MAGALONA VS. ERMITA, G.R.

187167, August
16, 2011
FACTS : The antecedent facts of this case emerged
upon the passing of Republic Act 3046 in 1961. The
laws purpose is to demarcate the maritime
baselines of the Philippines as it was deemed to be
an archipelago. RA 3046 stood unchallenged until
2009, when Congress amended it and passed RA
9522. This amending law shortened one baseline
and determined new base points of the archipelago.
More so, it has identified the Kalayaan Island Group
and the Scarborough Shoal, as "regimes of islands",
generating their own maritime zones. The
petitioners filed a case assailing the constitutionality
of RA 9522. To their opinion, the law has effectively
reduced the maritime territory of the country. With
this, Article I of the 1987 Constitution will be
violated. The petitioners also worried that that
because of the suggested changes in the maritime
baselines will allow for foreign aircrafts and vessels
to traverse the Philippine territory freely. In effect, it
steps on the states sovereignty and national
security. Meanwhile, the Congress insisted that in
no way will the amendments affect any pertinent
power of the state. It also deferred to agree that the
law impliedly relinquishes the Philippines claims
over Sabah. Lastly, they have questioned the
normative force of the notion that all the waters
within the rectangular boundaries in the Treaty of
Paris. Now, because this treaty still has
undetermined controversies, the Congress believes
that in the perspective of international law, it did
not see any binding obligation to honor it. Thus, this
case of prayer for writs of certiorari and prohibition
is filed before the court, assailing the
constitutionality of RA 9522.

ISSUE: Is R.A. 9522, the amendatory Philippine

Baseline Law, violative of Section 2, paragraph 2,
Article XII of the Constitution?
RULING: No. The Court dismissed the case. It
upheld the constitutionality of the law and made it
clear that it has merely demarcated the countrys
maritime zones and continental shelves in
accordance to UNCLOS III. Secondly, the Court
found that the framework of the regime of islands
suggested by the law is not incongruent with the
Philippines enjoyment of territorial sovereignty over
the areas of Kalayaan Group of Islands and the
Scarborough. Third, the court reiterated that the
claims over Sabah remained even with the adoption
of the amendments. Further, the Court importantly
stressed that the baseline laws are mere
mechanisms for the UNCLOS III to precisely
describe the delimitations. It serves as a notice to
the international family of states and it is in no way
affecting or producing any effect like enlargement or
diminution of territories. With regard to the
petitioners assertion that RA 9522 has converted
the internal waters into archipelagic
waters, the Court did not appear to be persuaded.
Instead, the Court suggested that the political
branches of Government can pass domestic laws
that will aid in the competent security measures and
policies that will regulate innocent passage. Since
the Court emphasized innocent passage as a right
based on customary law, it also believes that no
state can validly invoke sovereignty to deny a right
acknowledged by modern states. In the case of
archipelagic states such as ours, UNCLOS III
required the imposition of innocent passage as a
concession in lieu of their right to claim the entire
waters landward baseline. It also made it possible
for archipelagic states to be recognized as a
cohesive entity under the UNCLOS III.

Dizon Copper vs. Dr. Dizon, GR 183573, July 16,

2012
Facts: Celestino Dizon (Celestino) filed with
Declarations of Location over 57 mining claims in
Zambales. In 1966, herein petitioner Dizon CopperSilver Mines, Inc. was organized. Among its
incorporators were Celestino and his son, herein
respondent Dr. Luis D. Dizon. Celestino assigned
their 57 mining claims to petitioner. Petitioner
entered into an Operating Agreement with Benguet
Corporation (Benguet). In such agreement,
petitioner authorized Benguet to, among others,
explore, equip, develop and operate the 57 mining
claims. In 1978, the 57 mining claims became the
subject of a mining lease application with the
Bureau of Mines. Consequently, the government
issued 5 Mining Lease Contracts (MLCs) covering 6
out of the 57 mining claims. Benguet filed an MPSA
application with the DENR. Benguet and petitioner
terminated their Operating Agreement. In 2004,
Benguet assigned MPSA-P-III-16 in favor of the
latter. And this was recorded in the name of
petitioner. Petitioner sent a letter to the DENR MGB
RO-III, requesting the said office to include the 6
mining claims under MLCs in MPSA-P-III-16. The
request was approved. Despite the pendency of
MPSA-P-III-16, petitioner nonetheless filed with the
DENR another MPSA application designated as
MPSA-P-III-03-05 and covers all 57 of its mining
claims, inclusive of the 6 under MLCs. On the other
hand, respondent filed with the DENR his MPSA-PIII-05-05, an MPSA application covering 281.9544
hectares of mineral location in Zambales.
It
includes the 6 mining claims under MLCs.
Subsequently, the DENR MGB RO-III verified that
several areas applied for by respondent in MPSAP-III-05-05 overlaps with those in petitioners
application. The DENR Secretary issued an Order

