EN BANC

[G.R. No. 133250. July 9, 2002]

FRANCISCO I. CHAVEZ, petitioner, vs. PU!IC ES"A"ES AU"HORI"#
$%& A'ARI COAS"A! A# (EVE!OP'EN"
CORPORA"ION, respondents.
( E C I S I O N
CARPIO, J.)
This is an original Petition for Mandamus with prayer for a writ of preliminary
injunction and a temporary restraining order. The petition seeks to compel the Public
Estates Authority !PEA" for bre#ity$ to disclose all facts on PEA%s then on&going
renegotiations with Amari Coastal Bay and 'e#elopment Corporation !A(A)*" for
bre#ity$ to reclaim portions of (anila Bay. The petition further seeks to enjoin PEA from
signing a new agreement with A(A)* in#ol#ing such reclamation.
"*+ F$,-.
+n No#ember ,-. /012. the go#ernment. through the Commissioner of Public
3ighways. signed a contract with the Construction and 'e#elopment Corporation of the
Philippines !C'CP" for bre#ity$ to reclaim certain foreshore and offshore areas of
(anila Bay. The contract also included the construction of Phases * and ** of the
(anila&Ca#ite Coastal )oad. C'CP obligated itself to carry out all the works in
consideration of fifty percent of the total reclaimed land.
+n 4ebruary 5. /011. then President 4erdinand E. (arcos issued Presidential
'ecree No. /-65 creating PEA. P' No. /-65 tasked PEA !to reclaim land. including
foreshore and submerged areas." and !to de#elop. impro#e. ac7uire. 8 8 8 lease and sell
any and all kinds of lands."
9/:
+n the same date. then President (arcos issued
Presidential 'ecree No. /-6; transferring to PEA the !lands reclaimed in the foreshore
and offshore of the (anila Bay"
9,:
under the (anila&Ca#ite Coastal )oad and
)eclamation Project (CC))P$.
+n 'ecember ,0. /06/. then President (arcos issued a memorandum directing
PEA to amend its contract with C'CP. so that !9A:ll future works in (CC))P 8 8 8 shall
be funded and owned by PEA." Accordingly. PEA and C'CP e8ecuted a (emorandum
of Agreement dated 'ecember ,0. /06/. which stated<
!i$ C'CP shall undertake all reclamation. construction. and such other works
in the (CC))P 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 pro#ided for in Presidential 'ecree No. /;05. All the financing
re7uired for such works shall be pro#ided by PEA.
8 8 8
iii$ 8 8 8 C'CP shall gi#e up all its de#elopment rights and hereby agrees to
cede and transfer in fa#or of PEA. all of the rights. title. interest and
participation of C'CP in and to all the areas of land reclaimed by C'CP in the
(CC))P as of 'ecember 2-. /06/ which ha#e not yet been sold. transferred
or otherwise disposed of by C'CP as of said date. which areas consist of
appro8imately Ninety&Nine Thousand 4our 3undred >e#enty Three 00.512$
s7uare meters in the 4inancial Center Area co#ered by land pledge No. ; and
appro8imately Three (illion Three 3undred Eighty Two Thousand Eight
3undred Eighty Eight 2.26,.666$ s7uare meters of reclaimed areas at #arying
ele#ations abo#e (ean ?ow @ater ?e#el located outside the 4inancial Center
Area and the 4irst Neighborhood Anit."
92:
+n Banuary /0. /066. then President CoraCon C. A7uino issued >pecial Patent No.
2;/1. granting and transferring to PEA !the parcels of land so reclaimed under the
(anila&Ca#ite Coastal )oad and )eclamation Project (CC))P$ containing a total
area of one million nine hundred fifteen thousand eight hundred ninety four /.0/;.605$
s7uare meters." >ubse7uently. on April 0. /066. the )egister of 'eeds of the
(unicipality of ParaDa7ue issued Transfer Certificates of Title Nos. 12-0. 12//. and
12/,. in the name of PEA. co#ering the three reclaimed islands known as the !4reedom
*slands" located at the southern portion of the (anila&Ca#ite Coastal )oad. ParaDa7ue
City. The 4reedom *slands ha#e a total land area of +ne (illion 4i#e 3undred >e#enty
Eight Thousand 4our 3undred and 4orty +ne /.;16.55/$ s7uare meters or /;1.65/
hectares.
+n April ,;. /00;. PEA entered into a Boint Eenture Agreement !BEA" for bre#ity$
with A(A)*. a pri#ate corporation. to de#elop the 4reedom *slands. The BEA also
re7uired the reclamation of an additional ,;- hectares of submerged areas surrounding
these islands to complete the configuration in the (aster 'e#elopment Plan of the
>outhern )eclamation Project&(CC))P. PEA and A(A)* entered into the BEA through
negotiation without public bidding.
95:
+n April ,6. /00;. the Board of 'irectors of PEA. in
its )esolution No. /,5;. confirmed the BEA.

9;:
+n Bune 6. /00;. then President 4idel E.
)amos. through then E8ecuti#e >ecretary )uben Torres. appro#ed the BEA.
9F:
+n No#ember ,0. /00F. then >enate President Ernesto (aceda deli#ered a
pri#ilege speech in the >enate and denounced the BEA as the !grandmother of all
scams." As a result. the >enate Committee on Go#ernment Corporations and Public
Enterprises. and the Committee on Accountability of Public +fficers and *n#estigations.
conducted a joint in#estigation. The >enate Committees reported the results of their
in#estigation in >enate Committee )eport No. ;F- dated >eptember /F. /001.
91:
Among
the conclusions of their report are< /$ the reclaimed lands PEA seeks to transfer to
A(A)* under the BEA are lands of the public domain which the go#ernment has not
classified as alienable lands and therefore PEA cannot alienate these landsH ,$ the
certificates of title co#ering the 4reedom *slands are thus #oid. and 2$ the BEA itself is
illegal.
+n 'ecember ;. /001. then President 4idel E. )amos issued Presidential
Administrati#e +rder No. 2F; creating a ?egal Task 4orce to conduct a study on the
legality of the BEA in #iew of >enate Committee )eport No. ;F-. The members of the
?egal Task 4orce were the >ecretary of Bustice.
96:
the Chief Presidential ?egal Counsel.
90:
and the Go#ernment Corporate Counsel.
9/-:
The ?egal Task 4orce upheld the legality of
the BEA. contrary to the conclusions reached by the >enate Committees.
9//:
+n April 5 and ;. /006. the Philippine Daily Inquirer and Today published reports
that there were on&going renegotiations between PEA and A(A)* under an order
issued by then President 4idel E. )amos. According to these reports. PEA 'irector
Nestor Ialaw. PEA Chairman Arsenio Julo and retired Na#y +fficer >ergio CruC
composed the negotiating panel of PEA.
+n April /2. /006. Antonio (. Kulueta filed before the Court a Petition for
Prohibition with Application for the Issuance of a Temporary Restraining Order and
Preliminary Injunction docketed as G.). No. /2,005 seeking to nullify the BEA. The
Court dismissed the petition !for unwarranted disregard of judicial hierarchy. without
prejudice to the refiling of the case before the proper court."
9/,:
+n April ,1. /006. petitioner 4rank *. Cha#eC !Petitioner" for bre#ity$ as a ta8payer.
filed the instant Petition for Mandamus with Prayer for the Issuance of a rit of
Preliminary Injunction and Temporary Restraining Order. Petitioner contends the
go#ernment stands to lose billions of pesos in the sale by PEA of the reclaimed lands to
A(A)*. Petitioner prays that PEA publicly disclose the terms of any renegotiation of the
BEA. in#oking >ection ,6. Article **. and >ection 1. Article ***. of the /061 Constitution on
the right of the people to information on matters of public concern. Petitioner assails the
sale to A(A)* of lands of the public domain as a blatant #iolation of >ection 2. Article
L** of the /061 Constitution prohibiting the sale of alienable lands of the public domain
to pri#ate corporations. 4inally. petitioner asserts that he seeks to enjoin the loss of
billions of pesos in properties of the >tate that are of public dominion.
After se#eral motions for e8tension of time.
9/2:
PEA and A(A)* filed their Comments
on +ctober /0. /006 and Bune ,;. /006. respecti#ely. (eanwhile. on 'ecember ,6.
/006. petitioner filed an +mnibus (otion< a$ to re7uire PEA to submit the terms of the
renegotiated PEA&A(A)* contractH b$ for issuance of a temporary restraining orderH
and c$ to set the case for hearing on oral argument. Petitioner filed a )eiterati#e
(otion for *ssuance of a T)+ dated (ay ,F. /000. which the Court denied in a
)esolution dated Bune ,,. /000.
*n a )esolution dated (arch ,2. /000. the Court ga#e due course to the petition
and re7uired the parties to file their respecti#e memoranda.
+n (arch 2-. /000. PEA and A(A)* signed the Amended Boint Eenture Agreement
!Amended BEA." for bre#ity$. +n (ay ,6. /000. the +ffice of the President under the
administration of then President Boseph E. Estrada appro#ed the Amended BEA.
'ue to the appro#al of the Amended BEA by the +ffice of the President. petitioner
now prays that on !constitutional and statutory grounds the renegotiated contract be
declared null and #oid."
9/5:
"*+ I..u+.
The issues raised by petitioner. PEA
9/;:
and A(A)*
9/F:
are as follows<
*. @3ET3E) T3E P)*NC*PA? )E?*E4> P)AJE' 4+) *N T3E PET*T*+N A)E
(++T AN' ACA'E(*C BECAA>E +4 >AB>EMAENT EEENT>H
**. @3ET3E) T3E PET*T*+N (E)*T> '*>(*>>A? 4+) 4A*?*NG T+ +B>E)EE
T3E P)*NC*P?E G+EE)N*NG T3E 3*E)A)C3J +4 C+A)T>H
***. @3ET3E) T3E PET*T*+N (E)*T> '*>(*>>A? 4+) N+N&EL3AA>T*+N +4
A'(*N*>T)AT*EE )E(E'*E>H
*E. @3ET3E) PET*T*+NE) 3A> !O"#$ $TA%DI T+ B)*NG T3*> >A*TH
E. @3ET3E) T3E C+N>T*TAT*+NA? )*G3T T+ *N4+)(AT*+N *NC?A'E>
+44*C*A? *N4+)(AT*+N +N +N&G+*NG NEG+T*AT*+N> BE4+)E A 4*NA?
AG)EE(ENTH
E*. @3ET3E) T3E >T*PA?AT*+N> *N T3E A(EN'E' B+*NT EENTA)E
AG)EE(ENT 4+) T3E T)AN>4E) T+ A(A)* +4 CE)TA*N ?AN'>.
)EC?A*(E' AN' >T*?? T+ BE )EC?A*(E'. E*+?ATE T3E /061
C+N>T*TAT*+NH AN'
E**. @3ET3E) T3E C+A)T *> T3E P)+PE) 4+)A( 4+) )A*>*NG T3E *>>AE
+4 @3ET3E) T3E A(EN'E' B+*NT EENTA)E AG)EE(ENT *> G)+>>?J
'*>A'EANTAGE+A> T+ T3E G+EE)N(ENT.
"*+ Cou/-0. Rul1%2
First issue: whether the principal reliefs prayed for in the petition are moot and
academic because of subsequent events.
The petition prays that PEA publicly disclose the !terms and conditions of the on&
going negotiations for a new agreement." The petition also prays that the Court enjoin
PEA from !pri#ately entering into. perfecting and=or e8ecuting any new agreement with
A(A)*."
PEA and A(A)* claim the petition is now moot and academic because A(A)*
furnished petitioner on Bune ,/. /000 a copy of the signed Amended BEA containing the
terms and conditions agreed upon in the renegotiations. Thus. PEA has satisfied
petitioner%s prayer for a public disclosure of the renegotiations. ?ikewise. petitioner%s
prayer to enjoin the signing of the Amended BEA is now moot because PEA and A(A)*
ha#e already signed the Amended BEA on (arch 2-. /000. (oreo#er. the +ffice of the
President has appro#ed the Amended BEA on (ay ,6. /000.
Petitioner counters that PEA and A(A)* cannot a#oid the constitutional issue by
simply fast&tracking the signing and appro#al of the Amended BEA before the Court
could act on the issue. Presidential appro#al does not resol#e the constitutional issue
or remo#e it from the ambit of judicial re#iew.
@e rule that the signing of the Amended BEA by PEA and A(A)* and its appro#al
by the President cannot operate to moot the petition and di#est the Court of its
jurisdiction. PEA and A(A)* ha#e still to implement the Amended BEA. The prayer to
enjoin the signing of the Amended BEA on constitutional grounds necessarily includes
pre#enting its implementation if in the meantime PEA and A(A)* ha#e signed one in
#iolation of the Constitution. Petitioner%s principal basis in assailing the renegotiation of
the BEA is its #iolation of >ection 2. Article L** of the Constitution. which prohibits the
go#ernment from alienating lands of the public domain to pri#ate corporations. *f the
Amended BEA indeed #iolates the Constitution. it is the duty of the Court to enjoin its
implementation. and if already implemented. to annul the effects of such
unconstitutional contract.
The Amended BEA is not an ordinary commercial contract but one which seeks
to transfer title and ownership to 367.5 hectares of reclaimed lands and
submered areas of !anila "ay to a sinle private corporation. *t now becomes
more compelling for the Court to resol#e the issue to insure the go#ernment itself does
not #iolate a pro#ision of the Constitution intended to safeguard the national
patrimony. >uper#ening e#ents. whether intended or accidental. cannot pre#ent the
Court from rendering a decision if there is a gra#e #iolation of the Constitution. *n the
instant case. if the Amended BEA runs counter to the Constitution. the Court can still
pre#ent the transfer of title and ownership of alienable lands of the public domain in the
name of A(A)*. E#en in cases where super#ening e#ents had made the cases moot.
the Court did not hesitate to resol#e the legal or constitutional issues raised to formulate
controlling principles to guide the bench. bar. and the public.
9/1:
Also. the instant petition is a case of first impression. All pre#ious decisions of the
Court in#ol#ing >ection 2. Article L** of the /061 Constitution. or its counterpart
pro#ision in the /012 Constitution.
9/6:
co#ered aricultural lands sold to pri#ate
corporations which ac7uired the lands from pri#ate parties. The transferors of the
pri#ate corporations claimed or could claim the right to #udicial confirmation of their
imperfect titles
9/0:
under $itle %% of Commonwealth Act. /5/ !CA No. /5/" for bre#ity$. *n
the instant case. A(A)* seeks to ac7uire from PEA. a public corporation.
reclaimed lands and submerged areas for non&aricultural purposes
by purchase under P' No. /-65 charter of PEA$ and$itle %%% of CA No. /5/. Certain
undertakings by A(A)* under the Amended BEA constitute the consideration for the
purchase. Neither A(A)* nor PEA can claim judicial confirmation of their titles
because the lands co#ered by the Amended BEA are newly reclaimed or still to be
reclaimed. Budicial confirmation of imperfect title re7uires open. continuous. e8clusi#e
and notorious occupation of agricultural lands of the public domain for at least thirty
years since Bune /,. /05; or earlier. Besides. the deadline for filing applications for
judicial confirmation of imperfect title e8pired on 'ecember 2/. /061.
9,-:
?astly. there is a need to resol#e immediately the constitutional issue raised in this
petition because of the possible transfer at any time by PEA to A(A)* of title and
ownership to portions of the reclaimed lands. Ander the Amended BEA. PEA is
obligated to transfer to A(A)* the latter%s se#enty percent proportionate share in the
reclaimed areas as the reclamation progresses. The Amended BEA e#en allows A(A)*
to mortgage at any time the entire reclaimed area to raise financing for the reclamation
project.
9,/:
'econd issue: whether the petition merits dismissal for failin to observe the
principle overnin the hierarchy of courts.
PEA and A(A)* claim petitioner ignored the judicial hierarchy by seeking relief
directly from the Court. The principle of hierarchy of courts applies generally to cases
in#ol#ing factual 7uestions. As it is not a trier of facts. the Court cannot entertain cases
in#ol#ing factual issues. The instant case. howe#er. raises constitutional issues of
transcendental importance to the public.
9,,:
The Court can resol#e this case without
determining any factual issue related to the case. Also. the instant case is a petition
for mandamus which falls under the oriinal jurisdiction of the Court under >ection ;.
Article E*** of the Constitution. @e resol#e to e8ercise primary jurisdiction o#er the
instant case.
$hird issue: whether the petition merits dismissal for non&e(haustion of
administrative remedies.
PEA faults petitioner for seeking judicial inter#ention in compelling PEA to disclose
publicly certain information without first asking PEA the needed information. PEA claims
petitioner%s direct resort to the Court #iolates the principle of e8haustion of
administrati#e remedies. *t also #iolates the rule that mandamus may issue only if there
is no other plain. speedy and ade7uate remedy in the ordinary course of law.
PEA distinguishes the instant case from Ta&ada '( Tu'era
9,2:
where the Court granted
the petition for mandamus e#en if the petitioners there did not initially demand from the
+ffice of the President the publication of the presidential decrees. PEA points out that
in Ta&ada. the E8ecuti#e 'epartment had an affirmative statutory duty under Article ,
of the Ci#il Code
9,5:
and >ection / of Commonwealth Act No. F26
9,;:
to publish the
presidential decrees. There was. therefore. no need for the petitioners in Ta&ada to
make an initial demand from the +ffice of the President. *n the instant case. PEA
claims it has no affirmati#e statutory duty to disclose publicly information about its
renegotiation of the BEA. Thus. PEA asserts that the Court must apply the principle of
e8haustion of administrati#e remedies to the instant case in #iew of the failure of
petitioner here to demand initially from PEA the needed information.
The original BEA sought to dispose to A(A)* public lands held by PEA. a
go#ernment corporation. Ander >ection 10 of the Go#ernment Auditing Code.
9,F:,
the
disposition of go#ernment lands to pri#ate parties re7uires public bidding. )*+ was
under a positive leal duty to disclose to the public the terms and conditions for
the sale of its lands. The law obligated PEA to make this public disclosure e#en
without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original BEA. like the Amended BEA. was the result of
a neotiated contract. not of a public bidding. Considering that PEA had an affirmati#e
statutory duty to make the public disclosure. and was e#en in breach of this legal duty.
petitioner had the right to seek direct judicial inter#ention.
(oreo#er. and this alone is determinati#e of this issue. the principle of e8haustion of
administrati#e remedies does not apply when the issue in#ol#ed is a purely legal or
constitutional 7uestion.
