of jurisdiction and are inconsistent
with the executive orders. Also, DAO No. 57
violates the non-impairment clause of the 1987
Constitution for the unduly pre-termination of the
existing mining leases and other mining
agreements and automatic conversion of said
agreements into production-sharing agreements
within one (1) year from its effectivity.
The Court, acting on petitioner's urgent ex-
parte petition for issuance of a restraining
order/preliminary injunction, issued a Temporary
Restraining Order, upon posting of a P500, 000.00
bond, enjoining the enforcement and
implementation of DENR Administrative Order
Nos. 57 and 82, as amended, Series of 1989 and
1990, respectively.

ISSUES:
1. Did the DENR Secretary act with grave abuse
of discretion in the issuance of the two DAOs?
2. Are the two Department Administrative Orders
valid?

RULING:
1. It cannot be established that the Secretary went
beyond what is prescribed by the EO 279.
Section 6 of the said issuance specifically
authorizes him to promulgate such
supplementary rules and regulations as may be
necessary to effectively implement the
provisions thereof. Also, the DAOs and the EOs
are related in order to carry out the mandate of
Article XII, Section 2 of the 1987 Constitution.
2. The two are reasonably directed to the
accomplishment of the purposes of the law
under which they were issued and were
intended to secure the paramount interest of
the public, their economic growth and welfare.
Their constitutionality must be sustained and
their force and effect upheld for they were part
of the legitimate exercise of the police power of
the State. The non-impairment clause
guaranteed by the 1987 Constitution should not
prevail over the legitimate exercise of police
power since it has been ruled by the Court that
such power is not absolute. Thus, it is a valid
exercise.
Disposition
WHEREFORE, the petition is DISMISSED
for lack of merit. The Temporary Restraining Order
issued on July 2, 1991 is hereby LIFTED.
This is about a petition to seek the validity
of two administrative orders issued by the
Secretary of Environment and Natural Resources to
carry the provisions of an executive order.
President Aquino signed EO 279
authorizing the DENR secretary to negotiate and
conclude joint venture, co-production and
production sharing agreement for the exploration,
development and utilization of mineral resources
and prescribing the guidelines for those
agreements involving technical and financial
assistance by foreign-owned corporations for large
scale exploration, development and utilization of
minerals pursuant to Sec2 of Article XII.

The DENR secretary issued Administrative
Order 57, the Guidelines of Mineral Product
Sharing Agreement under Executive Order 279
and Administrative Order 82, laying the
Procedural Guidelines on the Award of Mineral
Product Sharing Agreement through Negotiation.
The miners filed the complaint saying that the
secretary was practicing in excess of the powers
given to him.
Admin Order 57 effectively transforms lease
agreements into mineral product sharing
agreements which imply negotiations. The
negotiations negate the miners contention that the
order mandates compulsion or automatic
conversion.
The petition is dismissed and the temporary
restraining order issued against the DENR orders is
lifted. Both orders are valid and constitutional.

Q: May aliens lease lands of the public domain?
A: No, because that would involve enjoyment of
the natural resources of the public domain

REPUBLIC VS ROSEMOOR
FACTS:
Rosemoor Mining and Development Corp. through
its 4 stockholders were granted permission to look
for marble deposits in the mountains of Biak na
Bato. After they succeeded in discovering marble
deposits they acquired the corresponding license to
exploit the said marble deposits through the
Bureau of Mines (License No. 33). However on
September 6,1986 Ernesto Maceda, then DENR
minister cancelled the said license. License was
issued in 1982 under PD463, which was later
repealed by RA7942.
Issue:
Whether or not provisions of Article XII Section 2
may apply to mining licenses issued before its
promulgation.
Ruling:
No. PD 463, as amended, pertained to the old
system of exploration, development and utilization
of natural resources through licenses, concessions
or leases. While these arrangements were provided
under the 1935 and the 1973 Constitutions, they
have been omitted by Section 2 of Article XII of the
1987 Constitution.
RA 7942 or the Philippine Mining Act of 1995
embodies the new constitutional mandate. It has
repealed or amended all laws, executive orders,
presidential decrees, rules and regulations -- or
parts thereof -- that are inconsistent with any of its
provisions.
It is relevant to state, however, that Section 2 of
Article XII of the 1987 Constitution does not apply
retroactively to a license, concession or lease
granted by the government under the 1973
Constitution or before the effectivity of the 1987
Constitution on February 2, 1987. As noted
in Miners Association of the Philippines v. Factoran Jr.,
the deliberations of the Constitutional Commission
emphasized the intent to apply the said
constitutional provision prospectively.
While RA 7942 has expressly repealed
provisions of mining laws that are inconsistent
with its own, it nonetheless respects previously
issued valid and existing licenses

LA BUGAL BLAAN TRIBAL ASSOC. VS.
RAMOS
Facts:
On July 25, 1987, then President Corazon C.
Aquino issued Executive Order (E.O.) No. 2796
authorizing the DENR Secretary to accept, consider
and evaluate proposals from foreign-owned
corporations or foreign investors for contracts or
agreements involving either technical or financial
assistance for large-scale exploration, development,
and utilization of minerals, which, upon
appropriate recommendation of the Secretary, the
President may execute with the foreign proponent.
On March 3, 1995, then President Fidel V.
Ramos approved RA 7942 (The Philippine Mining
Act), which took effect on April 9, 1995. On March
30, 1995, before the effectivity of RA 7942, the
President signed a Financial and Technical
Assistance Agreement (FTAA) with WMCP,
covering close to 100,000 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, which was later
repealed by DENR Administrative Order 96-40,
adopted on December 20, 1996.

