S. No.

1728
H. No. 9125
Republic of the Philippines
Congress of the Philippines
Metro Manila
enth Congress
hir! Regular Session
"egun an! hel! in Metro Manila# on Mon!a$ the t%ent$ eighth !a$ of &ul$# nineteen hun!re! an! ninet$ se'en
REPUBLIC ACT NO. 8371
AN ACT TO RECOGNIZE, PROTECT AND PROMOTE THE RIGHTS OF INDIGENOUS CULTURAL COMMUNITIES/ INDIGENOUS
PEOPLES, CREATING A NATIONAL COMMISSION ON INDIGENOUS PEOPLES, ESTABLISHING IMPLEMENTING
MECHANISMS, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

"e it enacte! b$ the Senate an! House of Representati'es of the Philippines in Congress asse(ble!)
CHAPTER I: GENERAL PROVISIONS
S*C+,N 1. Short itle. his -ct shall be .no%n as /he +n!igenous Peoples Rights -ct of 1997/.
S*C. 2. 0eclaration of State Policies. he State shall recogni1e an! pro(ote all the rights of +n!igenous Cultural Co((unities2
+n!igenous Peoples 3+CCs2+Ps4 hereun!er enu(erate! %ithin the fra(e%or. of the Constitution)
a4 he State shall recogni1e an! pro(ote the rights of +CCs2+Ps %ithin the fra(e%or. of national unit$ an! !e'elop(ent5
b4 he State shall protect the rights of +CCs2+Ps to their ancestral !o(ains to ensure their econo(ic# social an! cultural %ell being an!
shall recogni1e the applicabilit$ of custo(ar$ la%s go'erning propert$ rights or relations in !eter(ining the o%nership an! e6tent of
ancestral !o(ain5
c4 he State shall recogni1e# respect an! protect the rights of +CCs2 +Ps to preser'e an! !e'elop their cultures# tra!itions an!
institutions. +t shall consi!er these rights in the for(ulation of national la%s an! policies5
!4 he State shall guarantee that (e(bers of the +CCs2+Ps regar!less of se6# shall e7uall$ en8o$ the full (easure of Hu(an rights an!
free!o(s %ithout !istinction or !iscri(ination5
e4 he State shall ta.e (easures# %ith the participation of the +CCs2 +Ps concerne!# to protect their rights an! guarantee respect for
their cultural integrit$# an! to ensure that (e(bers of the +CCs2+Ps benefit on an e7ual footing fro( the rights an! opportunities %hich
national la%s an! regulations grant to other (e(bers of the population5 an!
f4 he State recogni1es its obligations to respon! to the strong e6pression of the +CCs2+Ps for cultural integrit$ b$ assuring (a6i(u(
+CC2+P participation in the !irection of e!ucation# health# as %ell as other ser'ices of +CCs2lPs# in or!er to ren!er such ser'ices (ore
responsi'e to the nee!s an! !esires of these co((unities.
o%ar!s these en!s# the State shall institute an! establish the necessar$ (echanis(s to enforce an! guarantee the reali1ation of these
rights# ta.ing into consi!eration their custo(s# tra!itions# 'alues# beliefs interests an! institutions# an! to a!opt an! i(ple(ent
(easures to protect their rights to their ancestral !o(ains.
CHAPTER II: DEFINITION OF TERMS
S*C. 9. 0efinition of er(s. :or purposes of this -ct# the follo%ing ter(s shall (ean)
a4 -ncestral 0o(ains Sub8ect to Section 5; hereof# refer to all areas generall$ belonging to +CCs2+Ps co(prising lan!s# inlan! %aters#
coastal areas# an! natural resources therein# hel! un!er a clai( of o%nership# occupie! or possesse! b$ +CCs2+Ps# b$ the(sel'es or
through their ancestors# co((unall$ or in!i'i!uall$ since ti(e i((e(orial# continuousl$ to the present e6cept %hen interrupte! b$ %ar#
force (a8eure or !isplace(ent b$ force# !eceit# stealth or as a conse7uence of go'ern(ent pro8ects or an$ other 'oluntar$ !ealings
entere! into b$ go'ern(ent an! pri'ate in!i'i!uals2corporations# an! %hich are necessar$ to ensure their econo(ic# social an! cultural
%elfare. +t shall inclu!e ancestral lan!s# forests# pasture# resi!ential# agricultural# an! other lan!s in!i'i!uall$ o%ne! %hether alienable
an! !isposable or other%ise# hunting groun!s# burial groun!s# %orship areas# bo!ies of %ater# (ineral an! other natural resources# an!
lan!s %hich (a$ no longer be e6clusi'el$ occupie! b$ +CCs2+Ps but fro( %hich the$ tra!itionall$ ha! access to for their subsistence
an! tra!itional acti'ities# particularl$ the ho(e ranges of +CCs2+Ps %ho are still no(a!ic an!2or shifting culti'ators5
b4 -ncestral <an!s Sub8ect to Section 5; hereof# refers to lan! occupie!# possesse! an! utili1e! b$ in!i'i!uals# fa(ilies an! clans %ho
are (e(bers of the +CCs2+Ps since ti(e i((e(orial# b$ the(sel'es or through their pre!ecessorsininterest# un!er clai(s of in!i'i!ual
or tra!itional group o%nership# continuousl$# to the present e6cept %hen interrupte! b$ %ar# force (a8eure or !isplace(ent b$ force#
!eceit# stealth# or as a conse7uence of go'ern(ent pro8ects an! other 'oluntar$ !ealings entere! into b$ go'ern(ent an! pri'ate
in!i'i!uals2corporations inclu!ing# but not li(ite! to# resi!ential lots# rice terraces or pa!!ies# pri'ate forests# s%i!!en far(s an! tree
lots5
c4 Certificate of -ncestral 0o(ain itle refers to a title for(all$ recogni1ing the rights of possession an! o%nership of +CCs2+Ps o'er
their ancestral !o(ains i!entifie! an! !elineate! in accor!ance %ith this la%5
!4 Certificate of -ncestral <an!s itle refers to a title for(all$ recogni1ing the rights of +CCs2+Ps o'er their ancestral lan!s5
e4 Co((unal Clai(s refer to clai(s on lan!# resources an! rights thereon5 belonging to the %hole co((unit$ %ithin a !efine! territor$5
f4 Custo(ar$ <a%s refer to a bo!$ of %ritten an!2or un%ritten rules# usages# custo(s an! practices tra!itionall$ an! continuall$
recogni1e!# accepte! an! obser'e! b$ respecti'e +CCs2+Ps5
g4 :ree an! Prior +nfor(e! Consent as use! in this -ct shall (ean the consensus of all (e(bers of the +CCs2+Ps to be !eter(ine! in
accor!ance %ith their respecti'e custo(ar$ la%s an! practices# free fro( an$ e6ternal (anipulation# interference coercion# an!
obtaine! after full$ !isclosing the intent an! scope of the acti'it$# in a language an! process un!erstan!able to the co((unit$5
h4 +n!igenous Cultural Co((unities2+n!igenous Peoples refer to a group of people or ho(ogenous societies i!entifie! b$ selfascription
an! ascription b$ others# %ho ha'e continuousl$ li'e! as organi1e! co((unit$ on co((unall$ boun!e! an! !efine! territor$# an! %ho
ha'e# un!er clai(s of o%nership since ti(e i((e(orial# occupie!# possesse! an! utili1e! such territories# sharing co((on bon!s of
language# custo(s# tra!itions an! other !istincti'e cultural traits# or %ho ha'e# through resistance to political# social an! cultural inroa!s
of coloni1ation# nonin!igenous religions an! cultures# beca(e historicall$ !ifferentiate! fro( the (a8orit$ of :ilipinos. +CCs2+Ps shall
li.e%ise inclu!e peoples %ho are regar!e! as in!igenous on account of their !escent fro( the populations %hich inhabite! the countr$#
at the ti(e of con7uest or coloni1ation# or at the ti(e of inroa!s of nonin!igenous religions an! cultures# or the establish(ent of present
state boun!aries# %ho retain so(e or all of their o%n social# econo(ic# cultural an! political institutions# but %ho (a$ ha'e been
!isplace! fro( their tra!itional !o(ains or %ho (a$ ha'e resettle! outsi!e their ancestral !o(ains5
i4 +n!igenous Political Structures refer to organi1ational an! cultural lea!ership s$ste(s# institutions# relationships# patterns an!
processes for !ecision(a.ing an! participation# i!entifie! b$ +CCs2+Ps such as# but not li(ite! to# Council of *l!ers# Council of i(ua$s#
"o!ong Hol!ers# or an$ other tribunal or bo!$ of si(ilar nature5
84 +n!i'i!ual Clai(s refer to clai(s on lan! an! rights thereon %hich ha'e been !e'ol'e! to in!i'i!uals# fa(ilies an! clans inclu!ing# but
not li(ite! to# resi!ential lots# rice terraces or pa!!ies an! tree lots5
.4 National Co((ission on +n!igenous Peoples 3NC+P4 refers to the office create! un!er his -ct# %hich shall be un!er the ,ffice of the
Presi!ent# an! %hich shall be the pri(ar$ go'ern(ent agenc$ responsible for the for(ulation an! i(ple(entation of policies# plans an!
progra(s to recogni1e# protect an! pro(ote the rights of +CCs2+Ps5
l4 Nati'e itle refers to precon7uest rights to lan!s an! !o(ains %hich# as far bac. as (e(or$ reaches# ha'e been hel! un!er a clai(
of pri'ate o%nership b$ +CCs2+Ps# ha'e ne'er been public lan!s an! are thus in!isputabl$ presu(e! to ha'e been hel! that %a$ since
before the Spanish Con7uest5
(4Nongo'ern(ent ,rgani1ation refers to a pri'ate# nonprofit 'oluntar$ organi1ation that has been organi1e! pri(aril$ for the !eli'er$
of 'arious ser'ices to the +CCs2+Ps an! has an establishe! trac. recor! for effecti'eness an! acceptabilit$ in the co((unit$ %here it
ser'es5
n4 People=s ,rgani1ation refers to a pri'ate# nonprofit 'oluntar$ organi1ation of (e(bers of an +CC2+P %hich is accepte! as
representati'e of such +CCs2+Ps5
o4 Sustainable ra!itional Resource Rights refer to the rights of +CCs2+Ps to sustainabl$ use# (anage# protect an! conser'e a4 lan!# air#
%ater# an! (inerals5 b4 plants# ani(als an! other organis(s5 c4 collecting# fishing an! hunting groun!s5 !4 sacre! sites5 an! e4 other
areas of econo(ic# cere(onial an! aesthetic 'alue in accor!ance %ith their in!igenous .no%le!ge# beliefs# s$ste(s an! practices5 an!
p4 i(e +((e(orial refers to a perio! of ti(e %hen as far bac. as (e(or$ can go# certain +CCs2+Ps are .no%n to ha'e occupie!#
possesse! in the concept of o%ner# an! utili1e! a !efine! territor$ !e'ol'e! to the(# b$ operation of custo(ar$ la% or inherite! fro(
their ancestors# in accor!ance %ith their custo(s an! tra!itions.
CHAPTER III: RIGHTS TO ANCESTRAL DOMAINS
S*C. >. Concept of -ncestral <an!s20o(ains. -ncestral lan!s2 !o(ains shall inclu!e such concepts of territories %hich co'er not onl$
the ph$sical en'iron(ent but the total en'iron(ent inclu!ing the spiritual an! cultural bon!s to the areas %hich the +CCs2+Ps possess#
occup$ an! use an! to %hich the$ ha'e clai(s of o%nership.
S*C. 5. +n!igenous Concept of ,%nership. +n!igenous concept of o%nership sustains the 'ie% that ancestral !o(ains an! all
resources foun! therein shall ser'e as the (aterial bases of their cultural integrit$. he in!igenous concept of o%nership generall$
hol!s that ancestral !o(ains are the +CC=s2+P=s pri'ate but co((unit$ propert$ %hich belongs to all generations an! therefore cannot
be sol!# !ispose! or !estro$e!. +t li.e%ise co'ers sustainable tra!itional resource rights.
S*C. ;. Co(position of -ncestral <an!s20o(ains. -ncestral lan!s an! !o(ains shall consist of all areas generall$ belonging to +CCs2
+Ps as referre! un!er Sec. 9# ite(s 3a4 an! 3b4 of this -ct.
S*C. 7. Rights to -ncestral 0o(ains. he rights of o%nership an! possession of +CCs2+Ps to their ancestral !o(ains shall be
recogni1e! an! protecte!. Such rights shall inclu!e)
a4 Right of ,%nership he right to clai( o%nership o'er lan!s# bo!ies of %ater tra!itionall$ an! actuall$ occupie! b$ +CCs2+Ps# sacre!
places# tra!itional hunting an! fishing groun!s# an! all i(pro'e(ents (a!e b$ the( at an$ ti(e %ithin the !o(ains5
b4Right to 0e'elop <an!s an! Natural Resources. Sub8ect to Section 5; hereof# right to !e'elop# control an! use lan!s an! territories
tra!itionall$ occupie!# o%ne!# or use!5 to (anage an! conser'e natural resources %ithin the territories an! uphol! the responsibilities
for future generations5 to benefit an! share the profits fro( allocation an! utili1ation of the natural resources foun! therein5 the right to
negotiate the ter(s an! con!itions for the e6ploration of natural resources in the areas for the purpose of ensuring ecological#
en'iron(ental protection an! the conser'ation (easures# pursuant to national an! custo(ar$ la%s5 the right to an infor(e! an!
intelligent participation in the for(ulation an! i(ple(entation of an$ pro8ect# go'ern(ent or pri'ate# that %ill affect or i(pact upon the
ancestral !o(ains an! to recei'e 8ust an! fair co(pensation for an$ !a(ages %hich the$ (a$ sustain as a result of the pro8ect5 an! the
right to effecti'e (easures b$ the go'ern(ent to pre'ent an$ interference %ith# alienation an! encroach(ent upon these rights5
c4 Right to Sta$ in the erritories. he right to sta$ in the territor$ an! not to be re(o'e! therefro(. No +CCs2+Ps %ill be relocate!
%ithout their free an! prior infor(e! consent# nor through an$ (eans other than e(inent !o(ain. ?here relocation is consi!ere!
necessar$ as an e6ceptional (easure# such relocation shall ta.e place onl$ %ith the free an! prior infor(e! consent of the +CCs2+Ps
concerne! an! %hene'er possible# the$ shall be guarantee! the right to return to their ancestral !o(ains# as soon as the groun!s for
relocation cease to e6ist. ?hen such return is not possible# as !eter(ine! b$ agree(ent or through appropriate proce!ures# +CCs2+Ps
shall be pro'i!e! in all possible cases %ith lan!s of 7ualit$ an! legal status at least e7ual to that of the lan! pre'iousl$ occupie! b$
the(# suitable to pro'i!e for their present nee!s an! future !e'elop(ent. Persons thus relocate! shall li.e%ise be full$ co(pensate!
for an$ resulting loss or in8ur$5
!4 Right in Case of 0isplace(ent. +n case !isplace(ent occurs as a result of natural catastrophes# the State shall en!ea'or to resettle
the !isplace! +CCs2+Ps in suitable areas %here the$ can ha'e te(porar$ life support s$ste(s) Pro'i!e!# hat the !isplace! +CCs2+Ps
shall ha'e the right to return to their aban!one! lan!s until such ti(e that the nor(alc$ an! safet$ of such lan!s shall be !eter(ine!)
Pro'i!e!# further# hat shoul! their ancestral !o(ain cease to e6ist an! nor(alc$ an! safet$ of the pre'ious settle(ents are not
possible# !isplace! +CCs2+Ps shall en8o$ securit$ of tenure o'er lan!s to %hich the$ ha'e been resettle!) Pro'i!e! further(ore# hat
basic ser'ices an! li'elihoo! shall be pro'i!e! to the( to ensure that their nee!s are a!e7uatel$ a!!resse!5
e4 Right to Regulate *ntr$ of Migrants. Right to regulate the entr$ of (igrant settlers an! organi1ations into the !o(ains5
f4 Right to Safe an! Clean -ir an! ?ater. :or this purpose# the +CCs2+Ps shall ha'e access to integrate! s$ste(s for the (anage(ent
of their inlan! %aters an! air space5
g4 Right to Clai( Parts of Reser'ations he right to clai( parts of the ancestral !o(ains %hich ha'e been reser'e! for 'arious
purposes# e6cept those reser'e! an! inten!e! for co((on an! public %elfare an! ser'ice5 an!
h4 Right to Resol'e Conflict. Right to resol'e lan! conflicts in accor!ance %ith custo(ar$ la%s of the area %here the lan! is locate!#
an! onl$ in !efault thereof shall the co(plaints be sub(itte! to a(icable settle(ent an! to the Courts of &ustice %hene'er necessar$.
S*C. 8. Rights to -ncestral <an!s. he right of o%nership an! possession of the +CCs 2+Ps to their ancestral lan!s shall be recogni1e!
an! protecte!.
a4 Right to transfer lan!2propert$. Such right shall inclu!e the right to transfer lan! or propert$ rights to2a(ong (e(bers of the sa(e
+CCs2+Ps# sub8ect to custo(ar$ la%s an! tra!itions of the co((unit$ concerne!.
b4 Right to Re!e(ption. +n cases %here it is sho%n that the transfer of lan!2propert$ rights b$ 'irtue of an$ agree(ent or !e'ise# to a
non(e(ber of the concerne! +CCs2+Ps is tainte! b$ the 'itiate! consent of the +CCs2+Ps# or is transferre! for an unconscionable
consi!eration or price# the transferor +CC2+P shall ha'e the right to re!ee( the sa(e %ithin a perio! not e6cee!ing fifteen 3154 $ears
fro( the !ate of transfer.
S*C. 9. Responsibilities of +CCs2+Ps to their@>ncestral 0o(ains. +CCs2+Ps occup$ing a !ul$ certifie! ancestral !o(ain shall ha'e the
follo%ing responsibilities)
a4 Maintain *cological "alance. o preser'e# restore# an! (aintain a balance! ecolog$ in the ancestral !o(ain b$ protecting the flora
an! fauna# %atershe! areas# an! other reser'es5
b4 Restore 0enu!e! -reas. o acti'el$ initiate# un!erta.e an! participate in the reforestation of !enu!e! areas an! other !e'elop(ent
progra(s an! pro8ects sub8ect to 8ust an! reasonable re(uneration5 an!
c4 ,bser'e <a%s. o obser'e an! co(pl$ %ith the pro'isions of this -ct an! the rules an! regulations for its effecti'e i(ple(entation.
S*C. 1A. Bnauthori1e! an! Bnla%ful +ntrusion. Bnauthori1e! en! unla%ful intrusion upon# or use of an$ portion of the ancestral
!o(ain# or an$ 'iolation of the rights herein before enu(erate!# shall be punishable un!er this la%. :urther(ore# the Co'ern(ent shall
ta.e (easures to pre'ent non+CCs2+Ps fro( ta.ing a!'antage of the +CCs2+Ps custo(s or lac. of un!erstan!ing of la%s to secure
o%nership# possession of lan! belonging to sai! +CCs2+Ps.
S*C. 11. Recognition of -ncestral 0o(ain Rights. he rights of +CCs2+Ps to their ancestral !o(ains b$ 'irtue of Nati'e itle shall be
recogni1e! an! respecte!. :or(al recognition# %hen solicite! b$ +CCs2 +Ps concerne!# shall be e(bo!ie! in a Certificate of -ncestral
0o(ain itle 3C-04# %hich shall recogni1e the title of the concerne! +CCs2+Ps o'er the territories i!entifie! an! !elineate!.
S*C. 12. ,ption to Secure Certificate of itle Bn!er Co((on%ealth -ct 1>1# as a(en!e!# or the <an! Registration -ct >9;. +n!i'i!ual
(e(bers of cultural co((unities# %ith respect to their in!i'i!uall$o%ne! ancestral lan!s %ho# b$ the(sel'es or through their
pre!ecessorsininterest# ha'e been in continuous possession an! occupation of the sa(e in the concept of o%ner since ti(e
i((e(orial or for a perio! of not less than thirt$ 39A4 $ears i((e!iatel$ prece!ing the appro'al of this -ct an! unconteste! b$ the
(e(bers of the sa(e +CCs2 +Ps shall ha'e the option to secure title to their ancestral lan!s un!er the pro'isions of Co((on%ealth -ct
1>1# as a(en!e!# or the <an! Registration -ct >9;.
:or this purpose# sai! in!i'i!uall$o%ne! ancestral lan!s# %hich are agricultural in character an! actuall$ use! for agricultural#
resi!ential# pasture# an! tree far(ing purposes# inclu!ing those %ith a slope of eighteen percent 318D4 or (ore# are hereb$ classifie!
as alienable an! !isposable agricultural lan!s.
he option grante! un!er this section shall be e6ercise! %ithin t%ent$ 32A4 $ears fro( the appro'al of this -ct.
CHAPTER IV: RIGHT TO SELFGOVERNANCE AND EMPOWERMENT
S*C. 19. SelfCo'ernance. he State recogni1es the inherent right of +CCs2+Ps to selfgo'ernance an! self!eter(ination an! respects
the integrit$ of their 'alues# practices an! institutions. Conse7uentl$# the State shall guarantee the right of +CCs2+Ps to freel$ pursue
their econo(ic# social an! cultural !e'elop(ent.
S*C. 1>. Support for -utono(ous Regions. he State shall continue to strengthen an! support the autono(ous regions create! un!er
the Constitution as the$ (a$ re7uire or nee!. he State shall li.e%ise encourage other +CCs2+Ps not inclu!e! or outsi!e Musli(
Min!anao an! the Cor!illeras to use the for( an! content of their %a$s of life as (a$ be co(patible %ith the fun!a(ental rights !efine!
in the Constitution of the Republic of the Philippines an! other internationall$ recogni1e! hu(an rights.
S*C. 15. &ustice S$ste(# Conflict Resolution +nstitutions# an! Peace "uil!ing Processes. he +CCs2+Ps shall ha'e the right to use their
o%n co((onl$ accepte! 8ustice s$ste(s# conflict resolution institutions# peace buil!ing processes or (echanis(s an! other custo(ar$
la%s an! practices %ithin their respecti'e co((unities an! as (a$ be co(patible %ith the national legal s$ste( an! %ith internationall$
recogni1e! hu(an rights.
S*C. 1;. Right to Participate in 0ecisionMa.ing +CCs2+Ps ha'e the right to participate full$# if the$ so choose# at all le'els of !ecision
(a.ing in (atters %hich (a$ affect their rights# li'es an! !estinies through proce!ures !eter(ine! b$ the( as %ell as to (aintain an!
!e'elop their o%n in!igenous political structures. Conse7uentl$# the State shall ensure that the +CCs2+Ps shall be gi'en (an!ator$
representation in polic$(a.ing bo!ies an! other local legislati'e councils.
S*C. 17. Right to 0eter(ine an! 0eci!e Priorities for 0e'elop(ent. he +CCs2+Ps shall ha'e the right to !eter(ine an! !eci!e their
o%n priorities for !e'elop(ent affecting their li'es# beliefs# institutions# spiritual %ellbeing# an! the lan!s the$ o%n# occup$ or use. he$
shall participate in the for(ulation# i(ple(entation an! e'aluation of policies# plans an! progra(s for national# regional an! local
!e'elop(ent %hich (a$ !irectl$ affect the(.
S*C. 18. ribal "aranga$s. he +CCs2+Ps li'ing in contiguous areas or co((unities %here the$ for( the pre!o(inant population but
%hich are locate! in (unicipalities# pro'inces or cities %here the$ !o not constitute the (a8orit$ of the population# (a$ for( or
constitute a separate baranga$ in accor!ance %ith the <ocal Co'ern(ent Co!e on the creation of tribal baranga$s.
S*C. 19. Role of Peoples ,rgani1ations. he State shall recogni1e an! respect the role of in!epen!ent +CCs2+Ps organi1ations to
enable the +CCs2+Ps to pursue an! protect their legiti(ate an! collecti'e interests an! aspirations through peaceful an! la%ful (eans.
S*C. 2A. Means for 0e'elop(ent2*(po%er(ent of +CCs2lPs. he Co'ern(ent shall establish the (eans for the full !e'elop(ent2
e(po%er(ent of the +CCs2+Ps o%n institutions an! initiati'es an!# %here necessar$# pro'i!e the resources nee!e! therefor.
CHAPTER V: SOCIAL JUSTICE AND HUMAN RIGHTS
S*C. 21. *7ual Protection an! Non!iscri(ination of +CCs2lPs. Consistent %ith the e7ual protection clause of the Constitution of the
Republic of the Philippines# the Charter of the Bnite! Nations# the Bni'ersal 0eclaration of Hu(an Rights inclu!ing the Con'ention on
the *li(ination of 0iscri(ination -gainst ?o(en an! +nternational Hu(an Rights <a%# the State shall# %ith !ue recognition of their
!istinct characteristics an! i!entit$ accor! to the (e(bers of the +CCs2+Ps the rights# protections an! pri'ileges en8o$e! b$ the rest of
the citi1enr$. +t shall e6ten! to the( the sa(e e(plo$(ent rights# opportunities# basic ser'ices# e!ucational an! other rights an!
pri'ileges a'ailable to e'er$ (e(ber of the societ$. -ccor!ingl$# the State shall li.e%ise ensure that the e(plo$(ent of an$ for( of
force or coercion against +CCs2+Ps shall be !ealt %ith b$ la%.
he State shall ensure that the fun!a(ental hu(an rights an! free!o(s as enshrine! in the Constitution an! rele'ant international
instru(ents are guarantee! also to in!igenous %o(en. o%ar!s this en!# no pro'ision in this -ct shall be interprete! so as to result in
the !i(inution of rights an! pri'ileges alrea!$ recogni1e! an! accor!e! to %o(en un!er e6isting la%s of general application.
S*C. 22. Rights !uring -r(e! Conflict. +CCs2+Ps ha'e the right to special protection an! securit$ in perio!s of ar(e! conflict. he
State shall obser'e international stan!ar!s# in particular the :ourth Cene'a Con'ention of 19>9# for the protection of ci'ilian
populations in circu(stances of e(ergenc$ an! ar(e! conflict# an! shall not recruit (e(bers of the +CCs2+Ps against their %ill into the
ar(e! forces# an! in particular# for use against other +CCs2+Ps5 nor recruit chil!ren of +CCs2 +Ps into the ar(e! forces un!er an$
circu(stance5 nor force in!igenous in!i'i!uals to aban!on their lan!s# territories an! (eans of subsistence# or relocate the( in special
centers for (ilitar$ purposes un!er an$ !iscri(inator$ con!ition.
S*C. 29. :ree!o( fro( 0iscri(ination an! Right to *7ual ,pportunit$ an! reat(ent. +t shall be the right of the +CCs2+Ps to be free
fro( an$ for( of !iscri(ination# %ith respect to recruit(ent an! con!itions of e(plo$(ent# such that the$ (a$ en8o$ e7ual opportunities
for a!(ission to e(plo$(ent# (e!ical an! social assistance# safet$ as %ell as other occupationall$ relate! benefits# infor(e! of their
rights un!er e6isting labor legislation an! of (eans a'ailable to the( for re!ress# not sub8ect to an$ coerci'e recruit(ent s$ste(s#
inclu!ing bon!e! labor an! other for(s of !ebt ser'itu!e5 an! e7ual treat(ent in e(plo$(ent for (en an! %o(en# inclu!ing the
protection fro( se6ual harass(ent.
o%ar!s this en!# the State shall# %ithin the fra(e%or. of national la%s an! regulations# an! in cooperation %ith the +CCs2+Ps
concerne!# a!opt special (easures to ensure the effecti'e protection %ith regar! to the recruit(ent an! con!itions of e(plo$(ent of
persons belonging to these co((unities# to the e6tent that the$ are not effecti'el$ protecte! b$ la%s applicable to %or.ers in general.
+CCs2+Ps shall ha'e the right to association an! free!o( for all tra!e union acti'ities an! the right to conclu!e collecti'e bargaining
agree(ents %ith e(plo$ers= organi1ations. he$ shall li.e%ise ha'e the right not to be sub8ect to %or.ing con!itions ha1ar!ous to their
health# particularl$ through e6posure to pestici!es an! other to6ic substances.
S*C. 2>. Bnla%ful -cts Pertaining to *(plo$(ent. +t shall be unla%ful for an$ person)
a4 o !iscri(inate against an$ +CC2+P %ith respect to the ter(s an! con!itions of e(plo$(ent on account of their !escent. *7ual
re(uneration shall be pai! to +CC2+P an! non+CC2+P for %or. of e7ual 'alue5 an!
b4 o !en$ an$ +CC2+P e(plo$ee an$ right or benefit herein pro'i!e! for or to !ischarge the( for the purpose of pre'enting the( fro(
en8o$ing an$ of the rights or benefits pro'i!e! un!er this -ct.
S*C. 25. "asic Ser'ices. he +CCs2+Ps ha'e the right to special (easures for the i((e!iate# effecti'e an! continuing i(pro'e(ent of
their econo(ic an! social con!itions# inclu!ing in the areas of e(plo$(ent# 'ocational training an! retraining# housing# sanitation#
health an! social securit$. Particular attention shall be pai! to the rights an! special nee!s of in!igenous %o(en# el!erl$# $outh#
chil!ren an! !ifferentl$able! persons. -ccor!ingl$# the State shall guarantee the right of +CCs2+Ps to go'ern(ent=s basic ser'ices %hich
shall inclu!e# but not li(ite! to# %ater an! electrical facilities# e!ucation# health an! infrastructure.
S*C. 2;. ?o(en. +CC2+P %o(en shall en8o$ e7ual rights an! opportunities %ith (en# as regar!s the social# econo(ic# political an!
cultural spheres of life. he participation of in!igenous %o(en in He !ecision(a.ing process in all le'els# as %ell as in the !e'elop(ent
of societ$# shall be gi'en !ue respect an! recognition.
he State shall pro'i!e full access to e!ucation# (aternal an! chil! care# health an! nutrition# an! housing ser'ices to in!igenous
%o(en. Eocational# technical# professional an! other for(s of training shall be pro'i!e! to enable these %o(en to full$ participate in all
aspects of social life. -s far as possible# the State shall ensure that in!igenous %o(en ha'e access to all ser'ices in their o%n
languages.
S*C. 27. Chil!ren an! Fouth. he State shall recogni1e the 'ital role of the chil!ren an! $outh of +CCs2+Ps in nationbuil!ing an! shall
pro(ote an! protect their ph$sical# (oral# spiritual# intellectual en! social %ellbeing. o%ar!s this en!# the State shall support all
go'ern(ent progra(s inten!e! for the !e'elop(ent an! rearing of the chil!ren an! $outh of +CCs2+Ps for ci'ic efficienc$ an! establish
such (echanis(s as (a$ be necessar$ for the protection of the rights of the in!igenous chil!ren an! $outh.
S*C. 28. +ntegrate! S$ste( of *!ucation. he State shall# through the NC+P# pro'i!e a co(plete# a!e7uate an! integrate! s$ste( of
e!ucation# rele'ant to the nee!s of the chil!ren an! $oung people of +CCs2 +Ps.
CHAPTER VI: CULTURAL INTEGRIT
S*C. 29. Protection of +n!igenous Culture# ra!itions an! +nstitutions. he State shall respect# recogni1e an! protect the right of
+CCs2+Ps to preser'e an! protect their culture# tra!itions an! institutions. +t shall consi!er these rights in the for(ulation an! application
of national plans an! policies.
S*C. 9A. *!ucational S$ste(s. he State shall pro'i!e e7ual access to 'arious cultural opportunities to the +CCs2+Ps through the
e!ucational s$ste(# public or pri'ate cultural entities# scholarships# grants an! other incenti'es %ithout pre8u!ice to their right to
establish an! control their e!ucational s$ste(s an! institutions b$ pro'i!ing e!ucation in their o%n language# in a (anner appropriate
to their cultural (etho!s of teaching an! learning. +n!igenous chil!ren2$outh shall ha'e the right to all le'els an! for(s of e!ucation of
the State.
S*C. 91. Recognition of Cultural 0i'ersit$. he State shall en!ea'or to ha'e the !ignit$ an! !i'ersit$ of the cultures# tra!itions#
histories an! aspirations of the +CCs2+Ps appropriatel$ reflecte! in all for(s of e!ucation# public infor(ation an! culturale!ucational
e6change. Conse7uentl$# the State shall ta.e effecti'e (easures# in consultation %ith +CCs2+Ps concerne!# to eli(inate pre8u!ice an!
!iscri(ination an! to pro(ote tolerance# un!erstan!ing an! goo! relations a(ong +CCs2+Ps an! all seg(ents of societ$. :urther(ore#
the Co'ern(ent shall ta.e effecti'e (easures to ensure that Stateo%ne! (e!ia !ul$ reflect in!igenous cultural !i'ersit$. he State
shall li.e%ise ensure the participation of appropriate in!igenous lea!ers in schools# co((unities an! international cooperati'e
un!erta.ings li.e festi'als# conferences# se(inars an! %or.shops to pro(ote an! enhance their !istincti'e heritage an! 'alues.
S*C. 92. Co((unit$ +ntellectual Rights. +CCs2+Ps ha'e the right to practice an! re'itali1e their o%n cultural tra!itions an! custo(s.
he State shall presence# protect an! !e'elop the past# present an! future (anifestations of their cultures as %ell as the right to the
restitution of cultural# intellectual religious# an! spiritual propert$ ta.en %ithout their free an! prior infor(e! consent or in 'iolation of
their la%s# tra!itions an! custo(s.
S*C. 99. Rights to Religious# Cultural Sites an! Cere(onies. +CCs2+Ps shall ha'e the right to (anifest# practice# !e'elop an! teach
their spiritual an! religious tra!itions# custo(s an! cere(onies5 the right to (aintain# protect an! ha'e access to their religious an!
cultural sites5 the right to use an! control of cere(onial ob8ects5 an!# the right to the repatriation of hu(an re(ains. -ccor!ingl$# the
State shall ta.e effecti'e (easures# in cooperation %ith the +CCs2+Ps concerne! to ensure that in!igenous sacre! places# inclu!ing
burial sites# be preser'e!# respecte! an! protecte!. o achie'e this purpose# it shall be unla%ful to)
a4 *6plore# e6ca'ate or (a.e !iggings on archeological sites of the +CCs2+Ps for the purpose of obtaining (aterials of cultural 'alues
%ithout the free an! prior infor(e! consent of the co((unit$ concerne!5 an!
b4 0eface# re(o'e or other%ise !estro$ artifacts %hich are of great i(portance to the +CCs2+Ps for the preser'ation of their cultural
heritage.
S*C. 9>. Right to +n!igenous Gno%le!ge S$ste(s an! Practices an! to 0e'elop o%n Sciences an! echnologies. +CCs2+Ps are
entitle! to the recognition of the full o%nership an! control en! protection of their cultural an! intellectual rights. he$ shall ha'e the
right to special (easures to control# !e'elop an! protect their sciences# technologies an! cultural (anifestations# inclu!ing hu(an an!
other genetic resources# see!s# inclu!ing !eri'ati'es of these resources# tra!itional (e!icines an! hearth practices# 'ital (e!icinal
plants# ani(als an! (inerals# in!igenous .no%le!ge s$ste(s an! practices# .no%le!ge of the properties of fauna an! flora# oral
tra!itions# literature# !esigns# an! 'isual an! perfor(ing arts.
S*C. 95. -ccess to "iological an! Cenetic Resources. -ccess to biological an! genetic resources an! to in!igenous .no%le!ge
relate! to the conser'ation# utili1ation an! enhance(ent of these resources# shall be allo%e! %ithin ancestral lan!s an! !o(ains of the
+CCs2+Ps onl$ %ith a free an! prior infor(e! consent of such co((unities# obtaine! in accor!ance %ith custo(ar$ la%s of the
concerne! co((unit$.
S*C. 9;. Sustainable -groechnical 0e'elop(ent. he State shall recogni1e the right of +CCs2+Ps to a sustainable agrotechnological
!e'elop(ent an! shall for(ulate an! i(ple(ent progra(s of action for its effecti'e i(ple(entation. he State shall li.e%ise pro(ote
the biggenetic an! resource (anage(ent s$ste(s a(ong the +CCs2+Ps shall encourage cooperation a(ong go'ern(ent agencies to
ensure the successful sustainable !e'elop(ent of +CCs2+Ps.
S*C. 97. :un!s for -rcheological an! Historical Sites. he +CCs2 +Ps shall ha'e the right to recei'e fro( the national go'ern(ent all
fun!s especiall$ ear(ar.e! or allocate! for the (anage(ent an! preser'ation of their archeological an! historical sites an! artifacts
%ith the financial an! technical support of the national go'ern(ent agencies.
CHAPTER VII: NATIONAL COMMISSION ON INDIGENOUS PEOPLES !NCIP"
S*C. 98. National Co((ission on +n!igenous Cultural Co((unities2ln!igenous Peoples 3NC+P4. o carr$ out the policies herein set
forth# there shall be create! the National Co((ission on +CCs2 +Ps 3NC+P4# %hich shall be the pri(ar$ go'ern(ent agenc$ responsible
for the for(ulation an! i(ple(entation of policies# plans an! progra(s to pro(ote an! protect the rights an! %ellbeing of the +CCs2+Ps
an! the recognition of their ancestral !o(ains as %ell as their rights thereto.
S*C. 99. Man!ate. he NC+P shall protect an! pro(ote the interest an! %ellbeing of the +CCs2+Ps %ith !ue regar! to their beliefs#
custo(s# tra!itions an! institutions.
S*C. >A. Co(position. he NC+P shall be an in!epen!ent agenc$ un!er the ,ffice of the Presi!ent an! shall be co(pose! of se'en
374 Co((issioners belonging to +CCs2+Ps# one 314 of %ho( shall be the Chairperson. he Co((issioners shall be appointe! b$ the
Presi!ent of the Philippines fro( a list of reco((en!ers sub(itte! b$ authentic +CCs2 +Ps) Pro'i!e!# hat the se'en 374 Co((issioners
shall be appointe! specificall$ fro( each of the follo%ing ethnographic areas) Region + an! the Cor!illeras# Region ++# the rest of <u1on#
+slan! Croups inclu!ing Min!oro# Pala%an# Ro(blon# Pana$ an! the rest of the Eisa$as5 Northern an! ?estern Min!anao5 Southern
an! *astern Min!anao5 an! Central Min!anao) Pro'i!e!# hat at least t%o 324 of the se'en374 Co((issioners shall be %o(en.
S*C. >1. Hualifications# enure# Co(pensation. he Chairperson an! the si6 3;4 Co((issioners (ust tee natural born :ilipino
citi1ens# bonafi!e (e(bers of +CCs2+Ps as certifie! b$ his2her tribe# e6perience! in ethnic affairs an! %ho ha'e %or.e! for at least ten
31A4 $ears %ith an +CC2+P co((unit$ an!2or an$ go'ern(ent agenc$ in'ol'e! in +CC2+P# at least 95 $ears of age at the ti(e of
appoint(ent# an! (ust be of pro'en honest$ an! integrit$) Pro'i!e!# hat at least t%o 324 of the
se'en 374 Co((issioners shall be (e(bers of the Philippine "ar) Pro'i!e!# farther# the (e(bers of the NC+P shall hol! office for a
perio! of three 394 $ears# an! (a$ be sub8ect to reappoint(ent for another ter() Pro'i!e!# further(ore# hat no person shall ser'e for
(ore than t%o 324 ter(s. -ppoint(ent to an$ 'acanc$ shall onl$ be for the une6pire! ter( of the pre!ecessor an! in no case shall a
(e(ber be appointe! or !esignate! in a te(porar$ or acting capacit$) Pro'i!e!# finall$# hat the Chairperson an! the Co((issioners
shall be entitle! to co(pensation ( accor!ance %ith the Salar$ Stan!ar!i1ation <a%.
S*C. >2. Re(o'al fro( office. -n$ (e(ber of the NC+P (a$ be re(o'e! fro( office b$ the Presi!ent# on his o%n initiati'e or upon
reco((en!ation b$ an$ in!igenous co((unit$# before the e6piration of his ter( for cause an! after co(pl$ing %ith !ue process
re7uire(ent of la%.
S*C. >9. -ppoint(ent of Co((issioners. he Presi!ent shall appoint the se'en 374 Co((issioners of the NC+P %ithin ninet$ 39A4
!a$s fro( the effecti'it$ of this -ct.
S*C. >>. Po%ers an! :unctions. o acco(plish its (an!ate# the NC+P shall ha'e the follo%ing po%ers# 8uris!iction an! function)
a4 o ser'e as the pri(ar$ go'ern(ent agenc$ through %hich +CCs2+Ps can see. go'ern(ent assistance an! as the (e!iu(# through
%hich such assistance (a$ be e6ten!e!5
b4 o re'ie% an! assess the con!itions of +CCs2+Ps inclu!ing e6isting la%s an! policies pertinent thereto an! to propose rele'ant la%s
an! policies to a!!ress their role in national !e'elop(ent5
c4 o for(ulate an! i(ple(ent policies# plans# progra(s an! pro8ects for the econo(ic# social an! cultural !e'elop(ent of the +CCs2+Ps
an! to (onitor the i(ple(entation thereof5
!4 o re7uest an! engage the ser'ices an! support of e6perts fro( other agencies of go'ern(ent or e(plo$ pri'ate e6perts an!
consultants as (a$ be re7uire! in the pursuit of its ob8ecti'es5
e4 o issue certificate of ancestral lan!2!o(ain title5
f4 Sub8ect to e6isting la%s# to enter into contracts# agree(ents# or arrange(ent# %ith go'ern(ent or pri'ate agencies or entities as (a$
be necessar$ to attain the ob8ecti'es of this -ct# an! sub8ect to the appro'al of the Presi!ent# to obtain loans fro( go'ern(ent len!ing
institutions an! other len!ing institutions to finance its progra(s5
g4o negotiate for fun!s an! to accept grants# !onations# gifts an!2or properties in %hate'er for( an! fro( %hate'er source# local an!
international# sub8ect to the appro'al of the Presi!ent of the Philippines# for the benefit of +CCs2+Ps an! a!(inister the sa(e in
accor!ance %ith the ter(s thereof5 or in the absence of an$ con!ition# in such (anner consistent %ith the interest of +CCs2+Ps as %ell
as e6isting la%s5
h4 o coor!inate !e'elop(ent progra(s an! pro8ects for the a!'ance(ent of the +CCs2+Ps an! to o'ersee the proper i(ple(entation
thereof5
i4 o con'ene perio!ic con'entions or asse(blies of +Ps to re'ie%# assess as %ell as propose policies or plans5
84 o a!'ise the Presi!ent of the Philippines on all (atters relating to the +CCs2+Ps an! to sub(it %ithin si6t$ 3;A4 !a$s after the close of
each calen!ar $ear# a report of its operations an! achie'e(ents5
.4 o sub(it to Congress appropriate legislati'e proposals inten!e! to carr$ out the policies un!er this -ct5
14 o prepare an! sub(it the appropriate bu!get to the ,ffice of the Presi!ent5
(4o issue appropriate certification as a precon!ition to the grant of per(it# lease# grant# or an$ other si(ilar authorit$ for the
!isposition# utili1ation# (anage(ent an! appropriation b$ an$ pri'ate in!i'i!ual# corporate entit$ or an$ go'ern(ent agenc$# corporation
or sub!i'ision thereof on an$ part or portion of the ancestral !o(ain ta.ing into consi!eration the consensus appro'al of the +CCs2+Ps
concerne!5
n4 o !eci!e all appeals fro( the !ecisions an! acts of all the 'arious offices %ithin the Co((ission5
o4 o pro(ulgate the necessar$ rules an! regulations for the i(ple(entation of this -ct5
p4 o e6ercise such other po%ers an! functions as (a$ be !irecte! b$ the Presi!ent of the Republic of the Philippines5 an!
74 o represent the Philippine +CCs2+Ps in all international conferences an! con'entions !ealing %ith in!igenous peoples an! other
relate! concerns.
S*C. >5. -ccessibilit$ an! ransparenc$. Sub8ect to such li(itations as (a$ be pro'i!e! b$ la% or b$ rules an! regulations
pro(ulgate! pursuant thereto# all official recor!s# !ocu(ents an! papers pertaining to official acts# transactions or !ecisions# as %ell as
research !ata use! as basis for polic$ !e'elop(ent of the Co((ission shall be (a!e accessible to the public.
S*C. >;. ,ffices %ithin the NC+P. he NC+P shall ha'e the follo%ing offices %hich shall be responsible for the i(ple(entation of the
policies hereinafter pro'i!e!)
a4 -ncestral 0o(ains ,ffice he -ncestral 0o(ain ,ffice shall be responsible for the i!entification# !elineation an! recognition of
ancestral lan!s2!o(ains. +t shall also be responsible for the (anage(ent of ancestral lan!s2!o(ains in accor!ance %ith a (aster plan
as %ell as the i(ple(entation of the ancestral !o(ain rights of the +CCs2+Ps as pro'i!e! in Chapter +++ of this -ct. +t shall also issue#
upon the free an! prior infor(e! consent of the +CCs2+Ps concerne!# certification prior to the grant of an$ license# lease or per(it for the
e6ploitation of natural resources affecting the interests of +CCs2+Ps or their ancestral !o(ains an! to assist the +CCs2+Ps in protecting
the territorial integrit$ of all ancestral !o(ains. +t shall li.e%ise perfor( such other functions as the Co((ission (a$ !ee( appropriate
an! necessar$5
b4 ,ffice on Polic$# Planning an! Research he ,f lice on Polic$# Planning an! Research shall be responsible for the for(ulation of
appropriate policies an! progra(s for +CCs2+Ps such as# but not li(ite! to# the !e'elop(ent of a :i'eFear Master Plan for the lCCs2+Ps.
Such plan shall un!ergo a process such that e'er$ fi'e $ears# the Co((ission shall en!ea'or to assess the plan an! (a.e
ra(ifications in accor!ance %ith the changing situations. he ,ffice shall also un!erta.e the !ocu(entation of custo(ar$ la% an! shall