declaring petitioners MPSA-P-III-16 and MPSA-PIII-03-05 void ab initio.

Issue: What is a mineral production sharing
agreement? Is it violative of sec. 2, par. 2g, Article
12 of the Constitution?
Ruling: A Mineral Production Sharing Agreement
(MPSA) is one of the mineral agreements innovated
by the 1987 Constitution by which the State takes
on a broader and more dynamic role in the
exploration, development and utilization of the
countrys mineral resources. By such agreements,
the government does not become a mere licensor,
concessor or lessor of mining resourcesbut
actually assumes full control and supervision in
the exploration, development and utilization of the
concerned mining claims, in consonance with
Section 2, Article XII of the Constitution.
2006 BAR: True or False
A law creating a state corporation to exploit,
develop, and utilize compressed natural gas.
SUGGESTED ANSWER:
The law is valid as under Article XII, Section
2 of the 1987 Constitution, the exploration,
development, and utilization of natural resources
shall be under the full control and supervision of the
State. It is also provided that the State may directly
undertake such activities or it may enter into coproduction, joint venture or sharing agreements with
Filipino citizens or corporations or associations, at
least 60% Filipino-owned.
Furthermore, the President may enter into
agreements with foreign-owned corporations
involving technical or financial assistance for largescale exploration, development, and utilization of

minerals, petroleum and other mineral oils,

according to terms and conditions provided by law.
A state corporation, unlike a private corporation,
may be created by special law and placed under the
control of the President, subject to such conditions
as the creating statute may provide.
2004 BAR: EAP is a government corporation
created for the purpose of reclaiming lands
including foreshore and submerged areas, as well
as to develop, improve, acquire, lease and sell any
and all kinds of lands. A law was passed
transferring title to EAP of lands already reclaimed
in the foreshore and offshore areas of MM Bay,
particularly the so-called Liberty Islands, as
alienable and disposable lands of the public
domain. Titles were duly issued in EAP's name.
Subsequently, EAP entered into a joint venture
agreement (JVA) with ARI, a private foreign
corporation, to develop Liberty Islands. Additionally,
the JVA provided for the reclamation of 250
hectares of submerged land in the area surrounding
Liberty Islands. EAP agreed to sell and transfer to
ARI a portion of Liberty Islands and a portion of the
area to be reclaimed as the consideration for ARI's
role and participation in the joint venture, upon
approval by the Office of the President. Is there any
constitutional obstacle to the sale and transfer by
EAP to ARI of both portions as provided for in the
JVA?
SUGGESTED ANSWER:
ARI cannot acquire a portion of Liberty
Islands because, although EAP has title to Liberty
Islands and thus such lands are alienable and
disposable land, they cannot be sold, only leased,
to private corporations. The portion of the area to be
reclaimed cannot be sold and transferred to ARI
because the seabed is inalienable land of the public
domain. (Section 3, Article XII of the 1987

Constitution; Chavez v. Public Estates Authority,

384 SCRA 152 [2002]).

Section 4. Forest Lands and Parks:

Apex Mining vs SMGM
152613,November 20, 2009

Corp.,

G.R.

No.

