ARTICLE XII - National Economy and Patrimony

THIS BLOG WAS CREATED BY:

DAYO, IRENE JOY B.

GALON, REGINE
DIVINAGRACIA, WINDEL V.
DIEGAS, ANNIE JANE
LUCERO, JESSA

ARTICLE XII
Patrimony

National

Economy

and

The section one states:

"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."

The law emphasizes that the state shall provide an equal distribution
of opportunities, wealth, and income. Is this truly achieved or at least being
strived for? No, the poorer and the harder ones job is, the less the salary he
receives. The poorer one is, the less opportunity he receives. The poor are
becoming poorer, having all the needs missed and never acquired. On the
other hand, the capitalists remain on their throne where they obtain so much
more than they need. Theirs is truly no improvement in terms of quality life
among the majority of the Filipino. Many Filipinos are hungry; they cannot

even get to go to school and enjoy their rights, especially their rights on
education.
The law also says that the State shall protect Filipino enterprises
against unfair foreign competition and trade practices. We have probably
noticed that this law is again violated and ignored because what we see now
in our nations surrounding is really evident that there are many and
dominating enterprises owned by foreigners. These foreigners-owned
businesses are weakening the Filipino businesses. The State shall have its
people prioritized.
It is really disappointing to know that the primary violators of our
constitution are our government officials.
It is obvious that the law has not been followed for a long time. we
can see businesses, institutions and other establishments which are owned
by foreigners. the law says that the State shall protect the nation's marine
wealth in its archipelagic waters, territorial sea, and exclusive economic
zone, and reserve its use and enjoyment exclusively to Filipino citizens.the
law emphasizes that the Filipinos shall be the number one priority and
concern of the State. it is really disappointing that the State are the initial
violator of the constitution. we can just see how awful the result of having
this law violated; our fellow Filipinos are working under these foreigner
capitalists in our very own land. if this continues, the nation's progress
would remain to be impossible. the Filipinos are being deceived; we do not
get to enjoy our own resources, instead, the foreigner capitalists are the
ones
making
use
of
all
our
resources.
For me, the State is somewhat like traitors for letting this awful thing to
happen to its people. we must not let our nation be run this way.
(From the views of Regine Galon)

The section two states:

"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 State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration, development, and utilization of
natural resources shall be under the full control and supervision of the State. The State may
directly undertake such activities, or it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations or associations at least
sixty per centum of whose capital is owned by such citizens. Such agreements may be for a

period not exceeding twenty-five years, renewable for not more than twenty-five years, and
under such terms and conditions as may be provided by law. In cases of water rights for
irrigation, water supply fisheries, or industrial uses other than the development of water
power, beneficial use may be the measure and limit of the grant."
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea,
and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the general terms and conditions
provided by law, based on real contributions to the economic growth and general welfare of
the country. In such agreements, the State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with
this provision, within thirty days from its execution."

The section two of the aforementioned article is being laid to protect

and preserve the public domains and natural resources owned by the state
such as waters, minerals, coal, petroleum, natural gas and other mineral
oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora
and fauna and many others.

Waters as we may know, in different forms, are very necessary for the
people. We use water in our daily living, calling it as a necessity. However,
issues regarding our water resources popped out giving us the idea that our
water resources are already being threatened. Such example is the Pasig
River. Pasig River has once known to be abundant with different freshwater
fishes and a wide source of livelihood of the towns people in Pasig. However,
due to tactless waste mismanagement of the people within years, Pasig
River has become a harmful place to dwell. Freshwater fishes may be
exchanged with poisonous organisms which are hazardous to human health.

BEFORE:

These pictures show the abundance and grace of Pasig River before.

AFTER:

Photos showing the destruction of Pasig River due to human careless activities.