9,1:
The principal issue in the instant case is the capacity of A(A)*
to ac7uire lands held by PEA in #iew of the constitutional ban prohibiting the alienation
of lands of the public domain to pri#ate corporations. @e rule that the principle of
e8haustion of administrati#e remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to brin this suit
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 affirmati#e duty imposed on PEA by the Constitution. PEA also claims that
petitioner has not shown that he will suffer any concrete injury because of the signing or
implementation of the Amended BEA. Thus. there is no actual contro#ersy re7uiring the
e8ercise of the power of judicial re#iew.
The petitioner has standing to bring this ta8payer%s suit because the petition seeks
to compel PEA to comply with its constitutional duties. There are two constitutional
issues in#ol#ed here. 4irst is the right of citiCens to information on matters of public
concern. >econd is the application of a constitutional pro#ision intended to insure the
e7uitable distribution of alienable lands of the public domain among 4ilipino
citiCens. The thrust of the first issue is to compel PEA to disclose publicly information
on the sale of go#ernment lands worth billions of pesos. information which the
Constitution and statutory law mandate PEA to disclose. The thrust of the second issue
is to pre#ent PEA from alienating hundreds of hectares of alienable lands of the public
domain in #iolation of the Constitution. compelling PEA to comply with a constitutional
duty to the nation.
(oreo#er. the petition raises matters of transcendental importance to the
public. *n ,have- v. ),...
9,6:
the Court upheld the right of a citiCen to bring a
ta8payer%s suit on matters of transcendental importance to the public. thus &
!Besides. petitioner emphasiCes. the matter of reco#ering the ill&gotten wealth
of the (arcoses is an issue of Ntranscendental importance to the public.% 3e
asserts that ordinary ta8payers ha#e a right to initiate and prosecute actions
7uestioning the #alidity of acts or orders of go#ernment agencies or
instrumentalities. if the issues raised are of Nparamount public interest.% and if
they Nimmediately affect the social. economic and moral well being of the
people.%
(oreo#er. the mere fact that he is a citiCen satisfies the re7uirement of
personal interest. when the proceeding in#ol#es the assertion of a public right.
such as in this case. 3e in#okes se#eral decisions of this Court which ha#e
set aside the procedural matter of locus standi. when the subject of the case
in#ol#ed public interest.
8 8 8
*n Ta&ada '( Tu'era. the Court asserted that when the issue concerns a public
right and the object of mandamus is to obtain the enforcement of a public
duty. the people are regarded as the real parties in interestH and because it is
sufficient that petitioner is a citiCen and as such is interested in the e8ecution
of the laws. he need not show that he has any legal or special interest in the
result of the action. *n the aforesaid case. the petitioners sought to enforce
their right to be informed on matters of public concern. a right then recogniCed
in >ection F. Article *E of the /012 Constitution. in connection with the rule that
laws in order to be #alid and enforceable must be published in the +fficial
GaCette or otherwise effecti#ely promulgated. *n ruling for the petitionersO legal
standing. the Court declared that the right they sought to be enforced Nis a
public right recogniCed by no less than the fundamental law of the land.%
!egaspi '( "i'il $er'ice "ommission. while reiterating Ta&ada. further
declared that Nwhen a mandamus proceeding in#ol#es the assertion of a
public right. the re7uirement of personal interest is satisfied by the mere fact
that petitioner is a citiCen and. therefore. part of the general OpublicO which
possesses the right.%
4urther. in Albano '( Reyes. we said that while e8penditure of public funds
may not ha#e been in#ol#ed under the 7uestioned contract for the
de#elopment. management and operation of the (anila *nternational
Container Terminal. Npublic interest 9was: definitely in#ol#ed considering the
important role 9of the subject contract: . . . in the economic de#elopment of the
country and the magnitude of the financial consideration in#ol#ed.% @e
concluded that. as a conse7uence. the disclosure pro#ision in the Constitution
would constitute sufficient authority for upholding the petitionerOs standing.
>imilarly. the instant petition is anchored on the right of the people to
information and access to official records. documents and papers P a right
guaranteed under >ection 1. Article *** of the /061 Constitution. Petitioner. a
former solicitor general. is a 4ilipino citiCen. Because of the satisfaction of the
two basic re7uisites laid down by decisional law to sustain petitionerOs legal
standing. i.e. /$ the enforcement of a public right ,$ espoused by a 4ilipino
citiCen. we rule that the petition at bar should be allowed."
@e rule that since the instant petition. brought by a citiCen. in#ol#es the
enforcement of constitutional rights & to information and to the e7uitable diffusion of
natural resources & matters of transcendental public importance. the petitioner has the
re7uisite locus standi.
Fifth issue: whether the constitutional riht to information includes official
information on on&oin neotiations before a final areement.
>ection 1. Article *** of the Constitution e8plains the people%s right to information on
matters of public concern in this manner<
!>ec. 1. The right of the people to information on matters of public concern
shall be recogniCed. +ccess to official records, and to documents, and
papers pertainin to official acts, transactions, or decisions, as well as to
go#ernment research data used as basis for policy de#elopment. shall be
afforded the citiCen. subject to such limitations as may be pro#ided by
law." Emphasis supplied$
The >tate policy of full transparency in all transactions in#ol#ing public interest
reinforces the people%s right to information on matters of public concern. This >tate
policy is e8pressed in >ection ,6. Article ** of the Constitution. thus<
!>ec. ,6. >ubject to reasonable conditions prescribed by law. the >tate
adopts and implements a policy of full public disclosure of all its
transactions involvin public interest." Emphasis supplied$
These twin pro#isions of the Constitution seek to promote transparency in policy&
making and in the operations of the go#ernment. as well as pro#ide the people sufficient
information to e8ercise effecti#ely other constitutional rights. These twin pro#isions are
essential to the e8ercise of freedom of e8pression. *f the go#ernment does not disclose
its official acts. transactions and decisions to citiCens. whate#er citiCens say. e#en if
e8pressed without any restraint. will be speculati#e and amount to nothing. These twin
pro#isions are also essential to hold public officials !at all times 8 8 8 accountable to the
people."
9,0:
for unless citiCens ha#e the proper information. they cannot hold public
officials accountable for anything. Armed with the right information. citiCens can
participate in public discussions leading to the formulation of go#ernment policies and
their effecti#e implementation. An informed citiCenry is essential to the e8istence and
proper functioning of any democracy. As e8plained by the Court in /almonte v.
"elmonte, Jr.
92-:
Q
!An essential element of these freedoms is to keep open a continuing
dialogue or process of communication between the go#ernment and the
people. *t is in the interest of the >tate that the channels for free political
discussion be maintained to the end that the go#ernment may percei#e and
be responsi#e to the people%s will. Jet. this open dialogue can be effecti#e
only to the e8tent that the citiCenry is informed and thus able to formulate its
will intelligently. +nly when the participants in the discussion are aware of the
issues and ha#e access to information relating thereto can such bear fruit."
PEA asserts. citing ,have- v. ),...
92/:
that in cases of on&going negotiations the
right to information is limited to !definite propositions of the go#ernment." 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 Ne8ploratory stage%."
Also. A(A)* contends that petitioner cannot in#oke the right at the pre&decisional
stage or before the closing of the transaction. To support its contention. A(A)* cites
the following discussion in the /06F Constitutional Commission<
3'/. Su$/+4. And when we say Ntransactions% which should be distinguished
from contracts. agreements. or treaties or whate#er. does the Gentleman refer
to the steps leading to the consummation of the contract. or does he refer to
the contract itselfR
'/. O5l+< $he 0transactions1 used here, % suppose is eneric and
therefore, it can cover both steps leadin to a contract and already a
consummated contract, !r. )residin 2fficer.
'/. Su$/+4< $his contemplates inclusion of neotiations leadin to the
consummation of the transaction.
'/. O5l+< 3es, sub#ect only to reasonable safeuards on the national
interest.
'/. Su$/+4< Thank you."
92,:
Emphasis supplied$
A(A)* argues there must first be a consummated contract before petitioner can in#oke
the right. )e7uiring go#ernment officials to re#eal their deliberations at the pre&
decisional stage will degrade the 7uality of decision&making in go#ernment
agencies. Go#ernment officials will hesitate to e8press their real sentiments during
deliberations if there is immediate public dissemination of their discussions. putting
them under all kinds of pressure before they decide.
@e must first distinguish between information the law on public bidding re7uires
PEA to disclose publicly. and information the constitutional right to information re7uires
PEA to release to the public. Before the consummation of the contract. PEA must. on
its own and without demand from anyone. disclose to the public matters relating to the
disposition of its property. These include the siCe. location. technical description and
nature of the property being disposed of. the terms and conditions of the disposition. the
parties 7ualified to bid. the minimum price and similar information. PEA must prepare
all these data and disclose them to the public at the start of the disposition process. long
before the consummation of the contract. because the Go#ernment Auditing Code
re7uires public biddin. *f PEA fails to make this disclosure. any citiCen can demand
from PEA this information at any time during the bidding process.
*nformation. howe#er. on on&oin evaluation or review of bids or proposals being
undertaken by the bidding or re#iew committee is not immediately accessible under the
right to information. @hile the e#aluation or re#iew is still on&going. there are no !official
acts. transactions. or decisions" on the bids or proposals. 3owe#er. once the committee
makes its official recommendation. there arises a 4definite proposition5on the part
of the go#ernment. 4rom this moment. the public%s right to information attaches. and
any citiCen can access all the non&proprietary information leading to such definite
proposition. *n ,have- v. ),...
922:
the Court ruled as follows<
!Considering the intent of the framers of the Constitution. we belie#e that it is
incumbent upon the PCGG and its officers. as well as other go#ernment
representati#es. to disclose sufficient public information on any proposed
settlement they ha#e decided to take up with the ostensible owners and
holders of ill&gotten wealth. >uch information. though. must pertain to definite
propositions of the overnment. not necessarily 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
!e8ploratory" stage. There is need. of course. to obser#e the same restrictions
on disclosure of information in general. as discussed earlier Q such as on
matters in#ol#ing national security. diplomatic or foreign relations. intelligence
and other classified information." Emphasis supplied$
Contrary to A(A)*%s contention. the commissioners of the /06F Constitutional
Commission understood that the right to information !contemplates inclusion of
neotiations leadin to the consummation of the transaction." Certainly. a
consummated contract is not a re7uirement for the e8ercise of the right to
information. +therwise. the people can ne#er e8ercise the right if no contract is
consummated. and if one is consummated. it may be too late for the public to e8pose its
defects.
)e7uiring a consummated contract will keep the public in the dark until the contract.
which may be grossly disad#antageous to the go#ernment or e#en illegal. becomes
a fait accompli. This negates the >tate policy of full transparency on matters of public
concern. a situation which the framers of the Constitution could not ha#e
intended. >uch a re7uirement will pre#ent the citiCenry from participating in the public
discussion of any proposed contract. effecti#ely truncating a basic right enshrined in
the Bill of )ights. @e can allow neither an emasculation of a constitutional right. nor a
retreat by the >tate of its a#owed !policy of full disclosure of all its transactions in#ol#ing
public interest."
The right co#ers three categories of information which are !matters of public
concern." namely< /$ official recordsH ,$ documents and papers pertaining to official
acts. transactions and decisionsH and 2$ go#ernment research data used in formulating
policies. The first category refers to any document that is part of the public records in
the custody of go#ernment agencies or officials. The second category refers to
documents and papers recording. e#idencing. establishing. confirming. supporting.
justifying or e8plaining official acts. transactions or decisions of go#ernment agencies or
officials. The third category refers to research data. whether raw. collated or processed.
owned by the go#ernment and used in formulating go#ernment policies.
The information that petitioner may access on the renegotiation of the BEA includes
e#aluation reports. recommendations. legal and e8pert opinions. minutes of meetings.
terms of reference and other documents attached to such reports or minutes. all relating
to the BEA. 3owe#er. the right to information does not compel PEA to prepare lists.
abstracts. summaries and the like relating to the renegotiation of the BEA.
925:
The right
only affords access to records. documents and papers. which means the opportunity to
inspect and copy them. +ne who e8ercises the right must copy the records. documents
and papers at his e8pense. The e8ercise of the right is also subject to reasonable
regulations to protect the integrity of the public records and to minimiCe disruption to
go#ernment operations. like rules specifying when and how to conduct the inspection
and copying.
92;:
The right to information. howe#er. does not e8tend to matters recogniCed as
pri#ileged information under the separation of powers.
92F:
The right does not also apply to
information on military and diplomatic secrets. information affecting national security.
and information on in#estigations of crimes by law enforcement agencies before the
prosecution of the accused. which courts ha#e long recogniCed as confidential.
921:
The
right may also be subject to other limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is pri#ileged
information rooted in the separation of powers. The information does not co#er
Presidential con#ersations. correspondences. or discussions during closed&door
Cabinet meetings which. like internal deliberations of the >upreme Court and other
collegiate courts. or e8ecuti#e sessions of either house of Congress.
926:
are recogniCed
as confidential. This kind of information cannot be pried open by a co&e7ual branch of
go#ernment. A frank e8change of e8ploratory ideas and assessments. free from the
glare of publicity and pressure by interested parties. is essential to protect the
independence of decision&making of those tasked to e8ercise Presidential. ?egislati#e
and Budicial power.
920:
This is not the situation in the instant case.
@e rule. therefore. that the constitutional right to information includes official
information on on&oin neotiations before a final contract. The information.
howe#er. must constitute definite propositions by the go#ernment and should not co#er
recogniCed e8ceptions like pri#ileged information. military and diplomatic secrets and
similar matters affecting national security and public order.
95-:
Congress has also
prescribed other limitations on the right to information in se#eral legislations.
95/:
'i(th issue: whether stipulations in the +mended J/+ for the transfer to +!+6% of
lands, reclaimed or to be reclaimed, violate the ,onstitution.
"*+ R+2$l1$% (o,-/1%+
The ownership of lands reclaimed from foreshore and submerged areas is rooted in
the )egalian doctrine which holds that the >tate owns all lands and waters of the public
domain. Apon the >panish con7uest of the Philippines. ownership of all !lands.
territories and possessions" in the Philippines passed to the >panish Crown.
95,:
The Iing.
as the so#ereign ruler and representati#e of the people. ac7uired and owned all lands
and territories in the Philippines e8cept those he disposed of by grant or sale to pri#ate
indi#iduals.
The /02;. /012 and /061 Constitutions adopted the )egalian doctrine substituting.
howe#er. the >tate. in lieu of the Iing. as the owner of all lands and waters of the public
domain. The )egalian doctrine is the foundation of the time&honored principle of land
ownership that !all lands that were not ac7uired from the Go#ernment. either by
purchase or by grant. belong to the public domain."
952:
Article 220 of the Ci#il Code of
/660. which is now Article 5,- of the Ci#il Code of /0;-. incorporated the )egalian
doctrine.
2wnership and 7isposition of 6eclaimed 8ands
The >panish ?aw of @aters of /6FF was the first statutory law go#erning the
ownership and disposition of reclaimed lands in the Philippines. +n (ay /6. /0-1. the
Philippine Commission enacted Act No. /F;5 which pro#ided for the lease, but not the
sale, of reclaimed lands of the overnment to corporations and individuals. ?ater.
on No#ember ,0. /0/0. the Philippine ?egislature appro#ed Act No. ,615. the Public
?and Act. which authoriCed the lease, but not the sale, of reclaimed lands of the
overnment to corporations and individuals. +n No#ember 1. /02F. the National
Assembly passed Commonwealth Act No. /5/. also known as the Public ?and Act.
which authoriCed the lease, but not the sale, of reclaimed lands of the overnment
to corporations and individuals. CA No. /5/ continues to this day as the general law
go#erning the classification and disposition of lands of the public domain.
$he 'panish 8aw of 9aters of :;66 and the ,ivil ,ode of :;;<
Ander the >panish ?aw of @aters of /6FF. the shores. bays. co#es. inlets and all
waters within the maritime Cone of the >panish territory belonged to the public domain
for public use.
955:
The >panish ?aw of @aters of /6FF allowed the reclamation of the sea
under Article ;. which pro#ided as follows<
!Article ;. ?ands reclaimed from the sea in conse7uence of works
constructed by the >tate. or by the pro#inces. pueblos or pri#ate persons. with
proper permission. shall become the property of the party constructing such
works. unless otherwise pro#ided by the terms of the grant of authority."
Ander the >panish ?aw of @aters. land reclaimed from the sea belonged to the party
undertaking the reclamation. pro#ided the go#ernment issued the necessary permit and
did not reser#e ownership of the reclaimed land to the >tate.
Article 220 of the Ci#il Code of /660 defined property of public dominion as follows<
!Art. 220. Property of public dominion is Q
/. That de#oted to public use. such as roads. canals. ri#ers. torrents. ports and bridges
constructed by the >tate. ri#erbanks. shores. roadsteads. and that of a similar
characterH
,. That belonging e8clusi#ely to the >tate which. without being of general public use. is
employed in some public ser#ice. or in the de#elopment of the national wealth. such
as walls. fortresses. and other works for the defense of the territory. and mines. until
granted to pri#ate indi#iduals."
Property de#oted to public use referred to property open for use by the public. *n
contrast. property de#oted to public ser#ice referred to property used for some specific
public ser#ice and open only to those authoriCed to use the property.
Property of public dominion referred not only to property de#oted to public use. but
also to property not so used but employed to develop the national wealth. This class
of property constituted property of public dominion although employed for some
economic or commercial acti#ity to increase the national wealth.
Article 25/ of the Ci#il Code of /660 go#erned the re&classification of property of
public dominion into pri#ate property. to wit<
!Art. 25/. Property of public dominion. when no longer de#oted to public use
or to the defense of the territory. shall become a part of the pri#ate property of
the >tate."
This pro#ision. howe#er. was not self&e8ecuting. The legislature. or the e8ecuti#e
department pursuant to law. must declare the property no longer needed for public use
or territorial defense before the go#ernment could lease or alienate the property to
pri#ate parties.
95;:
+ct =o. :65> of the )hilippine ,ommission
+n (ay 6. /0-1. the Philippine Commission enacted Act No. /F;5 which regulated
the lease of reclaimed and foreshore lands. The salient pro#isions of this law were as
follows<
!>ection /. The control and disposition of the foreshore as defined in
e8isting law. and the title to all .overnment or public lands made or
reclaimed by the .overnment by dredin or fillin or otherwise
throughout the Philippine *slands. shall be retained by the
.overnmentwithout prejudice to #ested rights and without prejudice to rights
conceded to the City of (anila in the ?uneta E8tension.
