ECONOMIC

PROVISIONS
HERSON S. VALMORES
SMU-LAW
REGALIAN DOCTRINE

 REGALIAN DOCTRINE. “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.”

 Exception: THE CONCEPT OF NATIVE TITLE (as embodied in the case of

Carino v. Insular Government) Lands and domains held prior to the Spanish
conquest under a claim of private ownership are presumed to have never been
public lands and are private
REGALIAN DOCTRINE
OPTIONS AVAILABLE TO THE STATE OF THE EDU OF
NATURAL RESOURCES

1. The State may directly undertake EDU activities

2. 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.
REGALIAN DOCTRINE

3. 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.

4. The President may enter into agreements with foreign-owned

corporations involving either technical of 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.
LANDS OF THE PUBLIC DOMAIN
CLASSIFICATIONS
1. Agricultural lands
2. Forest or timber lands
3. Mineral lands
4. National Parks

Only agricultural lands are alienable which is subject to the following

limitations:
1. Private corporations or associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding 25 years, renewable for not more
than 25 years, and not to exceed 1,000 hectares in area.
2. Citizens of the Philippines may lease not more than 500 hectares, or acquire not
more than 12 hectares thereof by purchase, homestead, or grant.
RULES REGARDING OWNERSHIP OF
LANDS

 LANDS OF THE PUBLIC DOMAIN: Only agricultural lands are ALIENABLE

 Filipino citizens may ACQUIRE not more than 12 hectares by purchase, homestead
or grant
 Filipino citizens may LEASE not more than 500 hectares
 Private corporations or associations may LEASE not exceeding 1,000 hectares

 PRIVATE LANDS: Only Filipino citizens may own private lands in the Philippines.
Exceptions:
 Section 7, Article XII – hereditary succession
 Section 8, Article XII: “A natural-born citizen of the Philippines who has lost his
Philippine citizenship may be a transferee of private lands, subject to limitations
provided by law.” Thus, under Section 5 of the Foreign Investment Act (R.A. 8179),
they may be a transferee of a private land up to a maximum of 5,000 square meters
in URBAN LAND, or three hectares of RURAL LAND for business or other
purposes.”
RULES REGARDING OWNERSHIP OF
LANDS
 STATUS OF RECLAIMED LAND AND LANDS FORMING PART OF THE REPARATION
AGREEMENT WITH JAPAN – LANDS OF THE PUBLIC DOMINION

 THE CLASSIFICATION OF PUBLIC LANDS IS AN EXCLUSIVE PREROGATIVE OF THE

EXECUTIVE DEPARTMENT, THROUGH THE OFFICE OF THE PRESIDENT AND NOT OF
THE COURTS. IT IS THEREFORE ITS CALL TO DETERMINE IF SUCH LANDS OF THE
PUBLIC DOMAIN WILL REMAIN INALIENABLE OR MAY BE DISPOSED OF FOR PRIVATE
OWNERSHIP.

 “CONTROL” IN THE EDU OF NATURAL RESOURCES. It was ruled in La Bugal-B’laan Tribal

Association v. Ramos that under the FTAA, the foreign contractor provides capital, technology and
technical know-how, and management expertise while the government, through its agencies (DENR
and Mines and Geosciences Bureau) actively exercises control and supervision over the entire
operation. Moreover, the FTAA is subject to the following constitutional safeguards:
 It shall be crafted in accordance with the general terms and conditions set by Congress in a
law;
 It is signed by the President who is presumed to have vetted the contractor and ensured that
the terms of the agreement is in accordance with law; and
 The President shall notify the Congress of any FTAA within 30 days from its execution.
RULES REGARDING OWNERSHIP OF
LANDS

 LESSON FROM THE CASE OF CHAVEZ V. AMARI

1. Foreshore and submerged areas form part of the public domain. In that state it is
beyond the commerce of man;
2. Lands reclaimed from foreshore and submerged areas form part of the public domain
and are inalienable;
3. Reclaimed lands retain their inherent potential as areas for public use or public
service until there is a formal declaration from the government to the contrary;
4. Reclaimed lands can only be alienated if it is converted, pursuant to law, into
alienable and disposable land of the public domain and is declared no longer needed
for public service; and
5. Only Filipino citizens could be a transferee of a reclaimed land which was declared
alienable and is released from public use or public service. Private corporations are
barred from being a transferee of a reclaimed land which meets the foregoing
requirements. They may only be allowed to lease pursuant to Section 3, Article XII
of the Constitution.
OWNERSHIP OF LANDS BY FOREIGNERS:
EXCEPTIONS