establish an! (aintain a Research Center that %oul! ser'e as a !epositor$ of ethnographic infor(ation for (onitoring# e'aluation an!
polic$ for(ulation. +t shall assist the legislati'e branch of the national go'ern(ent in the for(ulation of appropriate legislation benefiting
+CCs2+Ps5
c4 ,ffice of *!ucation# Culture an! Health he ,ffice on Culture# *!ucation an! Health shall be responsible for the effecti'e
i(ple(entation of the e!ucation# cultural an! rente! rights as pro'i!e! in this -ct. +t shall assist# pro(ote an! support co((unit$
schools# both for(al an! nonfor(al# for the benefit of the local in!igenous co((unit$# especiall$ in areas %here e6isting e!ucational
facilities are not accessible to (e(bers of the in!igenous group. +t shall a!(inister all scholarship progra(s an! other e!ucational
rights inten!e! for +CC2+P beneficiaries in coor!ination %ith the 0epart(ent of *!ucation# Culture an! Sports an! the Co((ission on
Higher *!ucation. +t shall un!erta.e# %ithin the li(its of a'ailable appropriation# a special progra( %hich inclu!es language an!
'ocational training# public health an! fa(il$ assistance progra( an! rente! sub8ects.
+t shall also i!entif$ +CCs2+Ps %ith potential training in the health profession an! encourage an! assist the( to enroll in schools of
(e!icine# nursing# ph$sical therap$ an! other allie! courses pertaining to the health profession.
o%ar!s this en!# the NC+P shall !eplo$ a representati'e in each of the sai! of offices personall$ perfor( the foregoing tas. an! %ho
shall recei'e co(plaints fro( the +CCs2+Ps an! co(pel action fro( appropriate agenc$. +t shall also (onitor the acti'ities of the National
Museu( an! other si(ilar go'ern(ent agencies generall$ inten!e! to (anage an! presence historical an! archeological artifacts of
the +CCs2+Ps an! shall be responsible for the i(ple(entation of such other functions as the NC+P (a$ !ee( appropriate an!
necessar$5
!4 ,ffice on Socio*cono(ic Ser'ices an! Special Concerns. he ,ffice on Socio*cono(ic Ser'ices an! Special Concerns shall ser'e
as the ,ffice through %hich the NC+P shall coor!inate %ith pertinent go'ern(ent agencies speciall$ charge! %ith the i(ple(entation of
'arious basic socioecono(ic ser'ices# policies# plans an! progra(s affecting the +CCs2+Ps to ensure that the sa(e are properl$ an!
!irectl$ en8o$e! b$ the(. +t shall also be responsible for such other functions as the NC+P (a$ !ee( appropriate an! necessar$5
e4 ,ffice of *(po%er(ent an! Hu(an Rights he ,ffice of *(po%er(ent an! Hu(an Rights shall ensure that in!igenous
sociopolitical# cultural an! econo(ic rights are respecte! an! recogni1e!. +t shall ensure that capacit$ buil!ing (echanis(s are
institute! an! +CCs2+Ps are affor!e! e'er$ opportunit$# if the$ so choose# to participate in all le'els of !ecision(a.ing. +t shall li.e%ise
ensure that the basic hu(an rights# an! such other rights as the NC+P (a$ !eter(ine# sub8ect to e6isting la%s# rules an! regulations#
are protecte! an! pro(ote!5
f4 -!(inistrati'e ,ffice he -!(inistrati'e ,ffice shall pro'i!e the NC+P %ith econo(ical# efficient an! effecti'e ser'ices pertaining to
personnel# finance# recor!s# e7uip(ent# securit$# supplies an! relate! ser'ices. +t shall also a!(inister the -ncestral 0o(ains :un!5
an!
g4 <egal -ffairs ,ffice here shall be a <egal -ffairs ,ffice %hich shall a!'ice the NC+P on all legal (atters concerning +CCs2+Ps an!
%hich shall be responsible for pro'i!ing +CCs2+Ps %ith legal assistance in litigation in'ol'ing co((unit$ interest. +t shall con!uct
preli(inar$ in'estigation on the basis of co(plaints file! b$ the +CCs2+Ps against a natural or 8uri!ical person belie'e! to ha'e 'iolate!
+CCs2BPs rights. ,n the basis of its fin!ings# it shall initiate the filing of appropriate legal or a!(inistrati'e action to the NC+P.
S*C. >7. ,ther ,ffices. he NC+P shall ha'e the po%er to create a!!itional of offices it (a$ !ee( necessar$ sub8ect to e6isting rules
an! regulations.
S*C. >8. Regional an! :iel! ,ffices. *6isting regional an! fiel! offices shall re(ain to function un!er the strengthene! organi1ational
structure of the NC+P. ,ther fiel! offices shall be create! %here'er appropriate an! the staffing pattern thereof shall be !eter(ine! b$
the NC+P) Pro'i!e!# hat in pro'inces %here there are +CCs2+Ps but %ithout fiel! of offices# the NC+P shall establish fiel! offices in sai!
pro'inces.
S*C. >9. 3office of the *6ecuti'e 0irector. he NC+P shall create the ,ffice of the *6ecuti'e 0irector %hich shall ser'e as its
secretariat. he office shall be hea!e! b$ an *6ecuti'e 0irector %ho shall be appointe! b$ the Presi!ent of the Republic of the
Philippines upon reco((en!ation of the NC+P on a per(anent basis. he staffing pattern of the office shall be !eter(ine! b$ the NC+P
sub8ect to e6isting rules an! regulations.
S*C. 5A. Consultati'e "o!$. - bo!$ consisting of the tra!itional lea!ers# el!ers an! representati'es fro( the %o(en an! $outh sectors
of the !ifferent +CCs2+Ps shall be constitute! b$ the NC+P fro( ti(e to ti(e to a!'ise it on (atters relating to the proble(s# aspirations
an! interests of the +CCs2+Ps.
CHAPTER VIII: DELINEATION AND RECOGNITION OF ANCESTRAL DOMAINS
S*C. 51. 0elineation an! Recognition of -ncestral 0o(ains. Self!elineation shall be the gui!ing principle in the i!entification an!
!elineation of ancestral !o(ains. -s such# the +CCs2+Ps concerne! shall ha'e a !ecisi'e role in all the acti'ities pertinent thereto. he
S%orn State(ent of the *l!ers as to the scope of the territories an! agree(ents2 pacts (a!e %ith neighboring +CCs2+Ps# if an$# %ill be
essential to the !eter(ination of these tra!itional territories. he Co'ern(ent shall ta.e the necessar$ steps to i!entif$ lan!s %hich the
+CCs2+Ps concerne! tra!itionall$ occup$ an! guarantee effecti'e protection of their rights of o%nership an! possession thereto.
Measures shall be ta.en in appropriate cases to safeguar! the right of the +CCs2+Ps concerne! to lan! %hich (a$ no longer be
e6clusi'el$ occupie! b$ the(# but to %hich the$ ha'e tra!itionall$ ha! access for their subsistence an! tra!itional acti'ities# particularl$
of +CCs2+Ps %ho are still no(a!ic an!2or shifting culti'ators.
S*C. 52. 0elineation Process. he i!entification an! !elineation of ancestral !o(ains shall be !one in accor!ance %ith the follo%ing
proce!ures)
a4 -ncestral 0o(ains 0elineate! Prior to this -ct. he pro'isions hereun!er shall not appl$ to ancestral !o(ains2lan!s alrea!$
!elineate! accor!ing to 0*NR -!(inistrati'e ,r!er No. 2# series of 1999# nor to ancestral lan!s an! !o(ains !elineate! un!er an$
other co((unit$2 ancestral !o(ain progra( prior to the enact(ent of this la%. +CCs2+Ps %hose ancestral lan!s2!o(ains %ere officiall$
!elineate! prior to the enact(ent of this la% shall ha'e the right to appl$ for the issuance of a Certificate of -ncestral 0o(ain itle
3C-04 o'er the area %ithout going through the process outline! hereun!er5
b4 Petition for 0elineation. he process of !elineating a specific peri(eter (a$ be initiate! b$ the NC+P %ith the consent of the +CC2+P
concerne!# or through a Petition for 0elineation file! %ith the NC+P# b$ a (a8orit$ of the (e(bers of the +CCs2+Ps5
c4 0elineation Proper. he official !elineation of ancestral !o(ain boun!aries inclu!ing census of all co((unit$ (e(bers therein# shall
be i((e!iatel$ un!erta.en b$ the -ncestral 0o(ains ,ffice upon filing of the application b$ the +CCs2+Ps concerne!. 0elineation %ill be
!one in coor!ination %ith the co((unit$ concerne! an! shall at all ti(es inclu!e genuine in'ol'e(ent an! participation b$ the
(e(bers of the co((unities concerne!5
!4 Proof Re7uire!. Proof of -ncestral 0o(ain Clai(s shall inclu!e the testi(on$ of el!ers or co((unit$ un!er oath# an! other
!ocu(ents !irectl$ or in!irectl$ attesting to the possession or occupation of the area since ti(e i((e(orial b$ such +CCs2+Ps in the
concept of o%ners %hich shall be an$ one 3 + 4 of the follo%ing authentic !ocu(ents)
14 ?ritten accounts of the +CCs2+Ps custo(s an! tra!itions5
24 ?ritten accounts of the +CCs2+Ps political structure an! institution5
94 Pictures sho%ing long ter( occupation such as those of ol! i(pro'e(ents# burial groun!s# sacre! places an! ol! 'illages5
>4 Historical accounts# inclu!ing pacts an! agree(ents concerning boun!aries entere! into b$ the +CCs2+Ps concerne! %ith other
+CCs2lPs5
54 Sur'e$ plans an! s.etch (aps5
;4 -nthropological !ata5
74 Cenealogical sur'e$s5
84 Pictures an! !escripti'e histories of tra!itional co((unal forests an! hunting groun!s5
94 Pictures an! !escripti'e histories of tra!itional lan!(ar.s such as (ountains# ri'ers# cree.s# ri!ges# hills# terraces an! the li.e5 an!
1A4 ?riteups of na(es an! places !eri'e! fro( the nati'e !ialect of the co((unit$.
e4 Preparation of Maps. ,n the basis of such in'estigation an! the fin!ings of fact base! thereon# the -ncestral 0o(ains ,ffice shall
prepare a peri(eter (ap# co(plete %ith technical !escriptions# an! a !escription of the natural features an! lan!(ar.s e(brace!
therein5
f4 Report of +n'estigation an! ,ther 0ocu(ents. - co(plete cop$ of the preli(inar$ census an! a report of in'estigation# shall be
prepare! b$ the -ncestral 0o(ains ,ffice of the NC+P5
g4 Notice an! Publication. - cop$ of each !ocu(ent# inclu!ing a translation in the nati'e language of the +CCs2+Ps concerne! shall be
poste! in a pro(inent place therein for at least fifteen 3 154 !a$s. - cop$ of the !ocu(ent shall also be poste! at the local# pro'incial
an! regional offices of the NC+P# an! shall be publishe! in a ne%spaper of general circulation once a %ee. for t%o 324 consecuti'e
%ee.s to allo% other clai(ants to file opposition thereto %ithin fifteen 3154 !a$s fro( !ate of such publication) Pro'i!e!# hat in areas
%here no such ne%spaper e6ists# broa!casting in a ra!io station %ill be a 'ali! substitute) Pro'i!e!# further# hat (ere posting shall be
!ee(e! sufficient if both ne%spaper an! ra!io station are not a'ailable5
h4*n!orse(ent to NC+P. ?ithin fifteen 3154 !a$s fro( publication# an! of the inspection process# the -ncestral 0o(ains ,ffice shall
prepare a report to the NC+P en!orsing a fa'orable action upon a clai( that is !ee(e! to ha'e sufficient proof. Ho%e'er# if the proof is
!ee(e! insufficient# the -ncestral 0o(ains ,ffice shall re7uire the sub(ission of a!!itional e'i!ence) Pro'i!e!# hat the -ncestral
0o(ains ,ffice shall re8ect an$ clai( that is !ee(e! patentl$ false or frau!ulent after inspection an! 'erification) Pro'i!e!# further# hat
in case of re8ection# the -ncestral 0o(ains ,ffice shall gi'e the applicant !ue notice# cop$ furnishe! all concerne!# containing the
groun!s for !enial. he !enial shall be appealable to the NC+P) Pro'i!e!# further(ore# hat in cases %here there are conflicting clai(s
a(ong +CCs2+Ps on the boun!aries of ancestral !o(ain clai(s# the -ncestral 0o(ains ,ffice shall cause the conten!ing parties to
(eet an! assist the( in co(ing up %ith a preli(inar$ resolution of the conflict# %ithout pre8u!ice to its full a!8u!ication accor!ing to the
section belo%.
i4 urno'er of -reas ?ithin -ncestral 0o(ains Manage! b$ ,ther Co'ern(ent -gencies. he Chairperson of the NC+P shall certif$
"lat the area co'ere! is an ancestral !o(ain. he secretaries of the 0epart(ent of -grarian Refor(# 0epart(ent of *n'iron(ent an!
Natural Resources# 0epart(ent of the +nterior an! <ocal Co'ern(ent# an! 0epart(ent of &ustice# the Co((issioner of the National
0e'elop(ent Corporation# an! an$ other go'ern(ent agenc$ clai(ing 8uris!iction o'er the area shall be notifie! hereof. Such
notification shall ter(inate an$ legal basis for the 8uris!iction pre'iousl$ clai(e!5
84 +ssuance of C-0. +CCs2+Ps %hose ancestral !o(ains ha'e been officiall$ !elineate! an! !eter(ine! b$ the NC+P shall be issue! a
C-0 in the na(e of the co((unit$ concerne!# containing a list of all !ose i!entifie! in the census5 an!
.4 Registration of C-0s. he NC+P shall register issue! certificates of ancestral !o(ain titles an! certificates of ancestral lan!s ti!es
before She Register of 0ee!s in the place %here the propert$ is situate!.
S*C. 59. +!entification# 0elineation an! Certification of -ncestral
a4 he allocation of lan!s %ithin an$ ancestral !o(ain to in!i'i!ual or in!igenous corporate 3fa(il$ or clan4 clai(ants shall be left to the
+CCs2+Ps concerne! to !eci!e in accor!ance %ith custo(s an! tra!itions5
b4 +n!i'i!ual an! in!igenous corporate clai(ants of ancestral lan!s %hich are not %ithin ancestral !o(ains# (a$ ha'e their clai(s
officiall$ establishe! b$ filing applications for the i!entification an! !elineation of their clai(s %ith the -ncestral 0o(ains ,ffice. -n
in!i'i!ual or recogni1e! hea! of a fa(il$ or clan (a$ file such application in his behalf or in behalf of his fa(il$ or clan# respecti'el$5
c4 Proofs of such clai(s shall acco(pan$ the application for( %hich shall inclu!e the testi(on$ un!er oath of el!ers of the co((unit$
an! other !ocu(ents !irectl$ or in!irectl$ attesting to the possession or occupation of the areas since ti(e i((e(orial b$ the in!i'i!ual
or corporate clai(ants in the concept of o%ners %hich shall be an$ of the authentic !ocu(ents enu(erate! un!er Sec. 52 3!4 of this
-ct# inclu!ing ta6 !eclarations an! proofs of pa$(ent of ta6es5
!4 he -ncestral 0o(ains ,ffice (a$ re7uire fro( each ancestral clai(ant the sub(ission of such other !ocu(ents# S%orn State(ents
an! the li.e# %hich in its opinion# (a$ she! light on the 'eracit$ of the contents of the application2clai(5
e4 Bpon receipt of the applications for !elineation an! recognition of ancestral lan! clai(s# the -ncestral 0o(ains ,ffice shall cause the
publication of the application an! a cop$ of each !ocu(ent sub(itte! inclu!ing a translation in the nati'e language of the +CCs2+Ps
concerne! in a pro(inent place therein for at least fifteen 3154 !a$s. - cop$ of the !ocu(ent shall also be poste! at the local# pro'incial#
an! regional offices of the NC+P an! shall be publishe! in a ne%spaper of general circulation once a %ee. for t%o 324 consecuti'e
%ee.s to allo% other clai(ants to file opposition thereto %ithin fifteen 3154 !a$s fro( the !ate of such publication) Pro'i!e!# hat in
areas %here no such ne%spaper e6ists# broa!casting in a ra!io station %ill be a 'ali! substitute) Pro'i!e!# further# hat (ere posting
shall be !ee(e! sufficient if both ne%spapers an! ra!io station are not a'ailable5
f4 :ifteen 3154 !a$s after such publication# the -ncestral 0o(ains ,ffice shall in'estigate an! inspect each application# an! if foun! to
be (eritorious# shall cause a parcellar$ sur'e$ of the area being clai(e!. he -ncestral 0o(ains ,ffice shall re8ect an$ clai( that is
!ee(e! patentl$ false or frau!ulent after inspection an! 'erification. +n case of re8ection# the -ncestral 0o(ains ,ffice shall gi'e the
applicant !ue notice# cop$ furnishe! all concerne!# containing the groun!s for !enial. he !enial shall be appealable to the NC+P. +n
case of conflicting clai(s a(ong in!i'i!ual or in!igenous corporate clai(ants# the -ncestral 0o(ains ,ffice shall cause the conten!ing
parties to (eet an! assist the( in co(ing up %ith a preli(inar$ resolution of the conflict# %ithout pre8u!ice to its full a!8u!ication
accor!ing to Sec. ;2 of this -ct. +n all procee!ings for the i!entification or !elineation of the ancestral !o(ains as herein pro'i!e!# the
0irector of <an!s shall represent the interest of the Republic of the Philippines5 an!
g4 he -ncestral 0o(ains ,ffice shall prepare an! sub(it a report on each an! e'er$ application sur'e$e! an! !elineate! to the NC+P#
%hich shall# in turn# e'aluate the report sub(itte!. +f the NC+P fin!s such clai( (eritorious# it shall issue a certificate of ancestral lan!#
!eclaring an! certif$ing the clai( of each in!i'i!ual or corporate 3fa(il$ or clan4 clai(ant o'er ancestral lan!s.
S*C. 5>. :rau!ulent Clai(s. he -ncestral 0o(ains ,f lice (a$# upon %ritten re7uest fro( the +CCs2lPs# re'ie% e6isting clai(s %hich
ha'e been frau!ulentl$ ac7uire! b$ an$ person or co((unit$. -n$ clai( foun! to be frau!ulentl$ ac7uire! b$# an! issue! to# an$ person
or co((unit$ (a$ be cancelle! b$ the NC+P after !ue notice an! hearing of all parties concerne!.
S*C. 55. Co((unal Rights. Sub8ect to Section 5; hereof# areas %ithin the ancestral !o(ains# %hether !elineate! or not# shall be
presu(e! to be co((unall$ hel!) Pro'i!e!# hat co((unal rights un!er this -ct shall not be construe! as coo%nership as pro'i!e! in
Republic -ct. No. 98;# other%ise .no%n as the Ne% Ci'il Co!e.
S*C. 5;. *6isting Propert$ Rights Regi(es. Propert$ rights %ithin the ancestral !o(ains alrea!$ e6isting an!2or 'este! upon effecti'it$
of this -ct# shall be recogni1e! an! respecte!.
S*C. 57. Natural Resources %ithin -ncestral 0o(ains. he +CCs2 +Ps shall ha'e priorit$ rights in the har'esting# e6traction#
!e'elop(ent or e6ploitation of an$ natural resources %ithin the ancestral !o(ains. - non(e(ber of the +CCs2+Ps concerne! (a$ be
allo%e! to ta.e part in the !e'elop(ent an! utili1ation of the natural resources for a perio! of not e6cee!ing t%ent$fi'e 3254 $ears
rene%able for not (ore than t%ent$fi'e 3254 $ears) Pro'i!e!# hat a for(al an! %ritten agree(ent is entere! into %ith the +CCs2+Ps
concerne! or that the co((unit$# pursuant to its o%n !ecision (a.ing process# has agree! to allo% such operation) Pro'i!e!# finall$#
hat the NC+P (a$ e6ercise 'isitorial po%ers an! ta.e appropriate action to safeguar! the rights of the +CCs2+Ps un!er the sa(e
contract.
S*C. 58. *n'iron(ental Consi!erations. -ncestral !o(ains or portions thereof# %hich are foun! to be necessar$ for critical
%atershe!s# (angro'es# %il!life sanctuaries# %il!erness# protecte! areas# forest co'er# or reforestation as !eter(ine! b$ appropriate
agencies %ith the full participation of the +CCs2+Ps concerne! shall be (aintaine!# (anage! an! !e'elope! for such purposes. he
+CCs2+Ps concerne! shall be gi'en the responsibilit$ to (aintain# !e'elop# protect an! conser'e such areas %ith the full an! effecti'e
assistance of go'ern(ent agencies. Shoul! the +CCs2+Ps !eci!e to transfer the responsibilit$ o'er the areas# sai! !ecision (ust be
(a!e in %riting. he consent of the +CCs2+Ps shoul! be arri'e! at in accor!ance %ith its custo(ar$ la%s %ithout pre8u!ice to the basic
re7uire(ents of e6isting la%s on free an! prior infor(e! consent) Pro'i!e!# hat the transfer shall be te(porar$ an! %ill ulti(atel$
re'ert to the +CCs2+Ps in accor!ance %ith a progra( for technolog$ transfer) Pro'i!e!# further# hat no +CCs2+Ps shall be !isplace! or
relocate! for the purpose enu(erate! un!er this section %ithout the %ritten consent of the specific persons authori1e! to gi'e consent.
S*C. 59. Certification Precon!ition. -ll !epart(ents an! other go'ern(ental agencies shall henceforth be strictl$ en8oine! fro(
issuing# rene%ing# or granting an$ concession# license or lease# or entering into an$ pro!uctionsharing agree(ent# %ithout prior
certification fro( the NC+P that the area affecte! !oes not o'erlap %ith an$ ancestral !o(ain. Such certification shall onl$ be issue!
after a fiel!base! in'estigation is con!ucte! b$ the -ncestral 0o(ains ,ffice of the area concerne!) Pro'i!e!# hat no certification
shall be issue! b$ the NC+P %ithout the free an! prior infor(e! an! %ritten consent of +CCs2+Ps concerne!) Pro'i!e!# further# hat no
!epart(ent# go'ern(ent agenc$ or go'ern(ento%ne! or controlle! corporation (a$ issue ne% concession# license# lease# or
pro!uction sharing agree(ent %hile there is a pen!ing application for a C-0) Pro'i!e!# finall$# hat the +CCs2+Ps shall ha'e the right
to stop or suspen!# in accor!ance %ith this -ct# an$ pro8ect that has not satisfie! the re7uire(ent of this consultation process.
S*C. ;A. *6e(ption fro( a6es. -ll lan!s certifie! to be ancestral !o(ains shall be e6e(pt fro( real propert$ ta6es# special le'ies#
en! other for(s of e6action e6cept such portion of the ancestral !o(ains as are actuall$ use! for largescale agriculture# co((ercial
forest plantation an! resi!ential purposes or upon titling b$ pri'ate persons) Pro'i!e!# hat all e6actions shall be use! to facilitate the
!e'elop(ent an! i(pro'e(ent of the ancestral !o(ains.
S*C. ;1. e(porar$ Re7uisition Po%ers. Prior to the establish(ent of an institutional sur'e$ing capacit$ %hereb$ it can effecti'el$
fulfill its (an!ate# but in no case be$on! three 394 $ears after its creation# the NC+P is hereb$ authori1e! to re7uest the 0epart(ent of
*n'iron(ent an! Natural Resources 30*NR4 sur'e$ tea(s as %ell as other e7uall$ capable pri'ate sur'e$ tea(s# through a
Me(oran!u( of -gree(ent 3M,-4# to !elineate ancestral !o(ain peri(eters. he 0*NR Secretar$ shall acco((o!ate an$ such
re7uest %ithin one 3 + 4 (onth of its issuance) Pro'i!e!# hat the Me(oran!u( of -gree(ent shall stipulate# a(ong others# a pro'ision
for technolog$ transfer to the NC+P.
S*C. ;2. Resolution of Conflicts. +n cases of conflicting interest# %here there are a!'erse clai(s %ithin the ancestral !o(ains as
!elineate! in the sur'e$ plan# an! %hich can not be resol'e!# the NC+P shall hear an! !eci!e# after notice to the proper parties# the
!isputes arising fro( the !elineation of such ancestral !o(ains) Pro'i!e!# hat if the !ispute is bet%een an!2or a(ong +CCs2+Ps
regar!ing the tra!itional boun!aries of their respecti'e ancestral !o(ains# custo(ar$ process shall be follo%e!. he NC+P shall
pro(ulgate the necessar$ rules an! regulations to carr$ out its a!8u!icator$ functions) Pro'i!e!# further# hat an$ !ecision# or!er# a%ar!
or ruling of the NC+P on an$ ancestral !o(ain !ispute or on an$ (atter pertaining to the application# i(ple(entation# enforce(ent an!
interpretation of this -ct (a$ be brought for Petition for Re'ie% to the Court of -ppeals %ithin fifteen3 154 !a$s fro( receipt of a cop$
thereof
S*C. ;9. -pplicable <a%s. Custo(ar$ la%s# tra!itions an! practices of the +CCs2+Ps of the lan! %here the conflict arises shall be
applie! first %ith respect to propert$ rights# clai(s an! o%nerships# here!itar$ succession an! settle(ent of lan! !isputes. -n$ !oubt or
a(biguit$ in the application an! interpretation of la%s shall be resol'e! in fa'or of the +CCs2+Ps.
S*C. ;>. Re(e!ial Measures. *6propriation (a$ be resorte! to in the resolution of conflicts of interest follo%ing the principle of the
/co((on goo!./ he NC+P shall ta.e appropriate legal action for the cancellation of officiall$ !ocu(ente! titles %hich %ere ac7uire!
illegall$) Pro'i!e!# hat such proce!ure shall ensure that the rights of possessors in goo! faith shall be respecte!) Pro'i!e! further#
hat the action for cancellation shall be initiate! %ithin t%o 328 $ears fro( the effecti'it$ of this -ct) Pro'i!e!# finall$# that the action for
recon'e$ance shall be %ithin a perio! of ten 3 1A4 $ears in accor!ance %ith e6isting la%s.
CHAPTER I#: JURISDICTION AND PROCEDURES FOR ENFORCEMENT OF RIGHTS
S*C. ;5. Pri(ac$ of Custo(ar$ <a%s an! Practices. ?hen !isputes in'ol'e +CCs2+Ps# custo(ar$ la%s an! practices shall be use! to
resol'e the !ispute.
S*C. ;;. &uris!iction of the NClP. he NC+P# through its regional offices# shall ha'e 8uris!iction o'er all clai(s an! !isputes in'ol'ing
rights of +CCs2+Ps) Pro'i!e!# ho%e'er# hat no such !ispute shall be brought to the NC+P unless the parties ha'e e6hauste! all
re(e!ies pro'i!e! un!er their custo(ar$ la%s. :or this purpose# a certification shall be issue! b$ the Council of *l!ers2<ea!ers %ho
participate! in the atte(pt to settle the !ispute that the sa(e has not been resol'e!# %hich certification shall be a con!ition prece!ent
to the filing of a petition %ith the NC+P.
S*C. ;7. -ppeals to the Court of -ppeals. 0ecisions of the NC+P shall be appealable to the Court of -ppeals b$%a$ of a petition for
re'ie%.
S*C. ;8. *6ecution of 0ecisions# -%ar!s ,r!ers. Bpon e6piration of the perio! herein pro'i!e! an! no appeal is perfecte! b$ an$ of
the conten!ing parties# the Hearing ,f ricer of the NC+P# on its o%n initiati'e or upon (otion b$ the pre'ailing part$# shall issue a %rit of
e6ecution re7uiring the sheriff or the proper officer to e6ecute final !ecisions# or!ers or a%ar!s of the Regional Hearing ,fficer of the
NC+P.
S*C. ;9. Huasi&u!icial Po%ers of the NClP. he NC+P shall ha'e the po%er an! authorit$)
a4 o pro(ulgate rules an! regulations go'erning the hearing an! !isposition of cases file! before it as %ell as those pertaining to its
internal functions an! such rules an! regulations as (a$ be necessar$ to carr$ out the purposes of this -ct5
b4o a!(inister oaths# su((on the parties to a contro'ers$# issue subpoenas re7uiring the atten!ance an! testi(on$ of %itnesses or
the pro!uction of such boo.s# papers# contracts# recor!s# agree(ents an! other !ocu(ent of si(ilar nature as (a$ be (aterial to a 8ust
!eter(ination of the (atter un!er in'estigation or hearing con!ucte! in pursuance of this -ct5
c4 o hol! an$ person in conte(pt# !irectl$ or in!irectl$# an! i(pose appropriate penalties therefor5 an!
!4 o en8oin an$ or all acts in'ol'ing or arising fro( an$ case pen!ing before it %hich# if not restraine! forth%ith# (a$ cause gra'e or
irreparable !a(age to an$ of the parties to the case or seriousl$ affect social or econo(ic acti'it$.
S*C. 7A. No Restraining ,r!er or Preli(inar$ +n8unction. No inferior court of the Philippines shall ha'e 8uris!iction to issue an
restraining or!er or %rit of preli(inar$ in8unction against the NC+P or an$ of its !ul$ authori1e! or !esignate! offices in an$ case#
!ispute or contro'ers$ arising fro(# necessar$ to# or interpretation of this -ct an! other pertinent la%s relating to +CCs2+Ps an! ancestral
!o(ains.
CHAPTER #: ANCESTRAL DOMAINS FUND
S*C. 71. -ncestral 0o(ains :un!. here is hereb$ create! a special fun!# to be .no%n as the -ncestral 0o(ains :un!# an initial
a(ount of ,ne hun!re! thirt$ (illion pesos 3P19A#AAA#AAA4 to co'er co(pensation for e6propriate! lan!s# !elineation an! !e'elop(ent
of ancestral !o(ains. -n a(ount of :ift$ (illion pesos 3P5A#AAA#AAA4 shall be source! fro( the gross inco(e of the Philippine Charit$
S%eepsta.es ,ffice 3PCS,4 fro( its lotto operation# en (illion pesos 3P1A#AAA#AAA4 fro( the gross receipts of the tra'el ta6 of the
prece!ing $ear# the fun! of the Social Refor( Council inten!e! for sur'e$ an! !elineation of ancestral lan!s2!o(ains# an! such other
source as the go'ern(ent (a$ !ee( appropriate. hereafter# such a(ount shall be inclu!e! in the annual Ceneral -ppropriations -ct.
:oreign as %ell as local fun!s %hich are (a!e a'ailable for the +CCs2lPs through the go'ern(ent of the Philippines shall be course!
through the NC+P. he NC+P (a$ also solicit an! recei'e !onations# en!o%(ents an! grants in the for( of contributions# an! such
en!o%(ents shall be e6e(pte! fro( inco(e or gift ta6es an! all other ta6es# charges or fees i(pose! b$ the go'ern(ent or an$
political sub!i'ision or instru(entalit$ thereof.
CHAPTER #I: PENALTIES
S*C. 72. Punishable -cts an! -pplicable Penalties. -n$ person %ho co((its 'iolation of an$ of the pro'isions of this -ct# such as# but
not li(ite! to# unauthori1e! an!2or unla%ful intrusion upon an$ ancestral lan!s or !o(ains as state! in Sec. 1A# Chapter +++# or shall
co((it an$ of the prohibite! acts (entione! in Sections 21 an! 2># Chapter E# Section 99# Chapter E+ hereof# shall be punishe! in
accor!ance %ith the custo(ar$ la%s of the +CCs2+Ps concerne!) Pro'i!e!# hat no such penalt$ shall be cruel# !egra!ing or inhu(an
punish(ent) Pro'i!e!# further# hat neither shall the !eath penalt$ or e6cessi'e fines be i(pose!. his pro'ision shall be %ithout
pre8u!ice to the right of an$ +CCs2+Ps to a'ail of the protection of e6isting la%s. +n %hich case# an$ person %ho 'iolates an$ pro'ision of
this -ct shall# upon con'iction# be punishe! b$ i(prison(ent of not less than nine 394 (onths but not (ore than t%el'e 3124 $ears or a
fine of not less than ,ne hun!re! thousan! pesos 3P1AA#AAA4 nor (ore than :i'e hun!re! thousan! pesos 3P5AA#AAA4 or both such
fine an! i(prison(ent upon the !iscretion of the court. +n a!!ition# he shall be oblige! to pa$ to the +CCs2+Ps concerne! %hate'er
!a(age (a$ ha'e been suffere! b$ the latter as a conse7uence of the unla%ful act.
S*C. 79. Persons Sub8ect to Punish(ent. +f the offen!er is a 8uri!ical person# all officers such as# but not li(ite! to# its presi!ent#
(anager# or hea! of office responsible for their unla%ful act shall be cri(inall$ liable therefor# in a!!ition to the cancellation of
certificates of their registration an!2or license) Pro'i!e!# hat if the offen!er is a public official# the penalt$ shall inclu!e perpetual
!is7ualification to hol! public office..
CHAPTER #II: MERGER OF THE OFFICE FOR NORTHERN CULTURAL COMMUNITIES !ONCC" AND THE OFFICE FOR
SOUTHERN CULTURAL COMMUNIONS !OSCC"
S*C. 7>. Merger of ,NCC2,SCC. he ,ffice for Northern Cultural Co((unities 3,NCC4 an! the ,ffice of Southern Cultural
Co((unities 3,SCC4# create! un!er *6ecuti'e ,r!er Nos. 122" an! 122C respecti'el$# are hereb$ (erge! as organic offices of the
NC+P an! shall continue to function un!er a re'itali1e! an! strengthene! structures to achie'e the ob8ecti'es of the NC+P) Pro'i!e!#
hat the positions of Staff 0irectors# "ureau 0irectors# 0eput$ *6ecuti'e 0irectors an! *6ecuti'e 0irectors# e6cept positions of
Regional 0irectors an! belo%# are hereb$ phase!out upon the effecti'it$ of this -ct) Pro'i!e!# further# hat officials of the phase!out
offices %ho (a$ be 7ualifie! (a$ appl$ for reappoint(ent %ith the NC+P an! (a$ be gi'en prior rights in the filling up of the ne%l$
create! positions of NC+P# sub8ect to the 7ualifications set b$ the Place(ent Co((ittee) Pro'i!e!# further(ore# hat in the case %here
an in!igenous person an! a nonin!igenous person %ith si(ilar 7ualifications appl$ for the sa(e position# priorit$ shall be gi'en to the
for(er. ,fficers an! e(plo$ees %ho are to be phase!out as a result of the (erger of their offices shall be entitle! to gratuit$ a rate
e7ui'alent to one an! a half 31 1224 (onths salar$ for e'er$ $ear of continuous an! satisfactor$ ser'ice ren!ere! or the e7ui'alent
nearest fraction thereof fa'orable to the( on the basis of the highest salar$ recei'e!. +f the$ are alrea!$ entitle! to retire(ent or
gratuit$# the$ shall ha'e the option to select either such retire(ent benefits or the gratuit$ herein pro'i!e!. ,fficers an! e(plo$ees %ho
(a$ be reinstate! shall refun! such retire(ent benefits or gratuit$ recei'e!) Pro'i!e!# finall$# hat absorbe! personnel (ust still (eet
the 7ualifications an! stan!ar!s set b$ the Ci'il Ser'ice an! the Place(ent Co((ittee herein create!.
S*C. 75. ransition Perio!. he ,NCC2,SCC shall ha'e a perio! of si6 3;4 (onths fro( the effecti'it$ of this -ct %ithin %hich to %in!
up its affairs an! to con!uct au!it of its finances.
S*C. 7;. ransfer of -ssets2Properties. -ll real an! personal properties %hich are 'este! in# or belonging to# the (erge! offices as
aforestate! shall be transferre! to the NC+P %ithout further nee! of con'e$ance# transfer or assign(ent an! shall be hel! for the sa(e
purpose as the$ %ere hel! b$ the for(er offices) Pro'i!e!# hat all contracts# recor!s an! !ocu(ents relating to the operations of the
(erge! offices shall be transferre! to the NC+P. -ll agree(ents an! contracts entere! into b$ the (erge! offices shall re(ain in full
force an! effect unless other%ise ter(inate!# (o!ifie! or a(en!e! b$ the NC+P.
S*C. 77. Place(ent Co((ittee. Sub8ect to rules on go'ern(ent reorgani1ation# a Place(ent Co((ittee shall be create! b$ the NC+P#
in coor!ination %ith the Ci'il Ser'ice Co((ission# %hich shall assist in the 8u!icious selection an! place(ent of personnel in or!er that
the best 7ualifie! an! (ost !eser'ing persons shall be appointe! in the reorgani1e! agenc$. he Place(ent Co((ittee shall be
co(pose! of se'en 374 co((issioners an! an +CCs=2+Ps= representati'e fro( each of the first an! secon! le'el e(plo$ees association
in the ,ffices for Northern an! Southern Cultural Co((unities 3,NCC2,SCC4# nongo'ern(ent organi1ations 3NC,s4 %ho ha'e ser'e!
the co((unit$ for at least fi'e 354 $ears an! peoples organi1ations 3P,s4 %ith at least fi'e 354 $ears of e6istence. he$ shall be gui!e!
b$ the criteria of retention an! appoint(ent to be prepare! b$ the consultati'e bo!$ an! b$ the pertinent pro'isions of the ci'il ser'ice
la%.
CHAPTER #III: FINAL PROVISIONS
S*C. 78. Special Pro'ision. he Cit$ of "aguio shall re(ain to be go'erne! b$ its Charter an! all lan!s proclai(e! as part of its to%n
site reser'ation shall re(ain as such until other%ise reclassifie! b$ appropriate legislation) Pro'i!e!# hat prior lan! rights an! titles
recogni1e! an!2or ac7uire! through an$ 8u!icial# a!(inistrati'e or other processes before the effecti'it$ of this -ct shall re(ain 'ali!)
Pro'i!e!# further# hat this pro'ision shall not appl$ to an$ territor$ %hich beco(es part of the Cit$ of "aguio after the effecti'it$ of this
-ct.
S*C. 79. -ppropriations. he a(ount necessar$ to finance the initial i(ple(entation of this -ct shall be charge! against the current
$ear=s appropriation of the ,NCC an! the ,SCC. hereafter# such su(s as (a$ be necessar$ for its continue! i(ple(entation shall be
inclu!e! in the annual Ceneral -ppropriations -ct.
S*C. 8A. +(ple(enting Rules an! Regulations. ?ithin si6t$ 3;A4 !a$s i((e!iatel$ after appoint(ent# the NC+P shall issue the
necessar$ rules an! regulations# in consultation %ith the Co((ittees on National Cultural Co((unities of the House of
Representati'es an! the Senate# for the effecti'e i(ple(entation of this -ct.
S*C. 81. Sa'ing Clause. his -ct %ill not in an$ (anner a!'ersel$ affect the rights an! benefits of the +CCs2+Ps un!er other
con'entions# reco((en!ations# international treaties# national la%s# a%ar!s# custo(s an! agree(ents.
S*C. 82. Separabilit$ Clause. +n case an$ pro'ision of this -ct or an$ portion thereof is !eclare! unconshtubona1 b$ a co(petent
court# other pro'isions shall not be affecte! thereb$.
S*C. 89. Repealing Clause. Presi!ential 0ecree No. >1A# *6ecuti'e ,r!er Nos. 122" an! 122C# an! all other la%s# !ecrees# or!ers#
rules an! regulations or parts thereof inconsistent %ith this -ct are hereb$ repeale! or (o!ifie! accor!ingl$.
S*C. 8>. *ffecti'it$. his -ct shall ta.e effect fifteen 3154 !a$s upon its publication in the 3official Ca1ette or in an$ t%o 324 ne%spapers
of general circulation.
-ppro'e!#
&,S* 0* E*N*C+-# &R.
Spea.er of the House of Representati'es
*RN*S, M. M-C*0-
Presi!ent of the Senate
his -ct# %hich is a consoli!ation of Senate "ill No. 1728 an! House "ill No. 9125 %as finall$ passe! b$ the Senate an! the House of
Representati'es on ,ctober 22# 1997.
R,"*R, P. N-I-R*N,
Secretar$ Ceneral
House of Representati'es
<,R*NI, *. <*FN*S# &R.
Secretar$ of the Senate
-ppro'e!) ,ct 29 1997
:+0*< E. R-M,S
Presi!ent of the Philippines
R$%&'()* +, -.$ P.)()%%)/$0
C+/12$00 +, -.$ P.)()%%)/$0
Metro Manila
E)1.-. C+/12$00
R$%&'()* A*- N+. 3456 M72*. 88, 1446
AN ACT GRANTING A PERIOD ENDING ON DECEMBER 31, 8666 FOR FILING APPLICATIONS FOR FREE PATENT AND
JUDICIAL CONFIRMATION OF IMPERFECT TITLE TO ALIENABLE AND DISPOSABLE LANDS OF THE PUBLIC DOMAIN UNDER
CHAPTERS VII AND VIII OF THE PUBLIC LAND ACT !CA 151, AS AMENDED"
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:)
S$*-)+/ 1. Paragraph 1# Section >># Chapter E++ of Co((on%ealth -ct No. 1>1# as a(en!e!# is hereb$ a(en!e! to rea! as follo%s)
/Sec. >>. -n$ naturalJborn citi1en of the Philippines %ho is not the o%ner of (ore than t%el'e 3124 hectares an! %ho# for at
least thirt$ 39A4 $ears prior to the effecti'it$ of this a(en!ator$ -ct# has continuousl$ occupie! an! culti'ate!# either b$ hi(self
or through his pre!ecessorsJinJinterest a tract or tracts of agricultural public lan!s sub8ect to !isposition# %ho shall ha'e pai!
the real estate ta6 thereon %hile the sa(e has not been occupie! b$ an$ person shall be entitle!# un!er the pro'isions of this
Chapter# to ha'e a free patent issue! to hi( for such tract or tracts of such lan! not to e6cee! t%el'e 3124 hectares./
S$*-)+/ 8. Section >5# Chapter E++ of Co((on%ealth -ct No. 1>1# as a(en!e!# is hereb$# further a(en!e! to rea! as follo%s)
/Sec. >5. he Presi!ent of the Philippines# upon reco((en!ation of the Secretar$ of *n'iron(ent an! Natural Resources#
shall fro( ti(e to ti(e fi6 b$ procla(ation the perio! %ithin %hich applications for free patents (a$ be file! in the Co((unit$
*n'iron(ent an! Natural Resources ,ffice or region specifie! in such procla(ation# an! upon the e6piration of the perio! so
!esignate!# unless the sa(e be e6ten!e! b$ the Presi!ent# all the lan! co(prise! %ithin such !istrict# chartere! cit$# pro'ince#
(unicipalit$ or region sub8ect thereto un!er the pro'isions of this Chapter (a$ be !ispose! of as agricultural public lan!
%ithout pre8u!ice to the prior right of the occupant an! culti'ator to ac7uire such lan! un!er this -ct b$ (eans other than free
patent. he ti(e to be fi6e! in the entire -rchipelago for the filing of applications un!er this Chapter shall not e6ten! be$on!
0ece(ber 91# 2AAA# e6cept in the Pro'inces of -gusan !el Norte# -gusan !el Sur# Cotabato# South Cotabato# Sultan Gu!arat#
"u.i!non# <anao !el Norte# <anao !el Sur# 0a'ao !el Norte# 0a'ao !el Sur# 0a'ao ,riental# Sulu# Mt. Pro'ince# "enguet#
GalingaJ-pa$ao# +fugao# Maguin!anao# a%iJa%i# an! "asilan %here the Presi!ent of the Philippines# upon the
reco((en!ation of the Secretar$ of *n'iron(ent an! Natural Resources# shall !eter(ine or fi6 the ti(e be$on! %hich the
filing of applications un!er this Chapter shall not e6ten!) pro'i!e!# that the perio! shall appl$ onl$ %hen the area applie! for
!oes not e6cee! t%el'e 3124 hectares. he perio! fi6e! for an$ !istrict# chartere! cit$# pro'ince or (unicipalit$ shall begin to
run thirt$ 39A4 !a$s after the publication of the procla(ation in one 314 ne%spaper of general circulation in the cit$# pro'ince or
(unicipalit$ concerne!. - certifie! cop$ of sai! procla(ation shall be furnishe! b$ the Secretar$ of *n'iron(ent an! Natural
Resources %ithin thirt$ 39A4 !a$s counte! fro( the !ate of the presi!ential procla(ation to the Co((unit$ *n'iron(ent an!
Natural Resources ,ffice an! to the pro'incial boar!# an! (unicipal boar! or cit$ council an! baranga$ council affecte!# an!
copies thereof shall be poste! on the bulletin boar! of the Co((unit$ *n'iron(ent an! Natural Resources ,ffice an! at
conspicuous places in the pro'incial buil!ing an! at the (unicipal buil!ing an! baranga$ halls or (eeting place.t shall
(oreo'er be announce! b$ go'ern(ent ra!io %hene'er a'ailable in each of the barrios of the (unicipalit$./
S$*-)+/ 3. Section >7# Chapter E+++ of Co((on%ealth -ct No. 1>1# as a(en!e!# is hereb$ further a(en!e! to rea! as follo%s)
/Sec. >7. he persons specifie! in the ne6t follo%ing section are hereb$ grante! ti(e# not to e6ten! be$on! 0ece(ber 91#
2AAA %ithin %hich to ta.e a!'antage of the benefit of this Chapter) pro'i!e!# that this perio! shall appl$ onl$ %here the area
applie! for !oes not e6cee! t%el'e 3124 hectares) pro'i!e!# further# that the se'eral perio!s of ti(e !esignate! b$ the
Presi!ent in accor!ance %ith Section :ort$Jfi'e of this -ct shall appl$ also to the lan!s co(prise! in the pro'isions of this
Chapter# but this section shall not be construe! as prohibiting an$ of sai! persons fro( acting un!er this Chapter at an$ ti(e
prior to the perio! fi6e! b$ the Presi!ent./
S$*-)+/ 5. -n$ la% or e6ecuti'e or!er or part thereof contrar$ to or inconsistent %ith this -ct is hereb$ !ee(e! repeale! accor!ingl$.
S$*-)+/ 9. +f an$ pro'ision of this -ct or the applicabilit$ of such pro'ision to an$ person or circu(stances shall be hel! in'ali!# the
'ali!it$ of the re(ain!er of this -ct an! the applicabilit$ of such pro'ision to the persons or circu(stances shall not be affecte!
thereb$.S$*-)+/ 3. his -ct shall ta.e effect fifteen 3154 !a$s after its publication in t%o 324 national ne%spapers of general circulation.
-ppro'e!) M72*. 88, 1446
R$%&'()* A*- N+. 7458
March A9# 1995

SB"&*C) A/ A*- I/0-)-&-)/1 7 N$: S;0-$< +, M)/$27( R$0+&2*$0 E=%(+27-)+/, D$>$(+%<$/-,
U-)()?7-)+/, 7/@ C+/0$2>7-)+/

"e it enacte! b$ the Senate an! House of Representati'es of the Philippines in Congress asse(ble!)