>ection ,. a$ The >ecretary of the *nterior shall cause all Go#ernment or
public lands made or reclaimed by the Go#ernment by dredging or filling or
otherwise to be di#ided into lots or blocks. with the necessary streets and
alleyways located thereon. and shall cause plats and plans of such sur#eys to
be prepared and filed with the Bureau of ?ands.
b$ Apon completion of such plats and plans the .overnor&.eneral shall
ive notice to the public that such parts of the lands so made or
reclaimed as are not needed for public purposes will be leased for
commercial and business purposes. 8 8 8.
8 8 8
e$ $he leases above provided for shall be disposed of to the hihest
and best bidder therefore. subject to such regulations and safeguards as the
Go#ernor&General may by e8ecuti#e order prescribe." Emphasis supplied$
Act No. /F;5 mandated that the overnment should retain title to all lands
reclaimed by the overnment. The Act also #ested in the go#ernment control and
disposition of foreshore lands. Pri#ate parties could lease lands reclaimed by the
go#ernment only if these lands were no longer needed for public purpose. Act No. /F;5
mandated public biddin in the lease of go#ernment reclaimed lands. Act No. /F;5
made go#ernment reclaimed lands sui eneris in that unlike other public lands which
the go#ernment could sell to pri#ate parties. these reclaimed lands were a#ailable only
for lease to pri#ate parties.
Act No. /F;5. howe#er. did not repeal >ection ; of the >panish ?aw of @aters of
/6FF. Act No. /F;5 did not prohibit pri#ate parties from reclaiming parts of the sea
under >ection ; of the >panish ?aw of @aters. ?ands reclaimed from the sea by pri#ate
parties with go#ernment permission remained pri#ate lands.
+ct =o. ?;7> of the )hilippine 8eislature
+n No#ember ,0. /0/0. the Philippine ?egislature enacted Act No. ,615. the Public
?and Act.
95F:
The salient pro#isions of Act No. ,615. on reclaimed lands. were as follows<
!>ec. F. $he .overnor&.eneral, upon the recommendation of the
'ecretary of +riculture and =atural 6esources, shall from time to time
classify the lands of the public domain into @
a$ +lienable or disposable.
b$ Timber. and
c$ (ineral lands. 8 8 8.
>ec. 1. 4or the purposes of the go#ernment and disposition of alienable or
disposable public lands. the .overnor&.eneral. upon recommendation by
the 'ecretary of +riculture and =atural 6esources, shall from time to
time declare what lands are open to disposition or concession under
this +ct."
>ec. 6. 2nly those lands shall be declared open to disposition or
concession which have been officially delimited or classified 8 8 8.
8 8 8
>ec. ;;. 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
aricultural purposes, and shall be open to disposition or concession. shall
be disposed of under the pro#isions of this chapter. and not otherwise.
>ec. ;F. $he lands disposable under this title shall be classified as
follows:
aA 8ands reclaimed by the .overnment by dredin, fillin, or
other meansB
CbA ForeshoreH
CcA !arshy lands or lands co#ered with water bordering upon the
shores or banks of na#igable lakes or ri#ersH
d$ ?ands not included in any of the foregoing classes.
8 8 8.
>ec. ;6. $he lands comprised in classes CaA, CbA, and CcA of section fifty&
si( shall be disposed of to private parties by lease only and not
otherwise. as soon as the .overnor&.eneral, upon recommendation by
the 'ecretary of +riculture and =atural 6esources, shall declare that
the same are not necessary for the public service and are open to
disposition under this chapter. $he lands included in class CdA may be
disposed of by sale or lease under the provisions of this
+ct." Emphasis supplied$
>ection F of Act No. ,615 authoriCed the Go#ernor&General to !classify lands of the
public domain into 8 8 8 alienable or disposable"
951:
lands. >ection 1 of the Act
empowered the Go#ernor&General to !declare what lands are open to disposition or
concession." >ection 6 of the Act limited alienable or disposable lands only to those
lands which ha#e been !officially delimited and classified."
>ection ;F of Act No. ,615 stated that lands !disposable under this title
956:
shall be
classified" as go#ernment reclaimed. foreshore and marshy lands. as well as other
lands. All these lands. howe#er. must be suitable for residential. commercial. industrial
or other producti#e non&aricultural purposes. These pro#isions #ested upon the
Go#ernor&General the power to classify inalienable lands of the public domain into
disposable lands of the public domain. These pro#isions also empowered the Go#ernor&
General to classify further such disposable lands of the public domain into go#ernment
reclaimed. foreshore or marshy lands of the public domain. as well as other non&
agricultural lands.
>ection ;6 of Act No. ,615 categorically mandated that disposable lands of the
public domain classified as go#ernment reclaimed. foreshore and marshy lands 4shall
be disposed of to private parties by lease only and not otherwise.5 The Go#ernor&
General. before allowing the lease of these lands to pri#ate parties. must formally
declare that the lands were !not necessary for the public ser#ice." Act No. ,615
reiterated the >tate policy to lease and not to sell go#ernment reclaimed. foreshore and
marshy lands of the public domain. a policy first enunciated in /0-1 in Act No.
/F;5. Go#ernment reclaimed. foreshore and marshy lands remained sui eneris. as
the only alienable or disposable lands of the public domain that the go#ernment could
not sell to pri#ate parties.
The rationale behind this >tate policy is ob#ious. Go#ernment reclaimed. foreshore
and marshy public lands for non&agricultural purposes retain their inherent potential as
areas for public ser#ice. This is the reason the go#ernment prohibited the sale. and
only allowed the lease. of these lands to pri#ate parties. The >tate always reser#ed
these lands for some future public ser#ice.
Act No. ,615 did not authoriCe the reclassification of go#ernment reclaimed.
foreshore and marshy lands into other non&agricultural lands under >ection ;F
d$. ?ands falling under >ection ;F d$ were the only lands for non&agricultural purposes
the go#ernment could sell to pri#ate parties. Thus. under Act No. ,615. the
go#ernment could not sell go#ernment reclaimed. foreshore and marshy lands to pri#ate
parties. unless the leislature passed a law allowin their sale.
950:
Act No. ,615 did not prohibit pri#ate parties from reclaiming parts of the sea
pursuant to >ection ; of the >panish ?aw of @aters of /6FF. ?ands reclaimed from the
sea by pri#ate parties with go#ernment permission remained pri#ate lands.
7ispositions under the :<35 ,onstitution
+n (ay /5. /02;. the /02; Constitution took effect upon its ratification by the
4ilipino people. The /02; Constitution. in adopting the )egalian doctrine. declared in
>ection /. Article L***. that Q
!>ection /. All agricultural. timber. and mineral lands of the public domain.
waters. minerals. coal. petroleum. and other mineral oils. all forces of potential
energy and other natural resources of the Philippines belong to the >tate. and
their disposition. e8ploitation. de#elopment. or utiliCation shall be limited to
citiCens of the Philippines or to corporations or associations at least si8ty per
centum of the capital of which is owned by such citiCens. subject to any
e8isting right. grant. lease. or concession at the time of the inauguration of the
Go#ernment established under this Constitution. =atural resources, with
the e(ception of public aricultural land, shall not be alienated. and no
license. concession. or lease for the e8ploitation. de#elopment. or utiliCation of
any of the natural resources shall be granted for a period e8ceeding twenty&
fi#e years. renewable for another twenty&fi#e years. e8cept as to water rights
for irrigation. water supply. fisheries. or industrial uses other than the
de#elopment of water power. in which cases beneficial use may be the
measure and limit of the grant." Emphasis supplied$
The /02; Constitution barred the alienation of all natural resources e8cept public
agricultural lands. which were the only natural resources the >tate could alienate. Thus.
foreshore lands. considered part of the >tate%s natural resources. became inalienable by
constitutional fiat. a#ailable only for lease for ,; years. renewable for another ,;
years. The go#ernment could alienate foreshore lands only after these lands were
reclaimed and classified as alienable agricultural lands of the public
domain. Go#ernment reclaimed and marshy lands of the public domain. being neither
timber nor mineral lands. fell under the classification of public agricultural lands.
9;-:
3owe#er. go#ernment reclaimed and marshy lands. although subject to classification
as disposable public agricultural lands. could only be leased and not sold to pri#ate
parties because of Act No. ,615.
The prohibition on pri#ate parties from ac7uiring ownership of go#ernment
reclaimed and marshy lands of the public domain was only a statutory prohibition and
the legislature could therefore remo#e such prohibition. The /02; Constitution did not
prohibit indi#iduals and corporations from ac7uiring go#ernment reclaimed and marshy
lands of the public domain that were classified as agricultural lands under e8isting public
land laws. >ection ,. Article L*** of the /02; Constitution pro#ided as follows<
!>ection ,. =o private corporation or association may acquire, lease, or
hold public aricultural lands in e(cess of one thousand and twenty four
hectares, nor may any individual acquire such lands by purchase in
e(cess of one hundred and forty hectares. or by lease in e8cess of one
thousand and twenty&four hectares. or by homestead in e8cess of twenty&four
hectares. ?ands adapted to graCing. not e8ceeding two thousand hectares.
may be leased to an indi#idual. pri#ate corporation. or
association." Emphasis supplied$
>till. after the effecti#ity of the /02; Constitution. the legislature did not repeal >ection
;6 of Act No. ,615 to open for sale to pri#ate parties go#ernment reclaimed and marshy
lands of the public domain. +n the contrary. the legislature continued the long
established >tate policy of retaining for the go#ernment title and ownership of
go#ernment reclaimed and marshy lands of the public domain.
,ommonwealth +ct =o. :>: of the )hilippine =ational +ssembly
+n No#ember 1. /02F. the National Assembly appro#ed Commonwealth Act No.
/5/. also known as the Public ?and Act. which compiled the then e8isting laws on lands
of the public domain. CA No. /5/. as amended. remains to this day the e(istin
eneral law go#erning the classification and disposition of lands of the public domain
other than timber and mineral lands.
9;/:
>ection F of CA No. /5/ empowers the President to classify lands of the public
domain into !alienable or disposable"
9;,:
lands of the public domain. which prior to such
classification are inalienable and outside the commerce of man. >ection 1 of CA No.
/5/ authoriCes the President to !declare what lands are open to disposition or
concession." >ection 6 of CA No. /5/ states that the go#ernment can declare open for
disposition or concession only lands that are !officially delimited and classified."
>ections F. 1 and 6 of CA No. /5/ read as follows<
!>ec. F. $he )resident. upon the recommendation of the 'ecretary of
+riculture and ,ommerce. shall from time to time classify the lands of
the public domain into @
a$ Alienable or disposable.
b$ Timber. and
c$ (ineral lands.
and may at any time and in like manner transfer such lands from one class to
another.
9;2:
for the purpose of their administration and disposition.
>ec. 1. 4or the purposes of the administration and disposition of alienable or
disposable public lands. the )resident, upon recommendation by the
'ecretary of +riculture and ,ommerce. shall from time to time declare
what lands are open to disposition or concessionunder this Act.
>ec. 6. 2nly those lands shall be declared open to disposition or
concession which have been officially delimited and classified and. when
practicable. sur#eyed. and which have not been reserved for public or
quasi&public uses. nor appropriated by the Go#ernment. nor in any manner
become pri#ate property. nor those on which a pri#ate right authoriCed and
recogniCed by this Act or any other #alid law may be claimed. or which. ha#ing
been reser#ed or appropriated. ha#e ceased to be so. 8 8 8."
Thus. before the go#ernment 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 reser#ing
these lands for public or 7uasi&public uses.
The salient pro#isions of CA No. /5/. on go#ernment reclaimed. foreshore and
marshy lands of the public domain. are as follows<
!>ec. ;6. +ny tract of land of the public domain which, bein neither
timber nor mineral land, is intended to be used for residential purposes
or for commercial, industrial, or other productive purposes other than
aricultural, and is open to disposition or concession, shall be disposed
of under the provisions of this chapter and not otherwise.
>ec. ;0. $he lands disposable under this title shall be classified as
follows:
CaA 8ands reclaimed by the .overnment by dredin, fillin, or
other meansB
CbA ForeshoreH
CcA !arshy lands or lands co#ered with water bordering upon the
shores or banks of na#igable lakes or ri#ersH
d$ ?ands not included in any of the foregoing classes.
>ec. F-. Any tract of land comprised under this title may be leased or sold. as
the case may be. to any person. corporation. or association authoriCed to
purchase or lease public lands for agricultural purposes. 8 8 8.
>ec. F/. $he lands comprised in classes CaA, CbA, and CcA of section fifty&
nine shall be disposed of to private parties by lease only and not
otherwise. as soon as the )resident. upon recommendation by the
>ecretary of Agriculture. shall declare that the same are not necessary for
the public service and are open to disposition under this chapter. $he lands
included in class CdA may be disposed of by sale or lease under the
provisions of this +ct." Emphasis supplied$
>ection F/ of CA No. /5/ readopted. after the effecti#ity of the /02; Constitution.
>ection ;6 of Act No. ,615 prohibiting the sale of go#ernment reclaimed. foreshore and
marshy disposable lands of the public domain. All these lands are intended for
residential. commercial. industrial or other non&agricultural purposes. As before.
>ection F/ allowed only the lease of such lands to pri#ate parties. The go#ernment
could sell to pri#ate parties only lands falling under >ection ;0 d$ of CA No. /5/. or
those lands for non&agricultural purposes not classified as go#ernment reclaimed.
foreshore and marshy disposable lands of the public domain. 4oreshore lands.
howe#er. became inalienable under the /02; Constitution which only allowed the lease
of these lands to 7ualified pri#ate parties.
>ection ;6 of CA No. /5/ e8pressly states that disposable lands of the public
domain intended for residential. commercial. industrial or other producti#e purposes
other than agricultural !shall be disposed of under the provisions of this chapter
and not otherwise." Ander >ection /- of CA No. /5/. the term !disposition" includes
lease of the land. Any disposition of go#ernment reclaimed. foreshore and marshy
disposable lands for non&agricultural purposes must comply with Chapter *L. Title *** of
CA No. /5/.
9;5:
unless a subse7uent law amended or repealed these pro#isions.
*n his concurring opinion in the landmark case of 6epublic 6eal *state
,orporation v. ,ourt of +ppeals,
9;;:
Bustice )eynato >. Puno summariCed succinctly
the law on this matter. as follows<
!4oreshore lands are lands of public dominion intended for public use. >o too
are lands reclaimed by the go#ernment by dredging. filling. or other
means. Act /F;5 mandated that the control and disposition of the foreshore
and lands under water remained in the national go#ernment. >aid law allowed
only the Nleasing% of reclaimed land. The Public ?and Acts of /0/0 and /02F
also declared that the foreshore and lands reclaimed by the go#ernment were
to be !disposed of to pri#ate parties by lease only and not otherwise." Before
leasing. howe#er. the Go#ernor&General. upon recommendation of the
>ecretary of Agriculture and Natural )esources. had first to determine that the
land reclaimed was not necessary for the public ser#ice. This re7uisite must
ha#e been met before the land could be disposed of. "ut even then, the
foreshore and lands under water were not to be alienated and sold to
private parties. $he disposition of the reclaimed land was only by
lease. $he land remained property of the 'tate.5 Emphasis supplied$
As obser#ed by Bustice Puno in his concurring opinion. !Commonwealth Act No. /5/
has remained in effect at present."
The >tate policy prohibiting the sale to pri#ate parties of go#ernment reclaimed.
foreshore and marshy alienable lands of the public domain. first implemented in /0-1
was thus reaffirmed in CA No. /5/ after the /02; Constitution took effect. The
prohibition on the sale of foreshore lands. howe#er. became a constitutional edict under
the /02; Constitution. 4oreshore lands became inalienable as natural resources of the
>tate. unless reclaimed by the go#ernment and classified as agricultural lands of the
public domain. in which case they would fall under the classification of go#ernment
reclaimed lands.
After the effecti#ity of the /02; Constitution. go#ernment reclaimed and marshy
disposable lands of the public domain continued to be only leased and not sold to
pri#ate parties.
9;F:
These lands remained sui eneris. as the only alienable or disposable
lands of the public domain the go#ernment could not sell to pri#ate parties.
>ince then and until now. the only way the go#ernment can sell to pri#ate parties
go#ernment reclaimed and marshy disposable lands of the public domain is for the
legislature to pass a law authoriCing such sale. CA No. /5/ does not authoriCe the
President to reclassify go#ernment reclaimed and marshy lands into other non&
agricultural lands under >ection ;0 d$. ?ands classified under >ection ;0 d$ are the
only alienable or disposable lands for non&agricultural purposes that the go#ernment
could sell to pri#ate parties.
(oreo#er. >ection F- of CA No. /5/ e(pressly re7uires congressional authority
before lands under >ection ;0 that the go#ernment pre#iously transferred to
go#ernment units or entities could be sold to pri#ate parties. >ection F- of CA No. /5/
declares that Q
!>ec. F-. 8 8 8 The area so leased or sold shall be such as shall. in the
judgment of the >ecretary of Agriculture and Natural )esources. be
reasonably necessary for the purposes for which such sale or lease is
re7uested. and shall not e8ceed one hundred and forty&four hectares<
Pro#ided. howe#er. That this limitation shall not apply to grants. donations. or
transfers made to a pro#ince. municipality or branch or subdi#ision of the
Go#ernment for the purposes deemed by said entities conduci#e to the public
interestH but the land so ranted, donated, or transferred to a province,
municipality or branch or subdivision of the .overnment shall not be
alienated, encumbered, or otherwise disposed of in a manner affectin
its title, e(cept when authori-ed by ,onress: 8 8 8." Emphasis supplied$
The congressional authority re7uired in >ection F- of CA No. /5/ mirrors the legislati#e
authority re7uired in >ection ;F of Act No. ,615.
+ne reason for the congressional authority is that >ection F- of CA No. /5/
e8empted go#ernment units and entities from the ma8imum area of public lands that
could be ac7uired from the >tate. These go#ernment units and entities should not just
turn around and sell these lands to pri#ate parties in #iolation of constitutional or
statutory limitations. +therwise. the transfer of lands for non&agricultural purposes to
go#ernment units and entities could be used to circum#ent constitutional limitations on
ownership of alienable or disposable lands of the public domain. *n the same manner.
such transfers could also be used to e#ade the statutory prohibition in CA No. /5/ on
the sale of go#ernment reclaimed and marshy lands of the public domain to pri#ate
parties. >ection F- of CA No. /5/ constitutes by operation of law a lien on these lands.
