ARTICLE XII National Economy and Patrimony

Section 1.
The goals of the national economy are a more equitable distribution of opportunities, income, and wealth;
a sustained increase in the amount of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising the quality of life for all, especially the
underprivileged.
The State shall promote industrialization and full employment based on sound agricultural development
and agrarian reform, through industries that make full and efficient use of human and natural resources,
and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given
optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar
collective organizations, shall be encouraged to broaden the base of their ownership.
 Three fold goals of the national economy:
- Equity, a more equitable distribution of opportunities, income and wealth
- Growth, a sustained increase in the amount of goods and services produced by a nation
for the benefit of the people
- Productivity, capacity or degree of effectiveness for making greater output out of every
unit of input employed.
 Strategies to accomplish goals:
1. To develop a self-reliant and independent national economy effectively controlled by
Filipinos
2. Promote industrialization and full employment
3. Protect Filipino enterprises against unfair foreign competition
4. To give all economic sectors optimum opportunity to develop
5. Encourage private enterprises, cooperatives and similar collective organizations
 The Regalian Doctrine
- Imperium, government auhoroity expressed through sovereignty
- Dominium, capacity of the state to own or acquire property
- Jura Regalia, that all lands were held from the crown  Ownership is vested in the
state, not in the head of the state.
- All lands that were not acquired from the government, either by purchase or by grant,
belong to the public domain. An exception to the rule would be any land that should
have been in the possession and occupant and of his predecessors-in-interest since time
immemorial
- LIMITS
 Only agricultural lands of the public domain may be alienated
 Exploration, development and utilization of natural resources shall be under the
full control and supervision of the state either by directly undertaking such EDU
or through co-production, joint venture or production sharing agreements
 All agreements with qualified private sector may be for a period not exceeding
25 years, renewable for another 25 years
  The use and enjoyment of the marine wealth of the archipelagic waters,
territorial sea, territorial sea, and exclusive economic zone shall be reserved for
Filipino citizens
 Utilization of natural resources in rivers, lakes, bays and lagoons may be allowed
on a “small scale” to Filipino citizens or cooperatives

THE IPRA CASE – CRUZ V. SEC. OF DENR, et al.

 Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus,
assailing constitutionality of certain provisions of Republic Act 8371, otherwise known as the
Indigenous Peoples Rights Act of 1997. And its Implementing Rules and Regulations
 Some provisions of the IPRA amount to an unlawful deprivation of the State’s ownersip over
lands of the public domain as well as minerals and other natural resources therein, in violation
of the regalia doctrine embodies in Sec 2, Article XII of the Constitution:
1. Section 3(a) – defines the extent and coverage of ancestral domains, Section 3(b)
defines ancestral lands
2. Section 5, Ancestral domains, inalienable public lands, bodies of water, mineral and
other resources found within ancestral domains are private but community property of
the indigenous peoples
3. Section 6 defines composition of ancestral domains and ancestral lands
4. Section 7 rights of IPs over ancestral domains
5. Section 8 rights of IPs over ancestral lands
6. Section 57 which provides for priority rights of IPs in benefits over natural resources
within the areas they claim, right to enter into agreements with non-IPs for a period not
exceeding 25 years, renewable for not more than 25 years
7. Section 58 which gives IPs responsibility over the area they claim
 All encompassing definition of AL and AD violate rights of private landowners
 Petitioners question provision of the IPRA defining the powers and jurisdiction of the NCIP and
making customary law applicable to the settlement of disputes involving AL and AD on the
ground that these provisions violate the due process clause.
- Section 51-53, 59, process of delineation and recognition of AD, vest on NCIP the sole
authority to delineate AD and AL
- Section 52 Upon certification from NCIP that a particular area is an AD, the jurisdiction
of other officials over said land terminates
- Section 63, customary law shall be applied first, in case of doubt / ambiguity in the
interpretation thereof shall be resolved in favor of the IPs
- Customary law shall be used
- Section 66 NCIP has jurisdiction over all claims and disputes involving rights of the IPs
 Petitioners assail validity of Rule VII, Part II, Section 1 of the NCIP administrative order #1, series
of 1998, which provides that the administrative relation of the NCIP to the office of the
president is characterized as a lateral but autonomous relationship for purposes of policy and
program coordination.
  As the votes were equally divided 7 to 7, the necessary majority was not obtained, the case was
redeliberated upon. After redeliberation, voting remained the same. Pursuant to Tule 56,
Section 7, of the rules of civil procedure, the petition is dismissed.
 PUNO – provisions of the IPRA do not contravene the constitution
- Ancestral domains refer to all areas generally belonging to ICCs/IPs comprising lands,
inland waters, coastal areas, and natural resources therein held under a claim of
ownership through their ancestors, communally or individually since time immemorial
- Ancestral lands refers to lands occupied, possessed and utilized by individuals, families
and clans who are members of the ICCs/IPs since time immemorial, by themselves or
through their predecessor-in-interest, under claims of individual or traditional group
ownership, continuously to the present
- Native title refers to pre-conquest rights to lands and domains which, as far bak as
memory reaches, have been held under a claim of private ownership by ICCs/IPs, have
never been public lands
- Carino v. Insular government – Carino was awarded his land. The decision largely rested
on the North American constitutionalist’s concept of “due process” as well as the
pronounced policy to “do justice to the natives”, Carino is the only case that specifically
and categorically recognizes native title
- In light of the Carino case, AL and AD are not part of the lands of public domain, they are
private
- Public domain: agricultural, forest or timber, mineral lands and national parks
- Examining the IPRA, there is nothing in the law that grants to the ICCs/IPs ownership
over the natural resources within their ancestral domains
- ICCs/IPs are merely granted the right to “manage and conserve” them for future
generations, “benefit and share” the profits from their allocation utilization, and
“negotiate the terms and conditions for their exploration” for the purpose of “ensuring
ecological environmental protection and conservation measures” – stewardship

Alienation of natural resources

SANTA ROSA MINING CO. V. LEIDO, JR.

 Petitioner assails validity of Presidential Decree No 1214 which requires holders of subsisting
and valid patentable mining claims located under the provisions of the Philippine Bill of 1902 to
file a mining lease application within one year from the approval of the decree.
 Petitioner accordingly filed a mining lease application, but “under protest”
 Petitioner contends tthat its 50 mining claims had already been declared as its own private and
exclusive property by a judgment of the CFI. Also, that they already had a vested right over its
mining claims even before PD1214
 Respondents claim that petitioner did not exhaust all administrative remedies. They also cited
the pendency of petitioner’s appeal with the office of the president, of the ruling of the
respondent secretary of natural resources which stated that 44 of the mining claims were void
 for lack of valid “tie points” as required under the Philippine Bill of 1902, and that all the mining
claims have been abandoned and cancelled for petitioner’s non compliance.
 W/N property right is absolute
 Decision: Property right is not absolute but is merely a possessory right. Petitioner’s claims are
still unpatented. They can be lost through abandonment of forfeiture or they may be revoked
for valid legal grounds.
 W/N PD1214 is unconstitutional
 Decision: PD1214 is constitutional. It is a valid exercise of the sovereign power of the state, as
owner, over lands of public domain of which petitioner’s mining claims still form a part, and over
the patrimony of the nation, which mineral deposits are a valuable asset.
 Mere location does not mean absolute ownership over the land / mining claim, to rule
otherwise would imply that location is all that is needed to acquire and maintain rights over a
located mining claim. The locator should faithfully and consistently comply with the
requirements for annual work and improvements in the located mining claim.

SMC V. CA

 SMC purchased land from Silverio Perez and filed and application for its registration (CFI)
 Solicitor General alleges that said parcel of land was included in public domain and that SMC
being a private corporation, is disqualified from holding alienable lands of the public domain.
 CFI granted the application
 CA reversed lower courts decision
 SC: W/N the evidence presented by the petitioner is sufficient enough to warrant a ruling that
SMC and/or its predecessor-in-interest has a registrable right to property
 Decision: Open, exclusive and undisputed possession of alienable public land for the period
prescribed by law creates the legal fiction whereby the land, upon completion of the requisite
period of 30 years ceases to be public land and becomes private property. However, it must be
CONCLUSIVELY ESTABLISHED.
 Perez’s documentary evidence, and testimony, being uncorroborated, is simply self serving and
undeserving of any weight.