Petitioners prayed that RA 7942 and its
implementing rules as well as the FTAA between
the government and WCMP be declared
unconstitutional. In accordance with the text of
Section 2, Article XII of the Constitution, FTAAs
should be limited to
technical or financial assistance only. Contrary
to the language of the Constitution, the WMCP
FTAA allows WMCP, a fully foreign-owned
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 identical to a service
contract.
Issue:
Whether or not RA7942 and the FTAA between the
Government and WCMP unconstitutional.
Ruling:
Yes. Respondents insist that agreements
involving technical or financial assistance is just
another term for service contracts. They contend
that the proceedings of the CONCOM indicate
that although the terminology service contract
was avoided [by the Constitution], the concept it
represented was not. They add that [t]he concept
is embodied in the phrase agreements involving
financial or technical assistance.
The phrase service contracts has been
deleted in the 1987 Constitutions Article on
National Economy and Patrimony. If the
CONCOM intended to retain the concept of service
contracts under the 1973 Constitution, it could have
simply adopted the old terminology (service
contracts) instead of employing new and
unfamiliar terms (agreements . . . involving either
technical or financial assistance). Such a
difference between the language of a provision in a
revised constitution and that of a similar provision
in the preceding constitution is viewed as
indicative of a difference in purpose. If, as
respondents suggest, the concept of technical or
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.
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 nations natural
resources is reserved exclusively to Filipinos.
Accordingly, such provision must be construed
strictly against their enjoyment by non-
Filipinos. As Commissioner Villegas emphasized,
the provision is very restrictive. Commissioner
Nolledo also remarked that entering into service
contracts is an 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. 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 exception.
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
service contracts that grant beneficial ownership to
foreign contractors contrary to the fundamental
law.
Section 33, which is found under Chapter VI
(Financial or Technical Assistance Agreement) of
R.A. No. 7942 states:
SEC. 33. Eligibility.Any qualified person with
technical and financial capability to
undertake large-scale exploration, development,
and utilization of mineral resources in the
Philippines may enter into a financial or technical
assistance agreement directly with the Government
through the Department. [Emphasis supplied.]
Exploration, as defined by R.A. No. 7942,
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
the feasibility of mining them for profit.
A legally organized foreign-owned corporation
may be granted an exploration permit, which vests
it with the right to conduct exploration for all
minerals in specified areas, i.e., to enter, occupy
and explore the same. Eventually, the foreign-

owned corporation, as such permittee, may apply
for a financial and technical assistance agreement.
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.
Utilization means the extraction or
disposition of minerals. 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.
A foreign-owned/-controlled corporation may
likewise be granted a mineral processing
permit. Mineral processing is the milling,
beneficiation or upgrading of ores or minerals and
rocks or by similar means to convert the same into
marketable products.
An FTAA contractor makes a warranty that the
mining operations shall be conducted in
accordance with the provisions of R.A. No. 7942
and its implementing rules and for work programs
and minimum expenditures and commitments.
And it obliges itself to furnish the Government
records of geologic, accounting, and other relevant
data for its mining operation.
Mining operation, as the law defines it,
means mining activities involving exploration,
feasibility, development, utilization,
and processing.
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.
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). Parenthetically,
Sections 72 to 75 use the term contractor, without
distinguishing between FTAA and mineral
agreement contractors. And so does holders of
mining rights in Section 76. A foreign contractor
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, provided that it reduces its
equity in the corporation, partnership, association
or cooperative to forty percent (40%).
Finally, under the Act, an FTAA contractor
warrants that it has or has access to all the
financing, managerial, and technical expertise. . .
. 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.
By allowing foreign contractors to manage or
operate all the aspects of the mining operation, the
above-cited provisions of R.A. No. 7942 have in
effect conveyed beneficial ownership over the
nations mineral resources to these contractors,
leaving the State with nothing but bare title thereto.
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.
In sum, the Court finds the following
provisions of R.A. No. 7942 to be violative of
Section 2, Article XII of the Constitution:
(1) The proviso in Section 3 (aq), which
defines qualified person, to wit:
Provided, That a legally organized foreign-owned
corporation shall be deemed a qualified person for
purposes of granting an exploration permit,
financial or technical assistance agreement or
mineral processing permit.
(2) Section 23, which specifies the rights
and obligations of an exploration permittee, insofar
as said section applies to a financial or technical
assistance agreement,
(3) Section 33, which prescribes the
eligibility of a contractor in a financial or technical
assistance agreement;
(4) Section 35, which enumerates the
terms and conditions for every financial or
technical assistance agreement;
(5) Section 39, which allows the
contractor in a financial and technical assistance
agreement to convert the same into a mineral
production-sharing agreement;
(6) Section 56, which authorizes the
issuance of a mineral processing permit to a
contractor in a financial and technical assistance
agreement;