9;1:
*n case of sale or lease of disposable lands of the public domain falling under
>ection ;0 of CA No. /5/. >ections F2 and F1 re7uire apublic biddin. >ections F2
and F1 of CA No. /5/ pro#ide as follows<
!>ec. F2. @hene#er it is decided that lands co#ered by this chapter are not
needed for public purposes. the 'irector of ?ands shall ask the >ecretary of
Agriculture and Commerce now the >ecretary of Natural )esources$ for
authority to dispose of the same. Apon receipt of such authority. the 'irector
of ?ands shall gi#e notice by public ad#ertisement in the same manner as in
the case of leases or sales of agricultural public land. 8 8 8.
>ec. F1. $he lease or sale shall be made by oral biddinB and
ad#udication shall be made to the hihest bidder. 8 8 8." Emphasis
supplied$
Thus. CA No. /5/ mandates the Go#ernment to put to public auction all leases or sales
of alienable or disposable lands of the public domain.
9;6:
?ike Act No. /F;5 and Act No. ,615 before it. CA No. /5/ did not repeal >ection ;
of the >panish ?aw of @aters of /6FF. Pri#ate parties could still reclaim portions of the
sea with go#ernment permission. 3owe#er. the reclaimed land could become
private land only if classified as alienable aricultural land of the public
domain open to disposition under CA No. /5/. The /02; Constitution prohibited the
alienation of all natural resources e8cept public agricultural lands.
$he ,ivil ,ode of :<5D
The Ci#il Code of /0;- readopted substantially the definition of property of public
dominion found in the Ci#il Code of /660. Articles 5,- and 5,, of the Ci#il Code of
/0;- state that Q
!Art. 5,-. The following things are property of public dominion<
/$ Those intended for public use. such as roads. canals. ri#ers. torrents. ports and
bridges constructed by the >tate. banks. shores. roadsteads. and others of similar
characterH
,$ Those which belong to the >tate. without being for public use. and are intended for
some public ser#ice or for the de#elopment of the national wealth.
8 8 8.
Art. 5,,. Property of public dominion. when no longer intended for public use
or for public ser#ice. shall form part of the patrimonial property of the >tate."
Again. the go#ernment must formally declare that the property of public dominion is
no longer needed for public use or public ser#ice. before the same could be classified
as patrimonial property of the >tate.
9;0:
*n the case of go#ernment reclaimed and marshy
lands of the public domain. the declaration of their being disposable. as well as the
manner of their disposition. is go#erned by the applicable pro#isions of CA No. /5/.
?ike the Ci#il Code of /660. the Ci#il Code of /0;- included as property of public
dominion those properties of the >tate which. without being for public use. are intended
for public ser#ice or the !development of the national wealth." Thus. go#ernment
reclaimed and marshy lands of the >tate. e#en if not employed for public use or public
ser#ice. if de#eloped to enhance the national wealth. are classified as property of public
dominion.
7ispositions under the :<73 ,onstitution
The /012 Constitution. which took effect on Banuary /1. /012. likewise adopted the
)egalian doctrine. >ection 6. Article L*E of the /012 Constitution stated that Q
!>ec. 6. All lands of the public domain. waters. minerals. coal. petroleum and
other mineral oils. all forces of potential energy. fisheries. wildlife. and other
natural resources of the Philippines belong to the >tate. 9ith the e(ception
of aricultural, 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 e8ploration. de#elopment. e8ploitation.
or utiliCation of any of the natural resources shall be granted for a period
e8ceeding twenty&fi#e years. renewable for not more than twenty&fi#e years.
e8cept as to water rights for irrigation. water supply. fisheries. or industrial
uses other than the de#elopment of water power. in which cases. beneficial
use may be the measure and the limit of the grant." Emphasis supplied$
The /012 Constitution prohibited the alienation of all natural resources with the
e8ception of !agricultural. industrial or commercial. residential. and resettlement lands of
the public domain." *n contrast. the /02; Constitution barred the alienation of all natural
resources e8cept !public agricultural lands." 3owe#er. the term !public agricultural
lands" in the /02; Constitution encompassed industrial. commercial. residential and
resettlement lands of the public domain.
9F-:
*f the land of public domain were neither
timber nor mineral land. it would fall under the classification of agricultural land of the
public domain. "oth the :<35 and :<73 ,onstitutions, therefore, prohibited the
alienation of all natural resources e(cept aricultural lands of the public domain.
The /012 Constitution. howe#er. limited the alienation of lands of the public domain
to indi#iduals who were citiCens of the Philippines. Pri#ate corporations. e#en if wholly
owned by Philippine citiCens. were no longer allowed to ac7uire alienable lands of the
public domain unlike in the /02; Constitution. >ection //. Article L*E of the /012
Constitution declared that Q
!>ec. //. The Batasang Pambansa. taking into account conser#ation.
ecological. and de#elopment re7uirements of the natural resources. shall
determine by law the siCe of land of the public domain which may be
de#eloped. held or ac7uired by. or leased to. any 7ualified indi#idual.
corporation. or association. and the conditions therefor. =o private
corporation or association may hold alienable lands of the public
domain e(cept by lease not to e8ceed one thousand hectares in area nor
may any citiCen hold such lands by lease in e8cess of fi#e hundred hectares
or ac7uire by purchase. homestead or grant. in e8cess of twenty&four
hectares. No pri#ate corporation or association may hold by lease.
concession. license or permit. timber or forest lands and other timber or forest
resources in e8cess of one hundred thousand hectares. 3owe#er. such area
may be increased by the Batasang Pambansa upon recommendation of the
National Economic and 'e#elopment Authority." Emphasis supplied$
Thus. under the /012 Constitution. pri#ate corporations could hold alienable lands
of the public domain only through lease. +nly indi#iduals could now ac7uire alienable
lands of the public domain. and private corporations became absolutely barred
from acquirin any Eind of alienable land of the public domain. The constitutional
ban e8tended to all kinds of alienable lands of the public domain. while the statutory ban
under CA No. /5/ applied only to go#ernment reclaimed. foreshore and marshy
alienable lands of the public domain.
)7 =o. :D;> ,reatin the )ublic *states +uthority
+n 4ebruary 5. /011. then President 4erdinand (arcos issued Presidential 'ecree
No. /-65 creating PEA. a wholly go#ernment owned and controlled corporation with a
special charter. >ections 5 and 6 of P' No. /-65. #ests PEA with the following
purposes and powers<
!>ec. 5. Purpose. The Authority is hereby created for the following purposes<
a$ $o reclaim land, includin foreshore and submered areas. by
dredin, fillin or other means, or to acquire reclaimed landB
b$ To de#elop. impro#e. ac7uire. administer. deal in. subdi#ide.
dispose. lease and sell any and all Einds of lands. buildings. estates
and other forms of real property. owned. managed. controlled and=or
operated by the go#ernmentH
c$ To pro#ide for. operate or administer such ser#ice as may be necessary for
the efficient. economical and beneficial utiliCation of the abo#e properties.
>ec. ;. Powers and functions of the Authority. The Authority shall. in carrying
out the purposes for which it is created. ha#e the following powers and
functions<
a$To prescribe its by&laws.
8 8 8
i$ $o hold lands of the public domain in e8cess of the area
permitted to pri#ate corporations by statute.
j$ $o reclaim lands and to construct work across. or otherwise. any
stream. watercourse. canal. ditch. flume 8 8 8.
8 8 8
o$ To perform such acts and e8ercise such functions as may be necessary for
the attainment of the purposes and objecti#es herein specified." Emphasis
supplied$
P' No. /-65 authoriCes PEA to reclaim both foreshore and submerged areas of the
public domain. 4oreshore areas are those co#ered and unco#ered by the ebb and flow
of the tide.
9F/:
>ubmerged areas are those permanently under water regardless of the ebb
and flow of the tide.
9F,:
4oreshore and submerged areas indisputably belong to the public
domain
9F2:
and are inalienable unless reclaimed. classified as alienable lands open to
disposition. and further declared no longer needed for public ser#ice.
The ban in the /012 Constitution on pri#ate corporations from ac7uiring alienable
lands of the public domain did not apply to PEA since it was then. and until today. a fully
owned go#ernment corporation. The constitutional ban applied then. as it still applies
now. only to !pri#ate corporations and associations." P' No. /-65 e8pressly empowers
PEA !to hold lands of the public domain5 e#en !in e8cess of the area permitted to
pri#ate corporations by statute." $hus, )*+ can hold title to private lands, as well
as title to lands of the public domain.
*n order for PEA to sell its reclaimed foreshore and submerged alienable lands of
the public domain. there must be legislati#e authority empowering PEA to sell these
lands. This legislati#e authority is necessary in #iew of >ection F- of CA No./5/. which
states Q
!>ec. F-. 8 8 8H but the land so granted. donated or transferred to a pro#ince.
municipality. or branch or subdi#ision of the Go#ernment shall not be
alienated. encumbered or otherwise disposed of in a manner affecting its
title. e(cept when authori-ed by ,onressH 8 8 8." Emphasis supplied$
@ithout such legislati#e authority. PEA could not sell but only lease its reclaimed
foreshore and submerged alienable lands of the public domain. Ne#ertheless. any
legislati#e authority granted to PEA to sell its reclaimed alienable lands of the public
domain would be subject to the constitutional ban on pri#ate corporations from ac7uiring
alienable lands of the public domain. 3ence. such legislati#e authority could only benefit
pri#ate indi#iduals.
7ispositions under the :<;7 ,onstitution
The /061 Constitution. like the /02; and /012 Constitutions before it. has adopted
the )egalian doctrine. The /061 Constitution declares that all natural resources are
!owned by the 'tate." and e8cept for alienable agricultural lands of the public domain.
natural resources cannot be alienated. >ections , and 2. Article L** of the /061
Constitution state that Q
!>ection ,. 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 'tate. 9ith the e(ception of aricultural lands, all other natural
resources shall not be alienated. The e8ploration. de#elopment. and
utiliCation of natural resources shall be under the full control and super#ision
of the >tate. 8 8 8.
>ection 2. ?ands 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 de#oted. +lienable lands of the public domain shall be limited to
aricultural lands. )rivate corporations or associations may not hold
such alienable lands of the public domain e(cept by lease, for a period
not e(ceedin twenty&five years, renewable for not more than twenty&
five years, and not to e(ceed one thousand hectares in area. CitiCens of
the Philippines may lease not more than fi#e hundred hectares. or ac7uire not
more than twel#e hectares thereof by purchase. homestead. or grant.
Taking into account the re7uirements of conser#ation. ecology. and
de#elopment. and subject to the re7uirements of agrarian reform. the
Congress shall determine. by law. the siCe of lands of the public domain which
may be ac7uired. de#eloped. held. or leased and the conditions
therefor." Emphasis supplied$
The /061 Constitution continues the >tate policy in the /012 Constitution banning
pri#ate corporations from ac7uiring any Eind of alienable land of the public
domain. ?ike the /012 Constitution. the /061 Constitution allows pri#ate corporations
to hold alienable lands of the public domain only throuh lease. As in the /02; and
/012 Constitutions. the general law go#erning the lease to pri#ate corporations of
reclaimed. foreshore and marshy alienable lands of the public domain is still CA No.
/5/.
$he 6ationale behind the ,onstitutional "an
The rationale behind the constitutional ban on corporations from ac7uiring. e8cept
through lease. alienable lands of the public domain is not well understood. 'uring the
deliberations of the /06F Constitutional Commission. the commissioners probed the
rationale behind this ban. thus<
!4). BE)NA>< (r. Eice&President. my 7uestions ha#e reference to page 2.
line ; which says<
SNo pri#ate corporation or association may hold alienable lands of the
public domain e8cept by lease. not to e8ceed one thousand hectares
in area.%
*f we recall. this pro#ision did not e8ist under the /02; Constitution. but this
was introduced in the /012 Constitution. *n effect. it prohibits pri#ate
corporations from ac7uiring alienable public lands. "ut it has not been very
clear in #urisprudence what the reason for this is. *n some of the cases
decided in /06, and /062. it was indicated that the purpose of this is to
prevent lare landholdins. *s that the intent of this pro#isionR
(). E*??EGA>< * think that is the spirit of the pro#ision.
4). BE)NA>< *n e8isting decisions in#ol#ing the *glesia ni Cristo. there were
instances where the *glesia ni Cristo was not allowed to ac7uire a mere 2/2&
s7uare meter land where a chapel stood because the >upreme Court said it
would be in #iolation of this." Emphasis supplied$
*n +yo v. ,usi.
9F5:
the Court e8plained the rationale behind this constitutional ban in
this way<
!*ndeed. one purpose of the constitutional prohibition against purchases of
public agricultural lands by pri#ate corporations is to e7uitably diffuse land
ownership or to encourage Nowner&culti#atorship and the economic family&siCe
farm% and to pre#ent a recurrence of cases like the instant case. 3uge
landholdings by corporations or pri#ate persons had spawned social unrest."
3owe#er. if the constitutional intent is to pre#ent huge landholdings. the Constitution
could ha#e simply limited the siCe of alienable lands of the public domain that
corporations could ac7uire. The Constitution could ha#e followed the limitations on
indi#iduals. who could ac7uire not more than ,5 hectares of alienable lands of the public
domain under the /012 Constitution. and not more than /, hectares under the /061
Constitution.
*f the constitutional intent is to encourage economic family&siCe farms. placing the
land in the name of a corporation would be more effecti#e in pre#enting the break&up of
farmlands. *f 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 subdi#ided parcels
of the farmland. This would pre#ent the continuing break&up of farmlands into smaller
and smaller plots from one generation to the ne8t.
*n actual practice. the constitutional ban strengthens the constitutional limitation on
indi#iduals from ac7uiring more than the allowed area of alienable lands of the public
domain. @ithout the constitutional ban. indi#iduals who already ac7uired the ma8imum
area of alienable lands of the public domain could easily set up corporations to ac7uire
more alienable public lands. An indi#idual could own as many corporations as his
means would allow him. An indi#idual could e#en hide his ownership of a corporation
by putting his nominees as stockholders of the corporation. The corporation is a
con#enient #ehicle to circum#ent the constitutional limitation on ac7uisition by
indi#iduals of alienable lands of the public domain.
The constitutional intent. under the /012 and /061 Constitutions. is to transfer
ownership of only a limited area of alienable land of the public domain to a 7ualified
indi#idual. This constitutional intent is safeguarded by the pro#ision prohibiting
corporations from ac7uiring alienable lands of the public domain. since the #ehicle to
circum#ent the constitutional intent is remo#ed. The a#ailable alienable public lands are
gradually decreasing in the face of an e#er&growing population. The most effecti#e way
to insure faithful adherence to this constitutional intent is to grant or sell alienable lands
of the public domain only to indi#iduals. This. it would seem. is the practical benefit
arising from the constitutional ban.
$he +mended Joint /enture +reement
The subject matter of the Amended BEA. as stated in its second @hereas clause.
consists of three properties. namely<
/. !9T:hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boule#ard in Parana7ue and ?as Pinas. (etro (anila. with a combined titled area of
/.;16.55/ s7uare metersH"
,. !9A:nother area of ,.5,/.;;0 s7uare meters contiguous to the three islandsH" and
2. !9A:t A(A)*%s option as appro#ed by PEA. an additional 2;- hectares more or less to
regulariCe the configuration of the reclaimed area."
9F;:
PEA confirms that the Amended BEA in#ol#es !the de#elopment of the 4reedom *slands
and further reclamation of about ,;- hectares 8 8 8." plus an option !granted to A(A)*
to subse7uently reclaim another 2;- hectares 8 8 8."
9FF:
*n short. the Amended BEA co#ers a reclamation area of 1;- hectares. 2nly
:57.;> hectares of the 75D&hectare reclamation pro#ect have been reclaimed, and
the rest of the 5<?.:5 hectares are still submered areas formin part of !anila
"ay.
Ander the Amended BEA. A(A)* will reimburse PEA the sum of P/.605./,0.,--.--
for PEA%s !actual cost" in partially reclaiming the 4reedom *slands. A(A)* will also
complete. at its own e8pense. the reclamation of the 4reedom *slands. A(A)* will
further shoulder all the reclamation costs of all the other areas. totaling ;0,./; hectares.
still to be reclaimed. A(A)* and PEA will share. in the proportion of 1- percent and 2-
percent. respecti#ely. the total net usable area which is defined in the Amended BEA as
the total reclaimed area less 2- percent earmarked for common areas. Title to A(A)*%s
share in the net usable area. totaling 2F1.; hectares. will be issued in the name of
A(A)*. >ection ;., c$ of the Amended BEA pro#ides that Q
!8 8 8. PEA shall ha#e the duty to e8ecute without delay the necessary deed
of transfer or con#eyance of the title pertaining to A(A)*%s ?and share based
on the ?and Allocation Plan. )*+, when requested in writin by +!+6%,
shall then cause the issuance and delivery of the proper certificates of
title coverin +!+6%1s 8and 'hare in the name of +!+6%, 8 8 8H pro#ided.
that if more than se#enty percent 1-T$ of the titled area at any gi#en time
pertains to A(A)*. PEA shall deli#er to A(A)* only se#enty percent 1-T$ of
the titles pertaining to A(A)*. until such time when a corresponding
proportionate area of additional land pertaining to PEA has been
titled." Emphasis supplied$
%ndisputably, under the +mended J/+ +!+6% will acquire and own a ma(imum of
367.5 hectares of reclaimed land which will be titled in its name.
To implement the Amended BEA. PEA delegated to the unincorporated PEA&A(A)*
joint #enture PEA%s statutory authority. rights and pri#ileges to reclaim foreshore and
submerged areas in (anila Bay. >ection 2.,.a of the Amended BEA states that Q
!PEA hereby contributes to the joint #enture its rights and pri#ileges to perform
)awland )eclamation and 3oriContal 'e#elopment as well as own the
)eclamation Area. thereby granting the Boint Eenture the full and e8clusi#e
right. authority and pri#ilege to undertake the Project in accordance with the
(aster 'e#elopment Plan."
The Amended BEA is the product of a renegotiation of the original BEA dated April ,;.
/00; and its supplemental agreement dated August 0. /00;.
$he $hreshold %ssue
The threshold issue is whether A(A)*. a pri#ate corporation. can ac7uire and own
under the Amended BEA 2F1.; hectares of reclaimed foreshore and submerged areas in
(anila Bay in #iew of >ections , and 2. Article L** of the /061 Constitution which state
that<
!>ection ,. All lands of the public domain. waters. minerals. coal. petroleum.
and other mineral oils. all forces of potential energy. fisheries. forests or
timber. wildlife. flora and fauna. and other natural resources are owned by the
>tate. 9ith the e(ception of aricultural lands, all other natural
resources shall not be alienated. 8 8 8.