CHAPTER I
INTRODUCTOR PROVISIONS

Sec. 1 itle. his -ct shall be .no%n as the Philippine Mining -ct of 1995.

Sec. 2 0eclaration of Polic$. -ll (ineral resources in public an! pri'ate lan!s %ithin the territor$ an! e6clusi'e econo(ic 1one of the
Republic of the Philippines are o%ne! b$ the State. +t shall be the responsibilit$ of the State to pro(ote their rational e6ploration#
!e'elop(ent# utili1ation an! conser'ation through the co(bine! efforts of go'ern(ent an! the pri'ate sector in or!er to enhance
national gro%th in a %a$ that effecti'el$ safeguar!s the en'iron(ent an! protect the rights of affecte! co((unities.

Sec. 9 0efinition of er(s. -s use! in an! for purposes of this -ct# the follo%ing ter(s# %hether in singular or plural# shall (ean)

3a4 /-ncestral lan!s/ refers to all lan!s# e6clusi'el$ an! actuall$ possesse!# occupie!# or utili1e! b$ in!igenous cultural co((unities b$
the(sel'es or through their ancestors in accor!ance %ith their custo(s an! tra!itions since ti(e i((e(orial# an! as (a$ be !efine!
an! !elineate! b$ la%.

3b4 /"loc./ or /(eri!ional bloc./ (eans an area boun!e! b$ oneJhalf 31224 (inute of latitu!e an! oneJhalf 31224 (inute of longitu!e#
containing appro6i(atel$ eight$Jone hectares 381 has.4.

3c4 /"ureau/ (eans the Mines an! Ceosciences "ureau un!er the 0epart(ent of *n'iron(ent an! Natural Resources.

3!4 /Carr$ing capacit$/ refers to the capacit$ of natural an! hu(an en'iron(ents to acco((o!ate an! absorb change %ithout
e6periencing con!itions of instabilit$ an! atten!ant !egra!ation.

3e4 /Contiguous 1one/ refers to %ater# sea botto( an! substratu( (easure! t%ent$Jfour nautical (iles 32> n.(.4 sea%ar! fro( base
line of the Philippine archipelago.

3f4 /Contract area/ (eans lan! or bo!$ of %ater !elineate! for purposes of e6ploration# !e'elop(ent# or utili1ation of the (inerals foun!
therein.

3g4 /Contractor/ (eans a 7ualifie! person acting alone or in consortiu( %ho is a part$ to a (ineral agree(ent or to a financial or
technical assistance agree(ent.

3h4 /CoJpro!uction agree(ent 3C-4/ (eans an agree(ent entere! into bet%een the Co'ern(ent an! one or (ore contractors in
accor!ance %ith Section 2;3b4 hereof.

3i4 /0epart(ent/ (eans the 0epart(ent of *n'iron(ent an! Natural Resources.

384 /0e'elop(ent/ (eans the %or. un!erta.en to e6plore an! prepare an ore bo!$ or a (ineral !eposit for (ining# inclu!ing the
construction of necessar$ infrastructure an! relate! facilities.

3.4 /0irector/ (eans the 0irector of the Mines an! Ceosciences "ureau.

3l4 /*cological profile or ecoJprofile/ refers to geographicJbase! instru(ents for planners an! !ecisionJ(a.ers %hich presents an
e'aluation of the en'iron(ental 7ualit$ an! carr$ing capacit$ of an area.

3(4 /*n'iron(ental Co(pliance Certificate 3*CC4/ refers to the !ocu(ent issue! b$ the go'ern(ent agenc$ concerne! certif$ing that
the pro8ect un!er consi!eration %ill not bring about an unacceptable en'iron(ental i(pact an! that the proponent has co(plie! %ith
the re7uire(ents of the en'iron(ental i(pact state(ent s$ste(.

3n4 /*n'iron(ental +(pact State(ent 3*+S4/ is the !ocu(ent %hich ai(s to i!entif$# pre!ict# interpret# an! co((unicate infor(ation
regar!ing changes in en'iron(ental 7ualit$ associate! %ith a propose! pro8ect an! %hich e6a(ines the range of alternati'es for the
ob8ecti'es of the proposal an! their i(pact on the en'iron(ent.

3o4 /*6clusi'e econo(ic 1one/ (eans the %ater# sea botto( an! subsurface (easure! fro( the baseline of the Philippine archipelago
up to t%o hun!re! nautical (iles 32AA n.(.4 offshore.

3p4 /*6isting (ining27uarr$ing right/ (eans a 'ali! an! subsisting (ining clai( or per(it or 7uarr$ per(it or an$ (ining lease contract
or agree(ent co'ering a (inerali1e! area grante!2issue! un!er pertinent (ining la%s.

374 /*6ploration/ (eans the searching or prospecting for (ineral resources b$ geological# geoche(ical or geoph$sical sur'e$s# re(ote
sensing# test pitting# trenching# !rilling# shaft sin.ing# tunneling or an$ other (eans for the purpose of !eter(ining the e6istence# e6tent#
7uantit$ an! 7ualit$ thereof an! the feasibilit$ of (ining the( for profit.

3r4 /:inancial or technical assistance agree(ent/ (eans a contract in'ol'ing financial or technical assistance for largeJscale e6ploration#
!e'elop(ent# an! utili1ation of (ineral resources.

3s4 /:orce (a8eure/ (eans acts or circu(stances be$on! the reasonable control of contractor inclu!ing# but not li(ite! to# %ar#
rebellion# insurrection# riots# ci'il !isturbance# bloc.a!e# sabotage# e(bargo# stri.e# loc.out# an$ !ispute %ith surface o%ners an! other
labor !isputes# epi!e(ic# earth7ua.e# stor(# floo! or other a!'erse %eather con!itions# e6plosion# fire# a!'erse action b$ go'ern(ent
or b$ an$ instru(entalit$ or sub!i'ision thereof# act of Co! or an$ public ene($ an! an$ cause that herein !escribe o'er %hich the
affecte! part$ has no reasonable control.

3t4 /:oreignJo%ne! corporation/ (eans an$ corporation# partnership# association# or cooperati'e !ul$ registere! in accor!ance %ith la%
in %hich less than fift$ per centu( 35AD4 of the capital is o%ne! b$ :ilipino citi1ens.

3u4 /Co'ern(ent/ (eans the go'ern(ent of the Republic of the Philippines.

3'4 /Cross output/ (eans the actual (ar.et 'alue of (inerals or (ineral pro!ucts fro( its (ining area as !efine! in the National
+nternal Re'enue Co!e.

3%4 /+n!igenous cultural co((unit$/ (eans a group or tribe of in!igenous :ilipinos %ho ha'e continuousl$ li'e! as co((unities on
co((unall$Jboun!e! an! !efine! lan! since ti(e i((e(orial an! ha'e succee!e! in preser'ing# (aintaining# an! sharing co((on
bon!s of languages# custo(s# tra!itions# an! other !istincti'e cultural traits# an! as (a$ be !efine! an! !elineate! b$ la%.

364 /&oint Eenture -gree(ent 3&E-4/ (eans an agree(ent entere! into bet%een the Co'ern(ent an! one or (ore contractors in
accor!ance %ith Section 2;3c4 hereof.

3$4 /Mineral processing/ (eans the (illing# benefaction or upgra!ing of ores or (inerals an! roc.s or b$ si(ilar (eans to con'ert the
sa(e into (ar.etable pro!ucts.

314 /Mine %astes an! tailings/ shall (ean soil an! roc. (aterials fro( surface or un!ergroun! (ining an! (illing operations %ith no
econo(ic 'alue to the generator of the sa(e.

3aa4 /Minerals/ refers to all naturall$ occurring inorganic substance in soli!# gas# li7ui!# or an$ inter(e!iate state e6clu!ing energ$
(aterials such as coal# petroleu(# natural gas# ra!ioacti'e (aterials# an! geother(al energ$.

3ab4 /Mineral agree(ent/ (eans a contract bet%een the go'ern(ent an! a contractor# in'ol'ing (ineral pro!uctionJsharing agree(ent#
coJpro!uction agree(ent# or 8ointJ'enture agree(ent.

3ac4 /Mineral lan!/ (eans an$ area %here (ineral resources are foun!.

3a!4 /Mineral resource/ (eans an$ concentration of (inerals2roc.s %ith potential econo(ic 'alue.

3ae4 /Mining area/ (eans a portion of the contract area i!entifie! b$ the contractor for purposes of !e'elop(ent# (ining# utili1ation# an!
sites for support facilities or in the i((e!iate 'icinit$ of the (ining operations.

3af4 /Mining operation/ (eans (ining acti'ities in'ol'ing e6ploration# feasibilit$# !e'elop(ent# utili1ation# an! processing.

3ag4 /Nongo'ern(ental ,rgani1ation 3NC,4/ inclu!es nonstoc.# nonprofit organi1ations in'ol'e! in acti'ities !ealing %ith resource an!
en'iron(ental conser'ation# (anage(ent an! protection.

3ah4 /Net assets/ refers to the propert$# plant an! e7uip(ent as reflecte! in the au!ite! financial state(ent of the contractor net of
!epreciation# as co(pute! for ta6 purposes# e6clu!ing appraisal increase an! construction in progress.

3ai4 /,ffshore/ (eans the %ater# sea botto(# an! subsurface fro( the shore or coastline rec.one! fro( the (ean lo% ti!e le'el up to
the t%o hun!re! nautical (iles 32AA n.(.4 e6clusi'e econo(ic 1one inclu!ing the archipelagic sea an! contiguous 1one.

3a84 /,nshore/ (eans the lan!%ar! si!e fro( the (ean ti!e ele'ation# inclu!ing sub(erge! lan!s in la.es# ri'ers an! cree.s.

3a.4 /,re/ (eans a naturall$ occurring substance or (aterial fro( %hich a (ineral or ele(ent can be (ine! an!2or processe! for profit.

3al4 /Per(ittee/ (eans the hol!er of an e6ploration per(it.

3a(4 /Pollution control an! infrastructure !e'ices/ refers to infrastructure# (achiner$# e7uip(ent an!2or i(pro'e(ents use! for
i(poun!ing# treating or neutrali1ing# precipitating# filtering# con'e$ing an! cleansing (ine in!ustrial %aste an! tailings as %ell as
eli(inating or re!ucing ha1ar!ous effects of soli! particles# che(icals# li7ui!s or other har(ful b$ pro!ucts an! gases e(itte! fro( an$
facilit$ utili1e! in (ining operations for their !isposal.

3an4 /Presi!ent/ (eans the Presi!ent of the Republic of the Philippines.

3ao4 /Pri'ate lan!/ refers to an$ lan! belonging to an$ pri'ate person %hich inclu!es alienable an! !isposable lan! being clai(e! b$ a
hol!er# clai(ant# or occupant %ho has alrea!$ ac7uire! a 'este! right thereto un!er the la%# although the correspon!ing certificate or
e'i!ence of title or patent has not been actuall$ issue!.

3ap4 /Public lan!/ refers to lan!s of the public !o(ain %hich ha'e been classifie! as agricultural lan!s an! sub8ect to (anage(ent an!
!isposition or concession un!er e6isting la%s.

3a74 /Hualifie! person/ (eans an$ citi1en of the Philippines %ith capacit$ to contract# or a corporation# partnership# association# or
cooperati'e organi1e! or authori1e! for the purpose of engaging in (ining# %ith technical an! financial capabilit$ to un!erta.e (ineral
resources !e'elop(ent an! !ul$ registere! in accor!ance %ith la% at least si6t$ per cent 3;AD4 of the capital of %hich is o%ne! b$
citi1ens of the Philippines) Pro'i!e!# hat a legall$ organi1e! foreignJo%ne! corporation shall be !ee(e! a 7ualifie! person for
purposes of granting an e6ploration per(it# financial or technical assistance agree(ent or (ineral processing per(it.

3ar4 /Huarr$ing/ (eans the process of e6tracting# re(o'ing an! !isposing 7uarr$ resources foun! on or un!erneath the surface of
pri'ate or public lan!.

3as4 /Huarr$ per(it/ (eans a !ocu(ent grante! to a 7ualifie! person for the e6traction an! utili1ation of 7uarr$ resources on public or
pri'ate lan!s.

3at4 /Huarr$ resources/ refers to an$ co((on roc. or other (ineral substances as the 0irector of Mines an! Ceosciences "ureau (a$
!eclare to be 7uarr$ resources such as# but not li(ite! to# an!esite# basalt# conglo(erate# coral san!# !iato(aceous earth# !iorite#
!ecorati'e stones# gabbro# granite# li(estone# (arble# (arl# re! burning cla$s for potteries an! bric.s# rh$olite# roc. phosphate#
san!stone# serpentine# shale# tuff# 'olcanic cin!ers# an! 'olcanic glass) Pro'i!e!# hat such 7uarr$ resources !o not contain (etals or
(etallic constituents an!2or other 'aluable (inerals in econo(icall$ %or.able 7uantities) Pro'i!e!# further# hat nonJ(etallic (inerals
such as .aolin# fel!spar# bull7uart1# 7uart1 or silica# san! an! pebbles# bentonite# talc# asbestos# barite# g$psu(# bau6ite# (agnesite#
!olo(ite# (ica# precious an! se(iJprecious stones# an! other nonJ(etallic (inerals that (a$ later be !isco'ere! an! %hich the
0irector !eclares the sa(e to be of econo(icall$ %or.able 7uantities# shall not be classifie! un!er the categor$ of 7uarr$ resources.

3au4 /Region !irector/ (eans the regional !irector of an$ (ines regional office un!er the 0epart(ent of *n'iron(ent an! Natural
Resources.

3a'4 /Regional office/ (eans an$ of the (ines regional offices of the 0epart(ent of *n'iron(ent an! Natural Resources.

3a%4 /Secretar$/ (eans the Secretar$ of the 0epart(ent of *n'iron(ent an! Natural Resources.

3a64 /Special allo%ance/ refers to pa$(ent to the clai(Jo%ners or surface rightJo%ners particularl$ !uring the transition perio! fro(
Presi!ential 0ecree No. >;9 an! *6ecuti'e ,r!er No. 279# series of 1987.

3a$4 /State/ (eans the Republic of the Philippines.

3a14 /Btili1ation/ (eans the e6traction or !isposition of (inerals.

CHAPTER II
GOVERNMENT MANAGEMENT

Sec. > ,%nership of Mineral Resources. J Mineral resources are o%ne! b$ the State an! the e6ploration# !e'elop(ent# utili1ation# an!
processing thereof shall be un!er its full control an! super'ision. he State (a$ !irectl$ un!erta.e such acti'ities or it (a$ enter into
(ineral agree(ents %ith contractors.

he State shall recogni1e an! protect the rights of the in!igenous cultural co((unities to their ancestral lan!s as pro'i!e! for b$ the
Constitution.
Sec. 5 Mineral Reser'ations. ?hen the national interest so re7uires# such as %hen there is a nee! to preser'e strategic ra% (aterials
for in!ustries critical to national !e'elop(ent# or certain (inerals for scientific# cultural or ecological 'alue# the Presi!ent (a$ establish
(ineral reser'ations upon the reco((en!ation of the 0irector through the Secretar$. Mining operations in e6isting (ineral reser'ations
an! such other reser'ations as (a$ thereafter be establishe!# shall be un!erta.en b$ the 0epart(ent or through a contractor)
Pro'i!e!# hat a s(all scale (ining agree(ent for a (a6i(u( aggregate area of t%ent$Jfi'e percent 325D4 of such (ineral
reser'ation# sub8ect to 'ali! e6isting (ining 7uarr$ing rights as pro'i!e! un!er Section 112 Chapter KK hereof. -ll sub(erge! lan!s
%ithin the contiguous 1one an! in the e6clusi'e econo(ic 1one of the Philippines are hereb$ !eclare! to be (ineral reser'ations.

- ten per centu( 31AD4 share of all ro$alties an! re'enues to be !eri'e! b$ the go'ern(ent fro( the !e'elop(ent an! utili1ation of the
(ineral resources %ithin (ineral reser'ations as pro'i!e! un!er this -ct shall accrue to the Mines an! Ceosciences "ureau to be
allotte! for special pro8ects an! other a!(inistrati'e e6penses relate! to the e6ploration an! !e'elop(ent of other (ineral reser'ations
(entione! in Section ; hereof.

Sec. ; ,ther Reser'ations. Mining operations in reser'e! lan!s other than (ineral reser'ations (a$ be un!erta.en b$ the 0epart(ent#
sub8ect to li(itations as herein pro'i!e!. +n the e'ent that the 0epart(ent cannot un!erta.e such acti'ities# the$ (a$ be un!erta.en b$
a 7ualifie! person in accor!ance %ith the rules an! regulations pro(ulgate! b$ the Secretar$. he right to !e'elop an! utili1e the
(inerals foun! therein shall be a%ar!e! b$ the Presi!ent un!er such ter(s an! con!itions as reco((en!e! b$ the 0irector an!
appro'e! b$ the Secretar$. Pro'i!e!# hat the part$ %ho un!ertoo. the e6ploration of sai! reser'ation shall be gi'en priorit$. he
(ineral lan! so a%ar!e! shall be auto(aticall$ e6clu!e! fro( the reser'ation !uring the ter( of the agree(ent) Pro'i!e!# further# hat
the right of the lessee of a 'ali! (ining contract e6isting %ithin the reser'ation at the ti(e of its establish(ent shall not be pre8u!ice! or
i(paire!.

Sec. 7 Perio!ic Re'ie% of *6isting Mineral Reser'ations. he Secretar$ shall perio!icall$ re'ie% e6isting (ineral reser'ations for the
purpose of !eter(ining %hether their continue! e6istence is consistent %ith the national interest# an! upon the reco((en!ation# the
Presi!ent (a$# b$ procla(ation# alter or (o!if$ the boun!aries thereof or re'ert the sa(e to the public !o(ain %ithout pre8u!ice to prior
e6isting rights.

Sec. 8 -uthorit$ of the 0epart(ent. he 0epart(ent shall be the pri(ar$ go'ern(ent agenc$ responsible for the conser'ation#
(anage(ent# !e'elop(ent# an! proper use of the State=s (ineral resources inclu!ing those in reser'ations# %atershe! areas# an!
lan!s of the public !o(ain. he Secretar$ shall ha'e the authorit$ to enter into (ineral agree(ents on behalf of the Co'ern(ent upon
the reco((en!ation of the 0irector# pro(ulgate such rules an! regulations as (a$ be necessar$ to i(ple(ent the intent an!
pro'isions of this -ct.

Sec. 9 -uthorit$ of the "ureau. he "ureau shall ha'e !irect charge in the a!(inistration an! !isposition of (ineral lan!s an! (ineral
resources an! shall un!erta.e geological# (ining# (etallurgical# che(ical# an! other researches as %ell as geological an! (ineral
e6ploration sur'e$s. he 0irector shall reco((en! to the Secretar$ the granting of (ineral agree(ents to !ul$ 7ualifie! persons an!
shall (onitor the co(pliance b$ the contractor of the ter(s an! con!itions of the (ineral agree(ents. he "ureau (a$ confiscate
suret$# perfor(ance an! guarant$ bon!s poste! through an or!er to be pro(ulgate! b$ the 0irector. he 0irector (a$ !eputi1e# %hen
necessar$# an$ (e(ber or unit of the Philippine National Police# baranga$# !ul$ registere! nongo'ern(ental organi1ation 3NC,4 or an$
7ualifie! person to police all (ining acti'ities.

Sec. 1A Regional ,ffices. here shall be as (an$ regional offices in the countr$ as (a$ be establishe! b$ the Secretar$# upon the
reco((en!ation of the 0irector.

Sec. 11 Processing of -pplications. he s$ste( of processing applications for (ining rights shall be prescribe! in the rules an!
regulations of this -ct.

Sec. 12 Sur'e$# Charting an! 0elineation of Mining -reas. - s.etch plan or (ap of the contract or (ining area prepare! b$ a !eputi1e!
geo!etic engineer suitable for publication purposes shall be re7uire! !uring the filing of a (ineral agree(ent or financial or technical
assistance agree(ent application. hereafter# the contract or (ining area shall be sur'e$e! an! (onu(ente! b$ a !eputi1e! geo!etic
engineer or bureau geo!etic engineer an! the sur'e$ plan shall be appro'e! b$ the 0irector before the appro'al of the (ining
feasibilit$.

Sec. 19 Meri!ional "loc.s. :or purposes of the !elineation of the contract of (ining areas un!er this -ct# the Philippine territor$ an! its
e6clusi'e econo(ic 1one shall be !i'i!e! into (eri!ional bloc.s of oneJhalf 31224 (inute of latitu!e an! oneJhalf 31224 (inute of
longitu!e.

Sec. 1> Recor!ing S$ste(. here shall be establishe! a national an! regional filing an! recor!ing s$ste(. - (ineral resource !atabase
s$ste( shall be set up in the "ureau %hich shall inclu!e# a(ong others# a (ineral rights (anage(ent s$ste(. he "ureau shall publish
at least annuall$# a (ineral rights (anage(ent s$ste(. he "ureau shall publish at least annuall$# a (ineral ga1ette of nation%i!e
circulation containing a(ong others# a current list of (ineral rights# their location in the (ap# (ining rules an! regulations# other official
acts affecting (ining# an! other infor(ation rele'ant to (ineral resources !e'elop(ent. - s$ste( an! publication fun! shall be inclu!e!
in the regular bu!get of the "ureau.

CHAPTER III
SCOPE OF APPLICATION

Sec. 15 Scope of -pplication. his -ct shall go'ern the e6ploration# !e'elop(ent# utili1ation an! processing of all (ineral resources.

Sec. 1; ,pening of -ncestral <an!s for Mining ,perations. No ancestral lan! shall be opene! for (ining operations %ithout the prior
consent of the in!igenous cultural co((unit$ concerne!.

Sec. 17 Ro$alt$ Pa$(ents for +n!igenous Cultural Co((unities. +n the e'ent of an agree(ent %ith an in!igenous cultural co((unit$
pursuant to the prece!ing section# the ro$alt$ pa$(ent# upon utili1ation of the (inerals shall be agree! upon b$ the parties. he sai!
ro$alt$ shall for( part of a trust fun! for the socioecono(ic %ellJbeing of the in!igenous cultural co((unit$.

Sec. 18 -reas ,pen to Mining ,perations. Sub8ect to an$ e6isting rights or reser'ations an! prior agree(ents of all parties# all (ineral
resources in public or pri'ate lan!s# inclu!ing ti(ber or forestlan!s as !efine! in e6isting la%s shall be open to (ineral agree(ents or
financial or technical assistance agree(ent applications. -n$ conflict that (a$ arise un!er this pro'ision shall be hear! an! resol'e! b$
the panel of arbitrators.

Sec. 19 -reas Close! to Mining -pplications. Mineral agree(ent or financial or technical assistance agree(ent applications shall not
be allo%e!)

3a4 +n (ilitar$ an! other go'ern(ent reser'ations# e6cept upon prior %ritten clearance b$ the go'ern(ent agenc$ concerne!5

3b4 Near or un!er public or pri'ate buil!ings# ce(eteries# archeological an! historic sites# bri!ges# high%a$s# %ater%a$s# railroa!s#
reser'oirs# !a(s or other infrastructure pro8ects# public or pri'ate %or.s inclu!ing plantations or 'aluable crops# e6cept upon %ritten
consent of the go'ern(ent agenc$ or pri'ate entit$ concerne!5

3c4 +n areas co'ere! b$ 'ali! an! e6isting (ining rights5

3!4 +n areas e6presse!l$ prohibite! b$ la%5

3e4 +n areas co'ere! b$ s(allJscale (iners as !efine! b$ la% unless %ith prior consent of the s(allJscale (iners# in %hich case a
ro$alt$ pa$(ent upon the utili1ation of (inerals shall be agree! upon b$ the parties# sai! ro$alt$ for(ing a trust fun! for the
socioecono(ic !e'elop(ent of the co((unit$ concerne!5 an!

3f4 ,l! gro%th or 'irgin forests# proclai(e! %atershe! forest reser'es# %il!erness areas# (angro'e forests# (oss$ forests# national
par.s# pro'incial2(unicipal forests# par.s# greenbelts# ga(e refuge an! bir! sanctuaries as !efine! b$ la% in areas e6pressl$ prohibite!
un!er the National +ntegrate! Protecte! areas S$ste( 3N+P-S4 un!er Republic -ct No. 758;# 0epart(ent -!(inistrati'e ,r!er No. 25#
series of 1992 an! other la%s.

CHAPTER IV
E#PLORATION PERMIT

Sec. 2A *6ploration Per(it. -n e6ploration per(it grants the right to con!uct e6ploration for all (inerals in specifie! areas. he "ureau
shall ha'e the authorit$ to grant an e6ploration per(it to a 7ualifie! person.

Sec. 21 er(s an! Con!itions of the *6ploration Per(it. -n e6ploration per(it shall be for a perio! of t%o 324 $ears# sub8ect to annual
re'ie% an! relin7uish(ent or rene%al upon the reco((en!ation of the 0irector.

Sec. 22 Ma6i(u( -reas for *6ploration Per(it. he (a6i(u( area that a 7ualifie! person (a$ hol! at an$ one ti(e shall be)

3a4 ,nshore# in an$ one pro'ince J

314 :or in!i'i!uals# t%ent$ 32A4 bloc.s5 an!

324 324 :or partnerships# corporations# cooperati'es# or associations# t%o hun!re! 32AA4 bloc.s.

3b4 ,nshore# in the entire Philippines J

314 :or in!i'i!uals# fort$ 3>A4 bloc.s5 an!

324 :or partnerships# corporations# cooperati'es# or associations# four hun!re! 3>AA4 bloc.s.

3c4 ,nshore# be$on! fi'e hun!re! (eters 35AA(4 fro( the (ean lo% ti!e le'el J

314 :or in!i'i!uals# one hun!re! 31AA4 bloc.s5 an!

324 :or partnerships# corporations# cooperati'es# or associations# one thousan! 31#AAA4 bloc.s.

Sec. 29 Rights an! ,bligations of the Per(ittee. -n e6ploration per(it shall grant to the per(ittee# his heirs or successorsJinJinterest#
the right to enter# occup$ an! e6plore the area) Pro'i!e!# hat if pri'ate or other parties are affecte!# the per(ittee shall first !iscuss
%ith the sai! parties the e6tent# necessit$# an! (anner of his entr$# occupation an! e6ploration an! in case of !isagree(ent# a panel of
arbitrators shall resol'e the conflict or !isagree(ent.

he per(ittee shall un!erta.e an e6ploration %or. on the area specifie! b$ its per(it base! on an appro'e! %or. progra(.

-n$ e6pen!iture in e6cess of the $earl$ bu!get of the appro'e! %or. progra( (a$ be carrie! for%ar! an! cre!ite! to the succee!ing
$ears co'ering the !uration of the per(it. he Secretar$# through the 0irector# shall pro(ulgate rules an! regulations go'erning the
ter(s an! con!itions of the per(it.

he per(ittee (a$ appl$ for a (ineral pro!uction sharing agree(ent# 8oint 'enture agree(ent# coJpro!uction agree(ent or financial or
technical assistance agree(ent o'er the per(it area# %hich application shall be grante! if the per(ittee (eets the necessar$
7ualifications an! the ter(s an! con!itions of an$ such agree(ent) Pro'i!e!# hat the e6ploration perio! co'ere! b$ the e6ploration
per(it shall be inclu!e! as part of the e6ploration perio! of the (ineral agree(ent or financial or technical assistance agree(ent.

Sec. 2> 0eclaration of Mining Pro8ect :easibilit$. - hol!er of an e6ploration per(it %ho !eter(ines the co((ercial 'iabilit$ of a pro8ect
co'ering a (ining area (a$# %ithin the ter( of the per(it# file %ith the "ureau a !eclaration of (ining pro8ect feasibilit$ acco(panie! b$
a %or. progra( for !e'elop(ent. he appro'al of the (ining pro8ect feasibilit$ an! co(pliance %ith other re7uire(ents pro'i!e! in this
-ct shall entitle the hol!er to an e6clusi'e right to a (ineral pro!uction sharing agree(ent or other (ineral agree(ents or financial or
technical assistance agree(ent.

Sec. 25 ransfer or -ssign(ent. -n e6ploration per(it (a$ be transferre! or assigne! to a 7ualifie! person sub8ect to the appro'al of
the Secretar$ upon the reco((en!ation of the 0irector.

CHAPTER V
MINERAL AGREEMENTS

Sec. 2; Mo!es of Mineral -gree(ent. :or purposes of (ining operations# a (ineral agree(ent (a$ ta.e the follo%ing for(s as herein
!efine!)

3a4 Mineral pro!uction sharing agree(ent J is an agree(ent %here the Co'ern(ent grants to the contractor the e6clusi'e right to
con!uct (ining operations %ithin a contract area an! shares in the gross output. he contractor shall pro'i!e the financing# technolog$#
(anage(ent an! personnel necessar$ for the i(ple(entation of this agree(ent.

3b4 CoJpro!uction agree(ent J is an agree(ent bet%een the Co'ern(ent an! the contractor %herein the Co'ern(ent shall pro'i!e
inputs to the (ining operations other than the (ineral resource.

3c4 &oint 'enture agree(ent J is an agree(ent %here a 8ointJ'enture co(pan$ is organi1e! b$ the Co'ern(ent an! the contractor %ith
both parties ha'ing e7uit$ shares. -si!e fro( earnings in e7uit$# the Co'ern(ent shall be entitle! to a share in the gross output.

- (ineral agree(ent shall grant to the contractor the e6clusi'e right to con!uct (ining operations an! to e6tract all (ineral resources
foun! in the contract area. +n a!!ition# the contractor (a$ be allo%e! to con'ert his agree(ent into an$ of the (o!es of (ineral
agree(ents or financial or technical assistance agree(ent co'ering the re(aining perio! of the original agree(ent sub8ect to the
appro'al of the Secretar$.

Sec. 27 *ligibilit$. - 7ualifie! person (a$ enter into an$ of the three 394 (o!es of (ineral agree(ent %ith the go'ern(ent for the
e6ploration# !e'elop(ent an! utili1ation of (ineral resources) Pro'i!e!# hat in case the applicant has been in the (ining in!ustr$ for
an$ length of ti(e# he shoul! possess a satisfactor$ en'iron(ental trac. recor! as !eter(ine! b$ the Mines an! Ceosciences "ureau
an! in consultation %ith the *n'iron(ent Manage(ent "ureau of the 0epart(ent.

Sec. 28 Ma6i(u( -reas for Mineral -gree(ent. he (a6i(u( area that a 7ualifie! person (a$ hol! at an$ ti(e un!er a (ineral
agree(ent shall be)

3a4 ,nshore# in an$ one pro'ince J

314 :or in!i'i!uals# ten 31A4 bloc.s5 an!

324 :or partnerships# cooperati'es# associations# or corporations# one hun!re! 31AA4 bloc.s.

3b4 ,nshore# in the entire Philippines J

314 :or in!i'i!uals# t%ent$ 32A4 bloc.s5 an!

324 :or partnerships# cooperati'es# associations# or corporations# t%o hun!re! 32AA4 bloc.s.

3c4 ,ffshore# in the entire Philippines J

314 :or in!i'i!uals# fift$ 35A4 bloc.s5

324 :or partnerships# cooperati'es# associations# or corporations# fi'e hun!re! 35AA4 bloc.s5 an!

394 :or the e6clusi'e econo(ic 1one# a larger area to be !eter(ine! b$ the Secretar$.

he (a6i(u( areas (entione! abo'e that a contractor (a$ hol! un!er a (ineral agree(ent shall not inclu!e (ining27uarr$ areas
un!er operating agree(ents bet%een the contractor an! a clai(o%ner2lessee2per(ittee2licensee entere! into un!er Presi!ential
0ecree No. >;9.

Sec. 29 :iling an! -ppro'al of Mineral -gree(ents. -ll propose! (ineral agree(ents shall be file! in the region %here the areas of
interest are locate!# e6cept in (ineral reser'ations %hich shall be file! %ith the "ureau.

he filing of a proposal for a (ineral agree(ent shall gi'e the proponent the prior right to areas co'ere! b$ the sa(e. he propose!
(ineral agree(ent %ill be appro'e! b$ the Secretar$ an! copies thereof shall be sub(itte! to the Presi!ent. hereafter# the Presi!ent
shall pro'i!e a list to Congress of e'er$ appro'e! (ineral agree(ent %ithin thirt$ 39A4 !a$s fro( its appro'al b$ the Secretar$.

Sec. 9A -ssign(ent2ransfer. -n$ assign(ent or transfer of rights an! obligations un!er an$ (ineral agree(ent e6cept a financial or
technical assistance agree(ent shall be sub8ect to the prior appro'al of the Secretar$. Such assign(ent or transfer shall be !ee(e!
auto(aticall$ appro'e! if not acte! upon b$ the Secretar$ %ithin thirt$ 39A4 %or.ing !a$s fro( official receipt thereof# unless patentl$
unconstitutional or illegal.

Sec. 91 ?ith!ra%al fro( Mineral -gree(ents. he contractor (a$# b$ gi'ing !ue notice at an$ ti(e !uring the ter(s of the agree(ent#
appl$ for the cancellation of the (ineral agree(ent !ue to causes %hich# in the opinion of the contractor# (a.e continue! (ining
operations no longer feasible or 'iable. he Secretar$ shall consi!er the notice an! issue its !ecision %ithin a perio! of thirt$ 39A4 !a$s)
Pro'i!e!# hat the contractor has (et all its financial# fiscal an! legal obligations.

Sec. 92 er(s. Mineral agree(ents shall ha'e a ter( not e6cee!ing t%ent$Jfi'e 3254 $ears to start fro( the !ate of e6ecution thereof#
an! rene%able for another ter( not e6cee!ing t%ent$Jfi'e 3254 $ears un!er the sa(e ter(s an! con!itions thereof# %ithout pre8u!ice to
charges (utuall$ agree! upon b$ the parties. -fter the rene%al perio!# the operation of the (ine (a$ be un!erta.en b$ the
Co'ern(ent or through a contractor. he contract for the operation of a (ine shall be a%ar!e! to the highest bi!!er in a public bi!!ing
after !ue publication of the notice thereof) Pro'i!e!# hat the contractor shall ha'e the right to e7ual the highest bi! upon
rei(burse(ent of all reasonable e6penses of the highest bi!!er.

CHAPTER VI
FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT

Sec. 99 *ligibilit$. -n$ 7ualifie! person %ith technical an! financial capabilit$ to un!erta.e largeJscale e6ploration# !e'elop(ent# an!
utili1ation of (ineral resources in the Philippines (a$ enter into a financial or technical assistance agree(ent !irectl$ %ith the
Co'ern(ent through the 0epart(ent.

Sec. 9> Ma6i(u( Contract -rea. he (a6i(u( contract area that (a$ be grante! per 7ualifie! person# sub8ect to relin7uish(ent shall
be)

3a4 1#AAA (eri!ional bloc.s onshore5
3b4 >#AAA (eri!ional bloc.s offshore5 or
3c4 Co(binations of 3a4 an! 3b4 pro'i!e! that it shall not e6cee! the (a6i(u( li(its for onshore an! offshore areas.

Sec. 95 er(s an! Con!itions. he follo%ing ter(s# con!itions# an! %arranties shall be incorporate! in the financial or technical
assistance agree(ent# to %it)

3a4 - fir( co((it(ent in the for( of a s%orn state(ent# of an a(ount correspon!ing to the e6pen!iture obligation that %ill be in'este!
in the contract area) Pro'i!e!# hat such a(ount shall be sub8ect to changes as (a$ be pro'i!e! for in the rules an! regulations of this
act5

3b4 - financial guarantee bon! shall be poste! in fa'or of the Co'ern(ent in an a(ount e7ui'alent to the e6pen!iture obligation of the
applicant for an$ $ear.

3c4 Sub(ission of proof of technical co(petence# such as# but not li(ite! to# its trac. recor! in (ineral resource e6ploration#
!e'elop(ent# an! utili1ation5 !etails of technolog$ to be e(plo$e! in the propose! operation5 an! !etails of technical personnel to
un!erta.e the operations5

3!4 Representations an! %arranties that the applicant has all the 7ualifications an! none of the !is7ualifications for entering into the
agree(ent5

3e4 Representations an! %arranties that the contractor has or has access to all the financing# (anagerial an! technical e6pertise an!# if
circu(stances !e(an!# the technolog$ re7uire! to pro(ptl$ an! effecti'el$ carr$ out the ob8ecti'es of the agree(ent %ith the
un!erstan!ing to ti(el$ !eplo$ these resources un!er its super'ision pursuant to the perio!ic %or. progra(s an! relate! bu!gets#
%hen proper# pro'i!ing an e6ploration perio! up to t%o 324 $ears# e6ten!ible for another t%o 324 $ears but sub8ect to annual re'ie% b$
the Secretar$ in accor!ance %ith the i(ple(enting rules an! regulations of this -ct# an! further# sub8ect to the relin7uish(ent
obligations5

3f4 Representations an! %arranties that# e6cept for pa$(ents for !ispositions for its e7uit$# foreign in'est(ents in local enterprises
%hich are 7ualifie! for repartriation# an! local supplier=s cre!its an! such other generall$ accepte! an! per(issible financial sche(es
for raising fun!s for 'ali! business purposes# the contractor shall not raise an$ for( of financing fro( !o(estic sources of fun!s#
%hether in Philippine or foreign currenc$# for con!ucting its (ining operations for an! in the contract area5

3g4 he (ining operations shall be con!ucte! in accor!ance %ith the pro'isions of this -ct an! its i(ple(enting rules an! regulations5

3h4 ?or. progra(s an! (ini(u( e6pen!itures co((it(ents5

3i4 Preferential use of local goo!s an! ser'ices to the (a6i(u( e6tent practicable5

384 - stipulation that the contractors are obligate! to gi'e preference to :ilipinos in all t$pes of (ining e(plo$(ent for %hich the$ are
7ualifie! an! that technolog$ shall be transferre! to the sa(e5

3.4 Re7uiring the pro(inent to effecti'el$ use appropriate antiJpollution technolog$ an! facilities to protect the en'iron(ent an! to
restore or rehabilitate (ine! out areas an! other areas affecte! b$ (ine tailings an! other for(s of pollution or !estruction5

3l4 he contractors shall furnish the Co'ern(ent recor!s of geologic# accounting# an! other rele'ant !ata for its (ining operations# an!
that boo. of accounts an! recor!s shall be open for inspection b$ the go'ern(ent5

3(4 Re7uiring the proponent to !ispose of the (inerals an! b$ pro!ucts pro!uce! un!er a financial or technical assistance agree(ent
at the highest price an! (ore a!'antageous ter(s an! con!itions as pro'i!e! for un!er the rules an! regulations of this -ct5

3n4 Pro'i!e for consultation an! arbitration %ith respect to the interpretation an! i(ple(entation of the ter(s an! con!itions of the
agree(ents5 an!

