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 UNDER-PRIVILEGED.

SECTION 1 (CONT.)
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.

SECTION 1 (CONT.)
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 NATIONAL ECONOMY

REFERS TO THE ENTIRE STRUCTURE OF ECONOMIC LIFE IN A
COUNTRY.
INCLUDES ACTIVITIES RELATING OR CONCERNING WITH
PRODUCTION, DISTRIBUTION, AND CONSUMPTION OF GOODS
AND SERVICES , AND WHAT ARE CALLED FACTORS OF
PRODUCTION
ENTERPRISES AND/OR GOVERNMENT AGENCIES ENGAGED IN
THESE ACTIVITIES ARE A PART OF THE NATIONAL ECONOMY
LAWS ON THE ECONOMY OF A COUNTRY ARE DESIGNED TO
ACHIEVE
THE
GOAL OF ECONOMIC GROWTH AND
DEVELOPMENT AND THE IMPROVEMENT OF THE MATERIAL
WELFARE OF THE PEOPLE.

NATIONAL PATRIMONY

REFERS PRIMARILY TO THE NATURAL RESOURCES OF OUR COUNTRY

WHICH UNDER THE CONSTITUTION INCLUDE:
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
ALL MARINE WEALTH IN ITS ARCHIPELAGIC WATERS, TERRITORIAL
SEA, AND EXCLUSIVE MARINE ZONE
- ARTICLE XII, SEC. 2, PARTS 1,2
CULTURAL HERITAGE, INCLUDING HISTORICAL LANDMARKS FORM
PART ALSO OF OUR NATIONAL PATRIMONY
- ARTICLE XII, SEC. 15-16
ALL NATURAL RESOURCES ARE OWNED BY THE STATE

SECTION 2

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 COPRODUCTION, 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.

SECTION 2 (CONT.)
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.

SECTION 2 (CONT.)
THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGNOWNED 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.

STATE OWNERSHIP OF NATURAL

RESOURCES

THE CONSTITUTION DECLARES THAT ALL

LANDS OF THE PUBLIC DOMAIN AND ALL
OTHER NATURAL RESOURCES OF THE
PHILIPPINES "ARE OWNED BY THE STATE."
(PART 1) IN FURTHERANCE OF THE
CONSTITUTIONAL POLICY ON NATURAL
RESOURCES, SECTION 2 PROHIBITS THE
TRANSFER OR CONVEYANCE TO ALIENS OF
PRIVATE LANDS SAVE IN HEREDITARY

STATE OWNERSHIP OF NATURAL

RESOURCES

OUR CONSTITUTION ADOPTS THE REGALIAN

DOCTRINE
REGALIAN DOCTRINE
HOLDS THAT ALL
MINERALS, COAL, ETC. FOUND EITHER IN PUBLIC
LANDS OR IN PRIVATE LANDS BELONG TO THE
STATE. THE ADOPTION OF THE REGALIAN DOCTRINE
WAS CONSIDERED A NECESSARY PREMISE FOR THE
RECOGNITION OF THE POWER OF THE STATE TO
CONTROL THE EXPLORATION, DEVELOPMENT, AND
UTILIZATION OF OUR NATURAL RESOURCES.

SECTION 3
LANDS OF THE PUBLIC DOMAIN ARE CLASSIFIED INTO
AGRICULTURAL, FOREST OR TIMBER, MINERAL LANDS AND
NATIONAL PARKS. AGRICULTURAL LANDS OF THE PUBLIC DOMAIN
MAY BE FURTHER CLASSIFIED BY LAW ACCORDING TO THE USES
TO WHICH THEY MAY BE DEVOTED. ALIENABLE LANDS OF THE
PUBLIC DOMAIN SHALL BE LIMITED TO AGRICULTURAL LANDS.
PRIVATE CORPORATIONS OR ASSOCIATIONS MAY NOT HOLD SUCH
ALIENABLE LANDS OF THE PUBLIC DOMAIN EXCEPT BY LEASE,
FOR A PERIOD NOT EXCEEDING TWENTY-FIVE YEARS, RENEWABLE
FOR NOT MORE THAN TWENTY-FIVE YEARS, AND NOT TO EXCEED
ONE THOUSAND HECTARES IN AREA. CITIZENS OF THE
PHILIPPINES MAY LEASE NOT MORE THAN FIVE HUNDRED
HECTARES, OR ACQUIRE NOT MORE THAN TWELVE HECTARES