8 8 8
>ection 2. 8 8 8 Alienable lands of the public domain shall be limited to
agricultural lands. )rivate corporations or associations may not hold
such alienable lands of the public domain e(cept by lease. 8 8
8."Emphasis supplied$
,lassification of 6eclaimed Foreshore and 'ubmered +reas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of
(anila Bay are alienable or disposable lands of the public domain. *n its (emorandum.
9F1:
PEA admits that Q
!Ander the Public ?and Act CA /5/. as amended$. reclaimed lands are
classified as alienable and disposable lands of the public domain:
N>ec. ;0. The lands disposable under this title shall be classified as follows<
a$ ?ands reclaimed by the go#ernment by dredging. filling.
or other meansH
8 8 8.%" Emphasis supplied$
?ikewise. the ?egal Task 4orce
9F6:
constituted under Presidential Administrati#e +rder
No. 2F; admitted in its )eport and )ecommendation to then President 4idel E. )amos.
!F6Geclaimed lands are classified as alienable and disposable lands of the public
domain."
9F0:
The ?egal Task 4orce concluded that Q
!'. Conclusion
)eclaimed lands are lands of the public domain. 3owe#er. by statutory
authority. the rights of ownership and disposition o#er reclaimed lands ha#e
been transferred to PEA. by #irtue of which PEA. as owner. may #alidly
con#ey the same to any 7ualified person without #iolating the Constitution or
any statute.
The constitutional pro#ision prohibiting pri#ate corporations from holding
public land. e8cept by lease >ec. 2. Art. LE**.
91-:
/061 Constitution$. does not
apply to reclaimed lands whose ownership has passed on to PEA by statutory
grant."
Ander >ection ,. Article L** of the /061 Constitution. the foreshore and submerged
areas of (anila Bay are part of the !lands of the public domain. waters 8 8 8 and other
natural resources" and conse7uently !owned by the >tate." As such. foreshore and
submerged areas !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
con#ert these inalienable natural resources of the >tate 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 disposition or
concession. (oreo#er. these reclaimed lands cannot be classified as alienable or
disposable if the law has reser#ed them for some public or 7uasi&public use.
91/:
>ection 6 of CA No. /5/ pro#ides that !only those lands shall be declared open to
disposition or concession which ha#e been officially delimited and classified."
91,:
The
President has the authority to classify inalienable lands of the public domain into
alienable or disposable lands of the public domain. pursuant to >ection F of CA No.
/5/. *n 8aurel vs. .arcia.
912:
the E8ecuti#e 'epartment attempted to sell the )oppongi
property in Tokyo. Bapan. which was ac7uired by the Philippine Go#ernment 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 5,,
915:
of the
Ci#il Code. a property of public dominion retains such character until formally
declared otherwise. The Court ruled that Q
!The fact that the )oppongi site has not been used for a long time for actual
Embassy ser#ice does not automatically con#ert it to patrimonial
property. Any such con#ersion happens only if the property is withdrawn from
public use Cebu +8ygen and Acetylene Co. #. Bercilles. FF >C)A 56/
9/01;:. + property continues to be part of the public domain, not
available for private appropriation or ownership 0until there is a formal
declaration on the part of the overnment to withdraw it from bein
such1 *gnacio #. 'irector of ?ands. /-6 Phil. 22; 9/0F-:." Emphasis
supplied$
P' No. /-6;. issued on 4ebruary 5. /011. authoriCed the issuance of special land
patents for lands reclaimed by PEA from the foreshore or submerged areas of (anila
Bay. +n Banuary /0. /066 then President CoraCon C. A7uino issued >pecial Patent No.
2;/1 in the name of PEA for the /;1.65 hectares comprising the partially reclaimed
4reedom *slands. >ubse7uently. on April 0. /000 the )egister of 'eeds of the
(unicipality of Parana7ue issued TCT Nos. 12-0. 12// and 12/, in the name of PEA
pursuant to >ection /-2 of P' No. /;,0 authoriCing the issuance of certificates of title
corresponding to land patents. To this day. these certificates of title are still in the name
of PEA.
P' No. /-6;. coupled with President A7uino%s actual issuance of a special patent
co#ering the 4reedom *slands. is e7ui#alent to an official proclamation classifying the
4reedom *slands as alienable or disposable lands of the public domain. P' No. /-6;
and President A7uino%s issuance of a land patent also constitute a declaration that the
4reedom *slands are no longer needed for public ser#ice. $he Freedom %slands are
thus alienable or disposable lands of the public domain, open to disposition or
concession to qualified parties.
At the time then President A7uino issued >pecial Patent No. 2;/1. PEA had already
reclaimed the 4reedom *slands although subse7uently there were partial erosions on
some areas. The go#ernment had also completed the necessary sur#eys on these
islands. Thus. the 4reedom *slands were no longer part of (anila Bay but part of the
land mass. >ection 2. Article L** of the /061 Constitution classifies lands of the public
domain into !agricultural. forest or timber. mineral lands. and national parks." Being
neither timber. mineral. nor national park lands. the reclaimed 4reedom *slands
necessarily fall under the classification of agricultural lands of the public domain. Ander
the /061 Constitution. agricultural lands of the public domain are the only natural
resources that the >tate may alienate to 7ualified pri#ate parties. All other natural
resources. such as the seas or bays. are !waters 8 8 8 owned by the >tate" forming part
of the public domain. and are inalienable pursuant to >ection ,. Article L** of the /061
Constitution.
A(A)* claims that the 4reedom *slands are pri#ate lands because C'CP. then a
pri#ate corporation. reclaimed the islands under a contract dated No#ember ,-. /012
with the Commissioner of Public 3ighways. A(A)*. citing Article ; of the >panish ?aw
of @aters of /6FF. argues that !if the ownership of reclaimed lands may be gi#en to the
party constructing the works. then it cannot be said that reclaimed lands are lands of the
public domain which the >tate may not alienate."
91;:
Article ; of the >panish ?aw of
@aters reads as follows<
!Article ;. ?ands reclaimed from the sea in conse7uence of works constructed
by the >tate. or by the pro#inces. pueblos or pri#ate persons. with proper
permission. shall become the property of the party constructing such
works. unless otherwise provided by the terms of the rant of authority."
Emphasis supplied$
Ander Article ; of the >panish ?aw of @aters of /6FF. pri#ate parties could reclaim
from the sea only with !proper permission" from the >tate. Pri#ate parties could own the
reclaimed land only if not !otherwise pro#ided by the terms of the grant of authority."
This clearly meant that no one could reclaim from the sea without permission from the
>tate because the sea is property of public dominion. *t also meant that the >tate could
grant or withhold ownership of the reclaimed land because any reclaimed land. like the
sea from which it emerged. belonged to the >tate. Thus. a pri#ate person reclaiming
from the sea without permission from the >tate could not ac7uire ownership of the
reclaimed land which would remain property of public dominion like the sea it replaced.
91F:
Article ; of the >panish ?aw of @aters of /6FF adopted the time&honored principle of
land ownership that !all lands that were not ac7uired from the go#ernment. either by
purchase or by grant. belong to the public domain."
911:
Article ; of the >panish ?aw of @aters must be read together with laws
subse7uently enacted on the disposition of public lands. *n particular. CA No. /5/
re7uires that lands of the public domain must first be classified as alienable or
disposable before the go#ernment can alienate them. These lands must not be
reser#ed for public or 7uasi&public purposes.
916:
(oreo#er. the contract between C'CP
and the go#ernment was e8ecuted after the effecti#ity of the /012 Constitution which
barred pri#ate corporations from ac7uiring any kind of alienable land of the public
domain. This contract could not ha#e con#erted the 4reedom *slands into pri#ate lands
of a pri#ate corporation.
Presidential 'ecree No. 2&A. issued on Banuary //. /012. re#oked all laws
authoriCing the reclamation of areas under water and re#ested solely in the National
Go#ernment the power to reclaim lands. >ection / of P' No. 2&A declared that Q
!$he provisions of any law to the contrary notwithstandin. the
reclamation of areas under water. whether foreshore or inland. shall belimited
to the =ational .overnment or any person authori-ed by it under a
proper contract. Emphasis supplied$
8 8 8."
P' No. 2&A repealed >ection ; of the >panish ?aw of @aters of /6FF because
reclamation of areas under water could now be undertaken only by the National
Go#ernment or by a person contracted by the National Go#ernment. Pri#ate parties
may reclaim from the sea only under a contract with the National Go#ernment. and no
longer by grant or permission as pro#ided in >ection ; of the >panish ?aw of @aters of
/6FF.
E8ecuti#e +rder No. ;,;. issued on 4ebruary /5. /010. designated PEA as the
National Go#ernment%s implementing arm to undertake !all reclamation projects of the
go#ernment." which !shall be undertaEen by the )*+ or throuh a proper contract
e(ecuted by it with any person or entity." Ander such contract. a pri#ate party
recei#es compensation for reclamation ser#ices rendered to PEA. Payment to the
contractor may be in cash. or in kind consisting of portions of the reclaimed land.
subject to the constitutional ban on pri#ate corporations from ac7uiring 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 declared no longer needed for public ser#ice.
The Amended BEA co#ers not only the 4reedom *slands. but also an additional
;0,./; hectares which are still submerged and forming part of (anila Bay. $here is no
leislative or )residential act classifyin these submered areas as alienable or
disposable lands of the public domain open to disposition. These submerged
areas are not co#ered by any patent or certificate of title. There can be no dispute that
these submerged areas form part of the public domain. and in their present state
are inalienable and outside the commerce of man. Antil reclaimed from the sea.
these submerged areas are. under the Constitution. !waters 8 8 8 owned by the >tate."
forming part of the public domain and conse7uently inalienable. +nly when actually
reclaimed from the sea can these submerged areas be classified as public agricultural
lands. which under the Constitution are the only natural resources that the >tate may
alienate. +nce reclaimed and transformed into public agricultural lands. the
go#ernment may then officially classify these lands as alienable or disposable lands
open to disposition. Thereafter. the go#ernment may declare these lands no longer
needed for public ser#ice. +nly then can these reclaimed lands be considered alienable
or disposable lands of the public domain and within the commerce of man.
The classification of PEA%s reclaimed foreshore and submerged lands into alienable
or disposable lands open to disposition is necessary because PEA is tasked under its
charter to undertake public ser#ices that re7uire the use of lands of the public
domain. Ander >ection ; of P' No. /-65. the functions of PEA include the following<
!9T:o own or operate railroads. tramways and other kinds of land transportation. 8 8 8H
9T:o construct. maintain and operate such systems of sanitary sewers as may be
necessaryH 9T: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 pri#ate parties of any or all of the hihways, roads, utilities,
buildins andHor any of its properties and to impose or collect fees or tolls for their
use." Thus. part of the reclaimed foreshore and submerged lands held by the PEA
would actually be needed for public use or ser#ice since many of the functions imposed
on PEA by its charter constitute essential public ser#ices.
(oreo#er. >ection / of E8ecuti#e +rder No. ;,; pro#ides that PEA !shall be
primarily responsible for integrating. directing. and coordinating all reclamation projects
for and on behalf of the National Go#ernment." The same section also states that !9A:ll
reclamation projects shall be appro#ed by the President upon recommendation of the
PEA. and shall be undertaken by the PEA or through a proper contract e8ecuted by it
with any person or entityH 8 8 8." Thus. under E+ No. ;,;. in relation to P' No. 2&A and
P' No./-65. PEA became the primary implementing agency of the National
Go#ernment to reclaim foreshore and submerged lands of the public domain. E+ No.
;,; recogniCed PEA as the go#ernment entity !to undertake the reclamation of lands
and ensure their ma8imum utiliCation in promotin public welfare and
interests."
910:
>ince large portions of these reclaimed lands would ob#iously be needed
for public ser#ice. there must be a formal declaration segregating reclaimed lands no
longer needed for public ser#ice from those still needed for public ser#ice.
>ection 2 of E+ No. ;,;. by declaring that all lands reclaimed by PEA !shall belong
to or be owned by the PEA." could not automatically operate to classify inalienable
lands into alienable or disposable lands of the public domain. +therwise. reclaimed
foreshore and submerged lands of the public domain would automatically become
alienable once reclaimed by PEA. whether or not classified as alienable or disposable.
The )e#ised Administrati#e Code of /061. a later law than either P' No. /-65 or
E+ No. ;,;. #ests in the 'epartment of En#ironment and Natural )esources !'EN)"
for bre#ity$ the following powers and functions<
!>ec. 5. Powers and 4unctions. The 'epartment shall<
/$ 8 8 8
8 8 8
5$ *(ercise supervision and control o#er forest lands. alienable and
disposable public lands. mineral resources and. in the process of e8ercising
such control. impose appropriate ta8es. fees. charges. rentals and any such
form of le#y and collect such re#enues for the e8ploration. de#elopment.
utiliCation or gathering of such resourcesH
8 8 8
/5$ )romulate rules, reulations and uidelines on the issuance of
licenses, permits, concessions, lease areements and such other
privilees concernin the development, e(ploration and utili-ation of the
country1s marine, freshwater, and bracEish water and over all aquatic
resources of the country and shall continue to oversee, supervise and
police our natural resourcesH cancel or cause to cancel such pri#ileges
upon failure. non&compliance or #iolations of any regulation. order. and for all
other causes which are in furtherance of the conser#ation of natural resources
and supporti#e of the national interestH
/;$ *(ercise e(clusive #urisdiction on the manaement and disposition
of all lands of the public domain and serve as the sole aency
responsible for classification. sub&classification. sur#eying and titling of
lands in consultation with appropriate agencies."
96-:
Emphasis supplied$
As manager. conser#ator and o#erseer of the natural resources of the >tate. 'EN)
e8ercises !super#ision and control o#er alienable and disposable public lands." 'EN)
also e8ercises !e8clusi#e jurisdiction on the management and disposition of all lands of
the public domain." Thus. 'EN) decides whether areas under water. like foreshore or
submerged areas of (anila Bay. should be reclaimed or not. This means that PEA
needs authoriCation from 'EN) before PEA can undertake reclamation projects in
(anila Bay. or in any part of the country.
'EN) also e8ercises e8clusi#e jurisdiction o#er the disposition of all lands of the
public domain. 3ence. 'EN) decides whether reclaimed lands of PEA should be
classified as alienable under >ections F
96/:
and 1
96,:
of CA No. /5/. +nce 'EN) decides
that the reclaimed lands should be so classified. it then recommends to the President
the issuance of a proclamation classifying the lands as alienable or disposable lands of
the public domain open to disposition. @e note that then 'EN) >ecretary 4ulgencio >.
4actoran. Br. countersigned >pecial Patent No. 2;/1 in compliance with the )e#ised
Administrati#e Code and >ections F and 1 of CA No. /5/.
*n short. 'EN) is #ested with the power to authoriCe the reclamation of areas under
water. while PEA is #ested with the power to undertake the physical reclamation of
areas under water. whether directly or through pri#ate contractors. 'EN) is also
empowered to classify lands of the public domain into alienable or disposable lands
subject to the appro#al of the President. +n the other hand. PEA is tasked to de#elop.
sell or lease the reclaimed alienable lands of the public domain.
Clearly. the mere physical act of reclamation by PEA of foreshore or submerged
areas does not make the reclaimed lands alienable or disposable lands of the public
domain. much less patrimonial lands of PEA. ?ikewise. the mere transfer by the
National Go#ernment of lands of the public domain to PEA does not make the lands
alienable or disposable lands of the public domain. much less patrimonial lands of PEA.
Absent two official acts Q a classification that these lands are alienable or
disposable and open to disposition and a declaration that these lands are not needed
for public ser#ice. lands reclaimed by PEA remain inalienable lands of the public
domain. +nly such an official classification and formal declaration can con#ert
reclaimed lands into alienable or disposable lands of the public domain. open to
disposition under the Constitution. Title * and Title ***
962:
of CA No. /5/ and other
applicable laws.
965:
)*+1s +uthority to 'ell 6eclaimed 8ands
PEA. like the ?egal Task 4orce. argues that as alienable or disposable lands of the
public domain. the reclaimed lands shall be disposed of in accordance with CA No. /5/.
the Public ?and Act. PEA. citing >ection F- of CA No. /5/. admits that reclaimed lands
transferred to a branch or subdi#ision of the go#ernment !shall not be alienated.
encumbered. or otherwise disposed of in a manner affecting its title. e(cept when
authori-ed by ,onress< 8 8 8."
96;:
Emphasis by PEA$
*n 8aurel vs. .arcia,
96F:
the Court cited >ection 56 of the )e#ised Administrati#e
Code of /061. which states that Q
!>ec. 56. +fficial AuthoriCed to Con#ey )eal Property. @hene#er real
property of the Go#ernment is authori-ed by law to be conveyed. the deed
of con#eyance shall be e8ecuted in behalf of the go#ernment by the following<
8 8 8."
Thus. the Court concluded that a law is needed to con#ey any real property belonging to
the Go#ernment. The Court declared that &
!*t is not for the President to con#ey real property of the go#ernment on his or
her own sole will. +ny such conveyance must be authori-ed and
approved by a law enacted by the ,onress. *t re7uires e8ecuti#e and
legislati#e concurrence." Emphasis supplied$
PEA contends that P' No. /-6; and E+ No. ;,; constitute the legislati#e authority
allowing PEA to sell its reclaimed lands. P' No. /-6;. issued on 4ebruary 5. /011.
pro#ides that Q
!$he land reclaimed in the foreshore and offshore area of !anila
"ay pursuant to the contract for the reclamation and construction of the
(anila&Ca#ite Coastal )oad Project between the )epublic of the Philippines
and the Construction and 'e#elopment Corporation of the Philippines dated
No#ember ,-. /012 and=or any other contract or reclamation co#ering the
same area is hereby transferred, conveyed and assined to the
ownership and administration of the )ublic *states +uthority established
pursuant to P' No. /-65H Pro#ided. howe#er. That the rights and interests of
the Construction and 'e#elopment Corporation of the Philippines pursuant to
the aforesaid contract shall be recogniCed and respected.
3enceforth. the Public Estates Authority shall e8ercise the rights and assume
the obligations of the )epublic of the Philippines 'epartment of Public
3ighways$ arising from. or incident to. the aforesaid contract between the
)epublic of the Philippines and the Construction and 'e#elopment
Corporation of the Philippines.
*n consideration of the foregoing transfer and assignment. the Public Estates
Authority shall issue in fa#or of the )epublic of the Philippines the
corresponding shares of stock in said entity with an issued #alue of said
shares of stock which$ shall be deemed fully paid and non&assessable.