The following provisions of the same Act are
likewise void as they are dependent on the
foregoing provisions and cannot stand on their
own:
(1) Section 3 (g), which defines the term
contractor, insofar as it applies to a financial or
technical assistance agreement.
Section 34, which prescribes the maximum
contract area in a financial or technical assistance
agreements;
Section 36, which allows negotiations for
financial or technical assistance agreements;
Section 37, which prescribes the procedure for
filing and evaluation of financial or technical
assistance agreement proposals;
Section 38, which limits the term of financial or
technical assistance agreements;
Section 40, which allows the assignment or
transfer of financial or technical assistance
agreements;
Section 41, which allows the withdrawal of the
contractor in an FTAA;
The second and third paragraphs of Section 81,
which provide for the Governments share in a
financial and technical assistance agreement; and
Section 90, which provides for incentives to
contractors in FTAAs insofar as it applies to said
contractors;
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 provisions which are thus
dependent, conditional, or connected, must fall
with them.

LA BUGAL-BLAAN TRIBAL ASSOCIATION,
INC. V. VICTOR RAMOS GR No. 127882
December 01, 2004
FACTS
This case is in continuation of the petition
already decided by the Court last January 27, 2004.
The established facts are already mentioned in the
first case. But since the Court found new issues,
there is a need to reiterate the said facts.
The Court decided that RA 7942, DAO 96-
40, and the WMCP FTAA as unconstitutional on
the ground that service contracts are prohibited in
the 1987 Constitution (Section 2, Article XII) in
favor of the rights of the Filipinos to enjoy the
national patrimony.
Subsequently, the respondents filed a
motion for reconsideration. After which petitioners
were required to comment on the matter and then
the oral argument was set. Hence, new issues were
found out by the Court after hearing the arguments
of the parties involved.
ISSUES
1. The constitutionality of RA 7942, DAO
96-40, and the WMCP FTAA
2. Has the case been rendered moot by the
sale of WMC shares in WMCP to
Sagittarius (60 percent of Sagittarius
equity is owned by Filipinos and/or
Filipino-owned corporations while 40
percent is owned by Indophil Resources
NL, an Australian company) and by the
subsequent transfer and registration of
the FTAA from WMCP to Sagittarius?
3. Assuming that the case has been
rendered moot, would it still be proper
to resolve the constitutionality of the
assailed provisions of the Mining Law,
DAO 96-40 and the WMCP FTAA?
4. What is the proper interpretation of the
phrase Agreements Involving Either
Technical or Financial Assistance
contained in paragraph 4 of Section 2 of
the Article XII of the 1987 Constitution?
RULING
1. In sum, there is a complete reversal of the
previous decision of the Court. To uphold the
unconstitutionality of RA 7942, DAO 96-40, and the
WMCP FTAA would lead to a stagnant and under-
develop mineral, petroleum, and other resources of
the State. If there large scale exploration,
development, and utilization run by foreign
corporations, there would be immediate and
tangible benefit for the Filipino people. Foreign
corporations or enterprises would contribute to the
economic development and general welfare of the