Our lands are also being threatened. One example is the mining in
Palawan in which the government and various environmental organizations
are working to be stopped. The issue has bring out various environmental
organizations such as Save Palawan Movement, Kabang Kalikasan ng
Pilipinas (WWF-Philippines) and Tanggol Kalikasan impeding the mining
activities and protecting the biodiversiy in Palawan. The point that they
would like to stress is that Palawan is one of the provinces in the Philippines
which is very successful in terms of Tourism. It is rich of attractive places
like islands and islets, rocky coves, and sugar-white sandy beaches, to name
a few. Palawan is also the home of the famous Puerto Princesa Underground
River, Kayangan Lake and Palawan Divers. It is very disgusting to know then,
that the mining will destruct this very rich natural resource where the
livelihood of many Palawan people depends. Mining is the extraction of
valuable minerals or other geological materials from the earth. There are
different techniques in mining in which the most harmful is the mountain top
removal. This technique is done through the use of explosives and big
machines. It is a common knowledge that Palawan is also abundant with
mineral resources such as nickel, copper, manganese, and chromite.
Needless to say, the place attracts several miners, and mining, so to say, can
cause a very big problem to the biodiversity and natural ecosystem of
Palawan.

A photo of the famous Underground River in Palawan.

A photo of the famous Underground River in Palawan.

These are just few of the things that are really contradictory to the
article. We are bound to protect and to preserve the resources where the
livelihoods of our fellow Filipinos and even we, ourselves, are dependent. In
contrary, only few people grouped in a certain environmental organizations
stand up and fight for our right.
(From the views of Irene Joy B. Dayo)
This section states the proper exploration and utilization, as well as
the development and uses of the Philippine natural resources. These
resources are protected by the state from disturbance of foreign countries

that will attempt to make use of our own natural resources. Through this law
also, Filipino citizens can join the co-production and will help promote our
country's best.
Through this law, the welfare of the country's natural resources are
protected from the foreign intentions and other people who plans to have it
as their own.
The citizens of the country can also make an investment and help the
country's economy through these resources. It can be of great help for the
country and as well as for our fellow citizens. This law serves as protection
to the natural resources of the Philippines. It hinders other country to use
the country's resources and helps the citizens to have investment using its
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.
(From the views of Windel Divina Gracia and Annie Diegas)
Some of the Country's Most Protected Tourist Spots and Natural
Resources:

(Photo illustrations by Irene Joy B. Dayo and Windel Divinagracia)

AN ISSUE AGAINST ARTICLE XII - National Economy and Patrimony:

WhatGoodisOurNationalPatrimonyIfWeCan'tMakeMoneyOffofIt?
The national patrimony issue is the 'sleeper' in the chacha controversy. Removing
therestrictionsonforeignownershipofsectorsoftheeconomyhasnothadaconsistentadvocate
duringtheArroyoyears.Partofthereasonhasbeenthedeterminedoppositionofcivilsociety
groupsbackedbysectionsoftheCatholicchurch.Knowingthis,DeVeneciaandtheHouse

tended to shy away fromthe issue in its advocacy in 20022005. The other major chacha
proponent, the federalists organizedwithin the Citizens Movement for a Federal Philippines
(CMFP)havenotpaidmuchattentioneither.
Thepeoplewhoshouldbeinterested,thebusinesscommunity,haveonlyshownsporadic
interest.Onlyforeignchambersofcommercehaveconsistentlyadvocatedthisstep.Thedebate
onthisissuehasnotreallybeen'joined'.Itis,potentially,themostemotionallyexplosiveofthe
threemajorconstitutionalreformissueclusters.Itisnotaneasyissuetodealwith.Ononehand,
thereisnoevidencethatforeigninvestorswillrespondtochangesintheeconomicprovisionsof
the constitution. Instead, foreign investors generally point to political factors
corruption,unstableregulatoryandpolicyenvironment,peaceandorderproblemsasthemain
investmentdisincentives.Ontheotherhand,constitutionalrestrictions havenotexactlybeen
effective.Asoneanalystputit,ratherplaintively,Itwouldseemthatconstitutionalconstraints
becomeineffectivewhenthegovernmentwishesitso.