3o4 Such other ter(s an! con!itions consistent %ith the Constitution an! %ith this -ct as the Secretar$ (a$ !ee( to be for the best
interest of the State an! the %elfare of the :ilipino people.

Sec. 9; Negotiations. - financial or technical assistance agree(ent shall be negotiate! b$ the 0epart(ent an! e6ecute! an! appro'e!
b$ the Presi!ent. he Presi!ent shall notif$ Congress of all :inancial or technical assistance agree(ents %ithin thirt$ 39A4 !a$s fro(
e6ecution an! appro'al thereof.

Sec. 97 :iling an! *'aluation of :inancial or echnical -ssistance -gree(ent Proposals. -ll financial or technical assistance agree(ent
proposals shall be file! %ith the "ureau after pa$(ent of the re7uire! processing fees. +f the proposal is foun! to be sufficient an!
(eritorious in for( an! substance after e'aluation# it shall be recor!e! %ith the appropriate go'ern(ent agenc$ to gi'e the proponent
the prior right to the area co'ere! b$ such proposal) Pro'i!e!# hat e6isting (ineral agree(ents# financial or technical assistance
agree(ents an! other (ining rights are not i(paire! or pre8u!ice! thereb$. he Secretar$ shall reco((en! its appro'al to the
Presi!ent.

Sec. 98 er(s of :inancial or echnical -ssistance -gree(ent. - financial or technical assistance agree(ent shall ha'e a ter( not
e6cee!ing t%ent$Jfi'e 3254 $ears to start fro( the e6ecution thereof# rene%able for not (ore than t%ent$Jfi'e 3254 $ears un!er such
ter(s an! con!itions as (a$ be pro'i!e! b$ la%.

Sec. 99 ,ption to Con'ert into a Mineral -gree(ent. he contractor has the option to con'ert the financial or technical assistance
agree(ent to a (ineral agree(ent at an$ ti(e !uring the ter( of the agree(ent# if the econo(ic 'iabilit$ of the contract area is foun!
to be ina!e7uate to 8ustif$ largeJscale (ining operations# after proper notice to the Secretar$ as pro'i!e! for un!er the i(ple(enting
rules an! regulations) Pro'i!e!# hat the (ineral agree(ent shall onl$ be for the re(aining perio! of the original agree(ent.

+n the case of a foreign contractor# it shall re!uce its e7uit$ to fort$ percent 3>AD4 in the corporation# partnership# association# or
cooperati'e. Bpon co(pliance %ith this re7uire(ent b$ the contractor# the Secretar$ shall appro'e the con'ersion an! e6ecute the
(ineral pro!uctionJsharing agree(ent.

Sec. >A -ssign(ent2ransfer. - financial or technical assistance agree(ent (a$ be assigne! or transferre!# in %hole or in part# to a
7ualifie! person sub8ect to the prior appro'al of the Presi!ent) Pro'i!e!# hat the Presi!ent shall notif$ Congress of e'er$ financial or
technical assistance agree(ent assigne! or con'erte! in accor!ance %ith this pro'ision %ithin thirt$ 39A4 !a$s fro( the !ate of the
appro'al thereof.

Sec. >1 ?ith!ra%al fro( :inancial or echnical -ssistance -gree(ent. he contractor shall (anifest in %riting to the Secretar$ his
intention to %ith!ra% fro( the agree(ent# if in his 8u!ge(ent the (ining pro8ect is no longer econo(icall$ feasible# e'en after he has
e6erte! reasonable !iligence to re(e!$ the cause or the situation. he Secretar$ (a$ accept the %ith!ra%al) Pro'i!e!# hat the
contractor has co(plie! or satisfie! all his financial# fiscal or legal obligations.

CHAPTER VII
SMALLASCALE MINING

Sec. >2 S(allJscale Mining. S(allJscale (ining shall continue to be go'erne! b$ Republic -ct No. 7A7; an! other pertinent la%s.

CHAPTER VIII
BUARR RESOURCES

Sec. >9 Huarr$ Per(it. -n$ 7ualifie! person (a$ appl$ to the pro'incial2cit$ (ining regulator$ boar! for a 7uarr$ per(it on pri'atel$J
o%ne! lan!s an!2or public lan!s for buil!ing an! construction (aterials such as (arble# basalt# an!esite# conglo(erate# tuff# a!obe#
granite# gabbro# serpentine# inset filing (aterials# cla$ for cera(ic tiles an! buil!ing bric.s# pu(ice# perlite an! other si(ilar (aterials
that are e6tracte! b$ 7uarr$ing fro( the groun!. he pro'incial go'ernor shall grant the per(it after the applicant has co(plie! %ith all
the re7uire(ents as prescribe! b$ the rules an! regulations.

he (a6i(u( area %hich a 7ualifie! person (a$ hol! at an$ one ti(e shall be fi'e hectares 35 has.4) Pro'i!e!# hat in largeJscale
7uarr$ operations in'ol'ing ce(ent ra% (aterials# (arble# granite# san! an! gra'el an! construction agree(ents# a 7ualifie! person
an! the go'ern(ent (a$ enter into a (ineral agree(ent as !efine! herein.

- 7uarr$ per(it shall ha'e a ter( of fi'e 354 $ears# rene%able for li.e perio!s but not to e6cee! a total ter( of t%ent$Jfi'e 3254 $ears# No
7uarr$ per(it shall be issue! or grante! on an$ area co'ere! b$ a (ineral agree(ent# or financial or technical assistance agree(ent.

Sec. >> Huarr$ :ee an! a6es. - per(ittee shall# !uring the ter( of his per(it# pa$ a 7uarr$ fee as pro'i!e! for un!er the i(ple(enting
rules an! regulations. he per(ittee shall also pa$ the e6cise ta6 as pro'i!e! b$ pertinent la%s.

Sec. >5 Cancellation of Huarr$ Per(it. - 7uarr$ per(it (a$ be cancelle! b$ the pro'incial go'ernor for 'iolations of the pro'isions of
this -ct or its i(ple(enting rules an! regulations or the ter(s an! con!itions of sai! per(it) Pro'i!e!# hat before the cancellation of
such per(it# the hol!er thereof shall be gi'en the opportunit$ to be hear! in an in'estigation con!ucte! for the purpose.

Sec. >; Co((ercial San! an! Cra'el Per(it. -n$ 7ualifie! person (a$ be grante! a per(it b$ the pro'incial go'ernor to e6tract an!
re(o'e san! an! gra'el or other loose or unconsoli!ate! (aterials %hich are use! in their natural state# %ithout un!ergoing processing
fro( an area of not (ore than fi'e hectares 35 has.4 an! in such 7uantities as (a$ be specifie! in the per(it.

Sec. >7 +n!ustrial San! an! Cra'el Per(it. -n$ 7ualifie! person (a$ be grante! an in!ustrial san! an! gra'el per(it b$ the "ureau for
the e6traction of san! an! gra'el an! other loose or unconsoli!ate! (aterials that necessitate the use of (echanical processing
co'ering an area of (ore than fi'e hectares 35 has.4 at an$ one ti(e. he per(it shall ha'e a ter( of fi'e 354 $ears# rene%able for a li.e
perio! but not to e6cee! a total ter( of t%ent$Jfi'e 3254 $ears.

Sec. >8 *6clusi'e San! an! Cra'el Per(it. -n$ 7ualifie! person (a$ be grante! an e6clusi'e san! an! gra'el per(it b$ the pro'incial
go'ernor to 7uarr$ an! utili1e san! an! gra'el or other loose or unconsoli!ate! (aterials fro( public lan!s for his o%n use# pro'i!e!
that there %ill be no co((ercial !isposition thereof.

- (ineral agree(ent or a financial technical assistance agree(ent contractor shall# ho%e'er# ha'e the right to e6tract an! re(o'e san!
an! gra'el an! other loose unconsoli!ate! (aterials %ithout nee! of a per(it %ithin the area co'ere! b$ the (ining agree(ent for the
e6clusi'e use in the (ining operations) Pro'i!e!# hat (onthl$ reports of the 7uantit$ of (aterials e6tracte! therefro( shall be
sub(itte! to the (ines regional office concerne!) Pro'i!e!# further# hat sai! right shall be coter(inous %ith the e6piration of the
agree(ent.

Hol!ers of e6isting (ining leases shall li.e%ise ha'e the sa(e rights as that of a contractor) Pro'i!e!# hat sai! right shall be
coter(inous %ith the e6pir$ !ates of the lease.

Sec. >9 Co'ern(ent Cratuitous Per(it. -n$ go'ern(ent entit$ or instru(entalit$ (a$ be grante! a gratuitous per(it b$ the pro'incial
go'ernor to e6tract san! an! gra'el# 7uarr$ or loose unconsoli!ate! (aterials nee!e! in the construction of buil!ing an!2or
infrastructure for public use or other purposes o'er an area of not (ore than t%o hectares 32 has.4 for a perio! coter(inous %ith sai!
construction.

Sec. 5A Pri'ate Cratuitous Per(it. -n$ o%ner of lan! (a$ be grante! a pri'ate gratuitous per(it b$ the pro'incial go'ernor.

Sec. 51 Cuano Per(it. -n$ 7ualifie! person (a$ be grante! a guano per(it b$ the pro'incial go'ernor to e6tract an! utili1e loose
unconsoli!ate! guano an! other organic fertili1er (aterials in an$ portion of a (unicipalit$ %here he has establishe! !o(icile. he
per(it shall be for specific ca'es an!2or for confine! sites %ith locations 'erifie! b$ the 0epart(ent=s fiel! officer in accor!ance %ith
e6isting rules an! regulations.

Sec. 52 Ce(stone Cathering Per(it. -n$ 7ualifie! person (a$ be grante! a nonJe6clusi'e ge(stone gathering per(it b$ the pro'incial
go'ernor to gather loose stones useful as ge(stones in ri'ers an! other locations.

CHAPTER I#
TRANSPORT, SALE AND PROCESSING OF MINERALS

Sec. 59 ,re ransport Per(it. - per(it specif$ing the origin an! 7uantit$ of nonJprocesse! (ineral ores or (inerals shall be re7uire!
for their transport. ransport per(its shall be issue! b$ the (ines regional !irector %ho has 8uris!iction o'er the area %here the ores
%ere e6tracte!. +n the case of (ineral ores or (inerals being transporte! fro( the s(allJscale (ining areas to the custo( (ills or
processing plants# the Pro'incial Mining Regulator$ "oar! 3PMR"4 concerne! shall for(ulate their o%n policies to go'ern such
transport of ores pro!uce! b$ s(allJscale (iners. he absence of a per(it shall be consi!ere! as pri(a facie e'i!ence of illegal (ining
an! shall be sufficient cause for the Co'ern(ent to confiscate the ores or (inerals being transporte!# the tools an! e7uip(ent utili1e!#
an! the 'ehicle containing the sa(e. ,re sa(ples not e6cee!ing t%o (etric tons 32 (.t.4 to be use! e6clusi'el$ for assa$ or pilot test
purposes shall be e6e(pte! fro( such re7uire(ent.

Sec. 5> Mineral ra!ing Registration. No person shall engage in the tra!ing of (ineral pro!ucts# either locall$ or internationall$# unless
registere! %ith the 0epart(ent of ra!e an! +n!ustr$ an! accre!ite! b$ the 0epart(ent# %ith a cop$ of sai! registration sub(itte! to
the "ureau.

Sec. 55 Minerals Processing Per(it. No person shall engage in the processing of (inerals %ithout first securing a (inerals processing
per(it fro( the Secretar$. Minerals processing per(it shall be for a perio! of fi'e 354 $ears rene%able for li.e perio!s but not to e6cee!
a total ter( of t%ent$Jfi'e 3254 $ears. +n the case of (ineral ores or (inerals pro!uce! b$ the s(allJscale (iners# the processing
thereof as %ell as the licensing of their custo( (ills# or processing plants shall continue to be go'erne! b$ the pro'isions of Republic
-ct No. 7A7;.

Sec. 5; *ligibilit$ of :oreignJo%ne!2Jcontrolle! Corporation. - foreignJo%ne!2Jcontrolle! corporation (a$ be grante! a (ineral
processing per(it.

CHAPTER #
DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOG

Sec. 57 *6pen!iture for Co((unit$ 0e'elop(ent an! Science an! Mining echnolog$. - contractor shall assist in the !e'elop(ent of
its (ining co((unit$# the pro(otion of the general %elfare of its inhabitants# an! the !e'elop(ent of science an! (ining technolog$.

Sec. 58 Cre!ite! -cti'ities. -cti'ities that (a$ be cre!ite! as e6pen!itures for !e'elop(ent of (ining co((unities# an! science an!
(ining technolog$ are the follo%ing)

3a4 -n$ acti'it$ or e6pen!iture inten!e! to enhance the !e'elop(ent of the (ining an! neighboring co((unities of a (ining operation
other than those re7uire! or pro'i!e! for un!er e6isting la%s# or collecti'e bargaining agree(ents# an! the li.e) an!

3b4 -n$ acti'it$ or e6pen!iture !irecte! to%ar!s the !e'elop(ent of geosciences an! (ining technolog$ such as# but not li(ite! to#
institutional an! (anpo%er !e'elop(ent# an! basic an! applie! researches. -ppropriate super'ision an! control (echanis(s shall be
prescribe! in the i(ple(enting rules an! regulations of this -ct.

Sec. 59 raining an! 0e'elop(ent. - contractor shall (aintain an effecti'e progra( of (anpo%er training an! !e'elop(ent throughout
the ter( of the (ineral agree(ent an! shall encourage an! train :ilipinos to participate in all aspects of the (ining operations#
inclu!ing the (anage(ent thereof. :or highl$Jtechnical an! speciali1e! (ining operations# the contractor (a$# sub8ect to the necessar$
go'ern(ent clearances# e(plo$ 7ualifie! foreigners.

Sec. ;A Bse of +n!igenous Coo!s# Ser'ices an! echnologies. - contractor shall gi'e preference to the use of local goo!s# ser'ices
an! scientific an! technical resources in the (ining operations# %here the sa(e are of e7ui'alent 7ualit$# an! are a'ailable on
e7ui'alent ter(s as their i(porte! counterparts.

Sec. ;1 0onations2urn ,'er of :acilities. Prior to cessation of (ining operations occasione! b$ aban!on(ent or %ith!ra%al of
operations# on public lan!s b$ the contractor# the latter shall ha'e a perio! of one 314 $ear therefro( %ithin %hich to re(o'e his
i(pro'e(ents5 other%ise# all the social infrastructure an! facilities shall be turne! o'er or !onate! ta6Jfree to the proper go'ern(ent
authorities# national or local# to ensure that sai! infrastructure an! facilities are continuousl$ (aintaine! an! utili1e! b$ the host an!
neighboring co((unities.

Sec. ;2 *(plo$(ent of :ilipinos. - contractor shall gi'e preference to :ilipino citi1ens in all t$pes of (ining e(plo$(ent %ithin the
countr$ insofar as such citi1ens are 7ualifie! to perfor( the correspon!ing %or. %ith reasonable efficienc$ an! %ithout ha1ar! to the
safet$ of the operations. he contractor# ho%e'er# shall not be hin!ere! fro( hiring e(plo$ees of his o%n selection# sub8ect to the
pro'ision of Co((on%ealth -ct No. ;19# as a(en!e!# for technical an! speciali1e! %or. %hich in his 8u!ge(ent an! %ith the appro'al
of the 0irector# re7uire! highl$Jspeciali1e! training or long e6perience in e6ploration# !e'elop(ent or utili1ation of (ineral resources)
Pro'i!e!# hat in no case shall each e(plo$(ent e6cee! fi'e 354 $ears or the pa$bac. perio! as represente! in original pro8ect stu!$#
%hiche'er is longer) Pro'i!e!# further# hat each foreigner e(plo$e! as (ine (anager# 'iceJpresi!ent for operations or in an e7ui'alent
(anagerial position in charge of (ining# (illing# 7uarr$ing or !rilling operation shall)

3a4 Present e'i!ence of his 7ualification an! %or. e6perience5 or

3b4 Shall pass the appropriate go'ern(ent licensure e6a(ination5 or

3c4 +n special cases# (a$ be per(itte! to %or. b$ the 0irector for a perio! not e6cee!ing one 314 $ear) Pro'i!e!# ho%e'er# hat if
reciprocal pri'ileges are e6ten!e! to :ilipino nationals in the countr$ of !o(icile# the 0irector (a$ grant %ai'ers or e6e(ptions.

CHAPTER #I
SAFET AND ENVIRONMENTAL PROTECTION

Sec. ;9 Mines Safet$ an! *n'iron(ental Protection. -ll contractors an! per(ittees shall strictl$ co(pl$ %ith all the (ines safet$ rules
an! regulations as (a$ be pro(ulgate! b$ the Secretar$ concerning the safe an! sanitar$ up.eep of the (ining operations an!
achie'e %asteJfree an! efficient (ine !e'elop(ent. Personnel of the 0epart(ent in'ol'e! in the i(ple(entation of (ines safet$# health
an! en'iron(ental rules an! regulations shall be co'ere! un!er Republic -ct No. 79A5.

Sec. ;> Mine <abor. No person un!er si6teen 31;4 $ears of age shall be e(plo$e! in an$ phase of (ining operations an! no person
un!er eighteen 3184 $ears of age shall be e(plo$e! un!ergroun! in a (ine.

Sec. ;5 Mine Super'ision. -ll (ining an! 7uarr$ing operations that e(plo$ (ore than fift$ 35A4 %or.ers shall ha'e at least one 314
license! (ining engineer %ith at least fi'e 354 $ears of e6perience in (ining operations# an! one 314 registere! fore(an.

Sec. ;; Mine +nspection. he regional !irector shall ha'e e6clusi'e 8uris!iction o'er the safet$ inspection of all installations# surface or
un!ergroun!# in (ining operations at reasonable hours of the !a$ or night an! as (uch as possible in a (anner that %ill not i(pe!e or
obstruct %or. in progress of a contractor or per(ittee.

Sec. ;7 Po%er to +ssue ,r!ers. he (ines regional !irector shall# in consultation %ith the *n'iron(ental Manage(ent "ureau# forth%ith
or %ithin such ti(e as specifie! in his or!er# re7uire the contractor to re(e!$ an$ practice connecte! %ith (ining or 7uarr$ing
operations# %hich is not in accor!ance %ith safet$ an! antiJpollution la%s an! regulations# %hich is not in accor!ance %ith safet$ an!
antiJpollution la%s an! regulations. +n case of i((inent !anger to life or propert$# the (ines regional !irector (a$ su((aril$ suspen!
the (ining or 7uarr$ing operations until the !anger is re(o'e!# or appropriate (easures are ta.en b$ the contractor or per(ittee.

Sec. ;8 Report of -cci!ents. +n case of an$ inci!ent or acci!ent# causing or creating the !anger of loss of life or serious ph$sical
in8uries# the person in charge of operations shall i((e!iatel$ report the sa(e to the regional office %here the operations are situate!.
:ailure to report the sa(e %ithout 8ustifiable reason shall be a cause for the i(position of a!(inistrati'e sanctions prescribe! in the
rules an! regulations i(ple(enting this -ct.

Sec. ;9 *n'iron(ental Protection. *'er$ contractor shall un!erta.e an en'iron(ental protection an! enhance(ent progra( co'ering
the perio! of the (ineral agree(ent or per(it. Such en'iron(ental progra( shall be incorporate! in the %or. progra( %hich the
contractor or per(ittee shall sub(it as an acco(pan$ing !ocu(ent to the application for a (ineral agree(ent or per(it. he %or.
progra( shall inclu!e not onl$ plans relati'e to (ining operations but also to rehabilitation# regeneration# re'egetation an! reforestation
of (inerali1e! areas# slope stabili1ation of (ine!Jout an! tailings co'ere! areas# a7uaculture# %atershe! !e'elop(ent an! %ater
conser'ation5 an! socioecono(ic !e'elop(ent.

Sec. 7A *n'iron(ental +(pact -ssess(ent 3*+-4. *6cept !uring the e6ploration perio! of a (ineral agree(ent or financial or technical
assistance agree(ent or an e6ploration per(it# an en'iron(ental clearance certificate shall be re7uire! base! on an en'iron(ental
i(pact assess(ent an! proce!ures un!er the Philippine *n'iron(ental +(pact -ssess(ent S$ste( inclu!ing Sections 2; an! 27 of
the <ocal Co'ern(ent Co!e of 1991 %hich re7uire national go'ern(ent agencies to (aintain ecological balance# an! prior consultation
%ith the local go'ern(ent units# nongo'ern(ental an! people=s organi1ations an! other concerne! sectors of the co((unit$) Pro'i!e!#
hat a co(plete! ecological profile of the propose! (ining area shall also constitute part of the en'iron(ental i(pact assess(ent.
People=s organi1ations an! nonJgo'ern(ental organi1ations shall be allo%e! an! encourage to participate in ensuring that
contractors2per(ittees shall obser'e all the re7uire(ents of en'iron(ental protection.

Sec. 71 Rehabilitation. Contractors an! per(ittees shall technicall$ an! biologicall$ rehabilitate the e6ca'ate! (ine!Jout# tailings
co'ere! an! !isturbe! areas to the con!ition of en'iron(ental safet$# as (a$ be pro'i!e! in the i(ple(enting rules an! regulations of
this -ct. - (ine rehabilitation fun! shall be create!# base! on the contractor=s appro'e! %or. progra(# an! shall be !eposite! as a trust
fun! in a go'ern(ent !epositor$ ban. an! use! for ph$sical an! social rehabilitation of areas an! co((unities affecte! b$ (ining
acti'ities an! for research on the social# technical an! pre'enti'e aspects of rehabilitation. :ailure to fulfill the abo'e obligation shall
(ean i((e!iate suspension or closure of the (ining acti'ities of the contractor2per(ittee concerne!.

CHAPTER #II
AU#ILIAR MINING RIGHTS

Sec. 72 i(ber Rights. -n$ pro'ision of la% to the contrar$ not%ithstan!ing# a contractor (a$ be range! a right to cut trees or ti(ber
%ithin his (ining area as (a$ be necessar$ for his (ining operations sub8ect to forestr$ la%s# rules an! regulations) Pro'i!e!# hat if
the lan! co'ere! b$ the (ining area is alrea!$ co'ere! b$ e6isting ti(ber concessions# the 'olu(e of ti(ber nee!e! an! the (anner of
cutting an! re(o'al thereof shall be !eter(ine! b$ the (ines regional !irector# upon consultation %ith the contractor# the ti(ber
concessionaire2per(ittee an! the :orest Manage(ent "ureau of the 0epart(ent) Pro'i!e!# further# hat in case of !isagree(ent
bet%een the contractor an! the ti(ber concessionaire# the (atter shall be sub(itte! to the Secretar$ %hose !ecision shall be final. he
contractor shall perfor( reforestation %or. %ithin his (ining area in accor!ance %ith forestr$ la%s# rules an! regulations.

Sec. 79 ?ater Rights. - contractor shall ha'e %ater rights for (ining operations upon appro'al of application %ith the appropriate
go'ern(ent agenc$ in accor!ance %ith e6isting %ater la%s# rules an! regulations pro(ulgate! thereun!er) Pro'i!e!# hat %ater rights
alrea!$ grante! or 'este! through long use# recogni1e! an! ac.no%le!ge! b$ local custo(s# la%s# an! !ecisions of courts shall not
thereb$ be i(paire!) Pro'i!e! further# hat the Co'ern(ent reser'es the right to regulate %ater rights an! the reasonable an!
e7uitable !istribution of %ater suppl$ so as to pre'ent the (onopol$ of the use thereof.

Sec. 7> Right to Possess *6plosi'es. - contractor2 e6ploration per(ittee shall ha'e the right to possess an! use e6plosi'es %ithin his
contract2per(it area as (a$ be necessar$ for his (ining operations upon appro'al of an application %ith the appropriate go'ern(ent
agenc$ in accor!ance %ith e6isting la%s# rules an! regulations pro(ulgate! thereun!er) Pro'i!e!# hat the Co'ern(ent reser'es the
right to regulate an! control the e6plosi'e accessories to ensure safe (ining operations.

Sec. 75 *ase(ent Rights. ?hen (ining areas are so situate! that for purposes of (ore con'enient (ining operations it is necessar$ to
buil!# construct or install on the (ining areas or lan!s o%ne!# occupie! or lease! b$ other persons# such infrastructure as roa!s#
railroa!s# (ills# %aste !u(p sites# tailings pon!s# %arehouses# staging or storage areas an! port facilities# tra(%a$s# run%a$s# airports#
electric trans(ission# telephone or telegraph lines# !a(s an! their nor(al floo! an! catch(ent areas# sites for %ater %ells# !itches#
canals# ne% ri'er be!s# pipelines# flu(es# cuts# shafts# tunnels# or (ills# the contractor# upon pa$(ent of 8ust co(pensation# shall be
entitle! to enter an! occup$ sai! (ining areas or lan!s.

Sec. 7; *ntr$ into Pri'ate <an!s an! Concession -reas. Sub8ect to prior notification# hol!ers of (ining rights shall not be pre'ente!
fro( entr$ into pri'ate lan!s an! concession areas b$ surface o%ners# occupants# or concessionaires %hen con!ucting (ining
operations therein) Pro'i!e!# hat an$ !a(age !one to the propert$ of the surface o%ner# occupant# or concessionaire as a
conse7uence of such operations shall be properl$ co(pensate! as (a$ be pro'i!e! for in the i(ple(enting rules an! regulations)
Pro'i!e!# further# hat to guarantee such co(pensation# the person authori1e! to con!uct (ining operation shall# prior thereto# post a
bon! %ith the regional !irector base! on the t$pe of properties# the pre'ailing prices in an! aroun! the area %here the (ining
operations are to be con!ucte!# %ith suret$ or sureties satisfactor$ to the regional !irector.

CHAPTER #III
SETTLEMENT OF CONFLICTS

Sec. 77 Panel of -rbitrators. here shall be a panel of arbitraters in the regional office of the 0epart(ent co(pose! of three 394
(e(bers# t%o 324 of %ho( (ust be (e(bers of the Philippine "ar in goo! stan!ing an! one license! (ining engineer or a professional
in a relate! fiel!# an! !ul$ !esignate! b$ the Secretar$ as reco((en!e! b$ the Mines an! Ceosciences "ureau 0irector. hose
!esignate! as (e(bers of the panel shall ser'e as such in a!!ition to their %or. in the 0epart(ent %ithout recei'ing an$ a!!itional
co(pensation. -s (uch as practicable# sai! (e(bers shall co(e fro( the !ifferent bureaus of the 0epart(ent in the region. he
presi!ing officer shall be on a $earl$ basis. he (e(bers of the panel shall perfor( their !uties an! obligations in hearing an! !eci!ing
cases until their !esignation is %ith!ra%n or re'o.e! b$ the Secretar$. ?ithin thirt$ 39A4 %or.ing !a$s# after the sub(ission of the case
b$ the parties for !ecision# the panel shall ha'e e6clusi'e an! original 8uris!iction to hear an! !eci!e on the follo%ing)

3a4 0isputes in'ol'ing rights to (ining areas5

3b4 0isputes in'ol'ing (ineral agree(ents or per(its5

3c4 0isputes in'ol'ing surface o%ners# occupants an! clai(hol!ers2concessionaires5 an!

3!4 0isputes pen!ing before the "ureau an! the 0epart(ent at the !ate of the effecti'it$ of this -ct.

Sec. 78 -ppellate &uris!iction. he !ecision or or!er of the panel of arbitrators (a$ be appeale! b$ the part$ not satisfie! thereto to the
(ines -!8u!ication "oar! %ithin fifteen 3154 !a$s fro( receipt thereof %hich (ust !eci!e the case %ithin thirt$ 39A4 !a$s fro(
sub(ission thereof for !ecision.

Sec. 79 Mines -!8u!ication "oar!. he Mines -!8u!ication "oar! shall be co(pose! of three 394 (e(bers. he Secretar$ shall be the
chair(an %ith the 0irector of the Mines an! Ceosciences "ureau an! the Bn!ersecretar$ for ,perations of the 0epart(ent as (e(ber
thereof. he "oar! shall ha'e the follo%ing po%ers an! functions)

3a4 o pro(ulgate rules an! regulations go'erning the hearing an! !isposition of cases before it# as %ell as those pertaining to its
internal functions# an! such rules an! regulations as (a$ be necessar$ to carr$ out its functions5

3b4 o a!(inister oaths# su((on the parties to a contro'ers$# issue subpoenas re7uiring the atten!ance an! testi(on$ of %itnesses or
the pro!uction of such boo.s# paper# contracts# recor!s# state(ent of accounts# agree(ents# an! other !ocu(ents as (a$ be (aterial
to a 8ust !eter(ination of the (atter un!er in'estigation# an! to testif$ in an$ in'estigation or hearing con!ucte! in pursuance of this
-ct5

3c4 o con!uct hearings on all (atters %ithin its 8uris!iction# procee! to hear an! !eter(ine the !isputes in the absence of an$ part$
thereto %ho has been su((one! or ser'e! %ith notice to appear# con!uct its procee!ings or an$ part thereof in public or in pri'ate#
a!8ourn its hearings at an$ ti(e an! place# refer technical (atters or accounts to an e6pert an! to accept his report as e'i!ence after
hearing of the parties upon !ue notice# !irect parties to be 8oine! in or e6clu!e! fro( the procee!ings# correct# a(en!# or %ai'e an$
error# !efect or irregularit$# %hether in substance or in for(# gi'e all such !irections at it (a$ !ee( necessar$ or e6pe!ient in the
!eter(ination of the !ispute before it an! !is(iss the (ining !ispute as part thereof# %here it is tri'ial or %here further procee!ings b$
the "oar! are not necessar$ or !esirable5

314 to hol! an$ person in conte(pt# !irectl$ or in!irectl$# an! i(pose appropriate penalties therefor5 an!

324 o en8oin an$ or all acts in'ol'ing or arising fro( an$ case pen!ing before it %hich# if not restraine! forth%ith# (a$ cause gra'e or
irreparable !a(age to an$ of the parties to the case or seriousl$ affect social an! econo(ic stabilit$.

+n an$ procee!ing before the "oar!# the rules of e'i!ence pre'ailing in courts of la% or e7uit$ shall not be controlling an! it is the spirit
an! intention of this -ct that shall go'ern. he "oar! shall use e'er$ an! all reasonable (eans to ascertain the facts in each case
spee!il$ an! ob8ecti'el$ an! %ithout regar! to technicalities of la% or proce!ure# all in the interest of !ue process. +n an$ procee!ing
before the "oar!# the parties (a$ be represente! b$ legal counsel. the fin!ings of fact of the "oar! shall be conclusi'e an! bin!ing on
the parties an! its !ecision or or!er shall be final an! e6ecutor$.

- petition for re'ie% b$ certiorari an! 7uestion of la% (a$ be file! b$ the aggrie'e! part$ %ith the Supre(e Court %ithin thirt$ 39A4 !a$s
fro( receipt of the or!er or !ecision of the "oar!.

CHAPTER #IV
GOVERNMENT SHARE

Sec. 8A Co'ern(ent Share in Mineral Pro!uction Sharing -gree(ent. he total go'ern(ent share in a (ineral pro!uction sharing
agree(ent shall be the e6cise ta6 on (ineral pro!ucts as pro'i!e! in Republic -ct No. 7729# a(en!ing Section 1513a4 of the National
+nternal Re'enue Co!e# as a(en!e!.

Sec. 81 Co'ern(ent Share in ,ther Mineral -gree(ents. he share of the Co'ern(ent in coJpro!uction an! 8ointJ'enture agree(ents
shall be negotiate! b$ the Co'ern(ent an! the contractor ta.ing into consi!eration the) 3a4 capital in'est(ent of the pro8ect# 3b4 ris.s
in'ol'e!# 3c4 contribution of the pro8ect to the econo($# an! 3!4 other factors that %ill pro'i!e for a fair an! e7uitable sharing bet%een
the Co'ern(ent an! the contractor. he Co'ern(ent shall also be entitle! to co(pensations for its other contributions %hich shall be
agree! upon b$ the parties# an! shall consist# a(ong other things# the contractor=s inco(e ta6# e6cise ta6# special allo%ance#
%ithhol!ing ta6 !ue fro( the contractor=s foreign stoc.hol!ers arising fro( !i'i!en! or interest pa$(ents to the sai! foreign
stoc.hol!ers# in case of a foreign national# an! all such other ta6es# !uties an! fees as pro'i!e! for un!er e6isting la%s.

he Co'ern(ent share in financial or technical assistance agree(ent shall consist of# a(ong other things# the contractor=s corporate
inco(e ta6# e6cise ta6# special allo%ance# %ithhol!ing ta6 !ue fro( the contractor=s foreign stoc.hol!ers arising fro( !i'i!en! or
interest pa$(ents to the sai! foreign stoc.hol!er in case of a foreign national an! all such other ta6es# !uties an! fees as pro'i!e! for
un!er e6isting la%s.

he collection of go'ern(ent share in financial or technical assistance agree(ent shall co((ence after the financial or technical
assistance agree(ent contractor has full$ reco'ere! its preJoperating e6penses# e6ploration# an! !e'elop(ent e6pen!itures# inclusi'e.

Sec. 82 -llocation of Co'ern(ent Share. he Co'ern(ent share as referre! to in the prece!ing sections shall be share! an! allocate!
in accor!ance %ith Sections 29A an! 292 of Republic -ct No. 71;A other%ise .no%n as the <ocal Co'ern(ent Co!e of 1991. +n case
the !e'elop(ent an! utili1ation of (ineral resources is un!erta.en b$ a go'ern(entJo%ne! or controlle! corporation# the sharing an!
allocation shall be in accor!ance %ith Sections 291 an! 292 of the sai! Co!e.

CHAPTER #V
TA#ES AND FEES

Sec. 89 +nco(e a6es. -fter the lapse of the inco(e ta6 holi!a$ as pro'i!e! for in the ,(nibus +n'est(ents Co!e# the contractor shall
be liable to pa$ inco(e ta6 as pro'i!e! in the National +nternal Re'enue Co!e# as a(en!e!.

Sec. 8> *6cise a6 on Mineral Pro!ucts. he contractor shall be liable to pa$ the e6cise ta6 on (ineral pro!ucts as pro'i!e! for un!er
Section 151 of the National +nternal Re'enue Co!e) Pro'i!e!# ho%e'er# hat %ith respect to a (ineral pro!uction sharing agree(ent#
the e6cise ta6 on (ineral pro!ucts shall be the go'ern(ent share un!er sai! agree(ent.

Sec. 85 Mine ?astes an! ailings :ees. - se(iJannual fee to be .no%n as (ine %astes an! tailings fee is hereb$ i(pose! on all
operating (ining co(panies in accor!ance %ith the i(ple(enting rules an! regulations. he (ine %astes an! tailings fee shall accrue
to a reser'e fun! to be use! e6clusi'el$ for pa$(ent for !a(ages to)

3a4 <i'es an! personal safet$5
3b4 <an!s# agricultural crops an! forest pro!ucts# (arine life an! a7uatic resources# cultural resources5 an!
3c4 +nfrastructure an! the re'egetation an! rehabilitation of silte! far( lan!s an! other areas !e'ote! to agriculture an! fishing cause!
b$ (ining pollution.

his is in a!!ition to the suspension or closure of the acti'ities of the contractor at an$ ti(e an! the penal sanctions i(pose! upon the
sa(e.

he Secretar$ is authori1e! to increase (ine %astes an! tailings fees# %hen public interest so re7uires# upon the reco((en!ation of
the 0irector.

Sec. 8; ,ccupation :ees. here shall be collecte! fro( an$ hol!er of a (ineral agree(ent# financial or technical assistance agree(ent
or e6ploration per(it on public or pri'ate lan!s# an annual occupation fee in accor!ance %ith the follo%ing sche!ule5

3a4 :or e6ploration per(it J :i'e pesos 3P5.AA4 per hectare or fraction thereof per annu(5

3b4 :or (ineral agree(ents an! financial or technical assistance agree(ents J :ift$ pesos 3P5A.AA4 per hectare or fraction thereof per
annu(5 an!

3c4 :or (ineral reser'ation J ,ne hun!re! pesos 3P1AA.AA4 per hectare or fraction thereof per annu(.

he Secretar$ is authori1e! to increase the occupation fees pro'i!e! herein %hen the public interest so re7uires# upon
reco((en!ation of the "ureau 0irector.

Sec. 87 Manner of pa$(ent of :ees. he fees shall be pai! on the !ate the (ining agree(ent is registere! %ith the appropriate office
an! on the sa(e !ate e'er$ $ear thereafter. +t shall be pai! to the treasurer of the (unicipalit$ or cit$ %here the onshore (ining areas
are locate!# or to the 0irector in case of offshore (ining areas. :or this purpose# the appropriate officer shall sub(it to the treasurer of
the (unicipalit$ or cit$ %here the onshore (ining area is locate!# a co(plete list of all onshore (ining rights registere! %ith his office#
in!icating therein the na(es of the hol!ers# area in hectares# location# an! !ate registere!. +f the fee is not pai! on the !ate specifie!# it
shall be increase! b$ t%ent$Jfi'e per centu( 325D4.

Sec. 88 -llocation of ,ccupation :ees. hirt$ per centu( 39AD4 of all occupational fees collecte! fro( hol!ers of (ining rights in
onshore (ining areas shall accrue to the pro'ince an! se'ent$ per centu( 37AD4 to the (unicipalit$ in %hich the onshore (ining areas
are locate!. +n a chartere! cit$# the full a(ount shall accrue to the cit$ concerne!.

Sec. 89 :iling :ees an! ,ther Charges. he Secretar$ is authori1e! to charge reasonable filing fees an! other charges as he (a$
prescribe in accor!ance %ith the i(ple(enting rules an! regulations.

CHAPTER #VI
INCENTIVES

Sec. 9A +ncenti'es. he contractors in (ineral agree(ents# an! financial or technical assistance agree(ents shall be entitle! to the
applicable fiscal an! nonJfiscal incenti'es as pro'i!e! for un!er *6ecuti'e ,r!er No. 22;# other%ise .no%n as the ,(nibus
+n'est(ents Co!e of 1987) Pro'i!e!# hat hol!ers of e6ploration per(its (a$ register %ith the "oar! of +n'est(ents an! be entitle! to
the fiscal incenti'es grante! un!er the sai! Co!e for the !uration of the per(its or e6tensions thereof) Pro'i!e!# further# hat (ining
acti'ities shall al%a$s be inclu!e! in the in'est(ent priorities plan.

Sec. 91 +ncenti'es for Pollution Control 0e'ices. Pollution control !e'ices ac7uire!# constructe! or installe! b$ contractors shall not be
consi!ere! as i(pro'e(ents on the lan! or buil!ing %here the$ are place!# an! shall not be sub8ect to real propert$ an! other ta6es or
assess(ents) Pro'i!e!# ho%e'er# hat pa$(ent of (ine %astes an! tailings fees is not e6e(pte!.

Sec. 92 +nco(e a6JCarr$ :or%ar! of <osses. - net operating loss %ithout the benefit of incenti'es incurre! in an$ of the first ten 31A4
$ears of operations (a$ be carrie! o'er as a !e!uction fro( ta6able inco(e for the ne6t fi'e 354 $ears i((e!iatel$ follo%ing the $ear of
such loss. he entire a(ount of the loss shall be carrie! o'er to the first of the fi'e 354 ta6able $ears follo%ing the loss# an! an$ portion
of such loss %hich e6cee!s the ta6able inco(e of such first $ear shall be !e!ucte! in li.e (anner fro( the ta6able inco(e of the ne6t
re(aining four 3>4 $ears.

Sec. 99 +nco(e a6J-ccelerate! 0epreciation. :i6e! assets (a$ be !epreciate! as follo%s)

3a4 o the e6tent of not (ore than t%ice as fast as the nor(al rate of !epreciation or !epreciate! at nor(al rate of !epreciation if the
e6pecte! life is ten 31A4 $ears or less5 or

3b4 0epreciate! o'er an$ nu(ber of $ears bet%een fi'e 354 $ears an! the e6pecte! life if the latter is (ore than ten 31A4 $ears# an! the
!epreciation thereon allo%e! as !e!uction fro( ta6able inco(e) Pro'i!e!# hat the contractor notifies the "ureau of +nternal Re'enue
at the beginning of the !epreciation perio! %hich !epreciation rate allo%e! b$ this section %ill be use!.

+n co(puting for ta6able inco(e# unless other%ise pro'i!e! in this -ct# the contractor (a$# at his option# !e!uct e6ploration an!
!e'elop(ent e6pen!itures accu(ulate! at cost as of the !ate of the prospecting or e6ploration an! !e'elop(ent e6pen!itures pai! or
incurre! !uring the ta6able $ear) Pro'i!e!# hat the total a(ount !e!uctible for e6ploration an! !e'elop(ent e6pen!itures shall not
e6cee! t%ent$Jfi'e per centu( 325D4 of the net inco(e fro( (ining operations. he actual e6ploration an! !e'elop(ent e6pen!itures
(inus the t%ent$Jfi'e per centu( 325D4 net inco(e fro( (ining shall be carrie! for%ar! to the succee!ing $ears until full$ !e!ucte!.

Net inco(e fro( (ining operation is !efine! as gross inco(e fro( operations less allo%able !e!uctions %hich are necessar$ or relate!
to (ining operations. -llo%able !e!uctions shall inclu!e (ining# (illing an! (ar.eting e6penses# !epreciation or properties !irectl$
use! in the (ining operations. his paragraph shall not appl$ to e6pen!itures for the ac7uisition or i(pro'e(ent of propert$ of a
character %hich is sub8ect to the allo%ances for !epreciation.

Sec. 9> +n'est(ent Cuarantees. he contractor shall be entitle! to the basic rights an! guarantees pro'i!e! in
the Constitution an! such other rights recogni1e! b$ the go'ern(ent as enu(erate! hereun!er.

3a4 Repatriation of in'est(ents. he right to repatriate the entire procee!s of the li7ui!ation of the foreign in'est(ent in the currenc$ in
%hich the in'est(ent %as originall$ (a!e an! at the e6change rate pre'ailing at the ti(e of repatriation.

3b4 Re(ittance of earnings. he right to re(it earnings fro( the in'est(ent in the currenc$ in %hich the foreign in'est(ent %as
originall$ (a!e at the e6change rate pre'ailing at the ti(e of re(ittance.

3c4 :oreign loans an! contracts. he right to re(it at the e6change rate pre'ailing at the ti(e of re(ittance such su(s as (a$ be
necessar$ to (eet the pa$(ents of interest an! principal on foreign loans an! foreign obligations arising fro( financial or technical
assistance contracts.

3!4 :ree!o( fro( e6propriation. he right to be free fro( e6propriation b$ the go'ern(ent of the propert$ represente! b$ in'est(ents
or loans# or of the propert$ of the enterprise e6cept for public use or in the interest of national %elfare or !efense an! upon pa$(ent of
8ust co(pensation. +n such cases# foreign in'estors or enterprises shall ha'e the right to re(it su(s recei'e! as co(pensation for the
e6propriate! propert$ in the currenc$ in %hich the in'est(ent %as originall$ (a!e an! at the e6change rate pre'ailing at the ti(e of
re(ittance.