country, conserve the environment, and uplift the
well-being of the affected local communities.
Though the State permits the foreign contractor
sufficient and reasonable management authority
over the enterprise it invested, in order to ensure
that it is operating efficiently and profitably, to
protect its investments and to enable it to succeed,
still the former has control over the latter for the
Constitution laid down the safeguards as stated in
Section 2, Article XII. Nowhere does it require the
government to hold all exploration permits and
similar authorizations. In fact, there is no
prohibition at all against foreign or local
corporations or contractors holding exploration
permits.
Pursuant to Section 20 of RA 7942, an exploration
permit merely grants to a qualified person the right
to conduct exploration for all minerals in specified
areas. Such a permit does not amount to an
authorization to extract and carry off the mineral
resources that may be discovered. This phase
involves nothing but expenditures for exploring the
contract area and locating the mineral bodies. As
no extraction is involved, there are no revenues or
incomes to speak of. In short, the exploration
permit is an authorization for the grantee to spend
its own funds on exploration programs that are
pre-approved by the government, without any
right to recover anything should no minerals in
commercial quantities be discovered. The State
risks nothing and loses nothing by granting these
permits to local or foreign firms; in fact, it stands to
gain in the form of data generated by the
exploration activities. The exploration permit
serves a practical and legitimate purpose in that it
protects the interests and preserves the rights of the
exploration permit grantee (the would-be
contractor) -- foreign or local -- during the period of
time that it is spending heavily on exploration
works, without yet being able to earn revenues to
recoup any of its investments and expenditures.
Minus this permit and the protection it affords, the
exploration works and expenditures may end up
benefiting only claim-jumpers. Such a possibility
tends to discourage investors and contractors.
Thus, Section 3(aq) of RA 7942 may not be deemed
unconstitutional. A careful perusal of the statute
itself and its implementing rules reveals that
neither RA 7942 nor DAO 99-56 can be said to
convey beneficial ownership of any mineral
resource or product to any foreign FTAA
contractor. WMCP FTAA uncovers no indication
that it confers upon WMCP ownership, beneficial
or otherwise, of the mining property it is to
develop, the minerals to be produced, or the
proceeds of their sale, which can be legally asserted
and enforced as against the State.
2. No. The basis for declaring the FTAA void still
has to be revisited, reexamined, and reconsidered.
It not per se defective or unconstitutional. It was
questioned only because it had been issued to an
allegedly non-qualified, foreign-owned
corporation. The decision has yet to become final,
to all intents and purposes, the FTAA must be
deemed valid and constitutional.
3. The Court must recognize the exceptional
character of the situation and the paramount public
interest involved, as well as the necessity for a
ruling to put an end to the uncertainties plaguing
the mining industry and the affected communities
as a result of future FTAAs, and the need to avert a
multiplicity of suits. Strong reasons of public policy
demand that the constitutionality issue be resolved
now.
4. The provision in question was intended to refer
to agreements other than those for mere financial
or technical assistance. It should be interpreted as
allowing foreign corporations to do large-scale
exploration within the State, for the former is in
reality not capable of doing it given the lump sum
of money needed and the risk of the undertaking. It
is given that even the basic services naturally
shouldered by the State are not adequately
provided to the people. The inclusion of technical
or financial assistance recognizes the fact that
foreign business entities and multinational
corporations are the ones with the resources and
know-how to provide technical and/or financial
assistance of the magnitude and type required for
large-scale exploration, development and
utilization (EDU) of these resources. The drafters
agreed that these agreements include management
authority with respect to the day-to-day operations
of the enterprise and measures for the protection of
the interests of the foreign corporation, provided
that Philippine sovereignty over natural resources
and full control over the enterprise undertaking the
exploration, development and utilization activities
remain firmly in the State. In relation to this, the
Court agreed that the framers were going to permit
service contracts with foreign corporations as
contractors, but with safety measures to prevent
abuses, as an exception to the general norm

established in paragraph 1, Section 2, Article XII.
This provision reserves or limits to Filipino
citizensand corporations at least sixty (60)
percent of which is owned by such citizensthe
EDU of natural resources. This prompted by the
insufficiency of Filipino capital and the felt need for
foreign investments in the EDU of natural
resources. This new service contracts, the foreign
contractors provide capital, technology and
technical know-how, and managerial expertise in
the creation and operation of large-scale
mining/extractive enterprises; and the
government, through its agencies (DENR, MGB),
actively exercises control and supervision over the
entire operation. Also, may be entered into only
with respect to minerals, petroleum, and other
mineral oils.
Disposition
WHEREFORE, the Court RESOLVES to
GRANT the respondents' and the intervenors'
Motions for Reconsideration; to REVERSE and SET
ASIDE this Court's January 27, 2004 Decision; to
DISMISS the Petition; and to issue this new
judgment declaring CONSTITUTIONAL (1)
Republic Act No. 7942 (the Philippine Mining
Law), (2) its Implementing Rules and Regulations
contained in DENR Administrative Order (DAO)
No. 9640 -- insofar as they relate to financial and
technical assistance agreements referred to in
paragraph 4 of Section 2 of Article XII of the
Constitution; and (3) the Financial and Technical
Assistance Agreement (FTAA) dated March 30,
1995 executed by the government and Western
Mining Corporation Philippines Inc. (WMCP),
except Sections 7.8 and 7.9 of the subject FTAA
which are hereby INVALIDATED for being
contrary to public policy and for being grossly
disadvantageous to the government
Q: May the State enter into service contracts with
foreign owned corporations?
A: Yes, but subject to the strict limitations in the
last two paragraphs of Section 2. Financial and
technical agreements are a form of service
contracts. Such service contracts may be entered
into only with respect to minerals, petroleum, and
other mineral oils.
The grant of such service contracts is subject to
several safeguards, among them:
(1) that the service contract be crafted in accordance
with a general law setting standard or uniform
terms, conditions, and requirements;
(2) the President be the signatory for the
government; and
(3) the President report the executed agreement to
Congress within thirty days.

Q: May such financial and technical assistance
agreements include management?
A: Yes, to the extent that management is incidental
to such agreements.