The >ecretary of Public 3ighways and the General (anager of the Public
Estates Authority shall e8ecute such contracts or agreements. including
appropriate agreements with the Construction and 'e#elopment Corporation
of the Philippines. as may be necessary to implement the abo#e.
'pecial land patentHpatents shall be issued by the 'ecretary of =atural
6esources in favor of the )ublic *states +uthority without pre#udice to
the subsequent transfer to the contractor or his assinees of such
portion or portions of the land reclaimed or to be reclaimed as provided
for in the above&mentioned contract. 2n the basis of such patents, the
8and 6eistration ,ommission shall issue the correspondin certificate
of title." Emphasis supplied$
+n the other hand. >ection 2 of E+ No. ;,;. issued on 4ebruary /5. /010. pro#ides
that &
!>ec. 2. +ll lands reclaimed by )*+ shall belon to or be owned by the
)*+ which shall be responsible for its administration. de#elopment. utiliCation
or disposition in accordance with the pro#isions of Presidential 'ecree No.
/-65. Any and all income that the PEA may deri#e from the sale. lease or use
of reclaimed lands shall be used in accordance with the pro#isions of
Presidential 'ecree No. /-65."
There is no e8press authority under either P' No. /-6; or E+ No. ;,; for PEA to
sell its reclaimed lands. P' No. /-6; merely transferred !ownership and administration"
of lands reclaimed from (anila Bay to PEA. while E+ No. ;,; declared that lands
reclaimed by PEA !shall belong to or be owned by PEA." E+ No. ;,; e8pressly states
that PEA should dispose of its reclaimed lands !in accordance with the pro#isions of
Presidential 'ecree No. /-65." the charter of PEA.
PEA%s charter. howe#er. e8pressly tasks PEA !to de#elop. impro#e. ac7uire.
administer. deal in. subdi#ide. dispose. lease and sell any and all Einds of lands 8 8 8
owned. managed. controlled and=or operated by the go#ernment."
961:
Emphasis
supplied$ $here is, therefore, leislative authority ranted to )*+ to sell its lands,
whether patrimonial or alienable lands of the public domain. PEA may sell to
pri#ate parties its patrimonial properties in accordance with the PEA charter free from
constitutional limitations. The constitutional ban on pri#ate corporations from ac7uiring
alienable lands of the public domain does not apply to the sale of PEA%s patrimonial
lands.
PEA may also sell its alienable or disposable lands of the public domain to
pri#ate indi#iduals since. with the legislati#e authority. there is no longer any statutory
prohibition against such sales and the constitutional ban does not apply to
indi#iduals. PEA. howe#er. cannot sell anyof its alienable or disposable lands of the
public domain to pri#ate corporations since >ection 2. Article L** of the /061
Constitution e8pressly prohibits such sales. The legislati#e authority benefits only
indi#iduals. Pri#ate corporations remain barred from ac7uiring any kind of alienable
land of the public domain. including go#ernment reclaimed lands.
The pro#ision in P' No. /-6; stating that portions of the reclaimed lands could be
transferred by PEA to the !contractor or his assignees" Emphasis supplied$ would not
apply to pri#ate corporations but only to indi#iduals because of the constitutional
ban. +therwise. the pro#isions of P' No. /-6; would #iolate both the /012 and /061
Constitutions.
$he requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable
lands open to disposition. and further declared no longer needed for public ser#ice. PEA
would ha#e to conduct a public bidding in selling or leasing these lands. PEA must
obser#e the pro#isions of >ections F2 and F1 of CA No. /5/ re7uiring public auction. in
the absence of a law e8empting PEA from holding a public auction.
966:
>pecial Patent No.
2;/1 e8pressly states that the patent is issued by authority of the Constitution and P'
No. /-65. !supplemented by Commonwealth Act No. /5/. as amended." This is an
acknowledgment that the pro#isions of CA No. /5/ apply to the disposition of reclaimed
alienable lands of the public domain unless otherwise pro#ided by law. E8ecuti#e +rder
No. F;5.
960:
which authoriCes PEA !to determine the kind and manner of payment for the
transfer" of its assets and properties. does not e8empt PEA from the re7uirement of
public auction. E+ No. F;5 merely authoriCes PEA to decide the mode of payment.
whether in kind and in installment. but does not authoriCe PEA to dispense with public
auction.
(oreo#er. under >ection 10 of P' No. /55;. otherwise known as the Go#ernment
Auditing Code. the go#ernment is re7uired to sell #aluable go#ernment property through
public bidding. >ection 10 of P' No. /55; mandates that Q
!>ection 10. 9hen overnment property has become unser#iceable for
any cause. or is no loner needed. it shall. upon application of the officer
accountable therefor. be inspected by the head of the agency or his duly
authoriCed representati#e in the presence of the auditor concerned and. if
found to be #alueless or unsaleable. it may be destroyed in their presence. %f
found to be valuable, it may be sold at public auction to the hihest
bidder under the super#ision of the proper committee on award or similar
body in the presence of the auditor concerned or other authoriCed
representati#e of the Commission. after advertisin by printed notice in the
2fficial .a-ette, or for not less than three consecutive days in any
newspaper of eneral circulation. or where the #alue of the property does
not warrant the e8pense of publication. by notices posted for a like period in at
least three public places in the locality where the property is to be sold. %n the
event that the public auction fails, the property may be sold at a private
sale at such price as may be fi(ed by the same committee or body
concerned and approved by the ,ommission."
*t is only when the public auction fails that a negotiated sale is allowed. in which case
the Commission on Audit must appro#e the selling price.
90-:
The Commission on Audit
implements >ection 10 of the Go#ernment Auditing Code through Circular No. 60&
,0F
90/:
dated Banuary ,1. /060. This circular emphasiCes that go#ernment assets must
be disposed of only through public auction. and a negotiated sale can be resorted to
only in case of !failure of public auction."
At the public auction sale. only Philippine citiCens are 7ualified to bid for PEA%s
reclaimed foreshore and submerged alienable lands of the public domain. Pri#ate
corporations are barred from bidding at the auction sale of any kind of alienable land of
the public domain.
PEA originally scheduled a public bidding for the 4reedom *slands on 'ecember /-.
/00/. PEA imposed a condition that the winning bidder should reclaim another ,;-
hectares of submerged areas to regulariCe the shape of the 4reedom *slands. under a
F-&5- sharing of the additional reclaimed areas in fa#or of the winning bidder.
90,:
No one.
howe#er. submitted a bid. +n 'ecember ,2. /005. the Go#ernment Corporate Counsel
ad#ised PEA it could sell the 4reedom *slands through negotiation. without need of
another public bidding. because of the failure of the public bidding on 'ecember /-.
/00/.
902:
3owe#er. the original BEA dated April ,;. /00; co#ered not only the 4reedom
*slands and the additional ,;- hectares still to be reclaimed. it also granted an option to
A(A)* to reclaim another 2;- hectares. The original BEA. a negotiated contract.
enlarged the reclamation area to 75D hectares.
905:
The failure of public bidding on
'ecember /-. /00/. in#ol#ing only 5-1.65 hectares.
90;:
is not a #alid justification for a
negotiated sale of 1;- hectares. almost double the area publicly auctioned. Besides.
the failure of public bidding happened on 'ecember /-. /00/. more than three years
before the signing of the original BEA on April ,;. /00;. The economic situation in the
country had greatly impro#ed during the inter#ening period.
6eclamation under the "2$ 8aw and the 8ocal .overnment ,ode
The constitutional prohibition in >ection 2. Article L** of the /061 Constitution is
absolute and clear< !Pri#ate corporations or associations may not hold such alienable
lands of the public domain e8cept by lease. 8 8 8." E#en )epublic Act No. F0;1 !B+T
?aw." for bre#ity$. cited by PEA and A(A)* as legislati#e authority to sell reclaimed
lands to pri#ate parties. recogniCes the constitutional ban. >ection F of )A No. F0;1
states Q
!>ec. F. )epayment >cheme. & 4or the financing. construction. operation and
maintenance of any infrastructure projects undertaken through the build&
operate&and&transfer arrangement or any of its #ariations pursuant to the
pro#isions of this Act. the project proponent 8 8 8 may likewise be repaid in the
form of a share in the re#enue of the project or other non&monetary payments.
such as. but not limited to. the grant of a portion or percentage of the
reclaimed land. sub#ect to the constitutional requirements with respect to
the ownership of the land< 8 8 8." Emphasis supplied$
A pri#ate corporation. e#en one that undertakes the physical reclamation of a
go#ernment B+T project. cannot ac7uire reclaimed alienable lands of the public domain
in #iew of the constitutional ban.
>ection 2-, of the ?ocal Go#ernment Code. also mentioned by PEA and A(A)*.
authoriCes local go#ernments in land reclamation projects to pay the contractor or
de#eloper in kind consisting of a percentage of the reclaimed land. to wit<
!>ection 2-,. 4inancing. Construction. (aintenance. +peration. and
(anagement of *nfrastructure Projects by the Pri#ate >ector. 8 8 8
8 8 8
*n case of land reclamation or construction of industrial estates. the repayment
plan may consist of the grant of a portion or percentage of the reclaimed land
or the industrial estate constructed."
Although >ection 2-, of the ?ocal Go#ernment Code does not contain a pro#iso similar
to that of the B+T ?aw. the constitutional restrictions on land ownership automatically
apply e#en though not e8pressly mentioned in the ?ocal Go#ernment Code.
Thus. under either the B+T ?aw or the ?ocal Go#ernment Code. the contractor or
de#eloper. if a corporate entity. can only be paid with leaseholds on portions of the
reclaimed land. *f the contractor or de#eloper is an indi#idual. portions of the reclaimed
land. not e8ceeding /, hectares
90F:
of non&agricultural lands. may be con#eyed to him in
ownership in #iew of the legislati#e authority allowing such con#eyance. This is the only
way these pro#isions of the B+T ?aw and the ?ocal Go#ernment Code can a#oid a
direct collision with >ection 2. Article L** of the /061 Constitution.
6eistration of lands of the public domain
4inally. PEA theoriCes that the !act of con#eying the ownership of the reclaimed
lands to public respondent PEA transformed such lands of the public domain to pri#ate
lands." This theory is echoed by A(A)* which maintains that the !issuance of the
special patent leading to the e#entual issuance of title takes the subject land away from
the land of public domain and con#erts the property into patrimonial or pri#ate
property." *n short. PEA and A(A)* contend that with the issuance of >pecial Patent
No. 2;/1 and the corresponding certificates of titles. the /;1.65 hectares comprising the
4reedom *slands ha#e become pri#ate lands of PEA. *n support of their theory. PEA
and A(A)* cite the following rulings of the Court<
)( $umail '( *udge of "+I of "otabato.
901:
where the Court held Q
!+nce the patent was granted and the corresponding certificate of title was issued.
the land ceased to be part of the public domain and became pri#ate property o#er
which the 'irector of ?ands has neither control nor jurisdiction."
,. !ee ,ong ,o- '( Da'id.
906:
where the Court declared &
!After the registration and issuance of the certificate and duplicate certificate of title
based on a public land patent. the land co#ered thereby automatically comes under
the operation of )epublic Act 50F subject to all the safeguards pro#ided therein."
2. ,eirs of .regorio Tengco '( ,eirs of *ose Aliwalas.
900:
where the Court ruled &
!@hile the 'irector of ?ands has the power to re#iew homestead patents. he may do
so only so long as the land remains part of the public domain and continues to be
under his e8clusi#e controlH 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 pri#ate
property o#er which the 'irector of ?ands has neither control nor jurisdiction."
5. Manalo '( Intermediate Appellate "ourt.
9/--:
where the Court held Q
!@hen the lots in dispute were certified as disposable on (ay /0. /01/. and free
patents were issued co#ering the same in fa#or of the pri#ate respondents. the said
lots ceased to be part of the public domain and. therefore. the 'irector of ?ands lost
jurisdiction o#er the same."
;.Republic '( "ourt of Appeals.
9/-/:
where the Court stated Q
!Proclamation No. 2;-. dated +ctober 0. /0;F. of President (agsaysay legally
effected a land grant to the (indanao (edical Center. Bureau of (edical >er#ices.
'epartment of 3ealth. of the whole lot. #alidly sufficient for initial registration under
the ?and )egistration Act. >uch land grant is constituti#e of a Nfee simple% title or
absolute title in fa#or of petitioner (indanao (edical Center. Thus. >ection /,, of
the Act. which go#erns the registration of grants or patents in#ol#ing public lands.
pro#ides that N@hene#er public lands in the Philippine *slands belonging to the
Go#ernment of the Anited >tates or to the Go#ernment of the Philippines are
alienated. granted or con#eyed to persons or to public or pri#ate corporations. the
same shall be brought forthwith under the operation of this Act ?and )egistration
Act. Act 50F$ and shall become registered lands.%"
The first four cases cited in#ol#e petitions to cancel the land patents and the
corresponding certificates of titles issued to private parties. These four cases
uniformly hold that the 'irector of ?ands has no jurisdiction o#er pri#ate lands or that
upon issuance of the certificate of title the land automatically comes under the Torrens
>ystem. The fifth case cited in#ol#es the registration under the Torrens >ystem of a
/,.6&hectare public land granted by the National Go#ernment to (indanao (edical
Center. a go#ernment unit under the 'epartment of 3ealth. The National Go#ernment
transferred the /,.6&hectare public land to ser#e as the site for the hospital buildings
and other facilities of (indanao (edical Center. which performed a public ser#ice. The
Court affirmed the registration of the /,.6&hectare public land in the name of (indanao
(edical Center under >ection /,, of Act No. 50F. This fifth case is an e8ample of a
public land being registered under Act No. 50F without the land losing its character as a
property of public dominion.
*n the instant case. the only patent and certificates of title issued are those in the
name of PEA. a wholly go#ernment owned corporation performing public as well as
proprietary functions. No patent or certificate of title has been issued to any pri#ate
party. No one is asking the 'irector of ?ands to cancel PEA%s patent or certificates of
title. *n fact. the thrust of the instant petition is that PEA%s certificates of title should
remain with PEA. and the land co#ered by these certificates. being alienable lands of
the public domain. should not be sold to a pri#ate corporation.
)egistration of land under Act No. 50F or P' No. /;,0 does not #est in the
registrant pri#ate or public ownership of the land. )egistration is not a mode of
ac7uiring ownership but is merely e#idence of ownership pre#iously conferred by any of
the recogniCed modes of ac7uiring ownership. )egistration does not gi#e the registrant
a better right than what the registrant had prior to the registration.
9/-,:
The registration of
lands of the public domain under the Torrens system. by itself. cannot con#ert public
lands into pri#ate lands.
9/-2:
Burisprudence holding that upon the grant of the patent or issuance of the certificate
of title the alienable land of the public domain automatically becomes pri#ate land
cannot apply to go#ernment units and entities like PEA. The transfer of the 4reedom
*slands to PEA was made subject to the pro#isions of CA No. /5/ as e8pressly stated in
>pecial Patent No. 2;/1 issued by then President A7uino. to wit<
!N+@. T3E)E4+)E. IN+@ JE. that by authority of the Constitution of the
Philippines and in conformity with the pro#isions of Presidential 'ecree No.
/-65. supplemented by ,ommonwealth +ct =o. :>:, as amended. there
are hereby granted and con#eyed unto the Public Estates Authority the
aforesaid tracts of land containing a total area of one million nine hundred
fifteen thousand eight hundred ninety four /.0/;.605$ s7uare metersH the
technical description of which are hereto attached and made an integral part
hereof." Emphasis supplied$
Thus. the pro#isions of CA No. /5/ apply to the 4reedom *slands on matters not
co#ered by P' No. /-65. >ection F- of CA No. /5/ prohibits. !e8cept when authoriCed
by Congress." the sale of alienable lands of the public domain that are transferred to
go#ernment units or entities. >ection F- of CA No. /5/ constitutes. under >ection 55 of
P' No. /;,0. a !statutory lien affecting title" of the registered land e#en if not annotated
on the certificate of title.
9/-5:
Alienable lands of the public domain held by go#ernment
entities under >ection F- of CA No. /5/ remain public lands because they cannot be
alienated or encumbered unless Congress passes a law authoriCing their
disposition. Congress. howe#er. cannot authoriCe the sale to pri#ate corporations of
reclaimed alienable lands of the public domain because of the constitutional ban. +nly
indi#iduals can benefit from such law.
The grant of legislati#e authority to sell public lands in accordance with >ection F-
of CA No. /5/ does not automatically con#ert alienable lands of the public domain into
pri#ate or patrimonial lands. The alienable lands of the public domain must be
transferred to 7ualified pri#ate parties. or to go#ernment entities not tasked to dispose of
public lands. before these lands can become pri#ate or patrimonial lands. +therwise.
the constitutional ban will become illusory if Congress can declare lands of the public
domain as pri#ate or patrimonial lands in the hands of a go#ernment agency tasked to
dispose of public lands. This will allow pri#ate corporations to ac7uire directly from
go#ernment agencies limitless areas of lands which. prior to such law. are concededly
public lands.
Ander E+ No. ;,;. PEA became the central implementin aency of the National
Go#ernment to reclaim foreshore and submerged areas of the public domain. Thus.
E+ No. ;,; declares that Q
!ELECAT*EE +)'E) N+. ;,;
'esignating the Public Estates Authority as the Agency Primarily )esponsible
for all )eclamation Projects
@hereas. there are se#eral reclamation projects which are ongoing or being
proposed to be undertaken in #arious parts of the country which need to be
e#aluated for consistency with national programsH
@hereas. there is a need to gi#e further institutional support to the
Go#ernment%s declared policy to pro#ide for a coordinated. economical and
efficient reclamation of landsH
@hereas. Presidential 'ecree No. 2&A re7uires that all reclamation of areas
shall be limited to the National Go#ernment or any person authoriCed by it
under proper contractH
9hereas, a central authority is needed to act on behalf of the =ational
.overnment which shall ensure a coordinated and interated approach
in the reclamation of landsH
9hereas, )residential 7ecree =o. :D;> creates the )ublic *states
+uthority as a overnment corporation to undertaEe reclamation of
lands and ensure their ma(imum utili-ation in promotin public welfare
and interestsH and
@hereas. Presidential 'ecree No. /5/F pro#ides the President with
continuing authority to reorganiCe the national go#ernment including the
transfer. abolition. or merger of functions and offices.