 RAMIREZ V. RAMIREZ – G.R. No. L-27952, 15 February 1982

 APPLICATION OF IN PARI DELICTO

 Rellosa v. Gaw Chee Hun, G.R. No. L-1411, 29 September 1953
 Frenzel v. Catito, G.R. No. 143958, 11 July 2003.
 Muller v. Muller, G.R. No. 149615, August 29, 2006
 Cheesman v. Intermediate Appellate Court, G.R. No. 74833, 21 January 1991.
 Mathews v. Taylor G.R. No. 164584, June 22, 2009

 EXCEPTIONS TO THE APPLICATION OF IN PARI DELICTO

 Philipine Banking Corporation v. Lui She, G.R. No. L-17587, 12 September 1967
“FILIPINO FIRST” POLICY

 MANILA PRINCE HOTEL – APPLICATION OF SECTION 10, ARTICLE XII (“In the
grant of rights, privileges and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.”)

 TANADA V. ANGARA – APPLICATION OF SECTIONS 1 AND 13, ARTICLE XII (The

second paragraph thereof provides:

 “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.”

 “The State shall pursue a trade policy that serves the general welfare and utilizes all
forms and arrangements of exchange on the basis of equality and reciprocity.”
FILIPINIZED
INDUSTRIES/BUSINESS
 Franchise, certificate or authorization to operate public utilities shall be granted only to (1)
Filipino citizens, or (2) corporations or associations at least 60% of which capital is owned
by Filipino citizens (Section 11, Article XII)
 Such franchise, certificate or authorization shall not be exclusive in character nor for a
longer period than 50 years;
 The grant of such franchise, certificate or authorization shall be subject to amendment,
alteration, or repeal by Congress when the public good so requires; and
 The State shall encourage equity participation in public utilities by the general public.
The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital. All the executive and
managing officers of such corporation or association must be citizens of the Philippines

 The practice of all professions in the Philippines shall be limited to Filipino citizens, save in
cases prescribed by law (Section 14, Article XII
FILIPINIZED
INDUSTRIES/BUSINESS
 “The Congress shall, upon recommendation of the economic and planning agency, when the
national interest dictates, reserve certain areas of investment to (1) Filipino citizens, or (2)
corporations or associations at least 60% of which capital is owned by Filipino citizens, or
such higher percentage as may be prescribed by Congress (Section 10, Article XII)
 The ownership and management of mass media shall be limited to Filipino citizens, or to
entities wholly-owned and managed by such citizens (Section 11 [1], Article XVI)
 Only Filipino citizens and entities at least 70% of which capital is owned by Filipino
citizens may engage in the advertising industry (Section 11 [2], Article XVI)
 Other than those established by religious groups and mission boards, educational institutions
shall be owned solely by Filipino citizens or entities at least 60% of which capital is owned
by Filipino citizens. The Congress may, however, increase Filipino equity participation in
all educational institutions. The control and administration of educational institutions shall
be vested in Filipino citizens (Section 4[2], Article XIV)
 No educational institutions shall be established exclusively for aliens and no group of
aliens shall comprise more than one-third of the enrolment in any school. This
restriction, however, does not apply to schools established for foreign diplomatic
personnel and their dependents and, unless otherwise provided by law, for other
foreign temporary residents.
FILIPINIZED
INDUSTRIES/BUSINESS
 In Wilson P. Gamboa v. Finance Secretary Margarito Teves, et al., G.R. No. 176579, 28
June 2011, the Supreme Court ruled that

 Mere legal title is insufficient to meet the 60 percent Filipino-owned “capital” required in the
Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled
with 60 percent of the voting rights, is required. The legal and beneficial ownership of 60
percent of the outstanding capital stock must rest in the hands of Filipino nationals in accordance
with the constitutional mandate. Otherwise, the corporation is “considered as non-Philippine
nationals.”

 The “Grandfather Rule” was likewise upheld in the same case

 “Compliance with the constitutional limitation(s) on engaging in nationalized activities must be
determined by ascertaining if 60% of the investing corporation’s outstanding capital stock is
owned by “Filipino citizens”, or as interpreted, by natural or individual Filipino citizens. If such
investing corporation is in turn owned to some extent by another investing corporation, the same
process must be observed. One must not stop until the citizenships of the individual or natural
stockholders of layer after layer of investing corporations have been established, the very essence
of the Grandfather Rule.”