Section 3. LANDS OF THE PUBLIC DOMAIN
ARE CLASSIFIED INTO
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 TO WHICH THEY MAY
BE DEVOTED. 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 HUNDRED HECTARES, OR ACQUIRE NOT
MORE THAN TWELVE HECTARES THEREOF, BY
PURCHASE, HOMESTEAD, OR GRANT.
TAKING 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.

Q: How are lands of the public classified?
A: 1. Agricultural
2. Forest/timber
3. Mineral lands &
4. National Parks


Q: Who classifies public lands?
A: In Director of Lands v. Court of Appeals, 129 SCRA
689 (June 22, 1984), the Court said: The
Classification of public lands is an exclusive
prerogative of the Executive Department (through
the Office of the President, upon recommendation
by the DENR) and not of the Courts. In the absence
of such classification, the land remains unclassified
until it is released therefrom and rendered upon
open disposition. This should be honored
Constitutional precepts. This is also in consonance
with the Regalian doctrine that all lands of the
public domain belong to the State, and that the
State is the source of any asserted right to
ownership in the land and charged with the
conservation of such patrimony.
Note: The power of the executive is delegated
power by virtue of C.A. No. 141.
Q: Who may change the classification of
public lands, e.g., from inalienable to
alienable, and how is the classification
done?
A: The classification of public lands is the
exclusive prerogative of the President upon
the recommendation of the pertinent
department head. (C.A. No. 141)
Q: Does the classification of land change
automatically when the nature of the land
changes?
A: No. A positive act of the executive is
needed. Anyone who claims that
classification has been changed must be able
to show the positive act of the President
indicating such positive act. The
classification is descriptive of the legal
nature of the land and NOT what it looks
like. Hence, for instance, that a former
forest has been denuded does not by the
fact mean it has ceased to be forest land.
Director of Lands v. Judge Aquino, G.R. No.
31688, December 17, 1990

Alienable lands of public domain
1. Only agricultural lands are alienable.
2. Agricultural lands may be further classified by
law according to the uses to which they may be
devoted.
Limitations regarding Alienable Lands of the
Public Domain
1. For private corporations or associations
A. They can only hold alienable lands of the
public domain BY LEASE
B. Period: Cannot exceed 25 years, renewable for
not more than 25 years
C. Area: Lease cannot exceed 1,000 hectares
Note: A corporation sole is treated like other
private corporations for the purpose of acquiring
public lands.
2. For Filipino citizens
A. Can lease up to 500 hectares
B. Can ACQUIRE not more than 12 hectares by
purchase, homestead or grant.
Taking into account the requirements of
conservation, ecology and development, and
subject to the requirements of agrarian reform,
Congress shall determine by law the size of the
lands of the public domain which may be acquired,
developed, held or lease and the conditions
therefore.

Q: What are the means by which lands of the
public domain become private land?
1. Acquired from government by purchase or
grant;
2. Uninterrupted possession by the occupant and
his predecessors-in-interest since time immemorial;
and
3. Open, exclusive, and undisputed possession of
ALIENABLE (agricultural) public land for a period
of 30 years. Director of Lands v. Intermediate Appellate
Court, 146 SCRA 508 (1986).
A. Upon completion of the requisite period, the
land becomes private property ipso jure without
need of any judicial or other sanction.
B. Here, in possession since time immemorial,
presumption is that the land was never part of
public domain.

C. In computing 30 years, start from when land
was converted to alienable land, not when it was
still forest land
D. Presumption is that land belongs to the State.

SECTION 4.
THE CONGRESS SHALL, AS SOON AS POSSIBLE,
DETERMINE, BY LAW, THE SPECIFIC LIMITS OF FOREST
LANDS AND NATIONAL PARKS, MARKING CLEARLY
THEIR BOUNDARIES ON THE GROUND. THEREAFTER,
SUCH FOREST LANDS AND NATIONAL PARKS SHALL BE
CONSERVED AND MAY NOT BE INCREASED NOR
DIMINISHED, EXCEPT BY LAW. THE CONGRESS SHALL
PROVIDE FOR SUCH PERIOD AS IT MAY DETERMINE,
MEASURES TO PROHIBIT LOGGING IN ENDANGERED
FORESTS AND WATERSHED AREAS.

Forest and parks
Forest deals with two classes of public land:
forest and
parks.
Once forest lands are converted into parks, logging
may no longer be permitted in the area.
Reclaimed land is public land. Before it can be
registered as private property it must be classified
as alienable

Section 5. ANCESTRAL LANDS
THE STATE, SUBJECT TO THE PROVISIONS OF THIS
CONSTITUTION AND NATIONAL DEVELOPMENT
POLICIES AND PROGRAMS, SHALL PROTECT THE
RIGHTS OF INDIGENOUS CULTURAL COMMUNITIES TO
THEIR ANCESTRAL LANDS TO ENSURE THEIR
ECONOMIC, SOCIAL, AND CULTURAL WELL-BEING.
THE CONGRESS MAY PROVIDE FOR THE APPLICABILITY
OF CUSTOMARY LAWS GOVERNING PROPERTY RIGHTS
OR RELATIONS IN DETERMINING THE OWNERSHIP AND
EXTENT OF ANCESTRAL DOMAIN.