Facts: Southeast
Mindanao
Gold
Mining
Corporation (SMGM) assails the Courts Decision
dated 23 June 2006, which held that the assignment
of Exploration Permit (EP) 133 in favor of SMGM
violated one of the conditions stipulated in the
permit, i.e., that the same shall be for the exclusive
use and benefit of Marcopper Mining Corporation
(MMC) or its duly authorized agents.
In view of this, and considering that under
Section 5 of Republic Act No. 7942, otherwise
known as the Mining Act of 1995, mining
operations in mineral reservations may be
undertaken directly by the State or through a
contractor, the Court deemed the issue of
ownership of priority right over the contested
Diwalwal Gold Rush Area as having been overtaken
by the said proclamation. Thus, it was held in the
Assailed Decision that it is now within the
prerogative of the Executive Department to
undertake directly the mining operations of the
disputed area or to award the operations to private
entities including petitioners Apex and Balite,
subject to applicable laws, rules and regulations,
and provided that these private entities are
qualified.
Issue: Is PP No. 297, declaring the Diwalwal Gold
Rush Area as a mineral reservation, valid and
constitutional, on the ground that it lacks the

concurrence of Congress as mandated by Section

4, Article XII of the Constitution?
Ruling: PP No. 297 is valid and constitutional even
without concurrence from Congress. The Court
recognized that the questioned proclamation came
from a co-equal branch of government, which
entitled it to a strong presumption of
constitutionality.
The
presumption
of
its
constitutionality stands inasmuch as the parties in
the instant cases did not question its validity, much
less present any evidence to prove that the same is
unconstitutional.
Section 4, Article XII of the Constitution
provides that the area covered by forest lands and
national parks may not be expanded or reduced,
unless pursuant to a law enacted by Congress.
SEM does not allege nor present any evidence that
Congress had already enacted a statute
determining with specific limits forest lands and
national parks. Considering the absence of such
law, Proclamation No. 297 could not have violated
Section 4, Article XII of the 1987 Constitution.
In addition, there is nothing in the
constitutional provision that prohibits the President
from declaring a forest land as an environmentally
critical area and from regulating the mining
operations therein by declaring it as a mineral
reservation in order to prevent the further
degradation of the forest environment and to
resolve the health and peace and order problems
that beset the area. **you can opt not to write the 3rd
paragraph in the index card**
1998 BAR:
Express your agreement or
disagreement with any of the following statements.
Begin your answer with the statement: "I AGREE"
or "DISAGREE" as the case may be.

1. Anyone, whether Individual, corporation or

association, qualified to acquire private lands is also
qualified to acquire public lands in the Philippines.
2. A religious corporation is qualified to have lands
in the Philippines on which it may build Its church
and make other improvements provided these are
actually, directly and exclusively used for religious
purposes.
3. A religious corporation cannot lease private lands
In the Philippines.
4. A religious corporation can acquire private lands
in the Philippines provided all its members are
citizens of the Philippines.
5. A foreign corporation can only lease private lands
in the Philippines.
SUGGESTED ANSWER:
1.) I disagree. Under Section 7, Article XII of the
Constitution, a corporation or association which is
sixty percent owned by Filipino citizens can acquire
private land, because it can lease public land and
can therefore hold public land. However, it cannot
acquire public land. Under Section 3, Article XII of
the
Constitution,
private
corporations and
associations can only lease and cannot acquire
public land. Under Section 8, Article XII of the
Constitution, a natural-born Filipino citizen who lost
his Philippine citizenship may acquire private land
only and cannot acquire public land.
2.) I disagree. The mere fact that a corporation is
religious does not entitle it to own public land. As
held In Register of Deeds vs. Ung Siu Si Temple, 97
Phil. 58, 61, land tenure is not indispensable to the
free exercise and enjoyment of religious profession
of worship. The religious corporation can own
private land only if it is at least sixty per cent owned
by Filipino citizens.