3e4 Re7uisition of in'est(ent. he right to be free fro( re7uisition of the propert$ represente! b$ the in'est(ent or of the propert$ of the
enterprises e6cept in case of %ar or national e(ergenc$ an! onl$ for the !uration thereof. &ust co(pensation shall be !eter(ine! an!
pai! either at the ti(e or i((e!iatel$ after cessation of the state of %ar or national e(ergenc$. Pa$(ents recei'e! as co(pensation for
the re7uisitione! propert$ (a$ be re(itte! in the currenc$ in %hich the in'est(ents %ere originall$ (a!e an! at the e6change rate
pre'ailing at the ti(e of re(ittance.

3f4 Confi!entialit$. -n$ confi!ential infor(ation supplie! b$ the contractor pursuant to this -ct an! its i(ple(enting rules an! regulations
shall be treate! as such b$ the !epart(ent an! the Co'ern(ent# an! !uring the ter( of the pro8ect to %hich it relates.

CHAPTER #VII
GROUND FOR CANCELLATION, REVOCATION, AND TERMINATION

Sec. 95 <ate or NonJfiling of Re7uire(ents. :ailure of the per(ittee or contractor to co(pl$ %ith an$ of the re7uire(ents pro'i!e! in
this -ct or in its i(ple(enting rules an! regulations# %ithout a 'ali! reason# shall be sufficient groun! fro( the suspension of an$ per(it
or agree(ent pro'i!e! un!er this -ct.

Sec. 9; Eiolation of the er(s an! Con!itions of Per(its or -gree(ents. Eiolations of the ter(s an! con!itions of the per(its or
agree(ents shall be a sufficient groun! for cancellation of the sa(e.

Sec. 97 NonJpa$(ent of ta6es an! :ees. :ailure to pa$ the ta6es an! fees !ue the Co'ern(ent for t%o 324 consecuti'e $ears shall
cause the cancellation of the e6ploration per(it# (ineral agree(ent# financial or technical assistance agree(ent an! other agree(ents
an! the reJopening of the area sub8ect thereof to ne% applicants.

Sec. 98 Suspension or Cancellation of a6 +ncenti'es an! Cre!its. :ailure to abi!e b$ the ter(s an! con!itions of ta6 incenti'es an!
cre!its shall cause the suspension or cancellation of sai! incenti'es an! cre!its.

Sec. 99 :alsehoo! or ,(ission of :acts in the State(ent. -ll state(ents (a!e in the e6ploration per(it# (ining agree(ent an!
financial or technical assistance shall be consi!ere! as con!itions an! essential parts thereof an! an$ falsehoo! in sai! state(ents or
o(ission of facts therein %hich (a$ alter# change or affect substantiall$ the facts set forth in sai! state(ents (a$ cause the re'ocation
an! ter(ination of the e6ploration per(it# (ining agree(ent an! financial or technical assistance agree(ent.

CHAPTER #VIII
ORGANIZATIONAL AND INSTITUTIONAL ARRANGEMENT

Sec. 1AA :ro( Staff "ureau to <ine "ureau. he Mines an! Ceosciences "ureau is hereb$ transfor(e! into a line bureau consistent
%ith Section 9 of this -ct) Pro'i!e!# hat un!er the Mines an! Ceosciences "ureau shall be the necessar$ (ines regional# !istrict an!
other pertinent offices J the nu(ber an! specific functions of %hich shall be pro'i!e! in the i(ple(enting rules an! regulations of this
-ct.

CHAPTER #I#
PENAL PROVISIONS

Sec. 1A1 :alse State(ents. -n$ person %ho .no%ingl$ presents an$ false application# !eclaration# or e'i!ence to the Co'ern(ent or
publishes or causes to be publishe! an$ prospectus or other infor(ation containing an$ false state(ent relating to (ines# (ining
operations or (ineral agree(ents# financial or technical assistance agree(ents an! per(its shall# upon con'iction# be penali1e! b$ a
fine of not e6cee!ing en housan! Pesos 3P1A#AAA.AA4.

Sec. 1A2 +llegal *6ploration. -n$ person un!erta.ing e6ploration %or. %ithout the necessar$ e6ploration per(it shall# upon con'iction#
be penali1e! b$ a fine of not e6cee!ing :ift$ thousan! pesos 3P5A#AAA.AA4.

Sec. 1A9 heft of Minerals. -n$ person e6tracting (inerals an! !isposing the sa(e %ithout a (ining agree(ent# lease# per(it# license#
or steals (inerals or ores or the pro!ucts thereof fro( (ines or (ills or processing plants shall# upon con'iction# be i(prisone! fro( si6
3;4 (onths to si6 3;4 $ears or pa$ a fine fro( en thousan! pesos 3P1A#AAA.AA4 to %ent$ thousan! pesos 3P2A#AAA.AA4# or both# at the
!iscretion of the appropriate court. +n a!!ition# he shall be liable to pa$ !a(ages an! co(pensation for the (inerals re(o'e!#
e6tracte!# an! !ispose! of. +n the case of associations# partnerships# or corporations# the presi!ent an! each of the !irectors thereof
shall be responsible for the acts co((itte! b$ such association# corporation# or partnership.

Sec. 1A> 0estruction of Mining Structures. -n$ person %ho %illfull$ !estro$s or !a(ages structures in or on the (ining area or on the
(ill sites shall# upon con'iction# be i(prisone! for a perio! not to e6cee! fi'e 354 $ears an! shall# in a!!ition# pa$ co(pensation for the
!a(ages %hich (a$ ha'e been cause! thereb$.

Sec. 1A5 Mines -rson. -n$ person %ho %illfull$ sets fire to an$ (ineral stoc.pile# (ine or %or.ings# fittings or a (ine# shall be guilt$ of
arson an! shall be punishe!# upon con'iction# b$ the appropriate court in accor!ance %ith the pro'isions of the Re'ise! Penal Co!e
an! shall# in a!!ition# pa$ co(pensation for the !a(ages cause! thereb$.

Sec. 1A; ?illful 0a(age to a Mine. -n$ person %ho %illfull$ !a(ages a (ine# unla%full$ causes %ater to run into a (ine# or obstructs
an$ shaft or passage to a (ine# or ren!ers useless# !a(ages or !estro$s an$ (achine# appliance# apparatus5 rope# chain# tac.le# or
an$ other things use! in a (ine# shall be punishe!# upon con'iction# b$ the appropriate court# b$ i(prison(ent not e6cee!ing a perio!
of fi'e 354 $ears an! shall# in a!!ition# pa$ co(pensation for the !a(ages cause! thereb$.

Sec. 1A7 +llegal ,bstruction to Per(ittees or Contractors. -n$ person %ho# %ithout 8ustifiable cause# pre'ents or obstructs the hol!er of
an$ per(it# agree(ent or lease fro( un!erta.ing his (ining operations shall be punishe!# upon con'iction b$ the appropriate court# b$
a fine not e6cee!ing :i'e thousan! pesos 3P5#AAA.AA4 or i(prison(ent not e6cee!ing one 314 $ear# or both# at the !iscretion of the
court.

Sec. 1A8 Eiolation of the er(s an! Con!itions of the *n'iron(ental Co(pliance Certificate. -n$ person %ho %illfull$ 'iolates or grossl$
neglects to abi!e b$ the ter(s an! con!itions of the en'iron(ental co(pliance certificate issue! to sai! person an! %hich causes
en'iron(ental !a(age through pollution shall suffer the penalt$ of i(prison(ent of si6 3;4 (onths to si6 3;4 $ears or a fine of :ift$
thousan! pesos 3P5A#AAA.AA4 to %o Hun!ere! housan! Pesos 3P2AA#AAA.AA4# or both at the !iscretion of the court.

Sec. 1A9 +llegal ,bstruction to Co'ern(ent ,fficials. -n$ person %ho illegall$ pre'ents or obstructs the Secretar$# the 0irector or an$ of
their representati'es in the perfor(ance of their !uties un!er the pro'isions of this -ct an! of the regulations pro(ulgate! hereun!er
shall be punishe!# upon con'iction# b$ the appropriate court# b$ a fine not e6cee!ing :i'e thousan! pesos 3P5#AAA.AA4 or b$
i(prison(ent not e6cee!ing one 314 $ear# or both# at the !iscretion of the court.

Sec. 11A ,ther Eiolations. -n$ other 'iolation of this -ct an! its i(ple(enting rules an! regulations shall constitute an offense
punishable %ith a fine not e6cee!ing fi'e thousan! pesos 3P5#AAA.AA4.

Sec. 111 :ines. he Secretar$ is authori1e! to charge fines for late or nonsub(ission of reports in accor!ance %ith the i(ple(enting
rules an! regulations of this -ct.

CHAPTER ##
TRANSITOR AND MISCELLANEOUS PROVISIONS

Sec. 112 NonJi(pair(ent of *6isting Mining2Huarr$ing Rights. -ll 'ali! an! e6isting (ining lease contracts# per(its2licenses# leases
pen!ing rene%al# (ineral pro!uctionJsharing agree(ents grante! un!er *6ecuti'e ,r!er N,. 279# at the !ate of effecti'it$ of this -ct#
shall re(ain 'ali!# shall not be i(paire!# an! shall be recogni1e! b$ the Co'ern(ent) Pro'i!e!# hat the pro'isions of Chapter K+E on
go'ern(ent share in (ineral pro!uctionJsharing agree(ent an! of Chapter KE+ on incenti'es of this -ct shall i((e!iatel$ go'ern an!
appl$ to a (ining lessee or contractor unless the (ining lessee or contractor in!icates his intention to the secretar$ in %riting# not to
a'ail of sai! pro'isions) Pro'i!e!# further# hat no rene%al of (ining lease contracts shall be (a!e after the e6piration of its ter()
Pro'i!e!# finall$# hat such leases# pro!uctionJsharing agree(ents# financial or technical assistance agree(ents shall co(pl$ %ith the
applicable pro'isions of this -ct an! its i(ple(enting rules an! regulations.

Sec. 119 Recognition of Eali! an! *6isting Mining Clai(s an! <ease2Huarr$ -pplications. Hol!ers of 'ali! an! e6isting (ining clai(s#
lease27uarr$ applications shall be gi'en preferential rights to enter into an$ (o!e or (ineral agree(ent %ith the go'ern(ent %ithin t%o
324 $ears fro( the pro(ulgation of the rules an! regulations i(ple(enting this -ct.

Sec. 11> Separabilit$ Clause. +f an$ of the pro'ision of this -ct is hel! or !eclare! to be unconstitutional or in'ali! b$ a co(petent court#
the other pro'isions hereof shall continue to be in force as if the pro'isions so annulle! or 'oi!e! ha! ne'er been incorporate! in this
-ct.

Sec. 115 Repealing an! -(en!ing Clause. -ll la%s# e6ecuti'e or!ers# presi!ential !ecrees# rules an! regulations# or parts thereof
%hich are inconsistent %ith an$ of the pro'isions of this -ct are hereb$ repeale! or a(en!e! accor!ingl$.

Sec. 11; *ftsfecti'it$ Clause. his -ct shall ta.e effect thirt$ 39A4 !a$s follo%ing its co(plete publications in t%o 324 ne%spapers of
general circulation in the Philippines.
CG. R. N+. 198554. O*-+'$2 88, 8665D
LUNINGNING P. DEL ROSARIOAIGTIBEN, JOSE REES IGTIBEN, JOSE DEL ROSARIO IGTIBEN, JR. 7/@ THERESA TOPACIO
MEDINA, petitioners, vs. REPUBLIC OF THE PHILIPPINES 7/@ THE COURT OF APPEALS, respondents.
D E C I S I O N
CHICOANAZARIO, J.:
his petition for re'ie% on certiorari un!er Rule >5 of the Rules of Court assails the !ecision of the Court of -ppeals in C-JC.R.
CE No. ;85>;#
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%hich set asi!e the !ecision of the Municipal Circuit rial Court of SilangJ-(a!eo# Ca'ite in <RC Case No. 98J199
3<R- Recor! No. NJ;97874
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an! !is(isse! petitionersN application for registration of a parcel of lan!.
,n A8 &anuar$ 1998# petitioners file! %ith the trial court an application for registration of lan! un!er Presi!ential 0ecree 3P04 No.
1529# other%ise .no%n as the Propert$ Registration 0ecree. he application co'ere! a parcel of lan! %ith an area of 2#988 s7uare
(eters# situate! in "aranga$ Malabag# Silang# Ca'ite# an! (ore particularl$ !escribe! as <ot 5>>2# Ca! >52J0# Silang Ca!astre# -pJ
A>JAA7AA7 3hereinafter referre! to as the Sub8ect Propert$4. Petitioners allege! that the$ ac7uire! the Sub8ect Propert$ b$ purchase#
an! that the$# b$ the(sel'es an! through their pre!ecessorsJinJinterest# ha! been in actual# continuous# uninterrupte!# open# public#
an! a!'erse possession of the Sub8ect Propert$ in the concept of o%ner for (ore that 9A $ears.
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No opposition %as file! against the application an! so petitioners procee!e! %ith the presentation of their e'i!ence. he State
%as represente! in the procee!ings b$ -ssistant Pro'incial Prosecutor &ose M. Eelasco# &r.
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"ase! on the testi(onial an! !ocu(entar$ e'i!ence presente!# the trial court trace! the histor$ of possession of the Sub8ect
Propert$ bac. to 1958# %hen the Sub8ect Propert$ %as first !eclare! for ta6 purposes b$ &ustina Hintog.
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eo!oro Calanog ca(e into possession of the Sub8ect Propert$ in 19;8. +n the sa(e $ear# the Sub8ect Propert$ %as transferre!
to spouses -lfre!o oni!o an! -gatona Calanog. -gatona Calanog allege!l$ inherite! the Sub8ect Propert$ fro( eo!oro Calanog# her
father5 on the other han!# -lfre!o oni!o suppose!l$ purchase! the sa(e propert$ also fro( eo!oro Calanog# his fatherJinJla%.
-lfre!o oni!o plante! the Sub8ect Propert$ %ith pala$# sa$ote# coffee# gu$abano an! other fruit bearing trees. -fter the !e(ise of
-gatona Calanog# the rest of the oni!o fa(il$# consisting of -lfre!o an! his chil!ren# Sa(uel# *li1abeth# "en8a(in# +(el!a an! *sther#
share! possession of the Sub8ect Propert$.
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,n 21 No'e(ber 1995# the oni!o fa(il$ sol! the Sub8ect Propert$ to petitioners# as e'i!ence! b$ a 0ee! of -bsolute Sale.
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he histor$ of possession of the Sub8ect Propert$# as relate! abo'e# %as supporte! b$ ta6 !eclarations in the na(e of petitioners
an! their pre!ecessorsJinJinterest fro( 1958 to 1998.
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,n 15 -ugust 2AAA# the trial court ren!ere! a !ecision appro'ing petitionersN application for registration of the Sub8ect Propert$.
he Republic of the Philippines# represente! b$ the ,ffice of the Solicitor Ceneral# appeale! the !ecision of the trial court to the Court
of -ppeals.
+n its appeal# the Republic allege! that the trial court erre! in appro'ing the application for registration !espite petitionersN failure to
pro'e open# continuous# e6clusi'e an! notorious possession an! occupation of the Sub8ect Propert$ since 12 &une 19>5# or earlier# as
re7uire! b$ Section >83b4 of Co((on%ealth -ct No. 1>1# other%ise .no%n as the Public <an! -ct# as a(en!e! b$ P0 No. 1A79.
Moreo'er# petitioners also faile! to pro!uce (uni(ents of title to tac. their possession to those of their pre!ecessorsJinJinterest in
co(pliance %ith the prescripti'e perio! re7uire! b$ la%.
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,n 2A 0ece(ber 2AA2# the Court of -ppeals ren!ere! a !ecision fin!ing the appeal (eritorious# setting asi!e the !ecision of the
trial court# an! !is(issing the application for registration of petitioners.
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he Court of -ppeals !enie! petitionersN Motion for
Reconsi!eration in its resolution !ate! 22 Ma$ 2AA9.
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Petitioners file! this petition for re'ie% on certiorari un!er Rule >5 of the Rules of Court pra$ing that the !ecision of the Court of
-ppeals be set asi!e an! that the !ecision of the trial court# appro'ing petitionersN application for registration of the Sub8ect Propert$# be
reinstate!.
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+n the original application file! b$ petitioners before the trial court# the$ clai( that the$ are entitle! to confir(ation an! registration
of their title to the Sub8ect Propert$ in accor!ance %ith Section 1> of the Propert$ Registration 0ecree# although the$ ha! not i!entifie!
un!er %hich specific paragraph of the sai! Section.
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Section 1> of the Propert$ Registration 0ecree rea!s O
S*C. 1>. Who may apply. O he follo%ing persons (a$ file in the proper Court of :irst +nstance an application for registration of title to
lan!# %hether personall$ or through their !ul$ authori1e! representati'es)
314 hose %ho b$ the(sel'es or through their pre!ecessorsJinJinterest ha'e been in open# continuous# e6clusi'e an! notorious
possession an! occupation of alienable an! !isposable lan!s of the public !o(ain un!er a bona fide clai( of o%nership since &une 12#
19>5# or earlier.
324 hose %ho ha'e ac7uire! o%nership of pri'ate lan!s b$ prescription un!er the pro'isions of e6isting la%s.
394 hose %ho ha'e ac7uire! o%nership of pri'ate lan!s or aban!one! ri'er be!s b$ right of accession or accretion un!er the e6isting
la%s.
3>4 hose %ho ha'e ac7uire! o%nership of lan! in an$ other (anner pro'i!e! for b$ la%.
"$ the allegation of petitioners in their application of actual# continuous# uninterrupte!# open# public# an! a!'erse possession of
the Sub8ect Propert$ in the concept of o%ner# b$ the(sel'es an! through their pre!ecessorsJinJinterest# for a gi'en perio! of ti(e# it can
be logicall$ presu(e! that their clai( to the right to register the Sub8ect Propert$ %as base! on Section 1># paragraph 314 of the
Propert$ Registration 0ecree.
Ho%e'er# subse7uent plea!ings file! b$ both petitioners an! respon!ent Republic before the Court of -ppeals an! this Court#
!iscuss (ainl$ the Public <an! -ct# thus# establishing that the application for registration file! b$ petitioners before the trial court is
essentiall$ an application for 8u!icial confir(ation of their i(perfect or inco(plete title o'er the Sub8ect Propert$# go'erne! b$ Sections
>7 to 57 of the Public <an! -ct.
Procee!ings un!er the Propert$ Registration 0ecree an! the Public <an! -ct are the sa(e in that both are against the %hole
%orl!# both ta.e the nature of 8u!icial procee!ings# an! the !ecree of registration issue! for both is conclusi'e an! final. he$ !iffer
(ainl$ in that un!er the Propert$ Registration 0ecree# there alrea!$ e6ists a title %hich the court onl$ nee!s to confir(. ,n the other
han!# un!er the Public <an! -ct# there e6ists a presu(ption that the lan! applie! for still pertains to the State# an! that the occupants
an! possessors can onl$ clai( an interest in the lan! b$ 'irtue of their i(perfect title or continuous# open# an! notorious possession
thereof. Nonetheless# in the en!# the t%o la%s arri'e at the sa(e goal# na(el$# a orrens title# %hich ai(s at co(plete e6tinguish(ent#
once an! for all# of rights a!'erse to the recor! title.
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+n general# an applicant for 8u!icial confir(ation of an i(perfect or inco(plete title un!er the Public <an! -ct (ust be able to pro'e
that) 314 the lan! is alienable public lan!5 an! 324 his open# continuous# e6clusi'e an! notorious possession an! occupation of the sa(e
(ust either be since ti(e i((e(orial or for the perio! prescribe! in the Public <an! -ct.
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he fin!ing of fact of the trial court that the Sub8ect Propert$ is alienable public lan! is un!ispute!. ?hat is to be !eter(ine!
herein is %hether petitioners ha'e co(plie! %ith the perio! of possession an! occupation re7uire! b$ the Public <an! -ct.
he pro'ision of the Public <an! -ct that is particularl$ rele'ant to petitionersN application is Section >83b4. hrough the $ears#
Section >83b4 of the Public <an! -ct has been a(en!e! se'eral ti(es. he case of Republic v. Doldol
L1;M
pro'i!es a su((ar$ of these
a(en!(ents# as follo%sO
6 6 6. he original Section >83b4 of C.-. No. 1>1 pro'i!e! for possession an! occupation of lan!s of the public !o(ain since &ul$ 2;#
189>. his %as superse!e! b$ R.-. No. 19>2# %hich pro'i!e! for a si(ple thirt$J$ear prescripti'e perio! of occupation b$ an applicant
for 8u!icial confir(ation of i(perfect title. he sa(e# ho%e'er# has alrea!$ been a(en!e! b$ Presi!ential 0ecree No. 1A79# appro'e!
on &anuar$ 25# 1977. -s a(en!e!# Section >83b4 no% rea!s)
3b4 hose %ho b$ the(sel'es or through their pre!ecessorsJinJinterest ha'e been in open# continuous# e6clusi'e an! notorious
possession an! occupation of agricultural lan!s of the public !o(ain# un!er a bona fide clai( of ac7uisition or o%nership# since &une
12# 19>5# or earlier# i((e!iatel$ prece!ing the filing of the application for confir(ation of title# e6cept %hen pre'ente! b$ %ars
or force maeure. hose shall be conclusi'el$ presu(e! to ha'e perfor(e! all the con!itions essential to a Co'ern(ent grant an! shall
be entitle! to a certificate of title un!er the pro'isions of this chapter.
Section >83b4 of the Public <an! -ct# as a(en!e! b$ P0 No. 1A79# presentl$ re7uires# for 8u!icial confir(ation of an i(perfect or
inco(plete title# the possession an! occupation of the piece of lan! b$ the applicants# b$ the(sel'es or through their pre!ecessorsJinJ
interest# since 12 &une 19>5 or earlier. his pro'ision is in total confor(it$ %ith Section 1>314 of the Propert$ Registration 0ecree
heretofore cite!.
+n the case at bar# the Court of -ppeals correctl$ rule! that petitioners ha'e faile! to co(pl$ %ith the perio! of possession an!
occupation of the Sub8ect Propert$# as re7uire! b$ both the Propert$ Registration 0ecree an! the Public <an! -ct. +n its !ecision# the
Court of -ppeals hel! that O
+n!ee!# the earliest perio! that the applicants coul! clai( o%nership o'er the propert$ is in 1958# %hich is the earliest !ate &ustina
Hintog# the pre'ious o%ner2occupant# !eclare! the propert$ for ta6ation purposes. his is far later than &une 12# 19>5# the !ate
prescribe! b$ la% that the applicantsN possession un!er clai( of o%nership shoul! ha'e begun at the latest.
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Petitioners (aintain# ho%e'er# that R- No. ;9>A# enacte! on 28 March 199A# has repeale! b$ i(plication Section >83b4 of the
Public <an! -ct# as a(en!e! b$ P0 No. 1A79# an! has effecti'el$ re!uce! the re7uire! perio! of possession an! occupation of the
lan! to thirt$ $ears prior to the filing of the application for confir(ation of an i(perfect or inco(plete title.
PetitionersN argu(ents are %ithout (erit. his Court has alrea!$ lai! !o%n the stan!ar! for repeals b$ i(plication# as follo%s O
+t has been the constant hol!ing of this Court that repeals b$ i(plication are not fa'ore! an! %ill not be so !eclare! unless it be
(anifest that the legislature so inten!e!. Such a !octrine goes as far bac. as Bnite! States '. Re$es# a 19A8 !ecision. +t is necessar$
then before such a repeal is !ee(e! to e6ist# that it be sho%n that the statutes or statutor$ pro'isions !eal %ith the sa(e sub8ect (atter
an! that the latter be inconsistent %ith the for(er. here (ust be a sho%ing of repugnanc$ clear an! con'incing in character. he
language use! in the latter statute (ust be such as to ren!er it irreconcilable %ith %hat ha! been for(erl$ enacte!. -n inconsistenc$
that falls short of that stan!ar! !oes not suffice. ?hat is nee!e! is a (anifest in!ication of the legislati'e purpose to repeal.
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+n herein case# Section >83b4 of the Public <an! -ct an! the pro'isions of R- No. ;9>A !o not e'en a!!ress the sa(e sub8ect
(atter.
+n the Public <an! -ct# the %a$s b$ %hich the State (a$ !ispose of agricultural lan!s is enu(erate!# to %it O
S*C. 11. Public lan!s suitable for agricultural purposes can be !ispose! of onl$ as follo%s O
1. :or ho(estea! settle(ent5
2. "$ sale5
9. "$ lease5 an!
>. "$ confir(ation of i(perfect or inco(plete titles)
3a4 "$ 8u!icial legali1ation5
3b4 "$ a!(inistrati'e legali1ation 3free patent4.
*ach (o!e of !isposition is appropriatel$ co'ere! b$ separate chapters of the Public <an! -ct since the specific re7uire(ents
an! application proce!ure !iffer for e'er$ (o!e. More particularl$# the confir(ation of i(perfect or inco(plete titles (a$ be !one t%o
%a$s# either b$) 3a4 a!(inistrati'e legali1ation or free patents un!er Chapter E++ of the Public <an! -ct5 or 3b4 8u!icial legali1ation or
8u!icial confir(ation of i(perfect or inco(plete titles un!er Chapter E+++ of the sa(e -ct. Ha'ing file! their application before the courts#
petitioners ha'e pursue! a 8u!icial legali1ation or 8u!icial confir(ation of their title to the Sub8ect Propert$.
Petitioners pri(aril$ base their argu(ents on the a(en!(ent b$ R- No. ;9>A of Section >> of the Public <an! -ct# to rea! as
follo%s O
S*C. >>. -n$ naturalJborn citi1en of the Philippines %ho is not the o%ner of (ore than t%el'e 3124 hectares an! %ho# for at least thirt$
39A4 $ears prior to the effecti'it$ of this a(en!ator$ -ct# has continuousl$ occupie! an! culti'ate!# either b$ hi(self or through his
pre!ecessorsJinJinterest a tract or tracts of agricultural public lan! sub8ect to !isposition# %ho shall ha'e pai! the real estate ta6 thereon
%hile the sa(e has not been occupie! b$ an$ person shall be entitle!# un!er the pro'isions of this Chapter# to ha'e a free patent
issue! to hi( for such tract or tracts of such lan! not to e6cee! t%el'e 3124 hectares.
?hile the abo'eJ7uote! pro'ision !oes pro'i!e for a 9AJ$ear perio! of occupation an! culti'ation of the lan!# Section >> of the
Public <an! -ct applies to free patents# an! not to 8u!icial confir(ation of an i(perfect or inco(plete title to %hich Section >83b4
applies.
he !istinction bet%een Sections >> an! >83b4 of the Public <an! -ct %as recogni1e! b$ Mr. &ustice Puno# in his separate opinion
in the case of Cru! v. Secretary of "nvironment and #atural Resources#
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in %hich he !iscusse! the !e'elop(ent of the Regalian
!octrine in the Philippine legal s$ste( O
Registration un!er the Public <an! -ct an! <an! Registration -ct recogni1es the concept of o%nership un!er the civil la$. his
o%nership is base! on a!'erse possession for a specifie! perio!# an! har.ens to Section >> of the Public <an! -ct on a!(inistrati'e
legali1ation 3free patent4 of i(perfect or inco(plete titles an! Section >83b4 an! 3c4 of the sa(e -ct on the 8u!icial confir(ation of
i(perfect or inco(plete titles.
he re(aining pro'isions of R- No. ;9>A a(en! Sections >> an! >7 of the Public <an! -ct b$ e6ten!ing the perio!s for filing of
applications for free patents an! for 8u!icial confir(ation of i(perfect or inco(plete titles# respecti'el$# to 91 0ece(ber 2AAA. *6cept
for e6ten!ing the perio! for filing of applications for 8u!icial confir(ation of i(perfect or inco(plete titles# R- No. ;9>A !oes not touch
on the other pro'isions un!er Chapter E+++ of the Public <an! -ct# such as Section >83b4 an! the prescripti'e perio! pro'i!e! therein.
Conse7uentl$# appl$ing the stan!ar! pro'i!e! b$ this Court on repeal b$ i(plication# there can be no conflict or inconsistenc$
bet%een Section >83b4 of the Public <an! -ct an! the pro'isions of R- No. ;9>A that %oul! gi'e rise to a repeal of the for(er b$ the
latter.
he subse7uent effecti'it$ of R- No. 917; on A1 &anuar$ 2AA1 !oes not affect the position of this Court on the issues !iscusse!
herein. ,nce again# Section >7 is the onl$ pro'ision un!er Chapter E+++ of the Public <an! -ct a(en!e! b$ R- No. 917; b$ further
e6ten!ing the perio! for filing of applications for 8u!icial confir(ation of i(perfect or inco(plete titles to 91 0ece(ber 2A2A. he other
pro'isions of the Public <an! -ct a(en!e! b$ R- No. 917;# such as Sections >> an! >5# alrea!$ refer to free patents un!er Chapter
E++. Section >83b4 of the Public <an! -ct# as a(en!e! b$ P0 No. 1A79# an! the prescripti'e perio! pro'i!e! therein still re(ain
unchange!.
+N -<<)
314 Section >> of the Public <an! -ct# as a(en!e! b$ R- No. ;9>A# %hich pro'i!es for a prescripti'e perio! of thirt$ 39A4 $ears
possession# applies onl$ to applications for free patents5
324 he case at bar is a 8u!icial application for confir(ation of an i(perfect or inco(plete title o'er the Sub8ect Propert$ co'ere! b$
Section >83b4 of the Public <an! -ct5 an!
394 Section >83b4 of the Public <an! -ct re7uires for 8u!icial confir(ation of an i(perfect or inco(plete title the continuous
possession of the lan! since 12 &une 19>5# or earlier# %hich petitioners herein faile! to co(pl$ %ith.
WHEREFORE# the petition is hereb$ 0*N+*0 for lac. of (erit. he Court -::+RMS the assaile! !ecision of the Court of -ppeals
in C-JC.R. CE No. ;85>;# %hich re'erse! the !ecision of the lo%er court in <RC Case No. 98J199 3<R- Recor! No. NJ;97874 an!
!is(isse! the application for lan! title of petitioners. No cost.
SO ORDERED.
Puno% &Chairman'% (ustria)*artine!% Calleo% Sr.% an! +inga% ,,.% concur
CG.R. N+. 139389. D$*$<'$2 3, 8666D
ISAGANI CRUZ 7/@ CESAR EUROPA, petitioners, vs. SECRETAR OF ENVIRONMENT AND NATURAL RESOURCES,
SECRETAR OF BUDGET AND MANAGEMENT 7/@ CHAIRMAN 7/@ COMMISSIONERS OF THE NATIONAL
COMMISSION ON INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAANI ASCARRAGA, EDTAMI MANSAANGAN, BASILIO WANDAG,
EVELN DUNUAN, AOM TUGAS, ALFREMO CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M.
DALUPINES, BAI EIRAMACONNIE SATURNO, BAE MLOMOABEATRIZ T. ABASALA, DATU BALITUNGTUNGAANTONIO
D. LUMANDONG, DATU MANTUMUEAW TEOFISTO SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD,
DATU RAMON BAAAN, TIMUA JOSE ANO, TIMUA MACARIO D. SALACAO, TIMUA EDWIN B. ENDING, DATU
SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAALIZA SAWA, BA INA DAAAMELINDA
S. REMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU MAEAPUEAW ADOLINO L. SAWA, DATU
MAUDAAWACRISPEN SAWA, VICE MAEA, LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR,
MANUEL S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES,
LNETTE CARANTESAVIVAL, LANGLE SEGUNDO, SATUR S. BUGNA, CARLING DOMULOT, ANDRES MENDIOGRIN,
LEOPOLDO ABUGAN, VIRGILIO CAETANO, CONCHITA G. DESCAGA, LEV ESTEVES, ODETTE G. ESTEVEZ,
RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B. GUINOSAO, WALTER N.
TIMOL, MANUEL T. SELEN, OSCAR DALUNHA, RICO O. SULATAN, RAFF MALINDA, ALFREDO ABILLANOS, JESSIE
ANDILAB, MIRLANDO H. MANGEULINTAS, SAMIE SATURNO, ROMEO A. LINDAHA, ROEL S. MANSANGACAGAN,
PABUITO S. LIESES, FILIPE G. SAWA, HERMINIA S. SAWA, JULIUS S. SAWA, LEONARDA SAWA, JIMM UGUB,
SALVADOR TIONGSON, VENANCIO APANG, MADION MALID, SUEIM MALID, NENENG MALID, MANGEATADONG
AUGUSTO DIANO, JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELA DIAMILING, SALOME P.
SARZA, FELIPE P. BAGON, SAMM SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA,
SR., JERSON P. GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH L.
MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, 2$%2$0$/-$@ '; .$2 ,7-.$2 CORNELIO
MALID, MARCELINO M. LADRA, 2$%2$0$/-$@ '; .$2 ,7-.$2 MONICO D. LADRA, JENNLN MALID, 2$%2$0$/-$@ '; .$2
,7-.$2 TON MALID, ARIEL M. EVANGELISTA, 2$%2$0$/-$@ '; .$2 <+-.$2 LINA BALBUENA, EDWARD M. EMU, SR.,
SUSAN BOLANIO, OND, PULA BATO BFLAAN TRIBAL FARMERFS ASSOCIATION, INTERAPEOPLEFS E#CHANGE, INC.
7/@ GREEN FORUMAWESTERN VISAAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IEALAHAN INDIGENOUS PEOPLE 7/@ HARIBON FOUNDATION FOR THE CONSERVATION OF NATURAL RESOURCES,
INC., intervenor.
R E S O L U T I O N
PER CURIAM:
Petitioners +sagani Cru1 an! Cesar *uropa brought this suit for prohibition an! (an!a(us as citi1ens an! ta6pa$ers# assailing the
constitutionalit$ of certain pro'isions of Republic -ct No. 8971 3R.-. 89714# other%ise .no%n as the +n!igenous Peoples Rights -ct of
1997 3+PR-4# an! its +(ple(enting Rules an! Regulations 3+(ple(enting Rules4.
+n its resolution of Septe(ber 29# 1998# the Court re7uire! respon!ents to co((ent.
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+n co(pliance# respon!ents Chairperson
an! Co((issioners of the National Co((ission on +n!igenous Peoples 3NC+P4# the go'ern(ent agenc$ create! un!er the +PR- to
i(ple(ent its pro'isions# file! on ,ctober 19# 1998 their Co((ent to the Petition# in %hich the$ !efen! the constitutionalit$ of the +PR-
an! pra$ that the petition be !is(isse! for lac. of (erit.
,n ,ctober 19# 1998# respon!ents Secretar$ of the 0epart(ent of *n'iron(ent an! Natural Resources 30*NR4 an! Secretar$ of
the 0epart(ent of "u!get an! Manage(ent 30"M4 file! through the Solicitor Ceneral a consoli!ate! Co((ent. he Solicitor Ceneral
is of the 'ie% that the +PR- is partl$ unconstitutional on the groun! that it grants o%nership o'er natural resources to in!igenous
peoples an! pra$s that the petition be grante! in part.
,n No'e(ber 1A# 1998# a group of inter'enors# co(pose! of Sen. &uan :la'ier# one of the authors of the +PR-# Mr. Ponciano
"ennagen# a (e(ber of the 198; Constitutional Co((ission# an! the lea!ers an! (e(bers of 112 groups of in!igenous peoples
3:la'ier# et. al4# file! their Motion for <ea'e to +nter'ene. he$ 8oin the NC+P in !efen!ing the constitutionalit$ of +PR- an! pra$ing for
the !is(issal of the petition.
,n March 22# 1999# the Co((ission on Hu(an Rights 3CHR4 li.e%ise file! a Motion to +nter'ene an!2or to -ppear as -(icus
Curiae. he CHR asserts that +PR- is an e6pression of the principle of parens patriae an! that the State has the responsibilit$ to
protect an! guarantee the rights of those %ho are at a serious !isa!'antage li.e in!igenous peoples. :or this reason it pra$s that the
petition be !is(isse!.
,n March 29# 1999# another group# co(pose! of the +.alahan +n!igenous People an! the Haribon :oun!ation for the
Conser'ation of Natural Resources# +nc. 3Haribon# et al.4# file! a (otion to +nter'ene %ith attache! Co((entJinJ+nter'ention. he$
agree %ith the NC+P an! :la'ier# et al. that +PR- is consistent %ith the Constitution an! pra$ that the petition for prohibition an!
(an!a(us be !is(isse!.
he (otions for inter'ention of the aforesai! groups an! organi1ations %ere grante!.
,ral argu(ents %ere hear! on -pril 19# 1999. hereafter# the parties an! inter'enors file! their respecti'e (e(oran!a in %hich
the$ reiterate the argu(ents a!!uce! in their earlier plea!ings an! !uring the hearing.
Petitioners assail the constitutionalit$ of the follo%ing pro'isions of the +PR- an! its +(ple(enting Rules on the groun! that the$
a(ount to an unla%ful !epri'ation of the StateNs o%nership o'er lan!s of the public !o(ain as %ell as (inerals an! other natural
resources therein# in 'iolation of the regalian !octrine e(bo!ie! in Section 2# -rticle K++ of the Constitution)
P314 Section 93a4 %hich !efines the e6tent an! co'erage of ancestral !o(ains# an! Section 93b4 %hich# in turn# !efines
ancestral lan!s5
P324 Section 5# in relation to section 93a4# %hich pro'i!es that ancestral !o(ains inclu!ing inalienable public lan!s# bo!ies of
%ater# (ineral an! other resources foun! %ithin ancestral !o(ains are pri'ate but co((unit$ propert$ of the in!igenous
peoples5
P394 Section ; in relation to section 93a4 an! 93b4 %hich !efines the co(position of ancestral !o(ains an! ancestral lan!s5
P3>4 Section 7 %hich recogni1es an! enu(erates the rights of the in!igenous peoples o'er the ancestral !o(ains5
354 Section 8 %hich recogni1es an! enu(erates the rights of the in!igenous peoples o'er the ancestral lan!s5
P3;4 Section 57 %hich pro'i!es for priorit$ rights of the in!igenous peoples in the har'esting# e6traction# !e'elop(ent or
e6ploration of (inerals an! other natural resources %ithin the areas clai(e! to be their ancestral !o(ains# an! the right
to enter into agree(ents %ith nonin!igenous peoples for the !e'elop(ent an! utili1ation of natural resources therein for
a perio! not e6cee!ing 25 $ears# rene%able for not (ore than 25 $ears5 an!
P374 Section 58 %hich gi'es the in!igenous peoples the responsibilit$ to (aintain# !e'elop# protect an! conser'e the
ancestral !o(ains an! portions thereof %hich are foun! to be necessar$ for critical %atershe!s# (angro'es# %il!life
sanctuaries# %il!erness# protecte! areas# forest co'er or reforestation.Q
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Petitioners also content that# b$ pro'i!ing for an allJenco(passing !efinition of Pancestral !o(ainsQ an! Pancestral lan!sQ %hich
(ight e'en inclu!e pri'ate lan!s foun! %ithin sai! areas# Sections 93a4 an! 93b4 'iolate the rights of pri'ate lan!o%ners.
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+n a!!ition# petitioners 7uestion the pro'isions of the +PR- !efining the po%ers an! 8uris!iction of the NC+P an! (a.ing custo(ar$
la% applicable to the settle(ent of !isputes in'ol'ing ancestral !o(ains an! ancestral lan!s on the groun! that these pro'isions 'iolate
the !ue process clause of the Constitution.
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hese pro'isions are)
P314 sections 51 to 59 an! 59 %hich !etail the process of !elineation an! recognition of ancestral !o(ains an! %hich 'est on
the NC+P the sole authorit$ to !elineate ancestral !o(ains an! ancestral lan!s5
P324 Section 52LiM %hich pro'i!es that upon certification b$ the NC+P that a particular area is an ancestral !o(ain an! upon
notification to the follo%ing officials# na(el$# the Secretar$ of *n'iron(ent an! Natural Resources# Secretar$ of +nterior
an! <ocal Co'ern(ents# Secretar$ of &ustice an! Co((issioner of the National 0e'elop(ent Corporation# the
8uris!iction of sai! officials o'er sai! area ter(inates5
P394 Section ;9 %hich pro'i!es the custo(ar$ la%# tra!itions an! practices of in!igenous peoples shall be applie! first %ith
respect to propert$ rights# clai(s of o%nership# here!itar$ succession an! settle(ent of lan! !isputes# an! that an$
!oubt or a(biguit$ in the interpretation thereof shall be resol'e! in fa'or of the in!igenous peoples5
P3>4 Section ;5 %hich states that custo(ar$ la%s an! practices shall be use! to resol'e !isputes in'ol'ing in!igenous
peoples5 an!
P354 Section ;; %hich 'ests on the NC+P the 8uris!iction o'er all clai(s an! !isputes in'ol'ing rights of the in!igenous
peoples.Q
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:inall$# petitioners assail the 'ali!it$ of Rule E++# Part ++# Section 1 of the NC+P -!(inistrati'e ,r!er No. 1# series of 1998# %hich
pro'i!es that Pthe a!(inistrati'e relationship of the NC+P to the ,ffice of the Presi!ent is characteri1e! as a lateral but autono(ous
relationship for purposes of polic$ an! progra( coor!ination.Q he$ conten! that sai! Rule infringes upon the Presi!entNs po%er of
control o'er e6ecuti'e !epart(ents un!er Section 17# -rticle E++ of the Constitution.
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Petitioners pra$ for the follo%ing)
P314 - !eclaration that Sections 9# 5# ;# 7# 8# 52L+M# 57# 58# 59# ;9# ;5 an! ;; an! other relate! pro'isions of R.-. 8971 are
unconstitutional an! in'ali!5
P324 he issuance of a %rit of prohibition !irecting the Chairperson an! Co((issioners of the NC+P to cease an! !esist fro(
i(ple(enting the assaile! pro'isions of R.-. 8971 an! its +(ple(enting Rules5
P394 he issuance of a %rit of prohibition !irecting the Secretar$ of the 0epart(ent of *n'iron(ent an! Natural Resources to
cease an! !esist fro( i(ple(enting 0epart(ent of *n'iron(ent an! Natural Resources Circular No. 2# series of 19985
P3>4 he issuance of a %rit of prohibition !irecting the Secretar$ of "u!get an! Manage(ent to cease an! !esist fro(
!isbursing public fun!s for the i(ple(entation of the assaile! pro'isions of R.-. 89715 an!
P354 he issuance of a %rit of (an!a(us co((an!ing the Secretar$ of *n'iron(ent an! Natural Resources to co(pl$ %ith
his !ut$ of carr$ing out the StateNs constitutional (an!ate to control an! super'ise the e6ploration# !e'elop(ent#
utili1ation an! conser'ation of Philippine natural resources.Q
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-fter !ue !eliberation on the petition# the (e(bers of the Court 'ote! as follo%s)
Se'en 374 'ote! to !is(iss the petition. &ustice Gapunan file! an opinion# %hich the Chief &ustice an! &ustices "ellosillo#
Huisu(bing# an! Santiago 8oin# sustaining the 'ali!it$ of the challenge! pro'isions of R.-. 8971. &ustice Puno also file! a separate
opinion sustaining all challenge! pro'isions of the la% %ith the e6ception of Section 1# Part ++# Rule +++ of NC+P -!(inistrati'e ,r!er No.
1# series of 1998# the Rules an! Regulations +(ple(enting the +PR-# an! Section 57 of the +PR- %hich he conten!s shoul! be
interprete! as !ealing %ith the largeJscale e6ploitation of natural resources an! shoul! be rea! in con8unction %ith Section 2# -rticle K++
of the 1987 Constitution. ,n the other han!# &ustice Men!o1a 'ote! to !is(iss the petition solel$ on the groun! that it !oes not raise a
8usticiable contro'ers$ an! petitioners !o not ha'e stan!ing to 7uestion the constitutionalit$ of R.-. 8971.
Se'en 374 other (e(bers of the Court 'ote! to grant the petition. &ustice Panganiban file! a separate opinion e6pressing the
'ie% that Sections 9 3a43b4# 5# ;# 7 3a43b4# 8# an! relate! pro'isions of R.-. 8971 are unconstitutional. He reser'es 8u!g(ent on the
constitutionalit$ of Sections 58# 59# ;5# an! ;; of the la%# %hich he belie'es (ust a%ait the filing of specific cases b$ those %hose rights
(a$ ha'e been 'iolate! b$ the +PR-. &ustice Eitug also file! a separate opinion e6pressing the 'ie% that Sections 93a4# 7# an! 57 of
R.-. 8971 are unconstitutional. &ustices Melo# Par!o# "uena# Con1agaJRe$es# an! 0e <eon 8oin in the separate opinions of &ustices
Panganiban an! Eitug.
-s the 'otes %ere e7uall$ !i'i!e! 37 to 74 an! the necessar$ (a8orit$ %as not obtaine!# the case %as re!eliberate!
upon. Ho%e'er# after re!eliberation# the 'oting re(aine! the sa(e. -ccor!ingl$# pursuant to Rule 5;# Section 7 of the Rules of Ci'il
Proce!ure# the petition is 0+SM+SS*0.
-ttache! hereto an! (a!e integral parts thereof are the separate opinions of &ustices Puno# Eitug# Gapunan# Men!o1a# an!
Panganiban.
SO ORDERED.
Davide% ,r.% C.,.% Bellosillo% *elo% -uisumbing% Pardo% Buena% .on!aga)Reyes% /nares)Santiago% an! De 0eon% ,r.% ,,.% concur.
Puno% 1itug% 2apunan% *endo!a an! Panganiban ,,.% see separate opinion
H*+RS ,: M-R+, M-<-"-N-N# C.R. No. 179987
Petitioner#

Present)

PBN,# C.,.%
HB+SBM"+NC#
FN-R*SJS-N+-C,#
C-RP+,#
J 'ersus J -BSR+-JM-R+N*I#
C,R,N-#
C-RP+, M,R-<*S#
+NC-#
CH+C,JN-I-R+,#
E*<-SC,# &R.#
N-CHBR-#
<*,N-R0, 0* C-SR,#
"R+,N#
R*PB"<+C ,: H* PH+<+PP+N*S# P*R-<-# an!
Respon!ent. "*RS-M+N# ,,.