Q: What is the difference between ancestral
lands and ancestral domain?
A: Ancestral domain is an all-embracing
concept and natural resources therein and includes
ancestral lands, forest, pasture, residential,
agricultural and other lands individually owned
whether alienable or not, hunting grounds, burial
grounds, worship areas, bodies of water and other
natural resources. They include lands which may
no longer be exclusively occupied by indigenous
cultural communities but to which they have
traditionally had access for their subsistence and
traditional activities.
Ancestral land is a narrower concept. It refers to
those held under the same conditions as ancestral
domain but limited to lands that are not merely
occupied and possessed but also utilized by
cultural communities under the claim of individual
or traditional group ownership. These include but
are not limited to residential lots, rice terraces or
paddies, private forest, farms and tree lots. (Section
3[a] and [b], R.A. No. 8371)

The ancestral land referred to in Section 5 of the
Constitution include both those outside and those
inside autonomous regions. For the purpose of
protecting indigenous cultural communities, the
provision in effect authorizes Congress to prescribe
how priorities are to be determined in the case of
conflict between law & customary law.

Protection of Indigenous Cultural Communities
1. The State protects the rights of indigenous
cultural communities to their ancestral lands
Subject to Constitutional provisions
Subject to national development policies
and programs
2. In determining ownership and extent of
ancestral domain, Congress may use customary
laws on property rights and relations.

Q: R.A. No. 8371, the Indigenous People Rights Act,
is assailed as unconstitutional on the ground that it
deprives the State of its ownership over lands of
the public domain and the natural resources in
them. Comment.
A: The vote of the Supreme Court on the subject
was equally divided, 7-7. Cruz. V. Secretary, G.R.
No. 135385, December 6, 2000.
The opinion defending constitutionality
held the following:

(1) Ancestral domain and ancestral lands are not
part of lands of the public domain. They are private
and belong to indigenous people. Cario v. Insular
Government, 212 U.S. 449 recognized native title
held by Filipinos from time immemorial and
excluded from the concept of jura regalia.
(2) The right of ownership granted does not include
natural resources. The right to negotiate terms and
conditions and conditions over natural resources
covers only exploration to ensure to environmental
protection. It is not a grant of exploration rights.
(3) The limited right of management refers to
utilization as expressly allowed in Section2, Article
XII.
(4) What is given is priority right, not exclusive
right. It does not preclude the State from entering
into co-production, joint venture, or production
sharing agreements with entities.
The opinion assailing the constitutionality
of the law held the following:
(1) the law amounts to an abdication of the
authority over a significant are of the countrys
patrimony;
(2) it relinquishes full control of natural resources
in favor of indigenous people;
(3) the law contravenes the provision which says
that all natural resources belong to the state.

Section 6. THE USE OF PROPERTY BEARS A SOCIAL
FUNCTION, AND ALL ECONOMIC AGENTS SHALL
CONTRIBUTE TO THE COMMON GOOD. INDIVIDUALS
AND PRIVATE GROUPS, INCLUDING CORPORATIONS,
COOPERATIVES, AND SIMILAR COLLECTIVE
ORGANIZATIONS, SHALL HAVE THE RIGHT TO OWN,
ESTABLISH, AND OPERATE ECONOMIC ENTERPRISES,
SUBJECT TO THE DUTY OF THE STATE TO PROMOTE
DISTRIBUTIVE JUSTICE AND TO INTERVENE WHEN THE
COMMON GOOD SO DEMANDS.

Q: May the National Electrification Authority, a
government agency empowered by law to
supervise and control electric cooperatives and
borrowers, override the decisions of cooperative
board?
A: In the facts of this case the Court saw no proof of
direct injury to petitioner. Hence it did not want to
rule directly on the constitutionality of the law
authorizing NEA to override a board. However, the
Court observed that Article XII, Section 6 of the
Constitution says that cooperatives are subject to
the duty of the State to intervene when the
common good demands. La Union Electric
Cooperative v. Judge Yaranon, G.R. No. 87001,
December 4, 1989.

Section 6 embodies guidelines which are
applicable not only to the utilization of land but to
everything which, in an agrarian economy has
special relevance to land.
The section in general is a rejection of laissez
faire and adopts the principles of solidarity. Thus,
where needed for common good, the state may
intervene in the operation.

Section 7. PRIVATE LANDS
SAVE IN CASES OF HEREDITARY SUCCESSION, NO
PRIVATE LANDS SHALL BE TRANSFERRED OR
CONVEYED EXCEPT TO INDIVIDUALS, CORPORATIONS,
OR ASSOCIATIONS QUALIFIED TO ACQUIRE OR HOLD
LANDS OF THE PUBLIC DOMAIN.

Q: What does private lands mean?
A: Private land means any land of private
ownership. This includes both land owned by
private individuals and lands which are
patrimonial property of the States or of Municipal
Corporation.