3.) I disagree. Under Section 1 of Presidential

Decree No. 471, corporations and associations
owned by aliens are allowed to lease private lands
up to twenty-five years, renewable for another
period of twenty-five years upon agreement of the
lessor and the lessee. Hence, even if the religious
corporation is owned by aliens, it can lease private
lands.
4.) I disagree. For a corporation' to qualify to
acquire private lands in the Philippines, under
Section 7, Article Xn of the Constitution in relation to
Section 2, Article XII of the Constitution, only sixty
per cent (60%) of the corporation is required to be
owned by Filipino citizens for it to qualify to acquire
private lands.
5.) I agree. A foreign corporation can lease private
lands only and cannot lease public land. Under
Section 2, Article XII of the Constitution, the
exploration, development and utilization of public
lands may be undertaken through co-production.
Joint venture or production-sharing agreements only
with Filipino citizen or corporations or associations
which are at least sixty per cent owned by Filipino
citizen.
2009 BAR: True or False
Aliens are absolutely prohibited from owning private
lands in the Philippines.
SUGGESTED ANSWER:
False, Aliens may own private lands in the
Philippines if they acquire the property through
hereditary succession. Also, natural-born Filipino
citizen who lost their Philippine citizenship may be
transferees of private lands, subject to limitations
provided by law.

2011 BAR:
Althea, a Filipino citizen, bought a lot in the
Philippines in 1975. Her
predecessors-in-interest have been in open,
continuous, exclusive and notorious
possession of the lot since 1940, in the concept of
owner. In 1988, Althea
became a naturalized Australian citizen. Is she
qualified to apply for registration
of the lot in her name? The answer is C
A. Yes, provided she acquires back her Filipino
citizenship.
B. No, except when it can be proved that Australia
has a counterpart domestic
law that also favors former Filipino citizens residing
there.
C. Yes, the lot is already private in character and as
a former natural-born
Filipino, she can buy the lot and apply for its
registration in her name.
D. No, foreigners are not allowed to own lands in
the Philippines.
Section 8. Property Rights of former natural
born Filipinos:
2000 BAR:
State whether or not the following law is
constitutional. Explain briefly.
No XVIII. a) Andy Lim, an ethnic Chinese,
became a naturalized Filipino in 1935. But later he
lost his Filipino citizenship when he became a
citizen of Canada in 1971. Wanting the best of both
worlds, he bought, in 1987, a residential lot in
Forbes Park and a commercial lot in Binondo. Are
these sales valid? Why? (3%)

Answer:
No, the sales are not valid. Under Section
8, Article XII of the Constitution, only a natural-born
citizen of the Philippines who lost his Philippine
citizenship may acquire private land. Since Andy
Lim was a former naturalized Filipino citizen, he is
not qualified to acquire private lands.
Section 10. Filipinized Areas of Investments:
Espina vs. Bautista, G.R. 143855, Sept. 21, 2010
On March 7, 2000 President Joseph E.
Estrada signed into law Republic Act (R.A.) 8762,
also known as the Retail Trade Liberalization Act of
2000. It expressly repealed R.A. 1180, which
absolutely prohibited foreign nationals from
engaging in the retail trade business. R.A. 8762
also allows natural-born Filipino citizens, who had
lost their citizenship and now reside in
the Philippines, to engage in the retail trade
business with the same rights as Filipino citizens.
On October 11, 2000 petitioners filed the present
petition, assailing the constitutionality of R.A. 8762
on the grounds that the implementation of R.A.
8762 would lead to alien control of the retail trade,
which taken together with alien dominance of other
areas of business, would result in the loss of
effective Filipino control of the economy, foreign
retailers like Walmart and K-Mart would crush
Filipino retailers and sari-sari store vendors, destroy
self-employment,
and
bring
about
more
unemployment.
Issue: Does R.A. 8762 [Retail Trade Liberalization
Act of 2000], violate the constitutional mandate in
Filipinization of areas of investments?