Blog Archives

Political Law (Constitutional Law) Article XII

DEC 20

Posted by Magz

ARTICLE XII NATIONAL ECONOMY AND PATRIMONY

Sec. 1. GOALS OF THE NATIONAL ECONOMY

Three-fold goal:
1. More equitable distribution of opportunities, income and wealth;
2. Sustained increase in the amount of goods and services produced by the nation for
the benefit of the people; and
3. Expanding productivity, as the key to raising the quality of life for all.
The State shall promote industrialization and full employment
1. It should be based on sound agricultural development and agrarian reform
2. It should be through industries that make full and efficient use of human and natural
resources. Industries should also be competitive in both domestic and foreign markets.
Protection of Filipino enterprises
The State shall protect Filipino enterprises against unfair foreign competition and trade
practices.
Role of Private Enterprises
Private enterprises, including corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of their ownership
Section 2. REGALIAN DOCTRINE

Distinction between Imperium and Dominium.

1. Imperium
Government authority possessed by the State which is appropriately embraced in
sovereignty.
2. Dominium
1.
2.

The capacity of the State to own and acquire property.

It refers to lands held by the government in a proprietary character: can provide for
the exploitation and use of lands and other natural resources.

Scope:
The following are owned by the State:
1. Lands of the public domain:
Waters
Minerals, coals, petroleum, and other mineral oils;
All sources of potential energy;
Fisheries;
Forests or timber;
Wildlife;
Flora and fauna; and
Other natural resources.
Alienation of Natural Resources
1. General Rule: All natural resources CANNOT be alienated
2. Exception: Agricultural lands
Exploration, Development and Utilization of Natural Resources

1. Shall be under the full control and supervision of the State

2. Means
A. The state may DIRECTLY UNDERTAKE such activities
B. The state may enter into CO-PRODUCTION, JOINT VENTURE OR PRODUCTIONSHARING arrangements with
1.
2.

Filipino citizen or
Corporation or association at least 60% of whose capital is owned by such citizens

3. Limitations:
A. Period: It should not exceed 25 years, renewable for not more than 25 years
B. Under terms and conditions as may be provided by law.
4. In case of water rights/water supply/fisheries/industrial uses other than the
development of water power
The beneficial use may be the measure and limit of the grant.
Small-scale Utilization of Natural Resources
1. Congress may, by law, authorize small-scale utilization of natural resources by Filipino
citizens
2. Congress may also authorize cooperative fish farming with priority given to
subsistence fishermen and fishworkers in the rivers, lakes, bays and lagoons.
Large-Scale Exploration, Development and Utilization of Minerals/Petroleum/Other
Mineral Oils
1. The President may enter into agreements with foreign owned corporations involving
technical or financial assistance for large-scale exploration etc. of minerals, petroleum,
and other mineral oils. These agreements should be in accordance with the general
terms and conditions provided by law.
2. They should be based on the real contributions to economic growth and general
welfare of the country.

3. In the agreements, the State should promote the development and use of local
scientific and technical resources.
4. The President should notify Congress of every contract under this provision within 30
days from its execution.
5. Management and service contracts are not allowed under this rule.
Protection of Marine Wealth
1. The State shall protect its marine wealth in its
Archipelagic waters
Territorial sea &
EEZ
2. The State shall reserve its use and enjoyment exclusively to Filipino citizens.
Section 3. LANDS OF THE PUBLIC DOMAIN ARE CLASSIFIED INTO
1. Agricultural
2. Forest/timber
3. Mineral lands &
4. National Parks
Note:
1. Classification of public lands is an exclusive prerogative of the Executive Department
through the Office of the President, upon recommendation by the DENR.
2. Classification is descriptive of the legal nature of the land and NOT what it looks like.
Thus, the fact that forest land is denuded does not mean it is no longer forest land.
Alienable lands of public domain
1. Only agricultural lands are alienable.

2. Agricultural lands may be further classified by law according to the uses to which
they may be devoted.
Limitations regarding Alienable Lands of the Public Domain
1. For private corporations or associations
A. They can only hold alienable lands of the public domain BY LEASE
B. Period: Cannot exceed 25 years, renewable for not more than 25 years
C. Area: Lease cannot exceed 1,000 hectares
Note: A corporation sole is treated like other private corporations for the purpose of
acquiring public lands.
2. For Filipino citizens
A. Can lease up to 500 hectares
B. Can ACQUIRE not more than 12 hectares by purchase, homestead or grant.
Taking into account the requirements of conservation, ecology and development, and
subject to the requirements of agrarian reform, Congress shall determine by law the size
of the lands of the public domain which may be acquired, developed, held or lease and
the conditions therefore.

