GR No.

122156
Manila Prince Hotel v. GSIS
February 3, 1997
SPECIAL CIVIL ACTION for Prohibition and Mandamus
Ponente: J. Bellosillo
FACTS
Respondent Government Service Insurance System (GSIS) sold through public bidding 30%-51%
of the issued and outstanding shares of Manila Hotel Corporation (MHC).
In a close bidding held 9/18/1995, only 2 bidders participated: (1) Petitioner Manila Prince Hotel,
Filipino corporation which offered to pay at 41.58 pesos per share and (2) Renong Berhad,
Malaysian company, which offered 44 per share, 2.42 pesos more than Manila Prince Hotel.
Bidding rules included that:
o Highest bidder must comply with conditions (including negotiating and executing with
GSIS and MHC contracts and agreements) or lose right to purchase shares to other
bidders
o Declaration of winning bidder/strategic partner takes place after: execution of necessary
contracts with GSIS and MHC and when requisite approvals from GSIS and MHC,
Commission on Privatization (COP) are obtained.
Pending declaration of Renong Berhad as winning bidder, Manila Prince Hotel matched bid price
of 44 per share, and sent 33 million pesos in bid security but GSIS refused to accept.
Manila Prince as a result filed this petition invoking Article XII Section 10 (2) of the
Constitution, that the Manila Hotel for all intents and purposes has become part of national
patrimony, and that the hotel business owned by GSIS being part of the tourism industry is a part
of the national economy. In view of this, Manila Prince Hotel should be the preferred bidder after
having matched Renong Berhads bid.
Respondents take exception.
o Art. XII Sec. 10 is merely a state policy and thus not a self-executing provision and
requiring implementing law.
o Manila Hotel does not fall under national patrimony (which refers to public domain and
natural resources).
o Mandate of the Constitution is to the State, not the GSIS which has its own separate and
distinct personality.
o Constitutional provision on national patrimony does not apply because 51% of the
property hardly constitutes the building and the land upon which the building stands.
o Petitioners are estopped from questioning since at the beginning they did not question the
bidding of foreign entities.
o Reliance on the bidding rule (to justify matching bid as valid) is misplaced. The privilege
of submitting a matching bid has not yet arisen since it only takes place if Highest Bidder
cannot be awarded the block of shares.
ISSUE 1: Is Article XII Section 10 self-executing?
HELD/RATIO
Yes.
Unless it is expressly provided that a legislative act is necessary, the presumption now in modern
constitutions is that all provisions are self-executing. Otherwise legislate has the power to ignore
and thus nullify constitutional mandates.

Self-executing provisions in Constitution do not exhaust legislative power on subject but

legislation must be in harmony with it. Subsequent legislation meanwhile does not mean that
constitutional provision is not by itself fully enforceable.
Article XII Section 10 is a mandatory, positive command which is complete in itself and needs no
further guidelines for enforcement.

ISSUE 2: Does Manila Hotel fall under national patrimony and national economy?
HELD/RATIO
Yes.
In its plain and ordinary meaning, patrimony refers not only to natural resources but also Filipino
cultural heritage. In this case, Manila Hotel has become a landmark, being a venue of various
significant events in Philippine history.
51% equity of MHC comes within the purview of constitutional shelter for it constitutes majority
control and management of hotel. As a result the 51% cannot be disassociated from the entirety of
the hotel and land.
ISSUE 3: Is this sale not covered by the fact that the constitutional mandate is directed to the State and
not the GSIS?
HELD/RATIO
No. The sale is still a state action.
Sale of 51% of MHC could only be carried out with prior approval of State through Commission
on Privatization (COP).
This makes the sale a state action even if transacted by GSIS (which itself is a government
instrumentality which derives authority to act from the State).
ISSUE 4: Is the petitioners reliance on the bidding rule (to justify matching bid as valid) misplaced?
HELD/RATIO
No. It justifies matching bid as valid.
Malaysian firm offered higher bid but it is not yet the winning bidder, pending negotiation and
execution of necessary contracts and approval, so GSIS cannot make the award yet nor does it
have the authority to under the rules.
Given that all laws/contracts/GSIS rules must conform to the Constitution, and that it mandates
preference to qualified Filipinos, the matching bid of Manila Prince Hotel precludes GSIS to
award win to Malaysian firm.
ISSUE 5: Are petitioners estopped from questioning the foreigners transaction?
HELD/RATIO
No. That defense is meritless.
Filipinos and foreigners alike were invited to bidding but foreigners may be awarded if no
Filipino matches highest bid by a foreign entity.
In this case, only after Manila Prince Hotel had matched the bid did the cause of action arise.
Since Manila Prince Hotel did match bid, GSIS has no alternative but to award them the
shares. Otherwise that will constitute grave abuse of discretion.
WHEREFORE, GSIS is directed to (1) cease and desist from selling to Renong Berhad, and (2) accept
bid of Manila Prince Hotel.