Q: Who may acquire private land?
A: On the basis of their capacity to acquire or hold
lands of the public domain,
General rule: Private lands CAN only be
transferred or conveyed to:
A. Filipino citizens
B. Corporations or associations incorporated in
the Philippines, at least 60% of whose capital is
owned by Filipino citizens
Exceptions:
A. In intestate succession, where an alien heir of
a Filipino is the transferee of private land.
B. A natural born citizen of the Philippines who
has lost his Philippine citizenship may be a

transferee of PRIVATE LAND, subject to
limitation provided by law. Hence, land can be
used only for residential purposes. In this case,
he only acquires derivative title.
C. Foreign states may acquire land but only for
embassy and staff residence purposes.

Q: Can a Filipino corporation acquire land?
A: Filipino citizens can both acquire or otherwise
hold lands of the public domain; Filipino
corporations cannot acquire lands of the public
domain but they can hold such lands by modes
other than acquisition, such as lease.
the purpose and spirit of the 1935 Constitution
demands that in the absence of a capital stock, the
controlling membership should be composed of
Filipino citizens. Bermudo v. Court of Appeals, 155
SCRA 8, 17 (1987), citing Register of Deeds v. Ung Siu
Si Temple, 97 Phil. 58, 61.

Filipino citizenship is only required at the time the
land is acquired. Thus, loss of citizenship after
acquiring the land does not deprive ownership.
Restriction against aliens only applies to
acquisition of ownership. Therefore:
A. Aliens may be lessees or usufructuaries
of private lands
B. Aliens may be mortgages of land, as long
as they do not obtain possession thereof and
do not bid in the foreclosure sale.

Land tenure is not indispensable to the free exercise
of religious profession and worship. A religious
corporation controlled by non-Filipinos cannot
acquire and own land, even for religious purposes.

Remedies to recover private lands from
disqualified aliens:
1. Escheat proceedings
2. Action for reversion under the Public Land Act
3. An action by the former Filipino owner to
recover the land
A. The former pari delicto principle has been
abandoned
B. Alien still has the title (didnt pass it on
to one who is qualified)

1. A foreigner may own a unit in a condominium
because the prohibition on aliens is only from
acquiring land. The land on which the
condominium stands is owned by the
condominium corporation.
2. May a Filipino citizen recover private land
invalidly sold to a disqualified alien?
NO. In cases where:
- The alien vendee has become a Filipino
citizen, recovery is barred.
- The alien vendee has sold it to a Filipino,
recovery by the original owner is likewise
barred.

FRENZEL V. CATITO GR NO. 143958, July 11,
2003
FACT:
Alfred Fritz Frenzel is an Australian citizen of
German descent. He worked as a pilot with the
New Guinea Airlines. He arrived in the Philippines
in 1974, started engaging in business in the country
two years thereafter, and married Teresita Santos, a
Filipino citizen. In 1981, Alfred and Teresita
separated from bed and board without obtaining a
divorce.
In 1983, he met Ederlina Catito, a Filipina and a
native of Davao City, who is working as Australia
in a massage parlor and without his knowledge
that Ederlina Catito was married to Klaus Muller, a
German national. Ederlina stop working and went
home to Philippine where Alfred joined her.
Alfred told Ederlina that he was married but he
was eager to divorce his wife.
Various properties was purchased in Ederlinas
name using the personal funds of Alfred.
The relation was become soured after Alfred
discovered that she had been married. Ederlina had
not been able to secure a divorce from his husband.
To avoid complication, Alfred decided to live
separately from Ederlina and cut off all contacts
with her.
Alfredo files a complaint against her for recovery of
real and personal properties invoking Article 22 of

the New Civil Code unjust enrichment. Ederlina
denied his accusation and insisting that she
acquired the said properties with her personal
funds, and as such, Alfred had no right.
The RTC rendered a decision in favor of Ederlina.
The Court of Appeal rendered a decision affirming
the decision of RTC.
ISSUE:
Whether or not Alfred may recover the properties
that was brought using his personal fund so he can
enable to sell the same at the public auction?
RULING:
No. Section 7, Article XII provides:
Save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands of the public domain.
Aliens, whether individual or corporations, have
been disqualified from acquiring lands of the
public domain. Hence, they have also been
disqualified from acquiring private lands.
Article 22 of New Civil Code:
Every person who through an act of performance by
another, or any other means, acquires or comes into
possession of something at the expense of the latter
without just or legal ground, shall return the same to
him.
Art. 1416 of New Civil Code:
When the agreement is not illegal per se but is merely
prohibited, and the prohibition by the law is designated
for the protection of the plaintiff, he may, if public policy
is thereby enhanced, recover what he has paid or
delivered.

A contract that violates the Constitution and the
law is null and void and vest no rights and creates
no obligation. It produces no legal effect at all.
The petitioner, being a party to an illegal contract,
cannot come into court of law and ask to have his
illegal objective carried out. One who loses his
money or property by knowingly engaging in a
contract or transaction which involves moral
turpitude may not maintain an action for his losses.
To claim equity they must come with clean hand.