Pro(ulgate!)

-pril 29# 2AA9

6JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ 6


D E C I S I O N

+NC-# ,.)

,ne (ain reason %h$ the infor(al sector has not beco(e for(al is that fro( +n!onesia to "ra1il# 9A
percent of the infor(al lan!s are not title! an! registere!. his is a generali1e! pheno(enon in the soJcalle! hir!
?orl!. -n! it has (an$ conse7uences.


666

he 7uestion is) Ho% is it that so (an$ go'ern(ents# fro( Suharto=s in +n!onesia to :u8i(ori=s in Peru# ha'e
%ante! to title these people an! ha'e not been able to !o so effecti'el$R ,ne reason is that none of the state s$ste(s
in -sia or <atin -(erica can gather proof of infor(al titles. +n Peru# the infor(als ha'e (eans of pro'ing propert$
o%nership to each other %hich are not the sa(e (eans !e'elope! b$ the Spanish legal s$ste(. he infor(als ha'e
their o%n papers# their o%n for(s of agree(ents# an! their o%n s$ste(s of registration# all of %hich are 'er$ clearl$
state! in the (aps %hich the$ use for their o%n infor(al business transactions.
+f $ou ta.e a %al. through the countr$si!e# fro( +n!onesia to Peru# an! $ou %al. b$ fiel! after fiel!JJin each
fiel! a !ifferent !og is going to bar. at $ou. *'en !ogs .no% %hat pri'ate propert$ is all about. he onl$ one %ho !oes
not .no% it is the go'ern(ent. he issue is that there e6ists a /co((on la%/ an! an /infor(al la%/ %hich the <atin
-(erican for(al legal s$ste( !oes not .no% ho% to recogni1e.
J Hernan!o 0e Soto
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his !ecision ine'itabl$ affects all untitle! lan!s currentl$ in possession of persons an! entities other than the Philippine
go'ern(ent. he petition# %hile unre(ar.able as to the facts# %as accepte! b$ the Court en banc in or!er to pro'i!e !efiniti'e clarit$ to
the applicabilit$ an! scope of original registration procee!ings un!er Sections 1>314 an! 1>324 of the Propert$ Registration 0ecree. +n
!oing so# the Court confronts not onl$ the rele'ant pro'isions of the Public <an! -ct an! the Ci'il Co!e# but also the realit$ on the
groun!. he countr$%i!e pheno(enon of untitle! lan!s# as %ell as the proble( of infor(al settle(ent it has spa%ne!# has unfortunatel$
been treate! %ith benign neglect. Fet our current la%s are he((e! in b$ their o%n circu(scriptions in a!!ressing the pheno(enon.
Still# the !ut$ on our part is pri(aril$ to !eci!e cases before us in accor! %ith the Constitution an! the legal principles that ha'e
!e'elope! our public lan! la%# though our social obligations !issua!e us fro( casting a blin! e$e on the en!e(ic proble(s.

3.

,n 2A :ebruar$ 1998# Mario Malabanan file! an application for lan! registration co'ering a parcel of lan! i!entifie! as <ot 98;>J
-# Ca!J>52J0# Silang Ca!astre#
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situate! in "aranga$ ibig# Silang Ca'ite# an! consisting of 71#92> s7uare (eters. Malabanan
clai(e! that he ha! purchase! the propert$ fro( *!uar!o Eela1co#
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an! that he an! his pre!ecessorsJinJinterest ha! been in open#
notorious# an! continuous a!'erse an! peaceful possession of the lan! for (ore than thirt$ 39A4 $ears.

he application %as raffle! to the Regional rial Court of 3RC4 Ca'iteJaga$ta$ Cit$# "ranch 18. he ,ffice of the Solicitor
Ceneral 3,SC4 !ul$ !esignate! the -ssistant Pro'incial Prosecutor of Ca'ite# &ose Eela1co# &r.# to appear on behalf of the State.
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-part fro( presenting !ocu(entar$ e'i!ence# Malabanan hi(self an! his %itness# -riste!es Eela1co# testifie! at the hearing. Eela1co
testifie! that the propert$ %as originall$ belonge! to a t%ent$Jt%o hectare propert$ o%ne! b$ his greatJgran!father# <ino Eela1co. <ino
ha! four sonsO "ene!icto# Cregorio# *!uar!o an! *stebanOthe fourth being -riste!esNs gran!father. Bpon <inoNs !eath# his four sons
inherite! the propert$ an! !i'i!e! it a(ong the(sel'es. "ut b$ 19;;# *stebanNs %ife# Mag!alena# ha! beco(e the a!(inistrator of all
the properties inherite! b$ the Eela1co sons fro( their father# <ino. -fter the !eath of *steban an! Mag!alena# their son Eirgilio
succee!e! the( in a!(inistering the properties# inclu!ing <ot 98;>J-# %hich originall$ belonge! to his uncle# *!uar!o Eela1co. +t %as
this propert$ that %as sol! b$ *!uar!o Eela1co to Malabanan.
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-ssistant Pro'incial Prosecutor &ose Eela1co# &r. !i! not crossJe6a(ine -riste!es Eela1co. He further (anifeste! that he Palso
L.ne%M the propert$ an! + affir( the truth of the testi(on$ gi'en b$ Mr. Eela1co.Q
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he Republic of the Philippines li.e%ise !i! not
present an$ e'i!ence to contro'ert the application.

-(ong the e'i!ence presente! b$ Malabanan !uring trial %as a Certification !ate! 11 &une 2AA1# issue! b$ the Co((unit$
*n'iron(ent S Natural Resources ,ffice# 0epart(ent of *n'iron(ent an! Natural Resources 3C*NR,J0*NR4# %hich state! that the
sub8ect propert$ %as P'erifie! to be %ithin the -lienable or 0isposable lan! per <an! Classification Map No. 9A19 establishe! un!er
Pro8ect No. 2AJ- an! appro'e! as such un!er :-, >J1;5; +/ M72*. 19, 1488.Q
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,n 9 0ece(ber 2AA2# the RC ren!ere! 8u!g(ent in fa'or of Malabanan# the !ispositi'e portion of %hich rea!s)

?H*R*:,R*# this Court hereb$ appro'es this application for registration an! thus places un!er the
operation of -ct 1>1# -ct >9; an!2or P.0. 1529# other%ise .no%n as Propert$ Registration <a%# the lan!s !escribe! in
Plan Cs!JA>JA179129J0# <ot 98;>J- an! containing an area of Se'ent$ ,ne housan! hree Hun!re! %ent$ :our
371#92>4 S7uare Meters# as supporte! b$ its technical !escription no% for(ing part of the recor! of this case# in
a!!ition to other proofs a!!uce! in the na(e of M-R+, M-<-"-N-N# %ho is of legal age# :ilipino# %i!o%er# an! %ith
resi!ence at Munting +log# Silang# Ca'ite.

,nce this 0ecision beco(es final an! e6ecutor$# the correspon!ing !ecree of registration shall forth%ith
issue.

S, ,R0*R*0.


he Republic interpose! an appeal to the Court of -ppeals# arguing that Malabanan ha! faile! to pro'e that the propert$
belonge! to the alienable an! !isposable lan! of the public !o(ain# an! that the RC ha! erre! in fin!ing that he ha! been in
possession of the propert$ in the (anner an! for the length of ti(e re7uire! b$ la% for confir(ation of i(perfect title.

,n 29 :ebruar$ 2AA7# the Court of -ppeals ren!ere! a 0ecision
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re'ersing the RC an! !is(issing the application of
Malabanan. he appellate court hel! that un!er Section 1>314 of the Propert$ Registration 0ecree an$ perio! of possession prior to the
classification of the lots as alienable an! !isposable %as inconse7uential an! shoul! be e6clu!e! fro( the co(putation of the perio! of
possession. hus# the appellate court note! that since the C*NR,J0*NR certification ha! 'erifie! that the propert$ %as !eclare!
alienable an! !isposable onl$ on 15 March 1982# the Eela1cosN possession prior to that !ate coul! not be factore! in the
co(putation of the perio! of possession. his interpretation of the Court of -ppeals of Section 1>314 of the Propert$ Registration 0ecree
%as base! on the CourtNs ruling in Republic v. Herbieto.
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Malabanan !ie! %hile the case %as pen!ing %ith the Court of -ppeals5
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hence# it %as his heirs %ho appeale! the !ecision of
the appellate court. Petitioners# before this Court# rel$ on our ruling in Republic v. #aguit#
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%hich %as han!e! !o%n 8ust four (onths
prior to Herbieto. Petitioners suggest that the !iscussion in Herbieto cite! b$ the Court of -ppeals is actuall$ obiter dictum since the
Metropolitan rial Court therein %hich ha! !irecte! the registration of the propert$ ha! no 8uris!iction in the first place since the re7uisite
notice of hearing %as publishe! onl$ after the hearing ha! alrea!$ begun. #aguit# petitioners argue# re(ains the controlling !octrine#
especiall$ %hen the propert$ in 7uestion is agricultural lan!. herefore# %ith respect to agricultural lan!s# an$ possession prior to the
!eclaration of the alienable propert$ as !isposable (a$ be counte! in rec.oning the perio! of possession to perfect title un!er the
Public <an! -ct an! the Propert$ Registration 0ecree.



he petition %as referre! to the Court en banc#
L12M
an! on 11 No'e(ber 2AA8# the case %as hear! on oral argu(ents. he
Court for(ulate! the principal issues for the oral argu(ents# to %it)

1. +n or!er that an alienable an! !isposable lan! of the public !o(ain (a$ be registere! un!er Section
1>314 of Presi!ential 0ecree No. 1529# other%ise .no%n as the Propert$ Registration 0ecree# shoul! the lan! be
classifie! as alienable an! !isposable as of &une 12# 19>5 or is it sufficient that such classification occur at an$ ti(e
prior to the filing of the applicant for registration pro'i!e! that it is establishe! that the applicant has been in open#
continuous# e6clusi'e an! notorious possession of the lan! un!er abona fide clai( of o%nership since &une 12# 19>5
or earlierR

2. :or purposes of Section 1>324 of the Propert$ Registration 0ecree (a$ a parcel of lan! classifie! as
alienable an! !isposable be !ee(e! pri'ate lan! an! therefore susceptible to ac7uisition b$ prescription in
accor!ance %ith the Ci'il Co!eR

9. Ma$ a parcel of lan! establishe! as agricultural in character either because of its use or because its
slope is belo% that of forest lan!s be registrable un!er Section 1>324 of the Propert$ Registration 0ecree in relation to
the pro'isions of the Ci'il Co!e on ac7uisiti'e prescriptionR

>. -re petitioners entitle! to the registration of the sub8ect lan! in their na(es un!er Section 1>314 or
Section 1>324 of the Propert$ Registration 0ecree or bothR
L19M

"ase! on these issues# the parties for(ulate! their respecti'e positions.

?ith respect to Section 1>314# petitioners reiterate that the anal$sis of the Court in #aguit is the correct interpretation of the
pro'ision. he see(ingl$ contra!ictor$ pronounce(ent in Herbieto# it is sub(itte!# shoul! be consi!ere!obiter dictum# since the lan!
registration procee!ings therein %as 'oi! ab initio !ue to lac. of publication of the notice of initial hearing. Petitioners further point out
that in Republic v. Bibonia#
L1>M
pro(ulgate! in &une of 2AA7# the Court applie! #aguit an! a!opte! the sa(e obser'ation that the
preferre! interpretation b$ the ,SC of Section 1>314 %as patentl$ absur!. :or its part# the ,SC re(ains insistent that for Section 1>314
to appl$# the lan! shoul! ha'e been classifie! as alienable an! !isposable as of 12 &une 19>5. -part fro( Herbieto# the ,SC also cites
the subse7uent rulings in Buenaventura v. Republic#
L15M
4ieldman (gricultural +rading v. Republic
L1;M
an! Republic v. 3mperial Credit
Corporation#
L17M
as %ell as the earlier case of Director of 0ands v. Court of (ppeals.
L18M

?ith respect to Section 1>324# petitioners sub(it that open# continuous# e6clusi'e an! notorious possession of an alienable
lan! of the public !o(ain for (ore than 9A $ears ipso ure con'erts the lan! into pri'ate propert$# thus placing it un!er the co'erage of
Section 1>324. -ccor!ing to the(# it %oul! not (atter %hether the lan! sought to be registere! %as pre'iousl$ classifie! as agricultural
lan! of the public !o(ain so long as# at the ti(e of the application# the propert$ ha! alrea!$ been Pcon'erte!Q into pri'ate propert$
through prescription. o bolster their argu(ent# petitioners cite e6tensi'el$ fro( our 2AA8 ruling in Republic v. +.(.#. Properties.
L19M


he argu(ents sub(itte! b$ the ,SC %ith respect to Section 1>324 are (ore e6tensi'e. he ,SC notes that un!er -rticle
1119 of the Ci'il Co!e# the ac7uisiti'e prescription of properties of the State refers to Ppatri(onial propert$#Q %hile Section 1>324 spea.s
of Ppri'ate lan!s.Q +t obser'es that the Court has $et to !eci!e a case that presente! Section 1>324 as a groun! for application for
registration# an! that the 9AJ$ear possession perio! refers to the perio! of possession un!er Section >83b4 of the Public <an! -ct# an!
not the concept of prescription un!er the Ci'il Co!e. he ,SC further sub(its that# assu(ing that the 9AJ$ear prescripti'e perio! can
run against public lan!s# sai! perio! shoul! be rec.one! fro( the ti(e the public lan! %as !eclare! alienable an! !isposable.

"oth si!es li.e%ise offer special argu(ents %ith respect to the particular factual circu(stances surroun!ing the sub8ect
propert$ an! the o%nership thereof.

33.

:irst# %e !iscuss Section 1>314 of the Propert$ Registration 0ecree. :or a full un!erstan!ing of the pro'ision# reference has to be
(a!e to the Public <an! -ct.

(.

Co((on%ealth -ct No. 1>1# also .no%n as the Public <an! -ct# has# since its enact(ent# go'erne! the classification an!
!isposition of lan!s of the public !o(ain. he Presi!ent is authori1e!# fro( ti(e to ti(e# to classif$ the lan!s of the public !o(ain into
alienable an! !isposable# ti(ber# or (ineral lan!s.
L2AM
-lienable an! !isposable lan!s of the public !o(ain are further classifie!
accor!ing to their uses into 3a4 agricultural5 3b4 resi!ential# co((ercial# in!ustrial# or for si(ilar pro!ucti'e purposes5 3c4 e!ucational#
charitable# or other si(ilar purposes5 or 3!4 reser'ations for to%n sites an! for public an! 7uasiJpublic uses.
L21M

Ma$ a pri'ate person 'ali!l$ see. the registration in his2her na(e of alienable an! !isposable lan!s of the public !o(ainR
Section 11 of the Public <an! -ct ac.no%le!ges that public lan!s suitable for agricultural purposes (a$ be !ispose! of Pb$ confir(ation
of i(perfect or inco(plete titlesQ through P8u!icial legali1ation.Q
L22M
Section >83b4 of the Public <an! -ct# as a(en!e! b$ P.0. No. 1A79#
supplies the !etails an! un(ista.abl$ grants that right# sub8ect to the re7uisites state! therein)

Sec. >8. he follo%ing !escribe! citi1ens of the Philippines# occup$ing lan!s of the public !o(ain or
clai(ing to o%n an$ such lan! or an interest therein# but %hose titles ha'e not been perfecte! or co(plete!# (a$
appl$ to the Court of :irst +nstance of the pro'ince %here the lan! is locate! for confir(ation of their clai(s an! the
issuance of a certificate of title therefor# un!er the <an! Registration -ct# to %it)

666

3b4 hose %ho b$ the(sel'es or through their pre!ecessors in interest ha'e been in open# continuous#
e6clusi'e# an! notorious possession an! occupation of alienable an! !isposable lan!s of the public !o(ain# un!er a
bona fi!e clai( of ac7uisition of o%nership# since &une 12# 19>5# or earlier# i((e!iatel$ prece!ing the filing of the
application for confir(ation of title e6cept %hen pre'ente! b$ %ar or force (a8eure. hese shall be conclusi'el$
presu(e! to ha'e perfor(e! all the con!itions essential to a Co'ern(ent grant an! shall be entitle! to a certificate
of title un!er the pro'isions of this chapter.


Section >83b4 of Co(. -ct No. 1>1 recei'e! its present %or!ing in 1977 %hen the la% %as a(en!e! b$ P.0. No. 1A79. %o
significant a(en!(ents %ere intro!uce! b$ P.0. No. 1A79. 4irst# the ter( Pagricultural lan!sQ %as change! to Palienable an! !isposable
lan!s of the public !o(ain.Q he ,SC sub(its that this a(en!(ent restricte! the scope of the lan!s that (a$ be registere!.
L29M
his is
not actuall$ the case. Bn!er Section 9 of the Public <an! -ct# Pagricultural lan!sQ are a (ere subset of Plan!s of the public !o(ain
alienable or open to !isposition.Q *'i!entl$# alienable an! !isposable lan!s of the public !o(ain are a larger class than onl$ Pagricultural
lan!s.Q

Second# the length of the re7uisite possession %as change! fro( possession for Pthirt$ 39A4 $ears i((e!iatel$ prece!ing the
filing of the applicationQ to possession Psince &une 12# 19>5 or earlier.Q he Court in #aguit e6plaine!)

?hen the Public <an! -ct %as first pro(ulgate! in 199;# the perio! of possession !ee(e! necessar$ to 'est
the right to register their title to agricultural lan!s of the public !o(ain co((ence! fro( &ul$ 2;# 189>. Ho%e'er# this
perio! %as a(en!e! b$ R.-. No. 19>2# %hich pro'i!e! that the bona fide clai( of o%nership (ust ha'e been for at
least thirt$ 39A4 $ears. hen in 1977# Section >83b4 of the Public <an! -ct %as again a(en!e!# this ti(e b$ P.0. No.
1A79# %hich pegge! the rec.oning !ate at &une 12# 19>5. 666


+t bears further obser'ation that Section >83b4 of Co(. -ct No# 1>1 is 'irtuall$ the sa(e as Section 1>314 of the Propert$
Registration 0ecree. Sai! 0ecree co!ifie! the 'arious la%s relati'e to the registration of propert$# inclu!ing lan!s of the public !o(ain. +t
is Section 1>314 that operationali1es the registration of such lan!s of the public !o(ain. he pro'ision rea!s)


S*C+,N 1>. ?ho (a$ appl$.T he follo%ing persons (a$ file in the proper Court of :irst +nstance an
application for registration of title to lan!# %hether personall$ or through their !ul$ authori1e! representati'es)

314 those %ho b$ the(sel'es or through their pre!ecessorsJinJinterest ha'e been in open#
continuous# e6clusi'e an! notorious possession an! occupation of alienable an! !isposable
lan!s of the public !o(ain un!er a bona fide clai( of o%nership since &une 12# 19>5# or
earlier.


Not%ithstan!ing the passage of the Propert$ Registration 0ecree an! the inclusion of Section 1>314 therein# the Public <an!
-ct has re(aine! in effect. "oth la%s co((onl$ refer to persons or their pre!ecessorsJinJinterest %ho Pha'e been in open# continuous#
e6clusi'e an! notorious possession an! occupation of alienable an! !isposable lan!s of the public !o(ain un!er a bona fide clai( of
o%nership since &une 12# 19>5# or earlier.Q hat circu(stance (a$ ha'e le! to the i(pression that one or the other is a re!un!anc$# or
that Section >83b4 of the Public <an! -ct has so(eho% been repeale! or (oote!. hat is not the case.

he opening clauses of Section >8 of the Public <an! -ct an! Section 1> of the Propert$ Registration 0ecree %arrant
co(parison)

Sec. >8 Lof the Public <an! -ctM. he follo%ing !escribe! citi1ens of the Philippines# occup$ing lan!s of the
public !o(ain or clai(ing to o%n an$ such lan! or an interest therein# but %hose titles ha'e not been perfecte! or
co(plete!# (a$ appl$ to the Court of :irst +nstance of the pro'ince %here the lan! is locate! for confir(ation of their
clai(s an! the issuance of a certificate of title therefor# un!er the <an! Registration -ct# to %it)

666

Sec. 1> Lof the Propert$ Registration 0ecreeM. ?ho (a$ appl$.T he follo%ing persons (a$ file in the
proper Court of :irst +nstance an application for registration of title to lan!# %hether personall$ or through their !ul$
authori1e! representati'es)

666

+t is clear that Section >8 of the Public <an! -ct is (ore !escripti'e of the nature of the right en8o$e! b$ the possessor than
Section 1> of the Propert$ Registration 0ecree# %hich see(s to presu(e the preJe6istence of the right# rather than establishing the right
itself for the first ti(e. +t is proper to assert that it is the Public <an! -ct# as a(en!e! b$ P.0. No. 1A79 effecti'e 25 &anuar$ 1977# that
has pri(aril$ establishe! the right of a :ilipino citi1en %ho has been Pin open# continuous# e6clusi'e# an! notorious possession an!
occupation of alienable an! !isposable lan!s of the public !o(ain# un!er a bona fi!e clai( of ac7uisition of o%nership# since &une 12#
19>5Q to perfect or co(plete his title b$ appl$ing %ith the proper court for the confir(ation of his o%nership clai( an! the issuance of
the correspon!ing certificate of title.


Section >8 can be 'ie%e! in con8unction %ith the aforeJ7uote! Section 11 of the Public <an! -ct# %hich pro'i!es that public
lan!s suitable for agricultural purposes (a$ be !ispose! of b$ confir(ation of i(perfect or inco(plete titles# an! gi'en the notion that
both pro'isions !eclare that it is in!ee! the Public <an! -ct that pri(aril$ establishes the substanti'e o%nership of the possessor %ho
has been in possession of the propert$ since 12 &une 19>5. +n turn# Section 1>3a4 of the Propert$ Registration 0ecree recogni1es the
substanti'e right grante! un!er Section >83b4 of the Public <an! -ct# as %ell pro'i!es the correspon!ing original registration proce!ure
for the 8u!icial confir(ation of an i(perfect or inco(plete title.

here is another li(itation to the right grante! un!er Section >83b4. Section >7 of the Public <an! -ct li(its the perio! %ithin %hich
one (a$ e6ercise the right to see. registration un!er Section >8. he pro'ision has been a(en!e! se'eral ti(es# (ost recentl$ b$ Rep.
-ct No. 917; in 2AA2. +t currentl$ rea!s thus)

Section >7. he persons specifie! in the ne6t follo%ing section are hereb$ grante! ti(e# not to e6ten!
be$on! 0ece(ber 91# 2A2A %ithin %hich to a'ail of the benefits of this Chapter) Pro'i!e!# hat this perio! shall appl$
onl$ %here the area applie! for !oes not e6cee! t%el'e 3124 hectares) Pro'i!e!# further# hat the se'eral perio!s of
ti(e !esignate! b$ the Presi!ent in accor!ance %ith Section :ort$J:i'e of this -ct shall appl$ also to the lan!s
co(prise! in the pro'isions of this Chapter# but this Section shall not be construe! as prohibiting an$ sai! persons
fro( acting un!er this Chapter at an$ ti(e prior to the perio! fi6e! b$ the Presi!ent.
L2>M

-ccor!ingl$ un!er the current state of the la%# the substanti'e right grante! un!er Section >83b4 (a$ be a'aile! of onl$ until 91
0ece(ber 2A2A.

B.

0espite the clear te6t of Section >83b4 of the Public <an! -ct# as a(en!e! an! Section 1>3a4 of the Propert$ Registration
0ecree# the ,SC has a!opte! the position that for one to ac7uire the right to see. registration of an alienable an! !isposable lan! of
the public !o(ain# it is not enough that the applicant an! his2her pre!ecessorsJinJinterest be in possession un!er a bona fide clai( of
o%nership since 12 &une 19>55 the alienable an! !isposable character of the propert$ (ust ha'e been !eclare! also as of 12 &une
19>5. :ollo%ing the ,SCNs approach# all lan!s certifie! as alienable an! !isposable after 12 &une 19>5 cannot be registere! either
un!er Section 1>314 of the Propert$ Registration 0ecree or Section >83b4 of the Public <an! -ct as a(en!e!. he absur!it$ of such an
i(plication %as !iscusse! in #aguit.

Petitioner suggests an interpretation that the alienable an! !isposable character of the lan! shoul! ha'e
alrea!$ been establishe! since &une 12# 19>5 or earlier. his is not borne out b$ the plain (eaning of Section 1>314.
PSince &une 12# 19>5#Q as use! in the pro'ision# 7ualifies its antece!ent phrase Pun!er a bonafi!e clai( of o%nership.Q
Cenerall$ spea.ing# 7ualif$ing %or!s restrict or (o!if$ onl$ the %or!s or phrases to %hich the$ are i((e!iatel$
associate!# an! not those !istantl$ or re(otel$ locate!.
L25M
(d pro5imum antecedents fiat relation nisi impediatur
sentencia.

"esi!es# %e are (in!ful of the absur!it$ that %oul! result if %e a!opt petitionerNs position. -bsent a
legislati'e a(en!(ent# the rule %oul! be# a!opting the ,SCNs 'ie%# that all lan!s of the public !o(ain %hich %ere not
!eclare! alienable or !isposable before &une 12# 19>5 %oul! not be susceptible to original registration# no (atter the
length of unchallenge! possession b$ the occupant. Such interpretation ren!ers paragraph 314 of Section 1> 'irtuall$
inoperati'e an! e'en preclu!es the go'ern(ent fro( gi'ing it effect e'en as it !eci!es to reclassif$ public agricultural
lan!s as alienable an! !isposable. he unreasonableness of the situation %oul! e'en be aggra'ate! consi!ering that
before &une 12# 19>5# the Philippines %as not $et e'en consi!ere! an in!epen!ent state.

-ccor!ingl$# the Court in #aguit e6plaine!)

LMhe (ore reasonable interpretation of Section 1>314 is that it (erel$ re7uires the propert$ sought to be
registere! as alrea!$ alienable an! !isposable at the ti(e the application for registration of title is file!. +f the State# at
the ti(e the application is (a!e# has not $et !ee(e! it proper to release the propert$ for alienation or !isposition# the
presu(ption is that the go'ern(ent is still reser'ing the right to utili1e the propert$5 hence# the nee! to preser'e its
o%nership in the State irrespecti'e of the length of a!'erse possession e'en if in goo! faith. Ho%e'er# if the propert$
has alrea!$ been classifie! as alienable an! !isposable# as it is in this case# then there is alrea!$ an intention on the
part of the State to ab!icate its e6clusi'e prerogati'e o'er the propert$.


he Court !eclares that the correct interpretation of Section 1>314 is that %hich %as a!opte! in #aguit. he contrar$
pronounce(ent in Herbieto# as pointe! out in #aguit# absur!l$ li(its the application of the pro'ision to the point of 'irtual inutilit$ since it
%oul! onl$ co'er lan!s actuall$ !eclare! alienable an! !isposable prior to 12 &une 19>5# e'en if the current possessor is able to
establish open# continuous# e6clusi'e an! notorious possession un!er a bona fide clai( of o%nership long before that !ate.

Moreo'er# the #aguit interpretation allo%s (ore possessors un!er a bona fide clai( of o%nership to a'ail of 8u!icial
confir(ation of their i(perfect titles than %hat %oul! be feasible un!er Herbieto. his balancing fact is significant# especiall$ consi!ering
our forthco(ing !iscussion on the scope an! reach of Section 1>324 of the Propert$ Registration 0ecree.

Petitioners (a.e the salient obser'ation that the contra!ictor$ passages fro( Herbieto are obiter dicta since the lan!
registration procee!ings therein is 'oi! ab initio in the first place !ue to lac. of the re7uisite publication of the notice of initial hearing.
here is no nee! to e6plicitl$ o'erturn Herbieto# as it suffices that the CourtNs ac.no%le!g(ent that the particular line of argu(ent use!
therein concerning Section 1>314 is in!ee! obiter.
+t (a$ be note! that in the subse7uent case of Buenaventura#
L2;M
the Court# citing Herbieto# again state! that PLaMn$ perio! of
possession prior to the !ate %hen the LsMub8ect Lpropert$ %asM classifie! as alienable an! !isposable is inconse7uential an! shoul! be
e6clu!e! fro( the co(putation of the perio! of possessionUQ hat state(ent# in the conte6t of Section 1>314# is certainl$ erroneous.
Nonetheless# the passage as cite! in Buenaventura shoul! again be consi!ere! as obiter. he application therein %as ulti(atel$
grante!# citing Section 1>324. he e'i!ence sub(itte! b$ petitioners therein !i! not establish an$ (o!e of possession on their part prior
to 19>8# thereb$ preclu!ing the application of Section 1>314. +t is not e'en apparent fro( the !ecision %hether petitioners therein ha!
clai(e! entitle(ent to original registration follo%ing Section 1>314# their position being that the$ ha! been in e6clusi'e possession un!er
a bona fi!e clai( of o%nership for o'er fift$ 35A4 $ears# but not before 12 &une 19>5.
hus# neither Herbieto nor its principal !iscipular ruling Buenaventura has an$ prece!ental 'alue %ith respect to Section 1>314.
,n the other han!# the ratio of #aguit is e(be!!e! in Section 1>314# since it precisel$ in'ol'e! situation %herein the applicant ha! been
in e6clusi'e possession un!er a bona fide clai( of o%nership prior to 12 &une 19>5. he CourtNs interpretation of Section 1>314 therein
%as !ecisi'e to the resolution of the case. -n$ !oubt as to %hich bet%een #aguit or Herbieto pro'i!es the final %or! of the Court on
Section 1>314 is no% settle! in fa'or of #aguit.

?e note! in #aguit that it shoul! be !istinguishe! fro( Brace$ell v. Court of (ppeals
[27]
since in the latter# the application for
registration ha! been file! '$,+2$ the lan! %as !eclare! alienable or !isposable. he !issent though pronounces Brace$ell as the
better rule bet%een the t%o. Fet t%o $ears after Brace$ell# its ponente# the estee(e! &ustice Consuelo FnaresJSantiago# penne! the
ruling in Republic v. Ceni!a#
L28M
%hich in'ol'e! a clai( of possession that e6ten!e! bac. to 1927 o'er a public !o(ain lan! that %as
!eclare! alienable an! !isposable onl$ in 198A. Ceni!a cite! Brace$ell# 7uote! e6tensi'el$ fro( it# an! follo%ing the (in!set of the
!issent# the atte(pt at registration inCeni!a shoul! ha'e faile!. Not so.

o pro'e that the lan! sub8ect of an application for registration is alienable# an applicant (ust establish the
e6istence of a positi'e act of the go'ern(ent such as a presi!ential procla(ation or an e6ecuti'e or!er5 an
a!(inistrati'e action5 in'estigation reports of "ureau of <an!s in'estigators5 an! a legislati'e act or a statute.

+n this case# pri'ate respon!ents presente! a certification !ate! No'e(ber 25# 199># issue! b$ *!uar!o M.
+nting# the Co((unit$ *n'iron(ent an! Natural Resources ,fficer in the 0epart(ent of *n'iron(ent an! Natural
Resources ,ffice in Cebu Cit$# stating that the lots in'ol'e! %ere /foun! to be %ithin the alienable an! !isposable
3sic4 "loc.J+# <an! Classification Pro8ect No. 92J-# per (ap 29;2 >J+555 !ate! 0ece(ber 9# 198A./ his is sufficient
e'i!ence to sho% the real character of the lan! sub8ect of pri'ate respon!entsN application. :urther# the certification
en8o$s a presu(ption of regularit$ in the absence of contra!ictor$ e'i!ence# %hich is true in this case. ?orth noting
also %as the obser'ation of the Court of -ppeals stating that)

LnMo opposition %as file! b$ the "ureaus of <an!s an! :orestr$ to contest the application
of appellees on the groun! that the propert$ still for(s part of the public !o(ain. Nor is there an$
sho%ing that the lots in 7uestion are forestal lan!....

hus# %hile the Court of -ppeals erre! in ruling that (ere possession of public lan! for the perio! re7uire!
b$ la% %oul! entitle its occupant to a confir(ation of i(perfect title# it !i! not err in ruling in fa'or of pri'ate
respon!ents as far as the first re7uire(ent in Section >83b4 of the Public <an! -ct is concerne!# for the$ %ere able to
o'erco(e the bur!en of pro'ing the alienabilit$ of the lan! sub8ect of their application.

-s correctl$ foun! b$ the Court of -ppeals# pri'ate respon!ents %ere able to pro'e their open# continuous#
e6clusi'e an! notorious possession of the sub8ect lan! e'en before the $ear 1927. -s a rule# %e are boun! b$ the
factual fin!ings of the Court of -ppeals. -lthough there are e6ceptions# petitioner !i! not sho% that this is one of
the(.
L29M


?h$ !i! the Court in Ceni!a# through the sa(e e(inent (e(ber %ho authore! Brace$ell# sanction the registration un!er Section
>83b4 of public !o(ain lan!s !eclare! alienable or !isposable thirt$Jfi'e 3954 $ears an! 18A !a$s after 12 &une 19>5R he telling
!ifference is that in Ceni!a# the application for registration %as file! nearl$ si6 3;4 $ears 7,-$2 the lan! ha! been !eclare! alienable or
!isposable# %hile in Brace$ell# the application %as file! nine 394 $ears'$,+2$ -.$ (7/@ :70 @$*(72$@ 7()$/7'($ +2 @)0%+07'($. hat
crucial !ifference %as also stresse! in #aguit to contra!istinguish it fro( Brace$ell# a !ifference %hich the !issent see.s to belittle.

333.

?e ne6t ascertain the correct fra(e%or. of anal$sis %ith respect to Section 1>324. he pro'ision rea!s)



S*C+,N 1>. ?ho (a$ appl$. T he follo%ing persons (a$ file in the proper Court of :irst +nstance an
application for registration of title to lan!# %hether personall$ or through their !ul$ authori1e! representati'es)

666

324 hose %ho ha'e ac7uire! o%nership o'er pri'ate lan!s b$ prescription un!er the pro'isions
of e6isting la%s.


he Court in #aguit offere! the follo%ing !iscussion concerning Section 1>324# %hich %e !i! e'en then recogni1e# an! still !o#
to be an obiter dictum% but %e nonetheless refer to it as (aterial for further !iscussion# thus)

0i! the enact(ent of the Propert$ Registration 0ecree an! the a(en!ator$ P.0. No. 1A79 preclu!e the
application for registration of alienable lan!s of the public !o(ain# possession o'er %hich co((ence! onl$ after &une
12# 19>5R +t !i! not# consi!ering Section 1>324 of the Propert$ Registration 0ecree# %hich go'erns an! authori1es the
application of Pthose %ho ha'e ac7uire! o%nership of pri'ate lan!s b$ prescription un!er the pro'isions of e6isting
la%s.Q

Prescription is one of the (o!es of ac7uiring o%nership un!er the Ci'il Co!e.L
L9AM
M here is a consistent
8urispru!ential rule that properties classifie! as alienable public lan! (a$ be con'erte! into pri'ate propert$ b$ reason
of open# continuous an! e6clusi'e possession of at least thirt$ 39A4 $ears.L
L91M
M ?ith such con'ersion# such propert$
(a$ no% fall %ithin the conte(plation of Ppri'ate lan!sQ un!er Section 1>324# an! thus susceptible to registration b$
those %ho ha'e ac7uire! o%nership through prescription. hus# e'en if possession of the alienable public lan!
co((ence! on a !ate later than &une 12# 19>5# an! such possession being been open# continuous an! e6clusi'e#
then the possessor (a$ ha'e the right to register the lan! b$ 'irtue of Section 1>324 of the Propert$ Registration
0ecree.

#aguit !i! not in'ol'e the application of Section 1>324# unli.e in this case %here petitioners ha'e base! their registration bi!
pri(aril$ on that pro'ision# an! %here the e'i!ence !efiniti'el$ establishes their clai( of possession onl$ as far bac. as 19>8. +t is in
this case that %e can properl$ appreciate the nuances of the pro'ision.

(.

he obiter in Naguit cite! the Ci'il Co!e pro'isions on prescription as the possible basis for application for original registration
un!er Section 1>324. Specificall$# it is -rticle 1119 %hich pro'i!es legal foun!ation for the application. +t rea!s)

-ll things %hich are %ithin the co((erce of (en are susceptible of prescription# unless other%ise pro'i!e!.
Propert$ of the State or an$ of its sub!i'isions not patri(onial in character shall not be the ob8ect of prescription.


+t is clear un!er the Ci'il Co!e that %here lan!s of the public !o(ain are patri(onial in character# the$ are susceptible to
ac7uisiti'e prescription. ,n the other han!# a(ong the public !o(ain lan!s that are not susceptible to ac7uisiti'e prescription are ti(ber
lan!s an! (ineral lan!s. he Constitution itself proscribes pri'ate o%nership of ti(ber or (ineral lan!s.

here are in fact se'eral pro'isions in the Ci'il Co!e concerning the ac7uisition of real propert$ through prescription.
,%nership of real propert$ (a$ be ac7uire! b$ or!inar$ prescription of ten 31A4 $ears#
L92M
or through e6traor!inar$ prescription of thirt$
39A4 $ears.
L99M
,r!inar$ ac7uisiti'e prescription re7uires possession in goo! faith#
L9>M
as %ell as 8ust title.
L95M

?hen Section 1>324 of the Propert$ Registration 0ecree e6plicitl$ pro'i!es that persons P%ho ha'e ac7uire! o%nership o'er
pri'ate lan!s b$ prescription un!er the pro'isions of e6isting la%s#Q it un(ista.abl$ refers to the Ci'il Co!e as a 'ali! basis for the
registration of lan!s. he Ci'il Co!e is the onl$ e6isting la% that specificall$ allo%s the ac7uisition b$ prescription of pri'ate lan!s#
inclu!ing patri(onial propert$ belonging to the State. hus# the critical 7uestion that nee!s affir(ation is %hether Section 1>324 !oes
enco(pass original registration procee!ings o'er patri(onial propert$ of the State# %hich a pri'ate person has ac7uire! through
prescription.

he Naguit obiter ha! a!'erte! to a fre7uentl$ reiterate! 8urispru!ence hol!ing that properties classifie! as alienable public
lan! (a$ be con'erte! into pri'ate propert$ b$ reason of open# continuous an! e6clusi'e possession of at least thirt$ 39A4 $ears.
L9;M
Fet if
%e ascertain the source of the Pthirt$J$earQ perio!# a!!itional co(ple6ities relating to Section 1>324 an! to ho% e6actl$ it operates %oul!
e(erge. :or -.$2$ 72$ )/ ,7*- -:+ @)0-)/*- +2)1)/0 +, -.$ -.)2-; !36"A;$72 2&($.

he first source is Rep. -ct No. 19>2# enacte! in 1957# %hich a(en!e! Section >83b4 of the Public <an! -ct b$ granting the
right to see. original registration of alienable public lan!s through possession in the concept of an o%ner for at least thirt$ $ears.

he follo%ingJ!escribe! citi1ens of the Philippines# occup$ing lan!s of the public !o(ain or clai(ing to o%n
an$ such lan!s or an interest therein# but %hose titles ha'e not been perfecte! or co(plete!# (a$ appl$ to the Court
of :irst +nstance of the pro'ince %here the lan! is locate! for confir(ation of their clai(s an! the issuance of a
certificate of title therefor# un!er the <an! Registration -ct# to %it)

6 6 6 6 6 6 6 6 6

3b4 hose %ho b$ the(sel'es or through their pre!ecessors in interest ha'e been in open# continuous#
e6clusi'e an! notorious possession an! occupation of agricultural lan!s of the public !o(ain# un!er a bona
fi!e clai( of ac7uisition of o%nership# ,+2 7- ($70- -.)2-; ;$720 )<<$@)7-$(; %2$*$@)/1 -.$ ,)()/1 +, -.$
7%%()*7-)+/ ,+2 *+/,)2<7-)+/ +, -)-($# e6cept %hen pre'ente! b$ %ar or force (a8eure. hese shall be conclusi'el$
presu(e! to ha'e perfor(e! all the con!itions essential to a Co'ern(ent grant an! shall be entitle! to a certificate
of title un!er the pro'isions of this Chapter. 3e(phasis supplie!4
L97M


his pro'ision %as repeale! in 1977 %ith the enact(ent of P.0. 1A79# %hich (a!e the !ate 12 &une 19>5 the rec.oning point
for the first ti(e. Nonetheless# applications for registration file! prior to 1977 coul! ha'e in'o.e! the 9AJ$ear rule intro!uce! b$ Rep. -ct
No. 19>2.

he secon! source is Section 1>324 of P.0. 1529 itself# at least b$ i(plication# as it applies the rules on prescription un!er the
Ci'il Co!e# particularl$ -rticle 1119 in relation to -rticle 1197. Note that there are t%o .in!s of prescription un!er the Ci'il Co!eOor!inar$
ac7uisiti'e prescription an! e6traor!inar$ ac7uisiti'e prescription# %hich# un!er -rticle 1197# is co(plete! Pthrough uninterrupte!
a!'erse possessionU for thirt$ $ears# %ithout nee! of title or of goo! faith.Q

,b'iousl$# the first source of the thirt$ 39A4J$ear perio! rule# Rep. -ct No. 19>2# beca(e una'ailable after 1977. -t present# the
onl$ legal basis for the thirt$ 39A4J$ear perio! is the la% on prescription un!er the Ci'il Co!e# as (an!ate! un!er Section 1>324.
Ho%e'er# there is a (aterial !ifference bet%een ho% the thirt$ 39A4J$ear rule operate! un!er Rep. -ct No. 19>2 an! ho% it !i! un!er the
Ci'il Co!e.