SECTION 3 (CONT.)
TAKING INTO ACCOUNT THE REQUIREMENTS
OF
CONSERVATION,
ECOLOGY,
AND
DEVELOPMENT, AND SUBJECT TO THE
REQUIREMENTS OF AGRARIAN REFORM, THE
CONGRESS SHALL DETERMINE, BY LAW, THE
SIZE OF LANDS OF THE PUBLIC DOMAIN
WHICH MAY BE ACQUIRED, DEVELOPED,
HELD, OR LEASED AND THE CONDITIONS
THEREFORE.

CLASSIFICATION OF LANDS OF THE PUBLIC

DOMAIN

AGRICULTURAL - LAND DEVOTED PRINCIPALLY

TO THE RAISING OF CROPS SUCH AS RICE, SUGAR,
TOBACCO, COCONUT, ETC., OR FOR FARMING
FOREST OR TIMBER - LAND PRODUCING WOOD,
OR
ABLE
TO
PRODUCE
WOOD,
OR
IF
AGRICULTURAL CROPS ON THE SAME LAND WILL
NOT BRING THE FINANCIAL RETURN THAT TIMBER
WILL, OR IF THE SAME LAND IS NEEDED FOR
PROTECTION PURPOSES;

CLASSIFICATION OF LANDS OF THE PUBLIC

DOMAIN

MINERAL - LAND IN WHICH MINERALS EXIST IN

SUFFICIENT QUANTITY OR QUALITY TO JUSTIFY THE
NECESSARY EXPENDITURES TO BE INCURRED IN
EXTRACTING AND UTILIZING SUCH MINERALS;
NATIONAL PARKS - LAND MAINTAINED BY THE
NATIONAL GOVERNMENT AS A PLACE OF BEAUTY OR
OF PUBLIC RECREATION, LIKE THE RIZAL PARK, OR
FORESTED LAND RESERVED FROM SETTLEMENT AND
MAINTAINED IN ITS NATURAL STATE FOR PUBLIC USE
(AS BY CAMPERS OR HUNTERS) OR AS WILDLIFE
REFUGE.

SECTION 4
THE 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 NOR DIMINISHED, EXCEPT BY
LAW. THE CONGRESS SHALL PROVIDE FOR SUCH
PERIOD AS IT MAY DETERMINE, MEASURES TO
PROHIBIT LOGGING IN ENDANGERED FORESTS

CONGRESS ROLE IN DETERMINING LIMITS

FOREST LANDS AND NATIONAL PARKS WHOSE BOUNDARIES HAVE
BEEN MARKED AS PROVIDED BY LAW ARE TO BE CONSERVED.
IT IS PROHIBITED TO INCREASE OR DECREASE THEIR AREAS
EXCEPT AS MAY BE AUTHORIZED BY LAW.
THE PROHIBITION AGAINST LOGGING TAKES INTO ACCOUNT THE
NEED TO PROTECT OUR DWINDLING FOREST RESOURCES FROM
FURTHER DEPLETION AND TO PREVENT FLOODS, SOIL EROSION,
SILTATION, POLLUTED RIVERS AND DROUGHT WHICH RESULT
FROM INDISCRIMINATE LOGGING, NOT TO MENTION THE LOSS OF
OTHER THINGS THAT MAKE UP OUR FOREST, SUCH AS THE RARE
BIRDS AND ANIMALS AND FLORA WHICH MAY BE UNIQUE TO THE
PHILIPPINES. AS THE FOREST SHRINKS, SO DOES THE WILDLIFE
POPULATION.