RAMIREZ V VDA DE RAMIREZ 111 SCRA 704,
712 (1982)
FACT:
Jose Eugenio Ramirez, Filipino National, died in
Spain on December 11, 1964, with only his widow
as compulsory heir. His will was admitted to
probate by the Court of First Instance of Manila
Branch X on July 27, 1965. Maria Luisa Palacio was
appointed administratrix of the estate. In the time
she submitted an inventory of the estate as follows:
On June 23, 1966, the administratrix submitted a
project of the partition as follows:
The property of the deceased is to be divided into
two parts. One part shall go to the widow en pleno
dominio in satisfaction of her legitime; the other
part or free portion shall go to the nephews Jorge
and Roberto Ramirez en nuda propriedad.
Furthermore, one third (1/3) of the portion is
charged with widows usufruct and the remaining
two thirds (2/3) with a usufruct in favor of Wanda
de Wrobleski (companion of the deceased).
Jorge and Roberto opposed the project of partition
on the ground that .(c) that the grant of a
usufruct over real property in the Philippines in
favor of Wanda, who is an alien violates Section 5,
Article II of the Philippine Constitution.

ISSUE:
Whether or not an alien may acquire private land
in the Philippines?

RULING:
The court upheld the validity of the usufruct given
to Wanda on the ground that the Constitution
cover not only succession by operation of law but
also testamentary succession.
Section 7 of Article XII of the 1987 Constitution:
Section 7. Save in cases of hereditary succession, no
private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to
acquire or hold lands of the public domain.
Section 7 contains an exception: aliens may acquire
private land in cases of hereditary succession.

RAMIREZ V VDA DE RAMIREZ GR NO. 108998,
August 24, 1994
FACT:
On June 17, 1978, respondent spouses bought lots
347 and 348 as their residence with a total area of
91.77 sq.m. situated in San Pablo City, from one
Cristeta Dazo Belen. At the time of the purchase,
respondent spouses where then natural-born
Filipino citizen.
On February 5, 1987, the spouse files an application
for registration of the title of the two (2) parcels of
land before the RTC of San Pablo City. This time,
however, they were no longer Filipino citizens and
have opted to embrace Canadian citizenship
through naturalization.
ISSUE:
Can a foreign national apply for registration of title
over parcel of land which he acquired by purchase
while he is still a citizen of the Philippines, from the
vendor who has complied with the requirements
for registration under the Public Land Act (CA
141)?
RULING:
For the purpose of transfer and/or acquisition of a
parcel of residence land, it is not significant
whether the private respondent are no longer
Filipino citizens at the time they purchased or
registered the parcels of land in question. What is
important is that they were formerly natural-born
citizens of the Philippines, and a transferees of a
private land, they could apply for registration in
accordance with the mandate of Section 8, Article
XII of the 1987 Constitution.

Batas Pambansa Blg. 185.
Sec. 2. Any natural-born citizen of the Philippines
who has lost his Philippine citizenship and who
has the legal capacity to enter into a contract under
Philippine laws may be a transferee of a private
land up to a maximum area of one thousand
(1,000) square meters, in the case of urban land, or
one hectare in the case of rural land, to be used by
him as his residence. In the case of married couples,
one of them may avail of the privilege herein
granted; provided, that if both shall avail of the
same, the total area acquired shall not exceed the
maximum herein fixed.
In case the transferee already owns urban or rural
lands for residential purposes, he shall still be
entitled to be a transferee of additional urban or
rural lands for residential purposes which, when
added to those already owned by him, shall not
exceed the maximum areas herein authorized.

CRUZ, J., dissenting
The important point is that the respondent spouses
are no longer citizens of the Philippines but
naturalized Canadians. It does not follow that
because they were citizens of the Philippines when
they acquired the land, they can register it in their
name now even if they are no longer Filipino.
Strict compliance is necessary because of the special
privilege granted to former Filipinos who have
become foreigners by their own choice. If we can be
so strict with our citizens, I see no reason why we
should be less so with those who have renounced
our country.

Additional Notes:
RA 8179. FOREIGN INVESTMENT ACT
SEC. 10. Other Rights of Natural Born Citizen
Pursuant to the Provisions of Article XII, Section 8
of the Constitution. - Any natural born citizen who
has lost his Philippine citizenship and who has the
legal capacity to enter into a contract under
Philippine laws may be a transferee of a private
land up to a maximum area of five thousand
(5,000) square meters in the case of urban land or
three (3) hectares in the case of rural land to be
used by him for business or other purposes. In the
case of married couples, one of them may avail of
the privilege herein granted: Provided, That if both
shall avail of the same, the total area acquired shall
not exceed the maximum herein fixed.

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BAYLOSIS, FERNANDEZ, FRANCISCO, ORO, TRINIDAD

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