Section >83b4 of the Public <an! -ct# as a(en!e! b$ Rep. -ct No. 19>2# !i! not refer to or call into application the Ci'il Co!e
pro'isions on prescription. +t (erel$ set forth a re7uisite thirt$J$ear possession perio! i((e!iatel$ prece!ing the application for
confir(ation of title# %ithout an$ 7ualification as to %hether the propert$ shoul! be !eclare! alienable at the beginning of# an! continue
as such# throughout the entire thirt$J39A4 $ears. here is neither statutor$ nor 8urispru!ential basis to assert Rep. -ct No. 19>2 ha!
(an!ate! such a re7uire(ent#
L98M
si(ilar to our earlier fin!ing %ith respect to the present language of Section >83b4# %hich no% sets 12
&une 19>5 as the point of reference.

hen# %ith the repeal of Rep. -ct No. 19>2# the thirt$J$ear possession perio! as basis for original registration beca(e Section
1>324 of the Propert$ Registration 0ecree# %hich entitle! those P%ho ha'e ac7uire! o%nership o'er pri'ate lan!s b$ prescription un!er
the pro'isions of e6isting la%sQ to appl$ for original registration. -gain# the thirt$J$ear perio! is !eri'e! fro( the rule on e6traor!inar$
prescription un!er -rticle 1197 of the Ci'il Co!e. -t the sa(e ti(e# Section 1>324 puts into operation the entire regi(e of prescription
un!er the Ci'il Co!e# a fact %hich !oes not hol! true %ith respect to Section 1>314.

B.

Bnli.e Section 1>314# Section 1>324 e6plicitl$ refers to the principles on prescription un!er e6isting la%s. -ccor!ingl$# %e are
i(pelle! to appl$ the ci'il la% concept of prescription# as set forth in the Ci'il Co!e# in our interpretation of Section 1>324. here is no
si(ilar !e(an! on our part in the case of Section 1>314.

he critical 7ualification un!er -rticle 1119 of the Ci'il Co!e is thus) PLpMropert$ of the State or an$ of its sub!i'isions not
patri(onial in character shall not be the ob8ect of prescription.Q he i!entification %hat consists of patri(onial propert$ is pro'i!e! b$
-rticles >2A an! >21# %hich %e 7uote in full)

-rt. >2A. he follo%ing things are propert$ of public !o(inion)

314 hose inten!e! for public use# such as roa!s# canals# ri'ers# torrents# ports an! bri!ges constructe! b$ the
State# ban.s# shores# roa!stea!s# an! others of si(ilar character5

324 hose %hich belong to the State# %ithout being for public use# an! are inten!e! for so(e public ser'ice or
for the !e'elop(ent of the national %ealth.

-rt. >21. -ll other propert$ of the State# %hich is not of the character state! in the prece!ing article# is
patri(onial propert$

+t is clear that propert$ of public !o(inion# %hich generall$ inclu!es propert$ belonging to the State# cannot be the ob8ect of
prescription or# in!ee!# be sub8ect of the co((erce of (an.
L99M
<an!s of the public !o(ain# %hether !eclare! alienable an! !isposable
or not# are propert$ of public !o(inion an! thus insusceptible to ac7uisition b$ prescription.

<et us no% e6plore the effects un!er the Ci'il Co!e of a !eclaration b$ the Presi!ent or an$ !ul$ authori1e! go'ern(ent officer of
alienabilit$ an! !isposabilit$ of lan!s of the public !o(ain. ?oul! such lan!s so !eclare! alienable an! !isposable be con'erte!# un!er
the Ci'il Co!e# fro( propert$ of the public !o(inion into patri(onial propert$R -fter all# b$ connotati'e !efinition# alienable an!
!isposable lan!s (a$ be the ob8ect of the co((erce of (an5 -rticle 1119 pro'i!es that all things %ithin the co((erce of (an are
susceptible to prescription5 an! the sa(e pro'ision further pro'i!es that patri(onial propert$ of the State (a$ be ac7uire! b$
prescription.

Nonetheless# -rticle >22 of the Ci'il Co!e states that PLpMropert$ of public !o(inion# %hen no longer inten!e! for public use or
for public ser'ice# shall for( part of the patri(onial propert$ of the State.Q +t is this pro'ision that controls ho% public !o(inion propert$
(a$ be con'erte! into patri(onial propert$ susceptible to ac7uisition b$ prescription. -fter all# -rticle >2A 324 (a.es clear that those
propert$ P%hich belong to the State# %ithout being for public use# an! are inten!e! for so(e public ser'ice or for the !e'elop(ent of the
national %ealthQ are public !o(inion propert$. :or as long as the propert$ belongs to the State# although alrea!$ classifie! as alienable
or !isposable# it re(ains propert$ of the public !o(inion if %hen it is Pinten!e! for so(e public ser'ice or for the !e'elop(ent of the
national %ealthQ.

A**+2@)/1(;, -.$2$ <&0- '$ 7/ $=%2$00 @$*(727-)+/ '; -.$ S-7-$ -.7- -.$ %&'()* @+<)/)+/ %2+%$2-; )0 /+ (+/1$2
)/-$/@$@ ,+2 %&'()* 0$2>)*$ +2 -.$ @$>$(+%<$/- +, -.$ /7-)+/7( :$7(-. +2 -.7- -.$ %2+%$2-; .70 '$$/ *+/>$2-$@ )/-+ %7-2)<+/)7(.
W)-.+&- 0&*. $=%2$00 @$*(727-)+/, -.$ %2+%$2-;, $>$/ ), *(700),)$@ 70 7()$/7'($ +2 @)0%+07'($, 2$<7)/0 %2+%$2-; +, -.$ %&'()*
@+<)/)+/, %&20&7/- -+ A2-)*($ 586!8", 7/@ -.&0 )/*7%7'($ +, 7*G&)0)-)+/ '; %2$0*2)%-)+/. I- )0 +/(; :.$/ 0&*. 7()$/7'($ 7/@
@)0%+07'($ (7/@0 72$ $=%2$00(; @$*(72$@ '; -.$ S-7-$ -+ '$ /+ (+/1$2 )/-$/@$@ ,+2 %&'()* 0$2>)*$ +2 ,+2 -.$ @$>$(+%<$/- +, -.$
/7-)+/7( :$7(-. -.7- -.$ %$2)+@ +, 7*G&)0)-)>$ %2$0*2)%-)+/ *7/ '$1)/ -+ 2&/. S&*. @$*(727-)+/ 0.7(( '$ )/ -.$ ,+2< +, 7 (7: @&(;
$/7*-$@ '; C+/12$00 +2 7 P2$0)@$/-)7( P2+*(7<7-)+/ )/ *70$0 :.$2$ -.$ P2$0)@$/- )0 @&(; 7&-.+2)?$@ '; (7:.

+t is co(prehensible %ith ease that this rea!ing of Section 1>324 of the Propert$ Registration 0ecree li(its its scope an! reach
an! thus affects the registrabilit$ e'en of lan!s alrea!$ !eclare! alienable an! !isposable to the !etri(ent of the bona fide possessors
or occupants clai(ing title to the lan!s. Fet this interpretation is in accor! %ith the Regalian !octrine an! its conco(itant assu(ption
that all lan!s o%ne! b$ the State# although !eclare! alienable or !isposable# re(ain as such an! ought to be use! onl$ b$ the
Co'ern(ent.

Recourse !oes not lie %ith this Court in the (atter. he !ut$ of the Court is to appl$ the Constitution an! the la%s in
accor!ance %ith their language an! intent. he re(e!$ is to change the la%# %hich is the pro'ince of the legislati'e branch. Congress
can 'er$ %ell be entreate! to a(en! Section 1>324 of the Propert$ Registration 0ecree an! pertinent pro'isions of the Ci'il Co!e to
liberali1e the re7uire(ents for 8u!icial confir(ation of i(perfect or inco(plete titles.

he operation of the foregoing interpretation can be illustrate! b$ an actual e6a(ple. Republic -ct No. 7227# entitle! P-n -ct
-ccelerating he Con'ersion ,f Militar$ Reser'ations +nto ,ther Pro!ucti'e Bses# etc.#Q is (ore co((onl$ .no%n as the "C0-
la%. Section 2 of the la% authori1es the sale of certain (ilitar$ reser'ations an! portions of (ilitar$ ca(ps in Metro Manila#
inclu!ing :ort "onifacio an! Eilla(or -ir "ase. :or purposes of effecting the sale of the (ilitar$ ca(ps# the la% (an!ates the Presi!ent
to transfer such (ilitar$ lan!s to the "ases Con'ersion 0e'elop(ent -uthorit$ 3"C0-4
L>AM
%hich in turn is authori1e! to o%n# hol! an!2or
a!(inister the(.
L>1M
he Presi!ent is authori1e! to sell portions of the (ilitar$ ca(ps# in %hole or in part.
L>2M
-ccor!ingl$# the "C0- la%
itself !eclares that the (ilitar$ lan!s sub8ect thereof are Palienable an! !isposable pursuant to the pro'isions of e6isting la%s an!
regulations go'erning sales of go'ern(ent properties.Q
L>9M

:ro( the (o(ent the "C0- la% %as enacte! the sub8ect (ilitar$ lan!s ha'e beco(e alienable an! !isposable. Ho%e'er# sai!
lan!s !i! not beco(e patri(onial# as the "C0- la% itself e6pressl$ (a.es the reser'ation that these lan!s are to be sol! in or!er to
raise fun!s for the con'ersion of the for(er -(erican bases at Clar. an! Subic.
L>>M
Such purpose can be tie! to either Ppublic ser'iceQ or
Pthe !e'elop(ent of national %ealthQ un!er -rticle >2A324. hus# at that ti(e# the lan!s re(aine! propert$ of the public !o(inion un!er
-rticle >2A324# not%ithstan!ing their status as alienable an! !isposable. +t is upon their sale as authori1e! un!er the "C0- la% to a
pri'ate person or entit$ that such lan!s beco(e pri'ate propert$ an! cease to be propert$ of the public !o(inion.


C.

Shoul! public !o(ain lan!s beco(e patri(onial because the$ are !eclare! as such in a !ul$ enacte! la% or !ul$ pro(ulgate!
procla(ation that the$ are no longer inten!e! for public ser'ice or for the !e'elop(ent of the national %ealth# %oul! the perio! of
possession prior to the con'ersion of such public !o(inion into patri(onial be rec.one! in counting the prescripti'e perio! in fa'or of
the possessorsR ?e rule in the negati'e.

he li(itation i(pose! b$ -rticle 1119 !issua!es us fro( ruling that the perio! of possession before the public !o(ain lan!
beco(es patri(onial (a$ be counte! for the purpose of co(pleting the prescripti'e perio!. Possession of public !o(inion propert$
before it beco(es patri(onial cannot be the ob8ect of prescription accor!ing to the Ci'il Co!e. -s the application for registration un!er
Section 1>324 falls %holl$ %ithin the fra(e%or. of prescription un!er the Ci'il Co!e# there is no %a$ that possession !uring the ti(e that
the lan! %as still classifie! as public !o(inion propert$ can be counte! to (eet the re7uisites of ac7uisiti'e prescription an! 8ustif$
registration.

-re %e being inconsistent in appl$ing !i'ergent rules for Section 1>314 an! Section 1>324R here is no inconsistenc$. S$*-)+/
15!1" <7/@7-$0 2$1)0-27-)+/ +/ -.$ '70)0 +, %+00$00)+/, :.)($ S$*-)+/ 15!8" $/-)-($0 2$1)0-27-)+/ +/ -.$ '70)0
+, %2$0*2)%-)+/ . R$1)0-27-)+/ &/@$2 S$*-)+/ 15!1" )0 $=-$/@$@ &/@$2 -.$ 7$1)0 +, -.$ P2+%$2-; R$1)0-27-)+/ D$*2$$ 7/@ -.$
P&'()* L7/@ A*- :.)($ 2$1)0-27-)+/ &/@$2 S$*-)+/ 15!8" )0 <7@$ 7>7)(7'($ '+-. '; -.$ P2+%$2-; R$1)0-27-)+/ D$*2$$ 7/@ -.$
C)>)( C+@$.

+n the sa(e (anner# %e can !istinguish bet%een the thirt$J$ear perio! un!er Section >83b4 of the Public <an! -ct# as a(en!e!
b$ Rep. -ct No. 1>72# an! the thirt$J$ear perio! a'ailable through Section 1>324 of the Propert$ Registration 0ecree in relation to -rticle
1197 of the Ci'il Co!e. T.$ %$2)+@ &/@$2 -.$ ,+2<$2 0%$7H0 +, 7 -.)2-;A;$72 %$2)+@ +, %+00$00)+/ # :.)($ -.$ %$2)+@ &/@$2 -.$
(7--$2 *+/*$2/0 7 -.)2-;A;$72 %$2)+@ +, $=-27+2@)/72; %2$0*2)%-)+/. R$1)0-27-)+/ &/@$2 S$*-)+/ 58!'" +, -.$ P&'()* L7/@ A*- 70
7<$/@$@ '; R$%. A*- N+. 1578 )0 '70$@ +/ -.)2-; ;$720 +, %+00$00)+/ 7(+/$ :)-.+&- 2$172@ -+ -.$ C)>)( C+@$, :.)($ -.$
2$1)0-27-)+/ &/@$2 S$*-)+/ 15!8" +, -.$ P2+%$2-; R$1)0-27-)+/ D$*2$$ )0 ,+&/@$@ +/ $=-27+2@)/72; %2$0*2)%-)+/ &/@$2 -.$ C)>)(
C+@$.

+t (a$ be as.e! %h$ the principles of prescription un!er the Ci'il Co!e shoul! not appl$ as %ell to Section 1>314. Not%ithstan!ing
the 'aunte! status of the Ci'il Co!e# it ulti(atel$ is 8ust one of nu(erous statutes# neither superior nor inferior to other statutes such as
the Propert$ Registration 0ecree. he legislati'e branch is not boun! to a!here to the fra(e%or. set forth b$ the Ci'il Co!e %hen it
enacts subse7uent legislation. Section 1>324 (anifests a clear intent to interrelate the registration allo%e! un!er that pro'ision %ith the
Ci'il Co!e# but no such intent e6ists %ith respect to Section 1>314.

31.

,ne of the .e$s to un!erstan!ing the fra(e%or. %e set forth to!a$ is seeing ho% our lan! registration proce!ures correlate %ith
our la% on prescription# %hich# un!er the Ci'il Co!e# is one of the (o!es for ac7uiring o%nership o'er propert$.

he Ci'il Co!e (a.es it clear that patri(onial propert$ of the State (a$ be ac7uire! b$ pri'ate persons through prescription. his
is brought about b$ -rticle 1119# %hich states that PLaMll things %hich are %ithin the co((erce of (an are susceptible to prescription#Q
an! that LpMropert$ of the State or an$ of its sub!i'isions not patri(onial in character shall not be the ob8ect of prescription.Q

here are t%o (o!es of prescription through %hich i((o'ables (a$ be ac7uire! un!er the Ci'il Co!e. he first is or!inar$
ac7uisiti'e prescription# %hich# un!er -rticle 1117# re7uires possession in goo! faith an! %ith 8ust title5 an!# un!er -rticle 119># is
co(plete! through possession of ten 31A4 $ears. here is nothing in the Ci'il Co!e that bars a person fro( ac7uiring patri(onial
propert$ of the State through or!inar$ ac7uisiti'e prescription# nor is there an$ apparent reason to i(pose such a rule. -t the sa(e
ti(e# there are in!ispensable re7uisitesOgoo! faith an! 8ust title. he ascertain(ent of goo! faith in'ol'es the application of -rticles
52;# 527# an! 528# as %ell as -rticle 1127 of the Ci'il Co!e#
L>5M
pro'isions that (ore or less spea. for the(sel'es.

,n the other han!# the concept of 8ust title re7uires so(e clarification. Bn!er -rticle 1129# there is 8ust title for the purposes of
prescription P%hen the a!'erse clai(ant ca(e into possession of the propert$ through one of the (o!es recogni1e! b$ la% for the
ac7uisition of o%nership or other real rights# but the grantor %as not the o%ner or coul! not trans(it an$ right.Q 0r. olentino e6plains)

&ust title is an act %hich has for its purpose the trans(ission of o%nership# an! %hich %oul! ha'e actuall$
transferre! o%nership if the grantor ha! been the o%ner. his 'ice or !efect is the one cure! b$ prescription.
*6a(ples) sale %ith !eli'er$# e6change# !onation# succession# an! dacion in pa$(ent.
L>;M

he ,SC sub(its that the re7uire(ent of 8ust title necessaril$ preclu!es the applicabilit$ of or!inar$ ac7uisiti'e prescription to
patri(onial propert$. he (a8or pre(ise for the argu(ent is that Pthe State# as the o%ner an! grantor# coul! not trans(it o%nership to
the possessor before the co(pletion of the re7uire! perio! of possession.Q
L>7M
+t is e'i!ent that the ,SC erre! %hen it assu(e! that the
grantor referre! to in -rticle 1129 is the State. he grantor is the one fro( %ho( the person in'o.ing or!inar$ ac7uisiti'e prescription
!eri'e! the title# %hether b$ sale# e6change# !onation# succession or an$ other (o!e of the ac7uisition of o%nership or other real rights.

*arlier# %e (a!e it clear that# %hether un!er or!inar$ prescription or e6traor!inar$ prescription# the perio! of possession
prece!ing the classification of public !o(inion lan!s as patri(onial cannot be counte! for the purpose of co(puting prescription. "ut
after the propert$ has been beco(e patri(onial# the perio! of prescription begins to run in fa'or of the possessor. ,nce the re7uisite
perio! has been co(plete!# t%o legal e'ents ensue) 314 the patri(onial propert$ is ipso ure con'erte! into pri'ate lan!5 an! 324 the
person in possession for the perio!s prescribe! un!er the Ci'il Co!e ac7uires o%nership of the propert$ b$ operation of the Ci'il Co!e.

+t is e'i!ent that once the possessor auto(aticall$ beco(es the o%ner of the con'erte! patri(onial propert$# the i!eal ne6t
step is the registration of the propert$ un!er the orrens s$ste(. +t shoul! be re(e(bere! that registration of propert$ is not a (o!e of
ac7uisition of o%nership# but (erel$ a (o!e of confir(ation of o%nership.
L>8M

<oo.ing bac. at the registration regi(e prior to the a!option of the Propert$ Registration 0ecree in 1977# it is apparent that the
registration s$ste( then !i! not full$ acco((o!ate the ac7uisition of o%nership of patri(onial propert$ un!er the Ci'il Co!e. ?hat the
s$ste( acco((o!ate! %as the confir(ation of i(perfect title brought about b$ the co(pletion of a perio! of possession or!aine!
un!er the Public <an! -ct 3either 9A $ears follo%ing Rep. -ct No. 19>2# or since 12 &une 19>5 follo%ing P.0. No. 1A794.

he <an! Registration -ct
L>9M
%as noticeabl$ silent on the re7uisites for alienable public lan!s ac7uire! through or!inar$
prescription un!er the Ci'il Co!e# though it arguabl$ !i! not preclu!e such registration.
L5AM
Still# the gap %as la(entable# consi!ering that
the Ci'il Co!e# b$ itself# establishes o%nership o'er the patri(onial propert$ of persons %ho ha'e co(plete! the prescripti'e perio!s
or!aine! therein. he gap %as finall$ close! %ith the a!option of the Propert$ Registration 0ecree in 1977# %ith Section 1>324 thereof
e6pressl$ authori1ing original registration in fa'or of persons %ho ha'e ac7uire! o%nership o'er pri'ate lan!s b$ prescription un!er the
pro'isions of e6isting la%s# that is# the Ci'il Co!e as of no%.

1.

?e s$nthesi1e the !octrines lai! !o%n in this case# as follo%s)

314 +n connection %ith Section 1>314 of the Propert$ Registration 0ecree# Section >83b4 of the Public <an! -ct recogni1es an!
confir(s that Pthose %ho b$ the(sel'es or through their pre!ecessors in interest ha'e been in open# continuous# e6clusi'e# an!
notorious possession an! occupation of alienable an! !isposable lan!s of the public !o(ain# un!er a bona fi!e clai( of ac7uisition of
o%nership# since &une 12# 19>5Q ha'e ac7uire! o%nership of# an! registrable title to# such lan!s base! on the length an! 7ualit$ of
their possession.

3a4 Since Section >83b4 (erel$ re7uires possession since 12 &une 19>5 an! !oes not re7uire that the lan!s shoul!
ha'e been alienable an! !isposable !uring the entire perio! of possession# the possessor is entitle! to secure 8u!icial
confir(ation of his title thereto as soon as it is !eclare! alienable an! !isposable# sub8ect to the ti(efra(e i(pose! b$ Section
>7 of the Public <an! -ct.
L51M

3b4 he right to register grante! un!er Section >83b4 of the Public <an! -ct is further confir(e! b$ Section 1>314 of
the Propert$ Registration 0ecree.

324 +n co(pl$ing %ith Section 1>324 of the Propert$ Registration 0ecree# consi!er that un!er the Ci'il Co!e# prescription is
recogni1e! as a (o!e of ac7uiring o%nership of patri(onial propert$. Ho%e'er# public !o(ain lan!s beco(e onl$ patri(onial propert$
not onl$ %ith a !eclaration that these are alienable or !isposable. here (ust also be an e6press go'ern(ent (anifestation that the
propert$ is alrea!$ patri(onial or no longer retaine! for public ser'ice or the !e'elop(ent of national %ealth# un!er -rticle >22 of the
Ci'il Co!e. -n! onl$ %hen the propert$ has beco(e patri(onial can the prescripti'e perio! for the ac7uisition of propert$ of the public
!o(inion begin to run.

3a4 Patri(onial propert$ is pri'ate propert$ of the go'ern(ent. he person ac7uires o%nership of patri(onial
propert$ b$ prescription un!er the Ci'il Co!e is entitle! to secure registration thereof un!er Section 1>324 of the Propert$
Registration 0ecree.

3b4 here are t%o .in!s of prescription b$ %hich patri(onial propert$ (a$ be ac7uire!# one or!inar$ an! other
e6traor!inar$. Bn!er or!inar$ ac7uisiti'e prescription# a person ac7uires o%nership of a patri(onial propert$ through
possession for at least ten 31A4 $ears# in goo! faith an! %ith 8ust title. Bn!er e6traor!inar$ ac7uisiti'e prescription# a personNs
uninterrupte! a!'erse possession of patri(onial propert$ for at least thirt$ 39A4 $ears# regar!less of goo! faith or 8ust title#
ripens into o%nership.

B.

?e no% appl$ the abo'eJstate! !octrines to the case at bar.

+t is clear that the e'i!ence of petitioners is insufficient to establish that Malabanan has ac7uire! o%nership o'er the sub8ect
propert$ un!er Section >83b4 of the Public <an! -ct. here is no substanti'e e'i!ence to establish that Malabanan or petitioners as his
pre!ecessorsJinJinterest ha'e been in possession of the propert$ since 12 &une 19>5 or earlier. he earliest that petitioners can !ate
bac. their possession# accor!ing to their o%n e'i!enceTthe a6 0eclarations the$ presente! in particularTis to the $ear 19>8. hus#
the$ cannot a'ail the(sel'es of registration un!er Section 1>314 of the Propert$ Registration 0ecree.


Neither can petitioners properl$ in'o.e Section 1>324 as basis for registration. ?hile the sub8ect propert$ %as !eclare! as
alienable or !isposable in 1982# there is no co(petent e'i!ence that is no longer inten!e! for public use ser'ice or for the !e'elop(ent
of the national e'i!ence# confor(abl$ %ith -rticle >22 of the Ci'il Co!e. he classification of the sub8ect propert$ as alienable an!
!isposable lan! of the public !o(ain !oes not change its status as propert$ of the public !o(inion un!er -rticle >2A324 of the Ci'il
Co!e. hus# it is insusceptible to ac7uisition b$ prescription.

13.

- final %or!. he Court is co(fortable %ith the correctness of the legal !octrines establishe! in this !ecision. Nonetheless#
!isco(fiture o'er the i(plications of to!a$Ns ruling cannot be !iscounte!. :or# e'er$ untitle! propert$ that is occupie! in the countr$ %ill
be affecte! b$ this ruling. he social i(plications cannot be !is(isse! lightl$# an! the Court %oul! be ab!icating its social responsibilit$
to the :ilipino people if %e si(pl$ le'ie! the la% %ithout co((ent.

he infor(al settle(ent of public lan!s# %hether !eclare! alienable or not# is a pheno(enon tie! to longJstan!ing habit an!
cultural ac7uiescence# an! is co((on a(ong the soJcalle! Phir! ?orl!Q countries. his para!ig( po%erfull$ e'o.es the !isconnect
bet%een a legal s$ste( an! the realit$ on the groun!. he la% so far has been unable to bri!ge that gap. -lternati'e (eans of
ac7uisition of these public !o(ain lan!s# such as through ho(estea! or free patent# ha'e

pro'en unattracti'e !ue to li(itations i(pose! on the grantee in the encu(brance or alienation of sai! properties.
L52M
&u!icial
confir(ation of i(perfect title has e(erge! as the (ost 'iable# if not the (ost attracti'e (eans to regulari1e the infor(al settle(ent of
alienable or !isposable lan!s of the public !o(ain# $et e'en that s$ste(# as re'eale! in this !ecision# has consi!erable li(its.

here are (illions upon (illions of :ilipinos %ho ha'e in!i'i!uall$ or e6clusi'el$ hel! resi!ential lan!s on %hich the$ ha'e li'e!
an! raise! their fa(ilies. Man$ (ore ha'e tille! an! (a!e pro!ucti'e i!le lan!s of the State %ith their han!s. he$ ha'e been regar!e!
for generation b$ their fa(ilies an! their co((unities as co((on la% o%ners. here is (uch to be sai! about the 'irtues of accor!ing
the( legiti(ate states. Fet such 'irtues are not for the Court to translate into positi'e la%# as the la% itself consi!ere! such lan!s as
propert$ of the public !o(inion. +t coul! onl$ be up to Congress to set forth a ne% phase of lan! refor( to sensibl$ regulari1e an!
for(ali1e the settle(ent of such lan!s %hich in legal theor$ are lan!s of the public !o(ain before the proble( beco(es insoluble. his
coul! be acco(plishe!# to cite t%o e6a(ples# b$ liberali1ing the stan!ar!s for 8u!icial confir(ation of i(perfect title# or a(en!ing the
Ci'il Co!e itself to ease the re7uisites for the con'ersion of public !o(inion propert$ into patri(onial.

,neNs sense of securit$ o'er lan! rights infuses into e'er$ aspect of %ellJbeing not onl$ of that in!i'i!ual# but also to the
personNs fa(il$. ,nce that sense of securit$ is !epri'e!# life an! li'elihoo! are put on stasis. +t is for the political branches to bring
%elco(e closure to the long pestering proble(.

WHEREFORE, the Petition is DENIED. he 0ecision of the Court of -ppeals !ate! 29 :ebruar$ 2AA7 an! Resolution !ate! 2
,ctober 2AA7 are AFFIRMED. No pronounce(ent as to costs.

SO ORDERED.



REPUBLIC OF THEPHILIPPINES#
Petitioner#




J 'ersus J




CHERL B. BIBONIA 7/@ JOSELITO
G. MANAHAN#
Respon!ents.

G.R. N+. 197533


Present)

PBN,# C.,.% Chairperson%
S-N0,E-<JCB+*RR*I#
C,R,N-#
-ICBN-# an!
C-RC+-# ,,.


Pro(ulgate!)


&une 21# 2AA7

6 JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ6

0 * C + S + , N

S-N0,E-<JCB+*RR*I# ,.)


:or our resolution is the instant Petition for Re'ie% on Certiorari
L1M
see.ing to re'erse the 0ecision
L2M
of the Court of -ppeals !ate!
:ebruar$ 28# 2AA9 in C-JC.R. CE No. 5>87> affir(ing in toto the 0ecision of the Regional rial Court 3RC4# "ranch 99# 0aet#
Ca(arines Norte !ate! Septe(ber 17# 199; in <an! Registration Case No. NJ775 3<R- Recor! No. NJ;17;24.


he facts are)

,n Septe(ber 1# 199># Cher$l ". "ibonia# respon!ent# an! Ricar!o <. :ernan!e1# substitute! b$ &oselito C. Manahan# also a
respon!ent# file! %ith the RC# "ranch 99# 0aet# Ca(arines Norte# an application for registration of t%o parcels of lan!# !oc.ete! as
<R- Recor! No. NJ;17;2.

Respon!ent "iboniaNs application co'ers <ot 1# %hile that of respon!ent Manahan co'ers <ot 2. "oth lots# inclu!e! in Plan PsuJ
A5JAA;A12# are locate! in Ein1ons# Ca(arines Norte.

Respon!ent "ibonia allege! in her application that she bought <ot 1 fro( Marita Ging as sho%n b$ a 0ee! of -bsolute Sale
!ate! Septe(ber 29# 1992. Marita# in turn# recei'e! the propert$ fro( her father# Mariano Morales# b$ 'irtue of a 0ee! of
0onation 3nter 1ivos !ate! No'e(ber 29# 1987. Morales# on the other han!# purchase! the sa(e lot fro( Sisenan!o "arco %ho# in
turn# bought it fro( Restituto Paraon on Septe(ber 1A# 1955.

:or his part# Ricar!o <. :ernan!e1# substitute! b$ respon!ent Manahan# allege! in the sa(e application that he bought <ot 2
on Septe(ber 29# 1992 fro( Re(e!ios Cribe. +t %as !onate! to the latter b$ her father# Mariano Morales# on 0ece(ber 18# 1987#
%ho purchase! the sa(e lot fro( "asilia "arco an! the heirs of <iberato Salo(e on &ul$ 91# 19;8.

+n the course of the procee!ings# or on -ugust 9# 1995# the trial court or!ere! the substitution of :ernan!e1 b$ respon!ent
Manahan# the for(er ha'ing transferre! his rights an! interest o'er <ot 2 in fa'or of the latter b$ 'irtue of a 0ee! of -ssign(ent
!ate! Ma$ 25# 1995.

+n its 0ecision#
L9M
!ate! Septe(ber 17# 199;# the trial court grante! respon!entsN application for registration# thus)

?H*R*:,R*# fin!ing the applicants# Cher$l ". "ibonia# of legal age# single# :ilipino LCMiti1en# %ith a!!ress at 8>
*steban -ba!a cor. Con1ales Street# <o$ola Heights# Hue1on Cit$# an! &oselito C. Manahan# of legal age# single# :ilipino
citi1en %ith a!!ress at25A1 CM Ro6as St.# Sta. -na# Manila to ha'e registrable titles o'er <ot 1 an! <ot 2# respecti'el$# of Plan
PSBJA5JAA;A12 %ith their correspon!ing technical !escriptions# 8u!g(ent is hereb$ ren!ere! confir(ing their respecti'e titles
thereto an! or!ering the registration thereof in their respecti'e na(es.

S, ,R0*R*0.


,n appeal b$ the Republic of the Philippines# herein petitioner# the Court of -ppeals# in a 0ecision
L>M
!ate! :ebruar$ 28# 2AA9#
affir(e! in toto the trial courtNs 8u!g(ent.

Hence# the present petition.

Petitioner Republic conten!s# a(ong others# that the Court of -ppeals erre! %hen it !eparte! fro( settle! 8urispru!ence b$
ruling that respon!ents ha'e occupie! the lots for thirt$ 39A4 $ears5 an! that the$ coul! not ha'e (aintaine! a bona fide clai( of
o%nership because at the ti(e of the filing of their application on Septe(ber 1# 199># the lots ha! been alienable for onl$ eight 384
$ears# per Certification fro( the Co((unit$ an! *n'iron(ent Natural Resources ,ffice 3C*NR,4 of the 0epart(ent of *n'iron(ent
an! Natural Resources 30*NR4.

:or their part# respon!ents (aintain that the petition shoul! be !enie! for lac. of (erit.

+n su(# the issues presente! before us are) 3a4 %hether respon!ents %ere able to pro'e that the lots sub8ect of their
application %ere then !isposable an! alienable lan! of the public !o(ain5 an! 3b4 %hether the$ %ere able to sho% that the$ ha'e been
in open# e6clusi'e# continuous an! notorious possession of the lots in the concept of o%ners.

Section 1> of Presi!ential 0ecree 3P.0.4 No. 1529# other%ise .no%n as the Propert$ Registration 0ecree# pro'i!es)

S*C. 1>. ?ho (a$ appl$. O he follo%ing persons (a$ file in the proper Court of :irst +nstance an
application for registration of title to lan!# %hether personall$ or through their !ul$ authori1e! representati'es)
hose %ho b$ the(sel'es or through their pre!ecessorsJinJinterest ha'e been in open# continuous#
e6clusi'e an! notorious possession an! occupation of alienable an! !isposable lan!s of the public !o(ain un!er a
bona fi!e clai( of o%nership since J&/$ 18, 1459 +2 $72()$2.


-ccor!ingl$# applicants for registration of lan! (ust pro'e) 3a4 that it for(s part of the alienable lan!s of the public !o(ain5 an!
3b4 that the$ ha'e been in open# e6clusi'e# continuous an! notorious possession an! occupation of the sa(e un!er a bona fide clai( of
o%nership either since ti(e i((e(orial or since &une 12# 19>5.
L5M

Relati'e to the first re7uisite# it is un!ispute! that the sub8ect lots ha'e been !eclare! as alienable an! !isposable b$ a
positi'e go'ern(ent act. he e'i!ence on recor! sho%s that a Certification
L;M
%as issue! b$ the C*NR,# 0*NR to the effect that the
lots are P$ithin Camarines #orte Proect #o. 6)"% alienable and disposable area% certified as such on ,anuary 78% 79:;.Q

Petitioner Republic argues# ho%e'er# that since the lots %ere !eclare! alienable onl$ on &anuar$ 17# 198;# respon!ents coul!
not ha'e occupie! an! possesse! the sa(e in the concept of o%ners since &une 12# 19>5.

?e !isagree.

-!opting petitionerNs 'ie% %oul! lea! to an absur! situation %herein all lan!s of the public !o(ain %hich %ere not !eclare!
alienable or !isposable before &une 12# 19>5 %oul! not be susceptible to original registration# not%ithstan!ing the occupantNs length of
unchallenge! possession. his coul! not ha'e been the intent of the la% since it is anathe(a to the StateNs polic$ of encouraging an!
pro(oting the !istribution of alienable public lan!s to spur econo(ic gro%th.

+n Republic v. Court of (ppeals%
[7]
a case %ith si(ilar factual antece!ents# %e hel!)

+nstea!# the (ore reasonable interpretation of Section 1>314 is that it (erel$ re7uires the propert$ sought to
be registere! as alrea!$ alienable an! !isposable 7- -.$ -)<$ -.$ 7%%()*7-)+/ ,+2 2$1)0-27-)+/ +, -)-($ )0 ,)($@. +f the
State# at the ti(e the application is (a!e# has not $et !ee(e! it proper to release the propert$ for alienation or
!isposition# the presu(ption is that the go'ern(ent is still reser'ing the right to utili1e the propert$5 hence# the nee!
to preser'e its o%nership in the State irrespecti'e of the length of a!'erse possession e'en if in goo! faith. H+:$>$2,
), -.$ %2+%$2-; .70 7(2$7@; '$$/ *(700),)$@ 70 7()$/7'($ 7/@ @)0%+07'($, 70 )- )0 )/ -.)0 *70$, -.$/ -.$2$ )0
7(2$7@; 7/ )/-$/-)+/ +/ -.$ %72- +, -.$ S-7-$ -+ 7'@)*7-$ )-0 $=*(&0)>$ %2$2+17-)>$ +>$2 -.$ %2+%$2-;. 3*(phasis
ours4


Here# %hen respon!ents file! their application in 199># the lots %ere alrea!$ !eclare! alienable an! !isposable b$ the 0*NR
>9 $ears ago# or in 19>5.

-s to the secon! re7uisite# both the trial court an! the Court of -ppeals foun! that respon!ents %ere able to pro'e# through
testi(onial an! !ocu(entar$ e'i!ence# that the$ an! their pre!ecessorsJinJinterest ha'e been in open# e6clusi'e# continuous an!
notorious possession of the lots for the perio! re7uire! b$ la%. he basis of such conclusion is pri(aril$ factual. +t is basic that
(atters of proof an! e'i!ence are be$on! the po%er of this Court to re'ie% e6cept in so(e (eritorious circu(stances. ?e fin! one
such circu(stance in this case.

+n granting respon!entsN application for registration# the trial court conclu!e!)

he foregoing facts contain all the essential re7uire(ents for the ac7uisition an! confir(ation of an
i(perfect title to an agricultural lan! in fa'or of the applicants %hose possession an! that of their pre!ecessorsJinJ
interest is <+2$ -.7/ -.)2-; !36" ;$720# hence sufficient to confer a registrable title to the applicants.


Ho%e'er# the trial court o'erloo.e! the fact that the re7uire! thirt$J$ear perio! of occupation b$ an applicant for registration
has alrea!$ been a(en!e! b$ P.0. No. 1A79#
L8M
that too. effect on &anuar$ 25# 1977. hus# instea! of the thirt$J$ear re7uire(ent#
applicants# b$ the(sel'es or through their pre!ecessorsJinJinterest# (ust pro'e that the$ ha'e been in open# e6clusi'e# continuous an!
notorious possession an! occupation of alienable an! !isposable lan!s of the public !o(ain# un!er a bona fide clai( of ac7uisition or
o%nership# 0)/*$ J&/$ 18, 1459, +2 $72()$2.

Bnfortunatel$# e'i!ence on recor! sho%s that their pre!ecessorsJinJinterest ha'e been in open# e6clusi'e an! continuous
possession of the
!ispute! propert$ onl$ since 1955. ,n this point# the Court of -ppeals hel!)

+n the present case# applicantsJappelleesN pre!ecessorsJinJinterest ha'e been in open# continuous# e6clusi'e
possession of the !ispute! lan! 70 $72(; 70 1499 3Co((issionerNs Report# p. 25 Recor!# p. 1294# thus# the$ onl$
steppe! into the shoes of their pre!ecessorsJinJinterest an! b$ 'irtue thereof# ac7uire! all the legal rights necessar$
to confir( %hat %oul! other%ise be !ee(e! as an i(perfect title.
L9M


-lthough respon!entsN possession an! that of their pre!ecessorsJinJinterest %as (ore than 99 $ears %hen the$ file! their
application for registration in 199># that perio! of possession %ill not suffice for purposes of registration of title. ?hat is re7uire! is
open# e6clusi'e# continuous an! notorious possession b$ respon!ents an! their pre!ecessorsJinJinterest# un!er a bona fide clai( of
o%nership# 0)/*$ J&/$ 18, 1459 or earlier.
L1AM
Much as %e %ant to confor( to the StateNs polic$ of encouraging an! pro(oting the
!istribution of alienable public lan!s to spur econo(ic gro%th an! re(ain true to the i!eal of social 8ustice# our han!s are tie! b$ the
la%Ns stringent safeguar!s against registering i(perfect titles.
L11M

WHEREFORE, %e GRANT the petition. he 0ecision of the Court of -ppeals !ate! :ebruar$ 28# 2AA9 in C-JC.R. CE No.
5>87> affir(ing in toto the 0ecision !ate! Septe(ber 17# 199; of the RC# "ranch 99# 0aet# Ca(arines Norte in <an! Registration
Case No. NJ775 3<R- Recor! No. NJ;17;24 is REVERSED. Respon!entsN application for registration of title is DENIED.

SO ORDERED.