CHAVEZ vs PEA, (G.R. No. 133250, November 11, 2003)

FACTS:
This petition asked the Court to legitimize a government contract that conveyed to a private entity
157.84 hectares of reclaimed public lands along Roxas Boulevard in Metro Manila at the negotiated
price of P1,200 per square meter. However, published reports place the market price of land near
that area at that time at a high of P90,000 per square meter. The difference in price is a staggering
P140.16 billion, equivalent to the budget of the entire Judiciary for seventeen years and more than
three times the Marcos Swiss deposits that this Court forfeited in favor of the government.
Public Estates Authority (PEA), under the JVA, obligated itself to convey title and possession over
the Property, consisting of approximately One Million Five Hundred Seventy Eight Thousand Four
Hundred Forty One (1,578,441) Square Meters for a total consideration of One Billion Eight
Hundred Ninety Four Million One Hundred Twenty Nine Thousand Two Hundred
(P1,894,129,200.00) Pesos, or a price of One Thousand Two Hundred (P1,200.00) Pesos per square
meter.

ISSUE:
Whether or not stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed or to
be reclaimed on portions of Manila Bay, violate the Constitution?

RULING:
Submerged lands, like the waters (sea or bay) above them, are part of the State’s inalienable natural
resources. Submerged lands are property of public dominion, absolutely inalienable and outside the
commerce of man. This is also true with respect to foreshore lands. Any sale of submerged or
foreshore lands is void being contrary to the Constitution as it violates Section 2, Article XII. In the
instant case, the bulk of the lands subject of the Amended JVA are still submerged lands even to this
very day, and therefore inalienable and outside the commerce of man. Of the 750 hectares subject
of the Amended JVA, 592.15 hectares or 78% of the total area are still submerged, permanently
under the waters of Manila Bay. Under the Amended JVA, the PEA conveyed to Amari the
submerged lands even before their actual reclamation, although the documentation of the deed of
transfer and issuance of the certificates of title would be made only after actual reclamation. This
Resolution does not prejudice any innocent third party purchaser of the reclaimed lands covered by
the Amended JVA. Neither the PEA nor Amari has sold any portion of the reclaimed lands to third
parties. Title to the reclaimed lands remains with the PEA. As held in the 9 July 2002 Decision, the
Amended JVA "violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution." 

LAUREL V. GARCIA

 Petitions for prohibition seeking to enjoin respondents from proceeding with the bidding of the
Roponggi property
 4 properties under the reparations agreement – Nampeidai, Kobe commercial, Kobe residential,
Roponggi
 Petitioners raise the ff issues:
o Can the Roponggi property and others of its kinds be alienated by the Philippine govt?
o Does the CE, etc. have the authority and jurisdiction to sell Roponggi property?
o Authority of the government to alienate the Roponggi property and make it available for
the sale to non-Filipino citizens and entities
o Bidding procedures being discriminatory against Filipino citizens by denying them right
to be informed
 Respondents aver that the subject property is not under our laws but under Japanese laws, that
Roponggi has ceased to become property of public dominion, that is has become patrimonial
property and that the intention to convert it to private use has been manifested by overt acts
such as the transfer of embassy to Nampeidai, issuance of AOs for the alienation of Japanese
properties, issuance of EO296, Enactment of CARP, holding of public bidding, acknowledgement
 of the senate of government’s intention to remove Roponggi from public purpose, the court’s
dismissal of petition in Ojeda v. Bidding Committee
 Decision: Roponggi is of public dominion unless it is convincingly shown that the property has
become patrimonial. The respondents failed to do this.
 Roponggi property outside the commerce of man
 The fact that the Roponggi property has not been used for a long time does not automatically
convert it to patrimonial property
 There is no formal declaration from the government to withdraw it from being such
 Abandonment cannot be inferred from non-use alone, it must be a certain and positive act
based on correct legal premises
 Lex situs rule is misplaced. The opinion does not tackle the alienablity of the real properties
procured through reparations nor the existence in what body of the authority to sell them
 Petition granted

Miners Association vs. Factoran, Jr.

