MANILA PRINCE HOTEL vs GSIS 267 SCRA 408; G.R. No.

122156; 3 Feb 1997 FACTS: The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding shares of respondent MHC. The winning bidder, or the eventual "strategic partner," is to provide management expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability and performance of the Manila Hotel . 2 In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner. Pending the declaration of Renong Berhad as the winning bidder/strategic partner and the execution of the necessary contracts, petitioner in a letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00 per share tendered by Renong Berhad. On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale of 51% of the MHC may be hastened by respondent GSIS and consummated with RenongBerhad, petitioner came to this Court on prohibition and mandamus. On 18 October 1995 the Court issued a temporary

restraining order enjoining respondents from perfecting and consummating the sale to the Malaysian firm. In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has been identified with the Filipino nation and has practically become a historical monument which reflects the vibrancy of Philippine heritage and culture. It is a proud legacy of an earlier generation of Filipinos who believed in the nobility and sacredness of independence and its power and capacity to release the full potential of the Filipino people. To all intents and purposes, it has become a part of the national patrimony. Petitioner also argues that since 51% of the shares of the MHC carries with it the ownership of the business of the hotel which is owned by respondent GSIS, a governmentowned and controlled corporation, the hotel business of respondent GSIS being a part of the tourism industry is unquestionably a part of the national economy. SECTION 10, SECOND PAR., ARTICLE XII which recognizes above all: IN THE GRANTS OF RIGHTS, PRIVILEGES, AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFRENCE TO QUALIFIED FILIPINOS. ISSUE: 1. Whether or not the term national patrimony applies to the Manila Hotel 2. Whether or not the term qualified Filipinos applies to the MPH 3. Whether or not the GSIS, being a chartered GOCC, is covered by the constitutional prohibition

RULING: 1. Patrimony means heritage, referring not only to natural resources but to the cultural heritage of Filipinos as well. Manila Prince Hotel is very much a part of our national patrimony and has played and important role in our nations history, having been the venue of many a historical events and serving as it did, and as it does, as the Philippine Guest House for visiting foreign heads of state, dignitaries, celebrities and others. A landmark and a living testament of the Philippine heritage. 2. Qualified according to the Constitution commission refers to (1) companies whose capital or controlling stock is wholly owned by citizens of the Phil. (2) the fact that the company can make viable contributions to the common good, because of credible competency and efficiency. By giving preference to Phil. companies or entities it does not mean that they should be pampered; rather they should indeed qualify first with the requirements that the law provides before they can even be considered as having the preferential treatment of the state accorded to them. In the first place, MPH was selected as on of the qualified bidders, which meant that they possessed both requirements. in the granting of economic rights, privileges and concession, when a choice is between a qualified foreigner and a qualified Filipino, the latter shall be chosen SECTION 10, SECOND PAR., ARTICLE XII which recognizes above all: IN THE GRANTS OF RIGHTS, PRIVILEGES, AND CONCESSIONS COVERING THE

NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFRENCE TO QUALIFIED FILIPINOS.