Ruling: No, there is no showing that the law has

contravened any constitutional mandate. The Court
is not convinced that the implementation of R.A.
8762 would eventually lead to alien control of the
retail trade business. Petitioners have not mustered
any concrete and strong argument to support its
thesis. The law itself has provided strict safeguards
on foreign participation in that business. The the
Court explained in Taada v. Angara, the provisions
of Article II of the 1987 Constitution, the
declarations of principles and state policies, are not
self-executing. Legislative failure to pursue such
policies cannot give rise to a cause of action in the
courts. While Section 19, Article II of the 1987
Constitution requires the development of a selfreliant and independent national economy
effectively controlled by Filipino entrepreneurs, it
does not impose a policy of Filipino monopoly of the
economic environment. The objective is simply to
prohibit foreign powers or interests from
maneuvering our economic policies and ensure that
Filipinos are given preference in all areas of
development. More importantly, Section 10, Article
XII of the 1987 Constitution gives Congress the
discretion to reserve to Filipinos certain areas of
investments upon the recommendation of the NEDA
and when the national interest requires. Thus,
Congress can determine what policy to pass and
when to pass it depending on the economic
exigencies. It can enact laws allowing the entry of
foreigners into certain industries not reserved by the
Constitution to Filipino citizens. In this case,
Congress has decided to open certain areas of the
retail trade business to foreign investments instead
of reserving them exclusively to Filipino
citizens. The NEDA has not opposed such policy.
2006 BAR:
State whether or not the following laws are
constitutional. Explain briefly.

A law prohibiting Chinese citizens from engaging in

retail trade. (2%)
SUGGESTED ANSWER:
The law is invalid as it singles out and
deprives Chinese citizens from engaging in retail
trade. In Ichong v. Hernandez, G.R. No. L-7995,
May 31,1957, the court held that the Treaty of Amity
between the Republic of the Philippines and the
Republic of China guarantees equality of treatment
to the Chinese nationals upon the same terms as
the nationals of any other country. Thus, the court
ruled therein that the nationals of China are not
discriminated against because nationals of all other
countries, except those of the United States, who
are granted special rights by the Constitution, are all
prohibited from engaging in the retail trade. In the
case at bar, the law discriminates only against
Chinese citizens and thus violates the equal
protection clause.
Gamboa vs. Teves, G.R. No. 176579, June 28,
2011
This is a petition to nullify the sale of shares
of stock of Philippine Telecommunications
Investment Corporation (PTIC) by the government
of the Republic of the Philippines, acting through the
Inter-Agency Privatization Council (IPC), to Metro
Pacific Assets Holdings, Inc. (MPAH), an affiliate of
First Pacific Company Limited (First Pacific), a Hong
Kong-based investment management and holding
company and a shareholder of the Philippine Long
Distance Telephone Company (PLDT).
The petitioner questioned the sale on the
ground that it also involved an indirect sale of 12
million shares (or about 6.3 percent of the
outstanding common shares) of PLDT owned by

PTIC to First Pacific. With the this sale, First

Pacifics common shareholdings in PLDT increased
from 30.7 percent to 37 percent, thereby increasing
the total common shareholdings of foreigners in
PLDT to about 81.47%. This, according to the
petitioner, violates Section 11, Article XII of the
1987 Philippine Constitution which limits foreign
ownership of the capital of a public utility to not
more than 40%.
Issue: Is section 11, Article XII, enabling or selfexecuting? Does the term capital in Section 11,
Article refer to the total common shares only or to
the total outstanding capital stock (combined total of
common and non-voting preferred shares) of PLDT,
a public utility?
Ruling:
a.) Self-executing. Section 11, Article XII of the
Constitution, like other provisions of the Constitution
expressly reserving to Filipinos specific areas of
investment, such as the development of natural
resources and ownership of land, educational
institutions and advertising business, is selfexecuting. There is no need for legislation to
implement these self-executing provisions of the
Constitution. The rationale why these constitutional
provisions are self-executing was explained
in Manila Prince Hotel v. GSIS.
To treat Section 11, Article XII of the
Constitution as not self-executing would mean that
since the 1935 Constitution, or over the last 75
years, not one of the constitutional provisions
expressly reserving specific areas of investments to
corporations, at least 60 percent of the capital of
which is owned by Filipinos, was enforceable. In
short, the framers of the 1935, 1973 and 1987
Constitutions miserably failed to effectively reserve