Means by Which Lands of the Public Domain Become Private

Land
1. Acquired from government by purchase or grant;
2. Uninterrupted possession by the occupant and his predecessors-in-interest since
time immemorial; and
3. Open, exclusive, and undisputed possession of ALIENABLE (agricultural) public land
for a period of 30 years.
A. Upon completion of the requisite period, the land becomes private property ipso jure
without need of any judicial or other sanction.

B. Here, in possession since time immemorial, presumption is that the land was never
part of public domain.
C. In computing 30 years, start from when land was converted to alienable land, not
when it was still forest land
D. Presumption is that land belongs to the State.
Section 4. Congress shall, as soon as possible, determine by law, the specific
limits of forest lands and national parks, marking clearly their boundaries on
the ground. Thereafter, such forest lands and national parks shall be
conserved and may not be increased or diminished, EXCEPT by law. Congress
shall provide measures to prohibit logging in
1.
2.

a.
b.

Endangered forest and

Watershed areas for such period as it may determine.

Section 5. ANCESTRAL LANDS

Protection of Indigenous Cultural Communities

1. The State protects the rights of indigenous cultural communities to their ancestral
lands
A. Subject to Constitutional provisions
B. Subject to national development policies and programs
2. In determining ownership and extent of ancestral domain, Congress may use
customary laws on property rights and relations.
3. ANCESTRAL DOMAIN
A. It refers to lands which are considered as pertaining to a cultural region
B. This includes lands not yet occupied, such as deep forests.

Section 7. PRIVATE LANDS

General rule
1. Private lands CAN only be transferred or conveyed to:

A. Filipino citizens
B. Corporations or associations incorporated in the Philippines, at least 60% of whose
capital is owned by Filipino citizens
2. Exceptions
A. In intestate succession, where an alien heir of a Filipino is the transferee of private
land.
B. A natural born citizen of the Philippines who has lost his Philippine citizenship may
be a transferee of PRIVATE ALND, subject to limitation provided by law. Hence, land can
be used only for residential purposes. In this case, he only acquires derivative title.
C. Foreign states may acquire land but only for embassy and staff residence purposes.
3. Filipino citizenship is only required at the time the land is acquired. Thus, loss of
citizenship after acquiring the land does not deprive ownership.
4. Restriction against aliens only applies to acquisition of ownership. Therefore:
A. Aliens may be lessees or usufructuaries of private lands
B. Aliens may be mortgages of land, as long as they do not obtain possession thereof
and do not bid in the foreclosure sale.
5. Land tenure is not indispensable to the free exercise of religious profession and
worship. A religious corporation controlled by non-Filipinos cannot acquire and own
land, even for religious purposes.
Remedies to recover private lands from disqualified aliens:
1. Escheat proceedings
2. Action for reversion under the Public Land Act
3. An action by the former Filipino owner to recover the land
A. The former pari delicto principle has been abandoned
B. Alien still has the title (didnt pass it on to one who is qualified)

Section 10. NATIONAL ECONOMY AND PATRIMONY/INVESTMENTS

Power of Congress
1. Congress, upon the recommendation of NEDA, can reserve to Filipino citizens or to
corporations or associations at least 60% of whose capital is owned by such citizens, or
such higher percentage as Congress may prescribe, certain areas of investment. This
may be done when the national interest dictates.
2. Congress shall also enact measures to encourage the formation and operation of
enterprises whose capital is wholly owned by Filipinos.

National Economy and Patrimony

In the grant of rights, privileges and concessions covering the national economy and
patrimony, the State shall give preference to QUALIFIED Filipinos.