SECTION 5
THE STATE, SUBJECT TO THE PROVISIONS OF THIS
CONSTITUTION
AND
NATIONAL
DEVELOPMENT
POLICIES AND PROGRAMS, SHALL PROTECT THE
RIGHTS OF INDIGENOUS CULTURAL COMMUNITIES TO
THEIR ANCESTRAL LANDS TO ENSURE THEIR
ECONOMIC, SOCIAL, AND CULTURAL WELL-BEING.
THE CONGRESS MAY PROVIDE FOR THE APPLICABILITY
OF CUSTOMARY LAWS GOVERNING PROPERTY RIGHTS
OR RELATIONS IN DETERMINING THE OWNERSHIP
AND EXTENT OF ANCESTRAL DOMAIN.

PROTECTION OF RIGHTS OF
INDIGENOUS CULTURAL
COMMUNITIES TO THEIR
ANCESTRAL LANDS

SECTION 5 EXPRESSIVELY RECOGNIZES

THE LEGAL EXISTENCE AND IDENTITY OF
INDIGENOUS CULTURAL COMMUNITIES
AND THEIR RIGHTS WITH RESPECT TO
THEIR ANCESTRAL LANDS.

SECTION 6
THE USE OF PROPERTY BEARS A SOCIAL
FUNCTION, AND ALL ECONOMIC AGENTS SHALL
CONTRIBUTE
TO
THE
COMMON
GOOD.
INDIVIDUALS AND PRIVATE GROUPS, INCLUDING
CORPORATIONS, COOPERATIVES, AND SIMILAR
COLLECTIVE ORGANIZATIONS, SHALL HAVE THE
RIGHT TO OWN, ESTABLISH, AND OPERATE
ECONOMIC ENTERPRISES, SUBJECT TO THE DUTY
OF THE STATE TO PROMOTE DISTRIBUTIVE JUSTICE
AND TO INTERVENE WHEN THE COMMON GOOD

USE OF PROPERTY BEARS A

SOCIAL FUNCTION

THIS PRINCIPLE IS DISCUSSED UNDER SOCIAL JUSTICE AND

HUMAN RIGHTS. (ART. XIII, SEC. 1, PAR. 2.) IN PURSUIT OF
THE ENDS OF SOCIAL JUSTICE, "THE STATE SHALL
REGULATE THE ACQUISITION, OWNERSHIP, USE AND
DISPOSITION OF PROPERTY AND ITS INCREMENTS."
IN ADDITION, IT MAY BE MENTIONED THAT THE RIGHT TO
OWN PROPERTY IS DERIVED FROM THE RIGHT TO USE IT.
MAN HAS THE RIGHT TO USE THINGS IN GENERAL FOR HIS
SURVIVAL OR DEVELOPMENT
THIS IS THE REASON WHY THE RIGHT TO PROPERTY
CANNOT BE UNLIMITED.

SECTION 7
SAVE IN CASES OF HEREDITARY
SUCCESSION, NO PRIVATE LANDS
SHALL
BE
TRANSFERRED
OR
CONVEYED EXCEPT TO INDIVIDUALS,
CORPORATIONS, OR ASSOCIATIONS
QUALIFIED TO ACQUIRE OR HOLD
LANDS OF THE PUBLIC DOMAIN.

ACQUISITION OF PRIVATE LANDS

ONLY THOSE WHO ARE "QUALIFIED TO ACQUIRE OR HOLD
ALIENABLE LANDS OF THE PUBLIC DOMAIN" MAY ACQUIRE
PRIVATE LANDS. UNDER THE CONSTITUTION, PRIVATE LANDS
MAY BE TRANSFERRED OR CONVEYED TO THE FOLLOWING:
(1) FILIPINO CITIZENS;
(2) CORPORATIONS AND ASSOCIATIONS AT LEAST 60% OF THE
CAPITAL OF WHICH IS OWNED BY FILIPINO CITIZENS (SEE SEC. 2,
PAR. 1.);
(3 ) ALIENS BUT ONLY IN CASES OF HEREDITARY SUCCESSION
(4) NATURAL-BORN FILIPINO CITIZENS WHO HAVE LOST THEIR
PHILIPPINE CITIZENSHIP SUBJECT TO LIMITATIONS PROVIDED BY
LAW. (SEC. 8.)

SECTION 8
NOTWITHSTANDING THE PROVISIONS
OF SECTION 7 OF THIS ARTICLE, 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.