G.R. No. 98332 January 16, 1995

Facts :

Former President Corazon Aquino issued Executive Order Nos 211 and 279 in the exercise of her
legislative powers. EO No. 211 prescribes the interim procedures in the processing and approval of
applications for the exploration, development and utilization of minerals pursuant to Section 2,
Article XII of the 1987 Constitution. EO No. 279 authorizes the DENR Secretary to negotiate and
conclude joint-venture, co-production, or production- sharing agreements for the exploration,
development, and utilization of mineral resources.

The issuance and the impeding implementation by the DENR of Administrative Order Nos. 57 which
declares that all existing mining leases or agreements which were granted after the effectivity of the
1987 Constitution…shall be converted into production-sharing agreements within one (1) year
from the effectivity of these guidelines.” and Administrative Order No. 82 which provides that a
failure to submit Letter of Intent and Mineral Production-Sharing Agreement within 2 years from
the effectivity of the Department Administrative Order No. 57 shall cause the abandonment of the
mining, quarry, and sand and gravel claims, after their respective effectivity dates compelled the
Miners Association of the Philippines, Inc., an organization composed of mining prospectors and
claim owners and claim holders, to file the instant petition assailing their validity and
constitutionality before this Court.
Issue : 
Are the two Department Administrative Orders valid?

Ruling :
Yes. Petitioner's insistence on the application of Presidential Decree No. 463, as amended, as the
governing law on the acceptance and approval of declarations of location and all other kinds of
applications for the exploration, development, and utilization of mineral resources pursuant to
Executive Order No. 211, is erroneous. Presidential Decree No. 463, as amended, pertains to the old
system of exploration, development and utilization of natural resources through "license,
concession or lease" which, however, has been disallowed by Article XII, Section 2 of the 1987
Constitution. By virtue of the said constitutional mandate and its implementing law, Executive
Order No. 279 which superseded Executive Order No. 211, the provisions dealing on "license,
concession or lease" of mineral resources under Presidential Decree No. 463, as amended, and
other existing mining laws are deemed repealed and, therefore, ceased to operate as the governing
law. In other words, in all other areas of administration and management of mineral lands, the
provisions of Presidential Decree No. 463, as amended, and other existing mining laws, still govern.
Section 7 of Executive Order No. 279 provides, thus:
Sec. 7. All provisions of Presidential Decree No. 463, as amended, other existing mining laws, and
their implementing rules and regulations, or parts thereof, which are not inconsistent with the
provisions of this Executive Order, shall continue in force and effect.

Well -settled is the rule, however, that regardless of the reservation clause, mining leases or
agreements granted by the State, such as those granted pursuant to Executive Order No. 211
referred to this petition, are subject to alterations through a reasonable exercise of the police power
of the State.
Accordingly, the State, in the exercise of its police power in this regard, may not be precluded by the
constitutional restriction on non-impairment of contract from altering, modifying and amending
the mining leases or agreements granted under Presidential Decree No. 463, as amended, pursuant
to Executive Order No. 211. Police Power, being co-extensive with the necessities of the case and
the demands of public interest; extends to all the vital public needs. The passage of Executive Order
No. 279 which superseded Executive Order No. 211 provided legal basis for the DENR Secretary to
carry into effect the mandate of Article XII, Section 2 of the 1987 Constitution.

WHEREFORE, the petition is DISMISSED for lack of merit.

REPUBLIC V. ROSEMOOR

 Petitioners discovered marble deposits in the mountains of Biak na Bato, BUlacan. Petitioners
were issued Licence No. 33
 Ernesto Maceda, minister of DENR, Rosemoor’s license was cancelled by him.