to Filipinos specific areas of investment, like the

operation by corporations of public utilities, the
exploitation by corporations of mineral resources,
the ownership by corporations of real estate, and
the ownership of educational institutions. All the
legislatures that convened since 1935 also
miserably failed to enact legislations to implement
these vital constitutional provisions that determine
who will effectively control the national economy,
Filipinos or foreigners. This Court cannot allow such
an absurd interpretation of the Constitution
b.) It refers to the total Common shares. The
petition and rule that the term capital in Section
11, Article XII of the 1987 Constitution refers only to
shares of stock entitled to vote in the election of
directors, and thus in the present case only to
common shares, and not to the total outstanding
capital stock (common and non-voting preferred
shares). Respondent Chairperson of the Securities
and Exchange Commission is directed to apply this
definition of the term capital in determining the
extent of allowable foreign ownership in respondent
Philippine Long Distance Telephone Company, and
if there is a violation of Section 11, Article XII of the
Constitution, to impose the appropriate sanctions
under the law. **Indisputably, construing the term
capital in Section 11, Article XII of the Constitution
to include both voting and non-voting shares will
result
in
the
abject
surrender
of
our
telecommunications
industry
to
foreigners,
amounting to a clear abdication of the States
constitutional duty to limit control of public utilities to
Filipino citizens. Such an interpretation certainly
runs counter to the constitutional provision reserving
certain areas of investment to Filipino citizens, such
as the exploitation of natural resources as well as
the ownership of land, educational institutions and
advertising businesses. The Court should never
open to foreign control what the Constitution has

expressly reserved to Filipinos for that would be a

betrayal of the Constitution and of the national
interest. The Court must perform its solemn duty to
defend and uphold the intent and letter of the
Constitution to ensure, in the words of the
Constitution, a self-reliant and independent national
economy effectively controlled by Filipinos.**
Section 16. GOCC and Economic Viability:
BSP vs. COA, G.R. No. 177131, June 7, 2011
Facts: The COA issued a resolution in 1999
defining its policy with respect to the audit of the
Boy Scouts of the Philippine, which was created as
a public corporation and that in BSP vs.NLRC, the
SC ruled that the BSP, as constituted under its
charter, was a GOCC within the meaning of Art. IX
(B) (2) (1) of the Constitution, and that the BSP is
regarded as a government instrumentality under the
Administrative Code. For the purposes of audit
supervision, the BSP shall be classified among the
government corporations to be audited by
employing the team audit approach. The BSP
sought reconsideration of the COA Resolution in a
letter signed by then BSP National President
Jejomar C. Binay, saying that it is not subject to the
COAs jurisdiction.
Issues:
a.) Is CA. no. 111, as amended by
R.A. 7278 constitutional and consistent with section
16, Article XII of the constitution?
b.) Does the test of economic viability apply
to public corporations dealing with governmental
functions?
Ruling:
a.) Yes. The BSP (CA no. 111, as amended
by RA 7278) is a public corporation or a government

agency or instrumentality with juridical personality,

which does not fall within the constitutional
prohibition in Article XII, Section 16, notwithstanding
the amendments to its charter. Not all corporations,
which are not government owned or controlled, are
ipso facto to be considered private corporations as
there exist another distinct class of corporations or
chartered institutions which are otherwise known as
"public corporations." These corporations are
treated by law as agencies or instrumentalities of
the government which are not subject to the tests of
ownership or control and economic viability but to
different
criteria
relating
to
their
public
purposes/interests or constitutional policies and
objectives and their administrative relationship to
the government or any of its Departments or
Offices.
b.) No. Section 16, Article XII deals with
the formation, organization, or regulation of
private corporations, which should be done
through a general law enacted by Congress,
provides for an exception, that is: if the corporation
is government owned or controlled; its creation is in
the interest of the common good; and it meets the
test of economic viability. The rationale behind
Article XII, Section 16 of the 1987 Constitution was
explained in Feliciano v. Commission on Audit, Art.
XII, Sec. 16 bans the creation of private
corporations by special law, however said
constitutional provision should not be construed so
as to prohibit the creation of public corporations or a
corporate agency or instrumentality of the
government intended to serve a public interest or
purpose. This should not be measured on the basis
of economic viability, but according to the public
interest or purpose it serves as envisioned by par.
2, Art. 44 of the Civil Code, and of the
Administrative Code.

