Topic: Limitations

La Bugal Blaan v Ramos

Facts:
President Corazon Aquino issued EO 2796 on July 25, 1987, authorizing DENR Secretary to accept,
consider and evaluate proposals from foreign-owned corporations.

President Fidel V. Ramos approved RA 7942 (Philippine Mining Act of 1995) on March 3, 1995. This
law shall govern the exploration, development, utilization and processing of all mineral resources
(sec 15). It contained provisions regarding FTAAs, as well as the different modes of mineral
agreements for mining:

(1) The State may directly undertake such activities.

(2) The State may enter into co-production, joint venture or production-sharing agreements with
Filipino citizens or qualified corporations.

(3) Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens.

(4) For the large-scale exploration, development and utilization of minerals, petroleum and other
mineral oils, the President may enter into agreements with foreign-owned corporations involving
technical or financial assistance.

Issue: Is RA 7942 unconstitutional? NO.

Held: (At first Yes, for being violative of Section 2, Article XII of the Constitution. Jan 204
decision) ie all other natural resources shall not be alienated, preserved for the Filipinos, etc

Ultimately, the Court upheld the constitutionality of RA 7942 Dec 2004 decision. The Constitution
should be read in broad, life-giving strokes. It should not be used to strangulate economic growth. It
should be construed to grant the President and Congress sufficient discretion to attract foreign
investments and expertise, as well as secure for our people blessings of prosperity and peace.

As per Section 2, Art XII: 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.

Note: (based from dissenting opinions) Limitations under Sec 2 Article XII
1. State retains legal ownership of all natural resources
2. State shall have full control and supervision over the exploration, development and utilization of
natural resources.
Specific limitations / restrictions in fourth paragraph of Sec 2 (power of president to enter into
agreements with foreign corporations):

First, the natural resources that may be subject of the agreement are a limited class, particularly
minerals, petroleum, and other mineral oils. Among the natural resources which are excluded from
these agreements are lands of the public domain, waters, coal, fisheries, forests or timbers, wildlife,
flora and fauna. Most notable of the exclusions are forests and timbers which are in all respects
expressly limited to Filipinos.

Second, these agreements with foreign-owned corporations can only be entered into for only large-scale
exploration, development and utilization of minerals, petroleum, and other mineral oils.

Third, it is only the President who may enter into these agreements. This is another pronounced change
from the 1973 Constitution, which allowed private persons to enter into service contracts with foreign
corporations.

Fourth, these agreements must be in accord with the general terms and conditions provided by law. This
proviso by itself, and more so when taken together, as it should, with another provision, entails
legislative intervention and affirmance in the exercise of this executive power. While it is the President
who enters into these contracts, he/she must act within such terms and conditions as may be prescribed
by Congress through legislation. The value of legislative input as a means of influencing policy should not
be discounted. Policy initiatives grounded on particular economic ideologies may find enactment
through legislation when approved by the necessary majorities in Congress. Legislative work includes
consultative processes with persons of diverse interests, assuring that economic decisions need not be
made solely from an ivory tower. There is also the possible sanction of repudiation by the voters of
legislators who prove insensate to the economic concerns of their constituents.

Fifth, the President is mandated to base the decision of entering into these agreements on "real
contributions to the economic growth and general welfare of the country." In terms of real limitations,
this condition has admittedly little effect. The discretion as to whether or not to enter into these
agreements is vested solely by the Constitution in the President, and such exercise of discretion,
pertaining as it does to the political wisdom of a co-equal branch, generally deserves respect from the
courts.