Section 11. FRANCHISES FOR PUBLIC UTILITIES

Power to grant:
1. Congress may directly grant a legislative franchise; or
2. Power to grant franchises may be delegated to appropriate regulatory agencies
and/or LGUs

Public utility
1. In order to be considered as a public utility, and thus subject to this provision, the
undertaking must involve dealing directly with the public.
2. Thus, a Build-Operate-Transfer grantee is NOT a public utility. The BOT grantee
merely constructs the utility, and it leases the same to the government. It is the
government which operates the public utility (operation separate from ownership).
To whom granted:
1. Filipino citizens or
2. Corporations or associations incorporated in the Philippines and at least 60% of the
capital is owned by Filipino citizens.

Terms and conditions:

1. Duration: Not more than 50 years
2. Franchise is NOT exclusive in character
3. Franchise is granted under the condition that it is subject to amendment, alteration,
or repeal by Congress when the common good so requires.

Participation of Foreign Investors

1. The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital.
2. Foreigners cannot be appointed as the executive and managing officers because
these positions are reserved for Filipino citizens.

Section 16. FORMATION/ORGANIZATION/REGULATION OF

CORPORATIONS
1. Private corporations
Congress can only provide for the formation, etc of private corporations through a
general law.
2. GOCCs
They may be created by:
a. Special charters in the interest of the common good and subject to the test of
economic viability.
b. By incorporation under the general corporation law.

Sections 18-19. SPECIAL ECONOMIC POWERS OF THE GOVERNMENT

1. Temporary takeover or direction of operations:
A. Conditions
i. National emergency and

ii. When the public interest requires

B. May be used against privately owned public utilities or businesses affected with
public interest.
C. Duration of the takeover: period of emergency
D. Takeover is subject to reasonable terms and conditions
E. No need for just compensation because it is only temporary.
2. Nationalization of vital industries:
A. Exercised in the interest of national welfare or defense
B. Involves either:
i. Establishment and operation of vital industries; or
ii. Transfer to public ownership, upon payment of just compensation, public utilities and
other private enterprises to be operated by the government.

Section 19. MONOPOLIES

1. The Constitution does NOT prohibit the existence of monopolies.
2. The State may either regulate or prohibit monopolies, when public interest so
requires.
3. Combinations in restraint of trade or unfair competition are prohibited.
Filipino citizenship or equity requirements:

ACTIVITY REQUIREMENTS
EQUITY
Exploitation of natural resources

CITIZENSHIP AND/OR

1. Filipino citizens; or

2. Corporations incorporated in RP, with 60% Filipino ownership

Operation of Public Utilities

1. Filipino citizens; or

2. Corporations incorporated in RP, with 60% Filipino ownership

Acquisition of alienable lands of the public domain

1. Filipino citizens;
2. Corporations incorporated in RP, with 60% Filipino ownership;
3. Former natural-born citizens of RP, as transferees, with certain legal restrictions; and
4. Alien heirs as transferees in case of intestate succession.

Practice of ALL Professions

Filipino citizens only (natural persons)

*Congress may, by law, otherwise prescribe

Mass Media

1. Filipino citizens; or

2. Corporations incorporated in RP, and 100% Filipino owned

Advertising

1. Filipino citizens; or

2. Corporations incorporated in RP, and 70% Filipino owned.

Educational institution

1. Filipino citizens; or

2. Corporations incorporated in RP, with 60% Filipino ownership

EXCEPT: Schools established by religious groups and mission boards.

*Congress may, by law, increase Filipino equity requirements for ALL educational
institutions.

Other economic activities

Congress may, by law, reserve to Filipino

citizens or to corporations 60% Filipino owned (or even higher) certain investment
areas.

Reference:
Political Law (Constitutional Law) Reviewer & Memory Aid
Ateneo Central Bar Operations 2001
Louie, Carrie, Evelyn, Thel, Gem, Ronald

patrimony

patrmn/

noun
1.
o

property inherited from one's father or male ancestor.

heritage.
"an organization that saves the world's cultural patrimony by restoring historic buildings"
synonyms:
heritage, inheritance, birthright; More
o
historical
the estate or property belonging by ancient endowment or right to a church or other
institution.