Republic vs. City of Paranaque, G.R. no. 191109,

July 18, 2012
This is a petition for review on certiorari
under Rule 45 of the 1997 Rules of Civil Procedure,
on pure questions of law, assailing the January 8,
2010 Order of the Regional Trial Court, Branch 195,
Parafiaque City (RTC), which ruled that petitioner
Philippine Reclamation Authority (PRA) is a
government-owned and controlled corporation
(GOCC), a taxable entity, and, therefore, . not
exempt from payment of real property taxes. The
pertinent portion of the said order reads: In view of
the finding of this court that petitioner is not exempt
from payment of real property taxes, respondent
Paraaque City Treasurer Liberato M. Carabeo did
not act xxx without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or
in excess of jurisdiction in issuing the warrants of
levy on the subject properties.
On August 3, 2009, after an exchange of
several pleadings and the failure of both parties to
arrive at a compromise agreement, PRA filed a
Motion for Leave to File and Admit Attached
Supplemental Petition which sought to declare as
null and void the assessment for real property
taxes, the levy based on the said assessment, the
public auction sale conducted on April 7, 2003, and
the Certificates of Sale issued pursuant to the
auction sale. On January 8, 2010, the RTC
rendered its decision dismissing PRAs petition. In
ruling that PRA was not exempt from payment of
real property taxes, the RTC reasoned out that it
was a GOCC under Section 3 of P.D. No. 1084. It
was organized as a stock corporation because it
had an authorized capital stock divided into no par
value shares. Not in conformity, PRA filed this
petition for certiorari assailing the January 8, 2010
RTC Order based on the following GROUNDS

Issue: Is the Philippine Reclamation Authority a

government-owned and controlled corporation
(GOCC) under Sec. 16, Article XII?
Ruling: A GOCC must have been organized as a
stock or non-stock corporation. The Philippine
Reclamation Authority is neither. It is not a GOCC.
When the law vests in a government instrumentality
corporate powers, the instrumentality does not
necessarily become a corporation. Unless the
government instrumentality is organized as a stock
or non-stock corporation, it remains a government
instrumentality exercising not only governmental but
also corporate powers. In the case at bench, PRA is
not a GOCC because it is neither a stock nor a nonstock corporation.
Furthermore, there is another
reason why the PRA cannot be classified as a
GOCC.
Section 16, Article XII of the 1987
Constitution provides as follows: Section 16. The
Congress shall not, except by general law, provide
for the formation, organization, or regulation of
private corporations.
Government-owned or
controlled corporations may be created or
established by special charters in the interest of the
common good and subject to the test of economic
viability.
**The fundamental provision above authorizes
Congress to create GOCCs through special
charters on two conditions: 1) the GOCC must be
established for the common good; and 2) the GOCC
must meet the test of economic viability. In this
case, PRA may have passed the first condition of
common good but failed the second one
economic viability.
Undoubtedly, the purpose
behind the creation of PRA was not for economic or
commercial activities. Neither was it created to
compete in the market place considering that there
were no other competing reclamation companies
being operated by the private sector. As mentioned

earlier, PRA was created essentially to perform a

public service considering that it was primarily
responsible for a coordinated, economical and
efficient reclamation, administration and operation
of lands belonging to the government with the object
of maximizing their utilization and hastening their
development consistent with the public interest.**
Section 17. Temporary Take Over:
2011 BAR:
The President issued an executive order directing
all department heads to secure his consent before
agreeing to appear during question hour before
Congress on matters pertaining to their
departments. Is the executive order unconstitutional
for suppressing information of public concern?
The answer is D.
(A) No, because those department heads
are his alter egos and he is but exercising
his right against self-incrimination.
(B) Yes, the President cannot control the
initiative of the department heads to
conform with the oversight function of
Congress.
(C) Yes, the President cannot withhold
consent to the initiative of his department
heads as it will violate the principle of check
and balance.