N+@. T3E)E4+)E. *. 4E)'*NAN' E. (A)C+>. President of the
Philippines. by #irtue of the powers #ested in me by the Constitution and
pursuant to Presidential 'ecree No. /5/F. do hereby order and direct the
following<
>ection /. $he )ublic *states +uthority C)*+A shall be primarily
responsible for interatin, directin, and coordinatin all reclamation
pro#ects for and on behalf of the =ational .overnment. All reclamation
projects shall be appro#ed by the President upon recommendation of the
PEA. and shall be undertaken by the PEA or through a proper contract
e8ecuted by it with any person or entityH Pro#ided. that. reclamation projects of
any national go#ernment agency or entity authoriCed under its charter shall be
undertaken in consultation with the PEA upon appro#al of the President.
8 8 8 ."
As the central implementing agency tasked to undertake reclamation projects
nationwide. with authority to sell reclaimed lands. PEA took the place of 'EN) as the
go#ernment agency charged with leasing or selling reclaimed lands of the public
domain. The reclaimed lands being leased or sold by PEA are not pri#ate lands. in the
same manner that 'EN). when it disposes of other alienable lands. does not dispose of
pri#ate lands but alienable lands of the public domain. +nly when 7ualified pri#ate
parties ac7uire these lands will the lands become pri#ate lands. %n the hands of the
overnment aency tasEed and authori-ed to dispose of alienable of disposable
lands of the public domain, these lands are still public, not private lands.
4urthermore. PEA%s charter e8pressly states that PEA !shall hold lands of the
public domain" as well as !any and all kinds of lands." PEA can hold both lands of the
public domain and pri#ate lands. Thus. the mere fact that alienable lands of the public
domain like the 4reedom *slands are transferred to PEA and issued land patents or
certificates of title in PEA%s name does not automatically make such lands pri#ate.
To allow #ast areas of reclaimed lands of the public domain to be transferred to PEA
as pri#ate lands will sanction a gross #iolation of the constitutional ban on pri#ate
corporations from ac7uiring any kind of alienable land of the public domain. PEA will
simply turn around. as )*+ has now done under the +mended J/+. and transfer
se#eral hundreds of hectares of these reclaimed and still to be reclaimed lands to a
single pri#ate corporation in only one transaction. This scheme will effecti#ely nullify the
constitutional ban in >ection 2. Article L** of the /061 Constitution which was intended
to diffuse e7uitably the ownership of alienable lands of the public domain among
4ilipinos. now numbering o#er 6- million strong.
This scheme. if allowed. can e#en be applied to alienable agricultural lands of the
public domain since PEA can !ac7uire 8 8 8 any and all kinds of lands." This will open
the floodgates to corporations and e#en indi#iduals ac7uiring hundreds of hectares of
alienable lands of the public domain under the guise that in the hands of PEA these
lands are pri#ate lands. This will result in corporations amassing huge landholdings
ne#er before seen in this country & creating the #ery e#il that the constitutional ban was
designed to pre#ent. This will completely re#erse the clear direction of constitutional
de#elopment in this country. The /02; Constitution allowed pri#ate corporations to
ac7uire not more than /.-,5 hectares of public lands.
9/-;:
The /012 Constitution
prohibited pri#ate corporations from ac7uiring any kind of public land. and the /061
Constitution has une7ui#ocally reiterated this prohibition.
The contention of PEA and A(A)* that public lands. once registered under Act No.
50F or P' No. /;,0. automatically become pri#ate lands is contrary to e8isting
laws. >e#eral laws authoriCe lands of the public domain to be registered under the
Torrens >ystem or Act No. 50F. now P' No. /;,0. without losing their character as
public lands. >ection /,, of Act No. 50F. and >ection /-2 of P' No. /;,0. respecti#ely.
pro#ide as follows<
Act No. 50F
!>ec. /,,. @hene#er public lands in the Philippine *slands belonging to the 8
8 8 Go#ernment of the Philippine *slands are alienated. granted. or con#eyed
to persons or the public or private corporations. the same shall be brought
forthwith under the operation of this Act and shall become registered lands."
P' No. /;,0
!>ec. /-2. Certificate of Title to Patents. @hene#er public land is by the
Go#ernment alienated. granted or con#eyed to any person. the same shall be
brought forthwith under the operation of this 'ecree." Emphasis supplied$
Based on its legislati#e history. the phrase !con#eyed to any person" in >ection /-2 of
P' No. /;,0 includes con#eyances of public lands to public corporations.
Alienable lands of the public domain !granted. donated. or transferred to a pro#ince.
municipality. or branch or subdi#ision of the Go#ernment." as pro#ided in >ection F- of
CA No. /5/. may be registered under the Torrens >ystem pursuant to >ection /-2 of
P' No. /;,0. >uch registration. howe#er. is e8pressly subject to the condition in
>ection F- of CA No. /5/ that the land !shall not be alienated. encumbered or otherwise
disposed of in a manner affectin its title. e(cept when authori-ed by
,onress." This pro#ision refers to go#ernment reclaimed. foreshore and marshy
lands of the public domain that ha#e been titled but still cannot be alienated or
encumbered unless e8pressly authoriCed by Congress. The need for legislati#e
authority pre#ents the registered land of the public domain from becoming pri#ate land
that can be disposed of to 7ualified pri#ate parties.
The )e#ised Administrati#e Code of /061 also recogniCes that lands of the public
domain may be registered under the Torrens >ystem. >ection 56. Chapter /,. Book * of
the Code states Q
!>ec. 56. +fficial AuthoriCed to Con#ey )eal Property. @hene#er real
property of the Go#ernment is authoriCed by law to be con#eyed. the deed of
con#eyance shall be e8ecuted in behalf of the go#ernment by the following<
/$ 8 8 8
,$ For property belonin to the 6epublic of the )hilippines, but titled
in the name of any political subdivision or of any corporate aency or
instrumentality. by the e8ecuti#e head of the agency or
instrumentality." Emphasis supplied$
Thus. pri#ate property purchased by the National Go#ernment for e8pansion of a public
wharf may be titled in the name of a go#ernment corporation regulating port operations
in the country. Pri#ate property purchased by the National Go#ernment for e8pansion of
an airport may also be titled in the name of the go#ernment agency tasked to administer
the airport. Pri#ate property donated to a municipality for use as a town plaCa or public
school site may likewise be titled in the name of the municipality.
9/-F:
All these properties
become properties of the public domain. and if already registered under Act No. 50F or
P' No. /;,0. remain registered land. There is no re7uirement or pro#ision in any
e8isting law for the de&registration of land from the Torrens >ystem.
Pri#ate lands taken by the Go#ernment for public use under its power of eminent
domain become un7uestionably part of the public domain. Ne#ertheless. >ection 6; of
P' No. /;,0 authoriCes the )egister of 'eeds to issue in the name of the National
Go#ernment new certificates of title co#ering such e8propriated lands. >ection 6; of P'
No. /;,0 states Q
!>ec. 6;. ?and taken by eminent domain. @hene#er any registered land. or
interest therein. is e8propriated or taken by eminent domain. the National
Go#ernment. pro#ince. city or municipality. or any other agency or
instrumentality e8ercising such right shall file for registration in the proper
)egistry a certified copy of the judgment which shall state definitely by an
ade7uate description. the particular property or interest e8propriated. 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 of
title by the )egister of 'eeds. and where the fee simple is taken. a new
certificate shall be issued in favor of the =ational .overnment, province,
city, municipality. or any other agency or instrumentality e8ercising such
right for the land so taken. The legal e8penses incident to the memorandum of
registration or issuance of a new certificate of title shall be for the account of
the authority taking the land or interest therein." Emphasis supplied$
Conse7uently. lands registered under Act No. 50F or P' No. /;,0 are not e8clusi#ely
pri#ate or patrimonial lands. ?ands of the public domain may also be registered
pursuant to e8isting laws.
A(A)* makes a parting shot that the Amended BEA is not a sale to A(A)* of the
4reedom *slands or of the lands to be reclaimed from submerged areas of (anila
Bay. *n the words of A(A)*. the Amended BEA !is not a sale but a joint #enture with a
stipulation for reimbursement of the original cost incurred by PEA for the earlier
reclamation and construction works performed by the C'CP under its /012 contract
with the )epublic." @hether the Amended BEA is a sale or a joint #enture. the fact
remains that the Amended BEA re7uires PEA to !cause the issuance and deli#ery of the
certificates of title con#eying A(A)*%s ?and >hare in the name of A(A)*."
9/-1:
This stipulation still contra#enes >ection 2. Article L** of the /061 Constitution which
pro#ides that pri#ate corporations !shall not hold such alienable lands of the public
domain e8cept by lease." The transfer of title and ownership to A(A)* clearly means
that A(A)* will !hold" the reclaimed lands other than by lease. The transfer of title and
ownership is a !disposition" of the reclaimed lands. a transaction considered a sale or
alienation under CA No. /5/.
9/-6:
the Go#ernment Auditing Code.
9/-0:
and >ection 2. Article
L** of the /061 Constitution.
The )egalian doctrine is deeply implanted in our legal system. 4oreshore and
submerged areas form part of the public domain and are inalienable. ?ands reclaimed
from foreshore and submerged areas also form part of the public domain and are also
inalienable. unless con#erted pursuant to law into alienable or disposable lands of the
public domain. 3istorically. lands reclaimed by the go#ernment are sui eneris. not
a#ailable for sale to pri#ate parties unlike other alienable public lands. )eclaimed lands
retain their inherent potential as areas for public use or public ser#ice. Alienable lands
of the public domain. increasingly becoming scarce natural resources. are to be
distributed e7uitably among our e#er&growing population. To insure such e7uitable
distribution. the /012 and /061 Constitutions ha#e barred pri#ate corporations from
ac7uiring any kind of alienable land of the public domain. Those who attempt to
dispose of inalienable natural resources of the >tate. or seek to circum#ent the
constitutional ban on alienation of lands of the public domain to pri#ate corporations. do
so at their own risk.
@e can now summariCe our conclusions as follows<
/. The /;1.65 hectares of reclaimed lands comprising the 4reedom *slands. now
co#ered by certificates of title in the name of PEA. arealienable lands of the public
domain. PEA may lease these lands to pri#ate corporations but may not sell or
transfer ownership of these lands to pri#ate corporations. PEA may only sell these
lands to Philippine citiCens. subject to the ownership limitations in the /061
Constitution and e8isting laws.
,. The ;0,./; hectares of submerged areas of (anila 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 ser#ice. The go#ernment
can make such classification and declaration only after PEA has reclaimed these
submerged areas. +nly then can these lands 7ualify as agricultural lands of the
public domain. which are the only natural resources the go#ernment can
alienate. *n their present state. the ;0,./; hectares of submerged areas
are inalienable and outside the commerce of man.
2. >ince the Amended BEA seeks to transfer to A(A)*. a pri#ate corporation.
ownership of 11.25 hectares
9//-:
of the 4reedom *slands. such transfer is #oid for
being contrary to >ection 2. Article L** of the /061 Constitution which prohibits
pri#ate corporations from ac7uiring any kind of alienable land of the public domain.
5. >ince the Amended BEA also seeks to transfer to A(A)* ownership of ,0-./;F
hectares
9///:
of still submerged areas of (anila Bay. such transfer is #oid for being
contrary to >ection ,. Article L** of the /061 Constitution which prohibits the
alienation of natural resources other than agricultural lands of the public
domain. PEA may reclaim these submerged areas. Thereafter. the go#ernment can
classify the reclaimed lands as alienable or disposable. and further declare them no
longer needed for public ser#ice. >till. the transfer of such reclaimed alienable lands
of the public domain to A(A)* will be #oid in #iew of >ection 2. Article L** of the
/061 Constitution which prohibits pri#ate corporations from ac7uiring any kind of
alienable land of the public domain.
Clearly. the Amended BEA #iolates glaringly >ections , and 2. Article L** of the /061
Constitution. Ander Article /5-0
9//,:
of the Ci#il Code. contracts whose !object or purpose
is contrary to law." or whose !object is outside the commerce of men." are !ine8istent
and #oid from the beginning." The Court must perform its duty to defend and uphold the
Constitution. and therefore declares the Amended BEA null and void ab initio.
'eventh issue: whether the ,ourt is the proper forum to raise the issue of
whether the +mended J/+ is rossly disadvantaeous to the overnment.
Considering that the Amended BEA is null and #oid 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
in#ol#es a determination of factual matters.
6HEREFORE. the petition is G)ANTE'. The Public Estates Authority and Amari
Coastal Bay 'e#elopment Corporation are PE)(ANENT?J ENB+*NE' from
implementing the Amended Boint Eenture Agreement which is hereby declared NA??
and E+*' ab initio.
SO OR(ERE(.
Da'ide/ *r(/ "(*(/ 0ellosillo/ Puno/ 1itug/ 2apunan/ Mendo3a/ Panganiban/
4uisumbing/ 5nares6$antiago/ $ando'al6.utierre3/ Austria6Martine3/ and "orona/
**(/ concur.
9/:
>ection 5 of P' No. /-65.
9,:
PEA%s (emorandum dated August 5. /000. p. 2.
92:
PEA%s (emorandum. supra note , at 1. PEA%s (emorandum 7uoted e8tensi#ely. in its >tatement of
4acts and the Case. the >tatement of 4acts in >enate Committee )eport No. ;F- dated >eptember /F.
/001.
95:
*n +pinion No. 22- dated 'ecember ,2. /005. the Go#ernment Corporate Counsel. citing C+A Audit
Circular No. 60&,0F. ad#ised PEA that PEA could negotiate the sale of the /;1.65&hectare 4reedom
*slands in #iew of the failure of the public bidding held on 'ecember /-. /00/ where there was not a
single bidder. >ee also >enate Committee )eport No. ;F-. p. /,.
9;:
PEA%s (emorandum. supra note , at 0.
9F:
Ibid(
91:
The e8istence of this report is a matter of judicial notice pursuant to >ection /. )ule /,0 of the )ules of
Court which pro#ides. !A court shall take judicial notice. without the introduction of e#idence. of 8 8 8 the
official acts of the legislature 8 8 8."
96:
Teofisto Guingona. Br.
90:
)enato Cayetano.
9/-:
Eirgilio C. Abejo.
9//:
)eport and )ecommendation of the ?egal Task 4orce. Anne8 !C". A(A)*%s (emorandum dated Bune
/0. /000.
9/,:
A(A)*%s Comment dated Bune ,5. /006. p. 2H Rollo. p. F6.
9/2:
A(A)* filed three motions for e8tension of time to file comment Rollo. pp. 2,. 26. 56$. while PEA filed
nine motions for e8tension of time Rollo. pp. /,1. /20$.
9/5:
Petitioner%s (emorandum dated Buly F. /000. p. 5,.
9/;:
)epresented by the +ffice of the >olicitor General. with >olicitor General )icardo P. Gal#eC. Assistant
>olicitor General ACucena ). Balanon&CorpuC. and Associate >olicitor )aymund *. )igodon signing PEA%s
(emorandum.
9/F:
)epresented by ACcuna Jorac Arroyo U Chua ?aw +ffices. and )omulo (abanta >ayoc U 'e los
Angeles ?aw +ffices.
9/1:
>alonga '( PaDo. /25 >C)A 526 /06;$H GonCales '( (arcos. F; >C)A F,5 /01; $H A7uino '( Enrile.
;0 >C)A /62 /015 $H 'ela Camara '( Enage. 5/ >C)A / /01/ $.
9/6:
>ection //. Article L*E.
9/0:
(anila Electric Co. '. Budge 4. Castro&Bartolome. //5 >C)A 100 /06,$H )epublic '( CA and
*glesia. and )epublic '. Cendana and *glesia ni Cristo. //0 >C)A 550 /06,$H )epublic '( Eillanue#a and
*glesia ni Cristo. //5 >C)A 61; /06,$H 'irector of ?ands '. ?ood. /,5 >C)A 5F- /062$H
)epublic '( *glesia ni Cristo. /,6 >C)A 55 /065$H 'irector of ?ands '. 3ermanos y 3ermanas de >ta.
CruC de (ayo. *nc.. /5/ >C)A ,/ /06F$H 'irector of ?ands '( *AC and Acme Plywood U Eeneer Co.. /5F
>C)A ;-0 /06F$H )epublic '. *AC and )oman Catholic Bishop of ?ucena. /F6 >C)A /F; /066$H
Nati#idad '. CA. ,-, >C)A 502 /00/$H Eillaflor '. CA and Nasipit ?umber Co.. ,6- >C)A ,01 /001$. *n
Ayog '( Cusi. //6 >C)A 50, /06,$. the Court did not apply the constitutional ban in the /012
Constitution because the applicant corporation. BiDan 'e#elopment Co.. *nc.. had fully complied with all
its obligations and e#en paid the full purchase price before the effecti#ity of the /012 Constitution.
although the sales patent was issued after the /012 Constitution took effect.
9,-:
P' No. /-12.
9,/:
Anne8 !B". A(A)*%s (emorandum dated Bune /0. /000. >ection ;., c$ and e$ of the Amended BEA.
pp. /F&/1.
9,,:
Cha#eC '. PCGG. ,00 >C)A 155 /006$.
9,2:
/2F >C)A ,1 /06;$.
9,5:
Article , of the Ci#il Code prior to its amendment by E+ No. ,--$ pro#ided as follows< !?aws shall take
effect after fifteen days following the completion of their publication in the +fficial GaCette. unless it is
pro#ided otherwise. 8 8 8."
9,;:
>ection / of CA No. F26 pro#ides as follows< !There shall be published in the +fficial GaCette all
important legislati#e acts and resolutions of the Congress of the PhilippinesH all e8ecuti#e and
administrati#e orders and proclamations. e8cept such as ha#e no general applicabilityH 8 8 8."
9,F:
>ection 10 of the Go#ernment Auditing Codes pro#ides as follows< !9hen overnment property has
become unser#iceable for any cause. or is no loner needed. it shall. upon application of the officer
accountable therefor. be inspected by the head of the agency or his duly authoriCed representati#e in the
presence of the auditor concerned and. if found to be #alueless or unsaleable. it may be destroyed in their
presence. %f found to be valuable, it may be sold at public auction to the hihest bidder under the
super#ision of the proper committee on award or similar body in the presence of the auditor concerned or
other authoriCed representati#e of the Commission. after advertisin by printed notice in the 2fficial
.a-ette, or for not less than three consecutive days in any newspaper of eneral circulation. or
where the #alue of the property does not warrant the e8pense of publication. by notices posted for a like
period in at least three public places in the locality where the property is to be sold. %n the event that the
public auction fails, the property may be sold at a private sale at such price as may be fi(ed by the
same committee or body concerned and approved by the ,ommission."
9,1:
Paat '( Court of Appeals. ,FF >C)A /F1 /001$H Muisumbing '( Budge Gumban. /02 >C)A ;,- /00/$H
Ealmonte '( Belmonte. Br.. /1- >C)A ,;F /060$.
9,6:
$ee note ,,.
9,0:
>ection /. Article L* of the /061 Constitution states as follows< !Public office is a public trust. Public
officers and employees must at all times be accountable to the people. ser#e them with utmost
responsibility. integrity. loyalty. and efficiency. act with patriotism and justice. and lead modest li#es."
92-:
/1- >C)A ,;F /060$.
92/:
$ee note ,,.
92,:
)ecord of the Constitutional Commission. Eol. E. pp. ,5&,;. /06F$.
922:
$upra. Note ,,.
925:
Ibid.
92;:
?egaspi '( Ci#il >er#ice Commission. /;- >C)A ;2- /061$.
92F:
Almonte '( Eas7ueC. ,55 >C)A ,6F /00;$.
921:
$ee Note ,,.
926:
Cha#eC #. PCGG. see note ,,H A7uino&>armiento '. (orato. ,-2 >C)A ;/; /00/$.
920:
Almonte '. Eas7ueC. see note 2F.
95-:
People%s (o#ement for Press 4reedom. et al. '. 3on. )aul (anglapus. G.). No. 65F5,. 7n
0anc )esolution dated April /2. /066H Cha#eC '. PCGG. see note ,,.
95/:
>ection ,1- of the National *nternal )e#enue Code punishes any officer or employee of the Bureau of
*nternal )e#enue who di#ulges to any person. e8cept as allowed by law. information regarding the
business. income. or estate of any ta8payer. the secrets. operation. style of work. or apparatus of any
manufacturer or producer. or confidential information regarding the business of any ta8payer. knowledge
of which was ac7uired by him in the discharge of his official duties. >ection /5 of ).A. No. 66--
>afeguard (easures Act$ prohibits the release to the public of confidential information submitted in
e#idence to the Tariff Commission. >ection 2 n$ of ).A. No. 6;-5 Philippine A*'> Pre#ention and
Control Act$ classifies as confidential the medical records of 3*E patients. >ection F j$ of ).A. No. 6-52
*nter&Country Adoption Act$ classifies as confidential the records of the adopted child. adopting parents.
and natural parents. >ection 05 f$ of ).A. No. 105, Philippine (ining Act$ re7uires the 'epartment of
En#ironment and Natural )esources to maintain the confidentiality of confidential information supplied by
contractors who are parties to mineral agreements or financial and technical assistance agreements.
95,:
The Recopilacion de !eyes de las Indias declared that< !@e. ha#ing ac7uired full so#ereignty o#er the
*ndies. and all lands. territories. and possessions not heretofore ceded away by our royal predecessors.
or by us. or in our name. still pertaining to 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 according as they belong to us. in order
that after reser#ing before all what to us or to our #iceroys. audiencias. and go#ernors may seem
necessary for public s7uares. 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 nati#es what may be necessary for tillage and pasturage. confirming them in what
they now ha#e and gi#ing them more if necessary. all the rest of said lands may remain free and
unencumbered for us to dispose of as we may wish." $ee concurring opinion of Bustice )eynato >. Puno
in )epublic )eal Estate Corporation #. Court of Appeals. ,00 >C)A /00 /006$.
952:
CariDo '. *nsular Go#ernment. 5/ Phil. 02; /0-0$. The e8ception mentioned in "ari&o/ referring to
lands in the possession of an occupant and of his predecessors&in&interest. since time immemorial. is
actually a species of a grant by the >tate. The Anited >tates >upreme Court. speaking through Bustice
+li#er @endell 3olmes. Br.. declared in "ari&o< !Prescription is mentioned again in the royal cedula of
+ctober /;. /1;5. cited in 2 Philippine. ;5FH N@here such possessors shall not be able to produce title
deeds. it shall be sufficient if they shall show that ancient possession. as a #alid title by prescription.% *t
may be that this means possession from before /1--H but. at all e#ents. the principle is admitted. As
prescription. e#en against the Crown lands. was recogniCed by the laws of >pain. we see no sufficient
reason for hesitating to admit that it was recogniCed in the Philippines in regard to lands o#er which >pain
had only a paper so#ereignty." $ee also )epublic '( ?ee. /01 >C)A /2 /00/$.
955:
Article / of the >panish ?aw of @aters of /6FF.
95;:
*gnacio '( 'irector of ?ands. /-6 Phil. 22; /0F-$H Bo#en '( 'irector of ?ands. 02 Phil. /25 /0;2$H
?aurel '. Garcia. /61 >C)A 101 /00-$. $ee concurring opinion of Bustice )eynato >. Puno in )epublic
)eal Estate Corporation '( Court of Appeals. ,00 >C)A /00 /006$.
95F:
Act No. 0,F. enacted on +ctober 1. /0-2. was also titled the Public ?and Act. This Act. howe#er. did
not co#er reclaimed lands. Ne#ertheless. >ection ,2 of this Act pro#ided as follows< !8 8 8 *n no case
may lands leased under the pro#isions of this chapter be taken so as to gain control of adjacent land.
water. stream. shore line. way. roadstead. or other #aluable right which in the opinion of the Chief of the
Bureau of Public ?ands would be prejudicial to the interests of the public."
951:
>ection /- of Act No. ,615 pro#ided as follows< !The words !alienation." !disposition." or !concession"
as used in this Act. shall mean any of the methods authoriCed by this Act for the ac7uisition. lease. use. or
benefit of the lands of the public domain other than timber or mineral lands."
956:
Title ** of Act No. ,615 go#erned alienable lands of the public domain for agricultural purposes. while
Title *** of the same Act go#erned alienable lands of the public domain for non&agricultural purposes.
950:
>ection ;1 of Act No. ,615 pro#ided as follows< !8 8 8H but the land so granted. donated. or transferred
to a pro#ince. municipality. or branch or subdi#ision of the Go#ernment shall not be alienated.
encumbered. or otherwise disposed of in a manner affecting its title. e(cept when authori-ed by the
leislatureH 8 8 8."
9;-:
Iri#enko '. )egister of 'eeds. 10 Phil. 5F/ /051$.;
9;/:
>ection , of CA No. /5/ states as follows< !The pro#isions of this Act shall apply to the lands of the
public domainH but timber and mineral lands shall be go#erned by special laws and nothing in this Act
pro#ided shall be understood or construed to change or modify the administration and disposition of the
lands commonly called !friar lands" and those which. being pri#ately owned. ha#e re#erted to or become
the property of the Commonwealth of the Philippines. which administration and disposition shall be
go#erned by the laws at present in force or which may hereafter be enacted."
9;,:
?ike Act No. ,615. >ection /- of CA No. /5/ defined the terms !alienation" and !disposition" as follows<
!The words !alienation." !disposition." or !concession" as used in this Act. shall mean any of the methods
authoriCed by this Act for the ac7uisition. lease. use. or benefit of the lands of the public domain other
than timber or mineral lands."
9;2:
).A. No. FF;1 has suspended the authority of the President to reclassify forest or mineral lands into
agricultural lands. >ection 5 a$ of )A No. FF;1 Comprehensi#e Agrarian )eform ?aw of /066$ states.
!No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the appro#al
of this Act until Congress. taking into account ecological. de#elopmental and e7uity considerations. shall
ha#e delimited by law. the specific limits of the public domain."
9;5:
Co#ering >ections ;6 to F6 of CA No. /5/.
9;;:
,00 >C)A /00 /006$.
9;F:
>ection /. Article L*** of the /02; Constitution limited the disposition and utiliCation of public agricultural
lands to Philippine citiCens or to corporations at least si8ty percent owned by Philippine citiCens. This was.
howe#er. subject to the original +rdinance appended to the /02; Constitution stating. among others. that
until the withdrawal of Anited >tates so#ereignty in the Philippines. !CitiCens and corporations of the
Anited >tates shall enjoy in the Commonwealth of the Philippines all the ci#il rights of the citiCens and
corporations. respecti#ely. thereof."
9;1:
>ection 55 of P' No. /;,0 pre#iously >ection 20 of Act No. 50F$ pro#ides that !liens. claims or rights
arising or e8isting under the laws and the Constitution of the Philippines which are not by law re7uired to
appear of record in the )egistry of 'eeds in order to be #alid against subse7uent purchasers or
encumbrancers of record" constitute statutory liens affecting the title.
9;6:
)A No. 12-. which took effect on Bune /6. /0;,. authoriCed the private sale of home lots to actual
occupants of public lands not needed for public ser#ice. >ection / of )A No. 12- pro#ided as follows<
!Notwithstanding the pro#isions of >ections F/ and F1 of Commonwealth Act No. /5/. as amended by )A
No. ,02. any 4ilipino citiCen of legal age who is not the owner of a home lot in the municipality or city in
which he resides and who had in good faith established his residence on a parcel of land of the )epublic
of the Philippines which is not needed for public ser#ice. shall be gi#en preference to purchase at a
pri#ate sale of which reasonable notice shall be gi#en to him. not more than one thousand s7uare meters
at a price to be fi8ed by the 'irector of ?ands with the appro#al of the >ecretary of Agriculture and Natural
)esources. 8 8 8." *n addition. on Bune /F. /056. Congress enacted ).A. No. ,02 allowing the private
sale of marshy alienable or disposable lands of the public domain to lessees who ha#e impro#ed and
utiliCed the same as farms. fishponds or other similar purposes for at least fi#e years from the date of the
lease contract with the go#ernment. ).A. No. ,02. howe#er. did not apply to marshy lands under >ection
;F c$. Title *** of CA No. /5/ which refers to marshy lands leased for residential. commercial. industrial or
other non&aricultural purposes.
9;0:
>ee note 50.
9F-:
$ee note F-.
9F/:
)epublic )eal Estate Corporation '( Court of Appeals. see note ;F.
9F,:
Ibid.
9F2:
*nsular Go#ernment '. Aldecoa. /0 Phil. ;-; /0//$H Go#ernment '( Cabangis. ;2 Phil. //, /0,0$.
9F5:
//6 >C)A 50, /06,$.
9F;:
Anne8 !B". A(A)*%s (emorandum. see note , at / U ,.
9FF:
PEA%s (emorandum. see note F.
9F1:
Ibid(. p. 55.
9F6:
$ee notes 0. /- U //.
9F0:
Anne8 !C". p. 2. A(A)*%s (emorandum. see note /, at 2.
91-:
This should read Article L**.
91/:
>ection 6 of CA No. /5/.
91,:
Emphasis supplied.
912:
/61 >C)A 101 /00-$.
915:
Article 5,, of the Ci#il Code states as follows< !Property of public dominion. when no longer needed for
public use or public ser#ice. shall form part of the patrimonial property of the >tate."
91;:
A(A)*%s Comment dated Bune ,5. /006. p. ,-H Rollo. p. 6;.
91F:
'iCon '. )odrigueC. /2 >C)A 1-; /0F;$H )epublic '( ?at Eda. de Castillo. /F2 >C)A ,6F /066$.
911:
CariDo '( *nsular Go#ernment. 5/ Phil. 02; /0-0$.
916:
Proclamation No. 5/. issued by President )amon (agsaysay on Buly ;. /0;5. reser#ed for !National
Park purposes" 5F5.FF hectares of the public domain in (anila Bay !situated in the cities of (anila and
Pasay and the municipality of )aranaque. Pro#ince of )iCal. *sland of ?uCon." which area. as described
in detail in the Proclamation. is !9B:ounded on the North. by (anila BayH on the East. by 'ewey
Boule#ardH and on the south and west. by (anila Bay." >ee concurring opinion of Bustice )eynato >.
Puno in )epublic )eal Estate Corporation #. Court of Appeals. ,00 >C)A /000 /006$. Ander >ections
, and 2. Article L** of the /061 Constitution. !national parks" are inalienable natural resources of the
>tate.
910:
4ifth @hereas clause of E+ No. ;,;.
96-:
>ection 5. Chapter *. Title L*E. Book *E.
96/:
>ection F of CA No /5/ pro#ides as follows< !The President. upon the recommendation of the
'ecretary of +riculture and ,ommerce. shall from time to timeclassify the lands of the public domain
into Q a$ Alienable or disposable. 8 8 8."
96,:
>ection 1 of CA No. /5/ pro#ides as follows< !4or purposes of the administration and disposition of
alienable or disposable public lands. the President. upon recommendation by the 'ecretary of
+riculture and ,ommerce. shall from time to time declare what lands are open to disposition or
concession under this Act."
962:
+n !?ands for )esidential. Commercial. or *ndustrial and other >imilar Purposes."
965:
)A No. ,02. enacted on Bune /F. /056. authoriCed the sale of marshy lands under certain
conditions. >ection / of )A No. ,02 pro#ided as follows< !The pro#isions of section si8ty&one of
Commonwealth Act Numbered +ne hundred and forty&one to the contrary notwithstanding. marshy lands
and lands under water bordering on shores or banks or na#igable lakes or ri#ers which are co#ered by
subsisting leases or leases which may hereafter be duly granted under the pro#isions of the said Act and
are already impro#ed and ha#e been utiliCed for farming. fishpond. or similar purposes for at least fi#e
years from the date of the contract of lease. may be sold to the lessees thereof under the pro#isions of
Chapter 4i#e of the said Act as soon as the President. upon recommendation of the >ecretary of
Agriculture and Natural )esources. shall declare that the same are not necessary for the public ser#ice."
96;:
PEA%s (emorandum. see note , at 5;.
96F:
$ee note 12.
961:
>ection 5 b$ of P' No. /-65
966:
).A. No. 12- allows the pri#ate sale of home lots to actual occupants of public lands. $ee note F2.
960:
*ssued on 4ebruary ,F. /06/.
90-:
@hile PEA claims there was a failure of public bidding on 'ecember /-. /00/. there is no showing that
the Commission on Audit appro#ed the price or consideration stipulated in the negotiated Amended BEA
as re7uired by >ection 10 of the Go#ernment Auditing Code. >enate Committee )eport No. ;F- did not
discuss this issue.
90/:
Paragraph , a$ of C+A Circular No. 60&,0F. on !>ale Thru Negotiation." states that disposal
through negotiated sale may be resorted to if !9T:here was a failure of public auction."
90,:
>enate Committee )eport No. ;F-. >tatement of 4acts. p. 1. citing PEA Board )esolution No. 62;. as
appearing in the (inutes of the PEA Board of 'irectors (eeting held on (ay 2-. /00/. per Certification of
Baime T. 'e Eeyra. Corporate >ecretary. dated Bune //. /00/.
902:
+pinion No. 22-. citing C+A Audit Circular No. 60&,0F. $ee note ;.
905:
PEA%s (emorandum. see note ,.
90;:
>enate Committee )eport No. ;F-. pp. 1&6. citing the (inutes of (eeting of the PEA Board of 'irectors
held on 'ecember /0. /00/.
90F:
>ection 2. Article L** of the /061 Constitution pro#ides as follows< !8 8 8 CitiCens of the Philippines may
8 8 8 ac7uire not more than twel#e hectares thereof by purchase. homestead or grant." 3owe#er. >ection
F of ).A. No. FF;1 Comprehensi#e Agrarian )eform ?aw$ limits the ownership of !public or pri#ate
agricultural land" to a ma8imum of fi#e hectares per person.
901:
0F Phil. 05F /0;;$.
906:
56 >C)A 21, /011$.
900:
/F6 >C)A /06 /066$.
9/--:
/1, >C)A 10; /060$.
9/-/:
12 >C)A /5F /01F$.
9/-,:
A#ila '. Tapucar. ,-/ >C)A /56 /00/$.
9/-2:
)epublic '( Ayala Cia. et al.. /5 >C)A ,;0 /0F;$H 'iCon '. )odrigueC. /2 >C)A 1-; /0F;$.
9/-5:
>ection 55 of P' No. /;,0 states as follows< !E#ery registered owner recei#ing a certificate of title in
pursuance of a decree of registration. and e#ery subse7uent purchaser of registered land taking a
certificate of title for #alue and in good faith. shall hold the same free from all encumbrances e8cept those
noted on said certificate and any of the following encumbrances which may be subsisting.
namely< +irst. 8iens, claims or rihts arisin or e(istin under the laws and ,onstitution of the
)hilippines which are not by law required to appear of record in the 6eistry of 7eeds in order to
be valid aainst subsequent purchasers or encumbrancers of record. 8 8 8." Ander >ection /-2 of
P' No. /;,0. >ection 55 applies to certificates of title issued pursuant to a land patent granted by the
go#ernment.
9/-;:
>ection ,. Article L*** of the /02; Constitution.
9/-F:
3arty '( (unicipality of Eictoria. /2 Phil. /;, /0-0$.
9/-1:
Anne8 !B". A(A)*%s (emorandum. see note ,/ at /F. >ection ;., c$ of the Amended BEA.
9/-6:
>ection /- of CA No. /5/ pro#ides as follows< !>ec. /-. The words !alienation." !disposition." or
!concession" as used in this Act. shall mean any of the methods authoriCed by this Act for
the acquisition, lease. use, or benefit of the lands of the public domain other than timber or mineral
lands."
9/-0:
>ection 10 of the Go#ernment Auditing Code. which re7uires public auction in the sale of go#ernment
assets. includes all kinds of disposal or di#estment of go#ernment assets. Thus. C+A Audit Circular No.
6F&,F5 dated +ctober /F. /06F speaks of !guidelines which$ shall go#ern the general procedures on
the divestment or disposal of assets of overnment&owned andHor controlled corporations and
their subsidiaries." ?ikewise. C+A Audit Circular No. 60&,0F dated Banuary ,1. speaks of !guidelines
which$ shall be obser#ed and adhered to in the divestment or disposal of property and other assets
of all overnment entitiesHinstrumentalities" and that !di#estment shall refer to the manner or scheme
of taking away. depri#ing. withdrawing of an authority. power or title." These C+A Circulars implement
>ection 10 of the Go#ernment Auditing Code.
9//-:
The share of A(A)* in the 4reedom *slands is 11.25 hectares. which is 1- percent of the net usable
area of //-.50 hectares. The net usable area is the total land area of the 4reedom *slands less 2- percent
allocated for common areas.
9///:
The share of A(A)* in the submerged areas for reclamation is ,0-./,0 hectares. which is 1- percent
of the net usable area of 5/5.51 hectares.
9//,:
Article /5-0 of the Ci#il Code pro#ides as follows< !The following contracts are ine8istent and #oid from
the beginning< /$ Those whose cause. object or purpose is contrary to lawH 8 8 8H 5$ Those whose object
is outside the commerce of menH 8 8 8."