LA BUGALABFLAAN TRIBAL ASSOCIATION, INC., 2$%2$0$/-$@ '; )-0 C.7)2<7/ FFLONG MIGUEL M. LUMAONG, WIGBERTO E.
TAIADA, PONCIANO BENNAGEN, JAIME TADEO, RENATO R. CONSTANTINO, JR., FFLONG AGUSTIN M. DABIE,
ROBERTO P. AMLO, RABIM L. DABIE, SIMEON H. DOLOJO, IMELDA M. GANDON, LEN B. GUSANAN, MARCELO L.
GUSANAN, BUINTOL A. LABUAAN, LOMINGGES D. LAWA, BENITA P. TACUAAN, <)/+20 JOL L. BUGO,
2$%2$0$/-$@ '; .)0 ,7-.$2 UNDERO D. BUGO, ROGER M. DADING, 2$%2$0$/-$@ '; .)0 ,7-.$2 ANTONIO L. DADING,
ROM M. LAGARO, 2$%2$0$/-$@ '; .)0 ,7-.$2 TOTING A. LAGARO, MIEEN JONG B. LUMAONG, 2$%2$0$/-$@ '; .)0
,7-.$2 MIGUEL M. LUMAONG, RENE T. MIGUEL, 2$%2$0$/-$@ '; .)0 <+-.$2 EDITHA T. MIGUEL, ALDEMAR L. SAL,
2$%2$0$/-$@ '; .)0 ,7-.$2 DANN M. SAL, DAIS RECARSE, 2$%2$0$/-$@ '; .$2 <+-.$2 LDIA S. SANTOS, EDWARD
M. EMU, ALAN P. MAMPARAIR, MARIO L. MANGCAL, ALDEN S. TUSAN, AMPARO S. AP, VIRGILIO CULAR, MARVIC
M.V.F. LEONEN, JULIA REGINA CULAR, GIAN CARLO CULAR, VIRGILIO CULAR, JR., 2$%2$0$/-$@ '; -.$)2 ,7-.$2
VIRGILIO CULAR, PAUL ANTONIO P. VILLAMOR, 2$%2$0$/-$@ '; .)0 %72$/-0 JOSE VILLAMOR 7/@ ELIZABETH PUAA
VILLAMOR, ANA GININA R. TALJA, 2$%2$0$/-$@ '; .$2 ,7-.$2 MARIO JOSE B. TALJA, SHARMAINE R. CUNANAN,
2$%2$0$/-$@ '; .$2 ,7-.$2 ALFREDO M. CUNANAN, ANTONIO JOSE A. VITUG III, 2$%2$0$/-$@ '; .)0 <+-.$2
ANNALIZA A. VITUG, LEAN D. NARVADEZ, 2$%2$0$/-$@ '; .)0 ,7-.$2 MANUEL E. NARVADEZ, JR., ROSERIO
MARALAG LINGATING, 2$%2$0$/-$@ '; .$2 ,7-.$2 RIO OLIMPIO A. LINGATING, MARIO JOSE B. TALJA, DAVID E. DE
VERA, MARIA MILAGROS L. SAN JOSE, SR., SUSAN O. BOLANIO, OND, LOLITA G. DEMONTEVERDE, BENJIE L.
NEBUINTO,
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ROSE LILIA S. ROMANO, ROBERTO S. VERZOLA, EDUARDO AURELIO C. REES, LEAN LOUEL A.
PERIA, 2$%2$0$/-$@ '; .)0 ,7-.$2 ELPIDIO V. PERIA,
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GREEN FORUM PHILIPPINES, GREEN FORUM WESTERN
VISAAS, !GFAWV", ENVIRONMETAL LEGAL ASSISTANCE CENTER !ELAC", PHILIPPINE EAISAHAN TUNGO SA
EAUNLARAN NG EANAUNAN AT REPORMANG PANSAEAHAN !EAISAHAN",
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EAISAHAN TUNGO SA EAUNLARAN
NG EANAUNAN AT REPORMANG PANSAEAHAN !EAISAHAN", PARTNERSHIP FOR AGRARIAN REFORM 7/@
RURAL DEVELOPMENT SERVICES, INC. !PARRDS", PHILIPPINE PARTJNERSHIP FOR THE DEVELOPMENT OF
HUMAN RESOURCES IN THE RURAL AREAS, INC. !PHILDHRRA", WOMENFS LEGAL BUREAU !WLB", CENTER FOR
ALTERNATIVE DEVELOPMENT INITIATIVES, INC. !CADI", UPLAND DEVELOPMENT INSTITUTE !UDI", EINAIAHAN
FOUNDATION, INC., SENTRO NG ALTERNATIBONG LINGAP PANLIGAL !SALIGAN", LEGAL RIGHTS AND NATURAL
RESOURCES CENTER, INC. !LRC", petitioners, vs. VICTOR O. RAMOS, SECRETAR, DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES !DENR", HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCES
BUREAU !MGBADENR", RUBEN TORRES, E#ECUTIVE SECRETAR, 7/@ WMC !PHILIPPINES", INC.
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respondents.
D E C I S I O N
CARPIOAMORALES, J.:
he present petition for (an!a(us an! prohibition assails the constitutionalit$ of Republic -ct No. 79>2#
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other%ise .no%n as the
PH+<+PP+N* M+N+NC -C ,: 1995# along %ith the +(ple(enting Rules an! Regulations issue! pursuant thereto# 0epart(ent of
*n'iron(ent an! Natural Resources 30*NR4 -!(inistrati'e ,r!er 9;J>A# an! of the :inancial an! echnical -ssistance -gree(ent
3:--4 entere! into on March 9A# 1995 b$ the Republic of the Philippines an! ?MC 3Philippines4# +nc. 3?MCP4# a corporation
organi1e! un!er Philippine la%s.
,n &ul$ 25# 1987# then Presi!ent Cora1on C. -7uino issue! *6ecuti'e ,r!er 3*.,.4 No. 279
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authori1ing the 0*NR Secretar$ to
accept# consi!er an! e'aluate proposals fro( foreignJo%ne! corporations or foreign in'estors for contracts or agree(ents in'ol'ing
either technical or financial assistance for largeJscale e6ploration# !e'elop(ent# an! utili1ation of (inerals# %hich# upon appropriate
reco((en!ation of the Secretar$# the Presi!ent (a$ e6ecute %ith the foreign proponent. +n entering into such proposals# the Presi!ent
shall consi!er the real contributions to the econo(ic gro%th an! general %elfare of the countr$ that %ill be reali1e!# as %ell as the
!e'elop(ent an! use of local scientific an! technical resources that %ill be pro(ote! b$ the propose! contract or agree(ent. Bntil
Congress shall !eter(ine other%ise# largeJscale (ining# for purpose of this Section# shall (ean those proposals for contracts or
agree(ents for (ineral resources e6ploration# !e'elop(ent# an! utili1ation in'ol'ing a co((itte! capital in'est(ent in a single (ining
unit pro8ect of at least :ift$ Million 0ollars in Bnite! States Currenc$ 3BS V5A#AAA#AAA.AA4.
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,n March 9# 1995# then Presi!ent :i!el E. Ra(os appro'e! R.-. No. 79>2 to Pgo'ern the e6ploration# !e'elop(ent# utili1ation
an! processing of all (ineral resources.Q
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R.-. No. 79>2 !efines the (o!es of (ineral agree(ents for (ining operations#
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outlines the
proce!ure for their filing an! appro'al#
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assign(ent2transfer
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an! %ith!ra%al#
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an! fi6es their ter(s.
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Si(ilar pro'isions go'ern
financial or technical assistance agree(ents.
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he la% prescribes the 7ualifications of contractors
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an! grants the( certain rights# inclu!ing ti(ber#
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%ater
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an!
ease(ent
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rights# an! the right to possess e6plosi'es.
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Surface o%ners# occupants# or concessionaires are forbi!!en fro(
pre'enting hol!ers of (ining rights fro( entering pri'ate lan!s an! concession areas.
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- proce!ure for the settle(ent of conflicts is
li.e%ise pro'i!e! for.
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he -ct restricts the con!itions for e6ploration#
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7uarr$
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an! other
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per(its. +t regulates the transport# sale an! processing of
(inerals#
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an! pro(otes the !e'elop(ent of (ining co((unities# science an! (ining technolog$#
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an! safet$ an! en'iron(ental
protection.
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he go'ern(entNs share in the agree(ents is spelle! out an! allocate!#
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ta6es an! fees are i(pose!#
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incenti'es grante!.
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-si!e fro( penali1ing certain acts#
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the la% li.e%ise specifies groun!s for the cancellation# re'ocation an! ter(ination of
agree(ents an! per(its.
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,n -pril 9# 1995# 9A !a$s follo%ing its publication on March 1A# 1995 in *alaya an! *anila +imes# t%o ne%spapers of general
circulation# R.-. No. 79>2 too. effect.
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Shortl$ '$,+2$ -.$ $,,$*-)>)-; +, R.A. N+. 7458# ho%e'er# or on March 9A# 1995# the Presi!ent entere! into an :-- %ith ?MCP
co'ering 99#987 hectares of lan! in South Cotabato# Sultan Gu!arat# 0a'ao !el Sur an! North Cotabato.
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,n -ugust 15# 1995# then 0*NR Secretar$ Eictor ,. Ra(os issue! 0*NR -!(inistrati'e ,r!er 30-,4 No. 95J29# s. 1995#
other%ise .no%n as the +(ple(enting Rules an! Regulations of R.-. No. 79>2. his %as later repeale! b$ 0-, No. 9;J>A# s. 199;
%hich %as a!opte! on 0ece(ber 2A# 199;.
,n &anuar$ 1A# 1997# counsels for petitioners sent a letter to the 0*NR Secretar$ !e(an!ing that the 0*NR stop the
i(ple(entation of R.-. No. 79>2 an! 0-, No. 9;J>A#
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gi'ing the 0*NR fifteen !a$s fro( receipt
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to act thereon. he 0*NR#
ho%e'er# has $et to respon! or act on petitionersN letter.
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Petitioners thus file! the present petition for prohibition an! (an!a(us# %ith a pra$er for a te(porar$ restraining or!er. he$
allege that at the ti(e of the filing of the petition# 1AA :-- applications ha! alrea!$ been file!# co'ering an area of 8.> (illion hectares#
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;> of %hich applications are b$ full$ foreignJo%ne! corporations co'ering a total of 5.8 (illion hectares# an! at least one b$ a full$
foreignJo%ne! (ining co(pan$ o'er offshore areas.
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Petitioners clai( that the 0*NR Secretar$ acte! %ithout or in e6cess of 8uris!iction)
I
6 6 6 in signing an! pro(ulgating 0*NR -!(inistrati'e ,r!er No. 9;J>A i(ple(enting Republic -ct No. 79>2# the latter being
unconstitutional in that it allo%s full$ foreign o%ne! corporations to e6plore# !e'elop# utili1e an! e6ploit (ineral resources in a (anner
contrar$ to Section 2# paragraph ># -rticle K++ of the Constitution5
II
6 6 6 in signing an! pro(ulgating 0*NR -!(inistrati'e ,r!er No. 9;J>A i(ple(enting Republic -ct No. 79>2# the latter being
unconstitutional in that it allo%s the ta.ing of pri'ate propert$ %ithout the !eter(ination of public use an! for 8ust co(pensation5
III
6 6 6 in signing an! pro(ulgating 0*NR -!(inistrati'e ,r!er No. 9;J>A i(ple(enting Republic -ct No. 79>2# the latter being
unconstitutional in that it 'iolates Sec. 1# -rt. +++ of the Constitution5
IV
6 6 6 in signing an! pro(ulgating 0*NR -!(inistrati'e ,r!er No. 9;J>A i(ple(enting Republic -ct No. 79>2# the latter being
unconstitutional in that it allo%s en8o$(ent b$ foreign citi1ens as %ell as full$ foreign o%ne! corporations of the nationNs (arine %ealth
contrar$ to Section 2# paragraph 2 of -rticle K++ of the Constitution5
V
6 6 6 in signing an! pro(ulgating 0*NR -!(inistrati'e ,r!er No. 9;J>A i(ple(enting Republic -ct No. 79>2# the latter being
unconstitutional in that it allo%s priorit$ to foreign an! full$ foreign o%ne! corporations in the e6ploration# !e'elop(ent an! utili1ation of
(ineral resources contrar$ to -rticle K++ of the Constitution5
VI
6 6 6 in signing an! pro(ulgating 0*NR -!(inistrati'e ,r!er No. 9;J>A i(ple(enting Republic -ct No. 79>2# the latter being
unconstitutional in that it allo%s the ine7uitable sharing of %ealth contrar$ to Sections LsicM 1# paragraph 1# an! Section 2# paragraph >L#M
L-rticle K++M of the Constitution5
VII
6 6 6 in reco((en!ing appro'al of an! i(ple(enting the :inancial an! echnical -ssistance -gree(ent bet%een the Presi!ent of the
Republic of the Philippines an! ?estern Mining Corporation Philippines +nc. because the sa(e is illegal an! unconstitutional.
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he$ pra$ that the Court issue an or!er)
3a4 Per(anentl$ en8oining respon!ents fro( acting on an$ application for :inancial or echnical -ssistance -gree(ents5
3b4 0eclaring the Philippine Mining -ct of 1995 or Republic -ct No. 79>2 as unconstitutional an! null an! 'oi!5
3c4 0eclaring the +(ple(enting Rules an! Regulations of the Philippine Mining -ct containe! in 0*NR -!(inistrati'e ,r!er No. 9;J
>A an! all other si(ilar a!(inistrati'e issuances as unconstitutional an! null an! 'oi!5 an!
3!4 Cancelling the :inancial an! echnical -ssistance -gree(ent issue! to ?estern Mining Philippines# +nc. as unconstitutional#
illegal an! null an! 'oi!.
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+(plea!e! as public respon!ents are Ruben orres# the then *6ecuti'e Secretar$# Eictor ,. Ra(os# the then 0*NR Secretar$#
an! Horacio Ra(os# 0irector of the Mines an! Ceosciences "ureau of the 0*NR. -lso i(plea!e! is pri'ate respon!ent ?MCP# %hich
entere! into the assaile! :-- %ith the Philippine Co'ern(ent. ?MCP is o%ne! b$ ?MC Resources +nternational Pt$.# <t!. 3?MC4# Pa
%holl$ o%ne! subsi!iar$ of ?estern Mining Corporation Hol!ings <i(ite!# a publicl$ liste! (a8or A&0-27()7/ <)/)/1 7/@ $=%(+27-)+/
*+<%7/;.Q
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"$ ?MCPNs infor(ation# Pit is a 1AAD o%ne! subsi!iar$ of ?MC <+M+*0.Q
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Respon!ents# asi!e fro( (eeting petitionersN contentions# argue that the re7uisites for 8u!icial in7uir$ ha'e not been (et an! that
the petition !oes not co(pl$ %ith the criteria for prohibition an! (an!a(us. -!!itionall$# respon!ent ?MCP argues that there has
been a 'iolation of the rule on hierarch$ of courts.
-fter petitioners file! their repl$# this Court grante! !ue course to the petition. he parties ha'e since file! their respecti'e
(e(oran!a.
?MCP subse7uentl$ file! a Manifestation !ate! Septe(ber 25# 2AA2 alleging that on &anuar$ 29# 2AA1# ?MC sol! all its shares
in ?MCP to Sagittarius Mines# +nc. 3Sagittarius4# a corporation organi1e! un!er Philippine la%s.
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?MCP %as subse7uentl$ rena(e!
Pa(pa.an Mineral Resources Corporation.Q
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?MCP clai(s that at least ;AD of the e7uit$ of Sagittarius is o%ne! b$ :ilipinos an!2or
:ilipinoJo%ne! corporations %hile about >AD is o%ne! b$ +n!ophil Resources N<# an -ustralian co(pan$.
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+t further clai(s that b$
such sale an! transfer of shares# P?MCP has cease! to be connecte! in an$ %a$ %ith ?MC.Q
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"$ 'irtue of such sale an! transfer# the 0*NR Secretar$# b$ ,r!er of 0ece(ber 18# 2AA1#
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appro'e! the transfer an! registration
of the sub8ect :-- fro( ?MCP to Sagittarius. Sai! ,r!er# ho%e'er# %as appeale! b$ <epanto Consoli!ate! Mining Co. 3<epanto4 to
the ,ffice of the Presi!ent %hich uphel! it b$ 0ecision of &ul$ 29# 2AA2.
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+ts (otion for reconsi!eration ha'ing been !enie! b$ the
,ffice of the Presi!ent b$ Resolution of No'e(ber 12# 2AA2#
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<epanto file! a petition for re'ie%
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before the Court of
-ppeals. +nci!entall$# t%o other petitions for re'ie% relate! to the appro'al of the transfer an! registration of the :-- to Sagittarius
%ere recentl$ resol'e! b$ this Court.
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+t bears stressing that this case has not been ren!ere! (oot either b$ the transfer an! registration of the :-- to a :ilipinoJo%ne!
corporation or b$ the nonJissuance of a te(porar$ restraining or!er or a preli(inar$ in8unction to sta$ the abo'eJsai! &ul$ 29# 2AA2
!ecision of the ,ffice of the Presi!ent.
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he 'ali!it$ of the transfer re(ains in !ispute an! a%aits final 8u!icial !eter(ination. his
assu(es# of course# that such transfer cures the :--Ns allege! unconstitutionalit$# on %hich 7uestion 8u!g(ent is reser'e!.
?MCP also points out that the original clai(o%ners of the (a8or (inerali1e! areas inclu!e! in the ?MCP :--# na(el$#
Sagittarius# a(pa.an Mining Corporation# an! Southcot Mining Corporation# are all :ilipinoJo%ne! corporations#
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each of %hich %as
a hol!er of an appro'e! Mineral Pro!uction Sharing -gree(ent a%ar!e! in 199># albeit their respecti'e (ineral clai(s %ere subsu(e!
in the ?MCP :--5
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an! that these three co(panies are the sa(e co(panies that consoli!ate! their interests in Sagittarius to %ho(
?MC sol! its 1AAD e7uit$ in ?MCP.
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?MCP conclu!es that in the e'ent that the :-- is in'ali!ate!# the MPS-s of the three
corporations %oul! be re'i'e! an! the (ineral clai(s %oul! re'ert to their original clai(ants.
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hese circu(stances# %hile infor(ati'e# are har!l$ significant in the resolution of this case# it in'ol'ing the 'ali!it$ of the :--# not
the possible conse7uences of its in'ali!ation.
,f the abo'eJenu(erate! se'en groun!s cite! b$ petitioners# as %ill be sho%n later# onl$ the first an! the last nee! be !el'e! into5
in the latter# the !iscussion shall !%ell onl$ insofar as it 7uestions the effecti'it$ of *. ,. No. 279 b$ 'irtue of %hich or!er the 7uestione!
:-- %as forge!.
I
"efore going into the substanti'e issues# the proce!ural 7uestions pose! b$ respon!ents shall first be tac.le!.
REBUISITES FOR JUDICIAL REVIEW
?hen an issue of constitutionalit$ is raise!# this Court can e6ercise its po%er of 8u!icial re'ie% onl$ if the follo%ing re7uisites are
present)
314 he e6istence of an actual an! appropriate case5
324 - personal an! substantial interest of the part$ raising the constitutional 7uestion5
394 he e6ercise of 8u!icial re'ie% is plea!e! at the earliest opportunit$5 an!
3>4 he constitutional 7uestion is the lis mota of the case.
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Respon!ents clai( that the first three re7uisites are not present.
Section 1# -rticle E+++ of the Constitution states that P384u!icial po%er inclu!es the !ut$ of the courts of 8ustice to settle actual
contro'ersies in'ol'ing rights %hich are legall$ !e(an!able an! enforceable.Q he po%er of 8u!icial re'ie%# therefore# is li(ite! to the
!eter(ination of actual cases an! contro'ersies.
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-n actual case or contro'ers$ (eans an e6isting case or contro'ers$ that is appropriate or ripe for !eter(ination# not con8ectural
or anticipator$#
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lest the !ecision of the court %oul! a(ount to an a!'isor$ opinion.
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he po%er !oes not e6ten! to h$pothetical
7uestions
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since an$ atte(pt at abstraction coul! onl$ lea! to !ialectics an! barren legal 7uestions an! to sterile conclusions
unrelate! to actualities.
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P<egal stan!ingQ or locus standi has been !efine! as a personal an! substantial interest in the case such that the part$ has
sustaine! or %ill sustain !irect in8ur$ as a result of the go'ern(ental act that is being challenge!#
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alleging (ore than a generali1e!
grie'ance.
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he gist of the 7uestion of stan!ing is %hether a part$ alleges Psuch personal sta.e in the outco(e of the contro'ers$ as
to assure that concrete a!'erseness %hich sharpens the presentation of issues upon %hich the court !epen!s for illu(ination of !ifficult
constitutional 7uestions.Q
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Bnless a person is in8uriousl$ affecte! in an$ of his constitutional rights b$ the operation of statute or
or!inance# he has no stan!ing.
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Petitioners tra'erse a %i!e range of sectors. -(ong the( are <a "ugal "Nlaan ribal -ssociation# +nc.# a far(ers an! in!igenous
peopleNs cooperati'e organi1e! un!er Philippine la%s representing a co((unit$ actuall$ affecte! b$ the (ining acti'ities of ?MCP#
(e(bers of sai! cooperati'e#
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as %ell as other resi!ents of areas also affecte! b$ the (ining acti'ities of ?MCP.
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hese petitioners
ha'e stan!ing to raise the constitutionalit$ of the 7uestione! :-- as the$ allege a personal an! substantial in8ur$. he$ clai( that
the$ %oul! suffer Pirre(e!iable !isplace(entQ
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as a result of the i(ple(entation of the :-- allo%ing ?MCP to con!uct (ining
acti'ities in their area of resi!ence. he$ thus (eet the appropriate case re7uire(ent as the$ assert an interest a!'erse to that of
respon!ents %ho# on the other han!# insist on the :--Ns 'ali!it$.
+n 'ie% of the allege! i(pen!ing in8ur$# petitioners also ha'e stan!ing to assail the 'ali!it$ of *.,. No. 279# b$ authorit$ of %hich
the :-- %as e6ecute!.
Public respon!ents (aintain that petitioners# being strangers to the :--# cannot sue either or both contracting parties to annul it.
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+n other %or!s# the$ conten! that petitioners are not real parties in interest in an action for the annul(ent of contract.
Public respon!entsN contention fails. he present action is not (erel$ one for annul(ent of contract but for prohibition an!
(an!a(us. Petitioners allege that public respon!ents acte! %ithout or in e6cess of 8uris!iction in i(ple(enting the :--# %hich the$
sub(it is unconstitutional. -s the case in'ol'es constitutional 7uestions# this Court is not concerne! %ith %hether petitioners are real
parties in interest# but %ith %hether the$ ha'e legal stan!ing. -s hel! in 2ilosbayan v. *orato)
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6 6 6. P+t is i(portant to note . . . that stan!ing because of its constitutional an! public polic$ un!erpinnings# is 'er$ !ifferent fro(
7uestions relating to %hether a particular plaintiff is the real part$ in interest or has capacit$ to sue. -lthough all three re7uire(ents are
!irecte! to%ar!s ensuring that onl$ certain parties can (aintain an action# stan!ing restrictions re7uire a partial consi!eration of the
(erits# as %ell as broa!er polic$ concerns relating to the proper role of the 8u!iciar$ in certain areas.LQM 3:R+*0*NH-<# G-N* -N0
M+<<*R# C+E+< PR,C*0BR* 928 L1985M4
Stan!ing is a special concern in constitutional la% because in so(e cases suits are brought not b$ parties %ho ha'e been personall$
in8ure! b$ the operation of a la% or b$ official action ta.en# but b$ concerne! citi1ens# ta6pa$ers or 'oters %ho actuall$ sue in the public
interest. Hence# the 7uestion in stan!ing is %hether such parties ha'e Pallege! such a personal sta.e in the outco(e of the contro'ers$
as to assure that concrete a!'erseness %hich sharpens the presentation of issues upon %hich the court so largel$ !epen!s for
illu(ination of !ifficult constitutional 7uestions.Q 3"a.er '. Carr# 9;9 B.S. 18;# 7 <.*!.2! ;99 L19;2M.4
-s earlier state!# petitioners (eet this re7uire(ent.
he challenge against the constitutionalit$ of R.-. No. 79>2 an! 0-, No. 9;J>A li.e%ise fulfills the re7uisites of
8usticiabilit$. -lthough these la%s %ere not in force %hen the sub8ect :-- %as entere! into# the 7uestion as to their 'ali!it$ is ripe for
a!8u!ication.
he ?MCP :-- pro'i!es)
1>.9 :uture <egislation
-n$ ter( an! con!ition (ore fa'ourable to :inancial Sechnical -ssistance -gree(ent contractors resulting fro(
repeal or a(en!(ent of an$ e6isting la% or regulation or fro( the enact(ent of a la%# regulation or a!(inistrati'e
or!er shall be consi!ere! a part of this -gree(ent.
+t is un!ispute! that R.-. No. 79>2 an! 0-, No. 9;J>A contain pro'isions that are (ore fa'orable to ?MCP# hence# these la%s# to the
e6tent that the$ are fa'orable to ?MCP# go'ern the :--.
+n a!!ition# R.-. No. 79>2 e6plicitl$ (a.es certain pro'isions appl$ to preJe6isting agree(ents.
S*C. 112. #on)impairment of "5isting *ining<-uarrying Rights. = 6 6 6 hat the pro'isions of Chapter K+E on go'ern(ent share in
(ineral pro!uctionJsharing agree(ent an! of Chapter KE+ on incenti'es of this -ct shall i((e!iatel$ go'ern an! appl$ to a (ining
lessee or contractor unless the (ining lessee or contractor in!icates his intention to the secretar$# in %riting# not to a'ail of sai!
pro'isions 6 6 6 Provided# finally# hat such leases# pro!uctionJsharing agree(ents# financial or technical assistance agree(ents shall
co(pl$ %ith the applicable pro'isions of this -ct an! its i(ple(enting rules an! regulations.
-s there is no suggestion that ?MCP has in!icate! its intention not to a'ail of the pro'isions of Chapter KE+ of R.-. No. 79>2# it can
safel$ be presu(e! that the$ appl$ to the ?MCP :--.
Misconstruing the application of the thir! re7uisite for 8u!icial re'ie% O that the e6ercise of the re'ie% is plea!e! at the earliest
opportunit$ O ?MCP points out that the petition %as file! onl$ al(ost t%o $ears after the e6ecution of the :--# hence# not raise! at
the earliest opportunit$.
he thir! re7uisite shoul! not be ta.en to (ean that the 7uestion of constitutionalit$ (ust be raise! i((e!iatel$ after the
e6ecution of the state action co(plaine! of. hat the 7uestion of constitutionalit$ has not been raise! before is not a 'ali! reason for
refusing to allo% it to be raise! later.
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- contrar$ rule %oul! (ean that a la%# other%ise unconstitutional# %oul! lapse into
constitutionalit$ b$ the (ere failure of the proper part$ to pro(ptl$ file a case to challenge the sa(e.
PROPRIET OF PROHIBITION
AND MANDAMUS
"efore the effecti'it$ in &ul$ 1997 of the Re'ise! Rules of Ci'il Proce!ure# Section 2 of Rule ;5 rea!)
S*C. 2. Petition for prohibition. O ?hen the procee!ings of an$ tribunal# corporation# boar!# or person# %hether e6ercising functions
8u!icial or (inisterial# are %ithout or in e6cess of its or his 8uris!iction# or %ith gra'e abuse of !iscretion# an! there is no appeal or an$
other plain# spee!$# an! a!e7uate re(e!$ in the or!inar$ course of la%# a person aggrie'e! thereb$ (a$ file a 'erifie! petition in the
proper court alleging the facts %ith certaint$ an! pra$ing that 8u!g(ent be ren!ere! co((an!ing the !efen!ant to !esist fro( further
procee!ing in the action or (atter specifie! therein.
Prohibition is a pre'enti'e re(e!$.
L7>M
+t see.s a 8u!g(ent or!ering the !efen!ant to !esist fro( continuing %ith the co((ission of
an act percei'e! to be illegal.
L75M
he petition for prohibition at bar is thus an appropriate re(e!$. ?hile the e6ecution of the contract itself (a$ be fait accompli# its
i(ple(entation is not. Public respon!ents# in behalf of the Co'ern(ent# ha'e obligations to fulfill un!er sai! contract. Petitioners see.
to pre'ent the( fro( fulfilling such obligations on the theor$ that the contract is unconstitutional an!# therefore# 'oi!.
he propriet$ of a petition for prohibition being uphel!# !iscussion of the propriet$ of the (an!a(us aspect of the petition is
ren!ere! unnecessar$.
HIERARCH OF COURTS
he contention that the filing of this petition 'iolate! the rule on hierarch$ of courts !oes not li.e%ise lie. he rule has been
e6plaine! thus)
"et%een t%o courts of concurrent original 8uris!iction# it is the lo%er court that shoul! initiall$ pass upon the issues of a case. hat %a$#
as a particular case goes through the hierarch$ of courts# it is shorn of all but the i(portant legal issues or those of first i(pression#
%hich are the proper sub8ect of attention of the appellate court. his is a proce!ural rule borne of e6perience an! a!opte! to i(pro'e
the a!(inistration of 8ustice.
his Court has consistentl$ en8oine! litigants to respect the hierarch$ of courts. -lthough this Court has concurrent 8uris!iction %ith the
Regional rial Courts an! the Court of -ppeals to issue %rits of certiorari# prohibition# mandamus# >uo $arranto# habeas corpus an!
in8unction# such concurrence !oes not gi'e a part$ unrestricte! free!o( of choice of court foru(. he resort to this CourtNs pri(ar$
8uris!iction to issue sai! %rits shall be allo%e! onl$ %here the re!ress !esire! cannot be obtaine! in the appropriate courts +2 :.$2$
$=*$%-)+/7( 7/@ *+<%$(()/1 *)2*&<0-7/*$0 K&0-),; 0&*. )/>+*7-)+/. ?e hel! in People v. Cuaresma that)
- beco(ing regar! for 8u!icial hierarch$ (ost certainl$ in!icates that petitions for the issuance of e6traor!inar$ %rits against first le'el
3PinferiorQ4 courts shoul! be file! %ith the Regional rial Court# an! those against the latter# %ith the Court of -ppeals. A @)2$*-
)/>+*7-)+/ +, -.$ S&%2$<$ C+&2-F0 +2)1)/7( K&2)0@)*-)+/ -+ )00&$ -.$0$ :2)-0 0.+&(@ '$ 7((+:$@ +/(; :.$2$ -.$2$ 72$ 0%$*)7(
7/@ )<%+2-7/- 2$70+/0 -.$2$,+2# clearl$ an! specificall$ set out in the petition. his is establishe! polic$. +t is a polic$ necessar$ to
pre'ent inor!inate !e(an!s upon the CourtNs ti(e an! attention %hich are better !e'ote! to those (atters %ithin its e6clusi'e
8uris!iction# an! to pre'ent further o'erJcro%!ing of the CourtNs !oc.et 6 6 6.
L7;M
L*(phasis supplie!.M
he repercussions of the issues in this case on the Philippine (ining in!ustr$# if not the national econo($# as %ell as the no'elt$
thereof# constitute e6ceptional an! co(pelling circu(stances to 8ustif$ resort to this Court in the first instance.
+n all e'ents# this Court has the !iscretion to ta.e cogni1ance of a suit %hich !oes not satisf$ the re7uire(ents of an actual case or
legal stan!ing %hen para(ount public interest is in'ol'e!.
L77M
?hen the issues raise! are of para(ount i(portance to the public# this
Court (a$ brush asi!e technicalities of proce!ure.
L78M
II
Petitioners conten! that *.,. No. 279 !i! not ta.e effect because its suppose! !ate of effecti'it$ ca(e after Presi!ent -7uino ha!
alrea!$ lost her legislati'e po%ers un!er the Pro'isional Constitution.
-n! the$ li.e%ise clai( that the ?MC :--# %hich %as entere! into pursuant to *.,. No. 279# 'iolates Section 2# -rticle K++ of the
Constitution because# a(ong other reasons)
314 +t allo%s foreignJo%ne! co(panies to e6ten! (ore than (ere financial or technical assistance to the State in the
e6ploitation# !e'elop(ent# an! utili1ation of (inerals# petroleu(# an! other (ineral oils# an! e'en per(its foreign o%ne! co(panies to
P+%$27-$ 7/@ <7/71$ (ining acti'ities.Q
324 +t allo%s foreignJo%ne! co(panies to e6ten! both technical 7/@ financial assistance# instea! of
P$)-.$2 technical +2 financial assistance.Q
o appreciate the i(port of these issues# a 'isit to the histor$ of the pertinent constitutional pro'ision# the concepts containe!
therein# an! the la%s enacte! pursuant thereto# is in or!er.
Section 2# -rticle K++ rea!s in full)
Sec. 2. -ll lan!s of the public !o(ain# %aters# (inerals# coal# petroleu(# an! other (ineral oils# all forces of potential energ$#
fisheries# forests or ti(ber# %il!life# flora an! fauna# an! other natural resources are o%ne! b$ the State. ?ith the e6ception of
agricultural lan!s# all other natural resources shall not be alienate!. he e6ploration# !e'elop(ent# an! utili1ation of natural resources
shall be un!er the full control an! super'ision of the State. he State (a$ !irectl$ un!erta.e such acti'ities or it (a$ enter into coJ
pro!uction# 8oint 'enture# or pro!uctionJsharing agree(ents %ith :ilipino citi1ens# or corporations or associations at least si6t$ per
centum of %hose capital is o%ne! b$ such citi1ens. Such agree(ents (a$ be for a perio! not e6cee!ing t%ent$Jfi'e $ears# rene%able
for not (ore than t%ent$Jfi'e $ears# an! un!er such ter(s an! con!itions as (a$ be pro'i!e! b$ la%. +n cases of %ater rights for
irrigation# %ater suppl$# fisheries# or in!ustrial uses other than the !e'elop(ent of %ater po%er# beneficial use (a$ be the (easure an!
li(it of the grant.
he State shall protect the nationNs (arine %ealth in its archipelagic %aters# territorial sea# an! e6clusi'e econo(ic 1one# an! reser'e
its use an! en8o$(ent e6clusi'el$ to :ilipino citi1ens.
he Congress (a$# b$ la%# allo% s(allJscale utili1ation of natural resources b$ :ilipino citi1ens# as %ell as cooperati'e fish far(ing# %ith
priorit$ to subsistence fisher(en an! fishJ%or.ers in ri'ers# la.es# ba$s# an! lagoons.
he Presi!ent (a$ enter into agree(ents %ith foreignJo%ne! corporations in'ol'ing either technical or financial assistance for largeJ
scale e6ploration# !e'elop(ent# an! utili1ation of (inerals# petroleu(# an! other (ineral oils accor!ing to the general ter(s an!
con!itions pro'i!e! b$ la%# base! on real contributions to the econo(ic gro%th an! general %elfare of the countr$. +n such
agree(ents# the State shall pro(ote the !e'elop(ent an! use of local scientific an! technical resources.
he Presi!ent shall notif$ the Congress of e'er$ contract entere! into in accor!ance %ith this pro'ision# %ithin thirt$ !a$s fro( its
e6ecution.
THE SPANISH REGIME
AND THE REGALIAN DOCTRINE
he first sentence of Section 2 e(bo!ies the Regalian !octrine or ura regalia. +ntro!uce! b$ Spain into these +slan!s# this feu!al
concept is base! on the StateNs po%er of dominium# %hich is the capacit$ of the State to o%n or ac7uire propert$.
L79M
+n its broa! sense# the ter( Pura regaliaQ refers to ro$al rights# or those rights %hich the Ging has b$ 'irtue of his prerogati'es. +n
Spanish la%# it refers to a right %hich the so'ereign has o'er an$thing in %hich a sub8ect has a right of propert$ or propriedad. hese
%ere rights en8o$e! !uring feu!al ti(es b$ the .ing as the so'ereign.
he theor$ of the feu!al s$ste( %as that title to all lan!s %as originall$ hel! b$ the Ging# an! %hile the use of lan!s %as grante! out to
others %ho %ere per(itte! to hol! the( un!er certain con!itions# the Ging theoreticall$ retaine! the title. "$ fiction of la%# the Ging %as
regar!e! as the original proprietor of all lan!s# an! the true an! onl$ source of title# an! fro( hi( all lan!s %ere hel!. he theor$
of ura regalia %as therefore nothing (ore than a natural fruit of con7uest.
L8AM
he Philippines ha'ing passe! to Spain b$ 'irtue of !isco'er$ an! con7uest#
L81M
earlier Spanish !ecrees !eclare! that Pall lan!s
%ere hel! fro( the Cro%n.Q
L82M
he Regalian !octrine e6ten!s not onl$ to lan! but also to Pall natural %ealth that (a$ be foun! in the bo%els of the
earth.Q
L89M
Spain# in particular# recogni1e! the uni7ue 'alue of natural resources# 'ie%ing the(# especiall$ (inerals# as an abun!ant
source of re'enue to finance its %ars against other nations.
L8>M
Mining la%s !uring the Spanish regi(e reflecte! this perspecti'e.
L85M
THE AMERICAN OCCUPATION AND
THE CONCESSION REGIME
"$ the T2$7-; +, P72)0 +, D$*$<'$2 16, 1848# Spain ce!e! Pthe archipelago .no%n as the Philippine +slan!sQ to the Bnite!
States. he Philippines %as hence go'erne! b$ (eans of organic acts that %ere in the nature of charters ser'ing as a Constitution of
the occupie! territor$ fro( 19AA to 1995.
L8;M
-(ong the principal organic acts of the Philippines %as the -ct of Congress of &ul$ 1# 19A2#
(ore co((onl$ .no%n as the P.)()%%)/$ B)(( +, 1468# through %hich the Bnite! States Congress assu(e! the a!(inistration of the
Philippine +slan!s.
L87M
Section 2A of sai! "ill reser'e! the !isposition of (ineral lan!s of the public !o(ain fro( sale. Section 21 thereof
allo%e! the free an! open e6ploration# occupation an! purchase of (ineral !eposits not onl$ to citi1ens of the Philippine +slan!s but to
those of the Bnite! States as %ell)
Sec. 21. hat all 'aluable (ineral !eposits in public lan!s in the Philippine +slan!s# both sur'e$e! an! unsur'e$e!# are hereb$
!eclare! to be free an! open to e6ploration# occupation an! purchase# an! the lan! in %hich the$ are foun!# to occupation an!
purchase# b$ citi1ens of the Bnite! States or of sai! +slan!s) Provided% hat %hen on an$ lan!s in sai! +slan!s entere! an! occupie! as
agricultural lan!s un!er the pro'isions of this -ct# but not patente!# (ineral !eposits ha'e been foun!# the %or.ing of such (ineral
!eposits is forbi!!en until the person# association# or corporation %ho or %hich has entere! an! is occup$ing such lan!s shall ha'e
pai! to the Co'ern(ent of sai! +slan!s such a!!itional su( or su(s as %ill (a.e the total a(ount pai! for the (ineral clai( or clai(s
in %hich sai! !eposits are locate! e7ual to the a(ount charge! b$ the Co'ern(ent for the sa(e as (ineral clai(s.
Bnli.e Spain# the Bnite! States consi!ere! natural resources as a source of %ealth for its nationals an! sa% fit to allo% both
:ilipino an! -(erican citi1ens to e6plore an! e6ploit (inerals in public lan!s# an! to grant patents to pri'ate (ineral lan!s.
L88M
- person
%ho ac7uire! o%nership o'er a parcel of pri'ate (ineral lan! pursuant to the la%s then pre'ailing coul! e6clu!e other persons# e'en
the State# fro( e6ploiting (inerals %ithin his propert$.
L89M
hus# earlier 8urispru!ence
L9AM
hel! that)
- 'ali! an! subsisting location of (ineral lan!# (a!e an! .ept up in accor!ance %ith the pro'isions of the statutes of the Bnite! States#
has the effect of a grant b$ the Bnite! States of the present an! e6clusi'e possession of the lan!s locate!# an! this e6clusi'e right of
possession an! en8o$(ent continues !uring the entire life of the location. 6 6 6.
6 6 6.
he !isco'er$ of (inerals in the groun! b$ one %ho has a 'ali! (ineral location perfects his clai( an! his location not onl$ against
thir! persons# but also against the .overnment. 6 6 6. L+talics in the original.M
he Regalian !octrine an! the -(erican s$ste(# therefore# !iffer in one essential respect. Bn!er the Regalian theor$# (ineral
rights are not inclu!e! in a grant of lan! b$ the state5 un!er the -(erican !octrine# (ineral rights are inclu!e! in a grant of lan! b$ the
go'ern(ent.
L91M
Section 21 also (a!e possible the concession 3fre7uentl$ st$le! Pper(itQ# licenseQ or PleaseQ4
L92M
s$ste(.
L99M
his %as the tra!itional
regi(e i(pose! b$ the colonial a!(inistrators for the e6ploitation of natural resources in the e6tracti'e sector 3petroleu(# har!
(inerals# ti(ber# etc.4.
L9>M
Bn!er the concession s$ste(# the concessionaire (a.es a !irect e7uit$ in'est(ent for the purpose of e6ploiting a particular
natural resource %ithin a gi'en area.
L95M
hus# the concession a(ounts to co(plete control b$ the concessionaire o'er the countr$Ns
natural resource# for it is gi'en e6clusi'e an! plenar$ rights to e6ploit a particular resource at the point of e6traction.
L9;M
+n consi!eration
for the right to e6ploit a natural resource# the concessionaire either pa$s rent or ro$alt$# %hich is a fi6e! percentage of the gross
procee!s.
L97M
<ater statutor$ enact(ents b$ the legislati'e bo!ies set up in the Philippines a!opte! the contractual fra(e%or. of the
concession.
L98M
:or instance# -ct No. 2992#
L99M
appro'e! on -ugust 91# 192A# %hich pro'i!e! for the e6ploration# location# an! lease of
lan!s containing petroleu( an! other (ineral oils an! gas in the Philippines# an! -ct No. 2719#
L1AAM
appro'e! on Ma$ 1># 1917# %hich
pro'i!e! for the leasing an! !e'elop(ent of coal lan!s in the Philippines# both utili1e! the concession s$ste(.
L1A1M
THE 1439 CONSTITUTION AND THE
NATIONALIZATION OF NATURAL RESOURCES
"$ the -ct of Bnite! States Congress of March 2># 199># popularl$ .no%n as the T;@)/10AM*D&,,)$ L7:# the People of the
Philippine +slan!s %ere authori1e! to a!opt a constitution.
L1A2M
,n &ul$ 9A# 199># the Constitutional Con'ention (et for the purpose of
!rafting a constitution# an! the Constitution subse7uentl$ !rafte! %as appro'e! b$ the Con'ention on :ebruar$ 8# 1995.
L1A9M
he
Constitution %as sub(itte! to the Presi!ent of the Bnite! States on March 18# 1995.
L1A>M
,n March 29# 1995# the Presi!ent of the
Bnite! States certifie! that the Constitution confor(e! substantiall$ %ith the pro'isions of the -ct of Congress appro'e! on March 2>#
199>.
L1A5M
,n Ma$ 1># 1995# the Constitution %as ratifie! b$ the :ilipino people.
L1A;M
he 1995 Constitution a!opte! the Regalian !octrine# !eclaring all natural resources of the Philippines# inclu!ing (ineral lan!s
an! (inerals# to be propert$ belonging to the State.
L1A7M
-s a!opte! in a republican s$ste(# the (e!ie'al concept of ura regalia is
strippe! of ro$al o'ertones an! o%nership of the lan! is 'este! in the State.
L1A8M
Section 1# -rticle K+++# on Conser'ation an! Btili1ation of Natural Resources# of the 1995 Constitution pro'i!e!)
S*C+,N 1. -ll agricultural# ti(ber# an! (ineral lan!s of the public !o(ain# %aters# (inerals# coal# petroleu(# an! other (ineral oils# all
forces of potential energ$# an! other natural resources of the Philippines belong to the State# an! their !isposition# e6ploitation#
!e'elop(ent# or utili1ation shall be li(ite! to citi1ens of the Philippines# or to corporations or associations at least si6t$ per centum of
the capital of %hich is o%ne! b$ such citi1ens# sub8ect to an$ e6isting right# grant# lease# or concession at the ti(e of the inauguration of
the Co'ern(ent establishe! un!er this Constitution. Natural resources# %ith the e6ception of public agricultural lan!# shall not be
alienate!# an! no license# concession# or lease for the e6ploitation# !e'elop(ent# or utili1ation of an$ of the natural resources shall be
grante! for a perio! e6cee!ing t%ent$Jfi'e $ears# e6cept as to %ater rights for irrigation# %ater suppl$# fisheries# or in!ustrial uses other
than the !e'elop(ent of %ater po%er# in %hich cases beneficial use (a$ be the (easure an! the li(it of the grant.
he nationali1ation an! conser'ation of the natural resources of the countr$ %as one of the fi6e! an! !o(inating ob8ecti'es of the
1995 Constitutional Con'ention.
L1A9M
,ne !elegate relates)
here %as an o'er%hel(ing senti(ent in the Con'ention in fa'or of the principle of state o%nership of natural resources an! the
a!option of the Regalian !octrine. State o%nership of natural resources %as seen as a necessar$ starting point to secure recognition of
the stateNs po%er to control their !isposition# e6ploitation# !e'elop(ent# or utili1ation. he !elegates of the Constitutional Con'ention
'er$ %ell .ne% that the concept of State o%nership of lan! an! natural resources %as intro!uce! b$ the Spaniar!s# ho%e'er# the$ %ere
not certain %hether it %as continue! an! applie! b$ the -(ericans. o re(o'e all !oubts# the Con'ention appro'e! the pro'ision in the
Constitution affir(ing the Regalian !octrine.
he a!option of the principle of state o%nership of the natural resources an! of the Regalian !octrine %as consi!ere! to be a
necessar$ starting point for the plan of nationali1ing an! conser'ing the natural resources of the countr$. :or %ith the establish(ent of
the principle of state o%nership of the natural resources# it %oul! not be har! to secure the recognition of the po%er of the State to
control their !isposition# e6ploitation# !e'elop(ent or utili1ation.
L11AM
he nationali1ation of the natural resources %as inten!e! 314 to insure their conser'ation for :ilipino posterit$5 324 to ser'e as an
instru(ent of national !efense# helping pre'ent the e6tension to the countr$ of foreign control through peaceful econo(ic penetration5
an! 394 to a'oi! (a.ing the Philippines a source of international conflicts %ith the conse7uent !anger to its internal securit$ an!
in!epen!ence.
L111M
he sa(e Section 1# -rticle K+++ also a!opte! the concession s$ste(# e6pressl$ per(itting the State to grant licenses#
concessions# or leases for the e6ploitation# !e'elop(ent# or utili1ation of an$ of the natural resources. Crants# ho%e'er# %ere li(ite! to
:ilipinos or entities at least ;AD of the capital of %hich is o%ne! b$ :ilipinos.
he s%ell of nationalis( that suffuse! the 1995 Constitution %as ra!icall$ !ilute! %hen on No'e(ber 19>;# the Parit$
-(en!(ent# %hich ca(e in the for( of an P,r!inance -ppen!e! to the Constitution#Q %as ratifie! in a plebiscite.
L112M
he -(en!(ent
e6ten!e!# fro( &ul$ ># 19>; to &ul$ 9# 197># the right to utili1e an! e6ploit our natural resources to citi1ens of the Bnite! States an!
business enterprises o%ne! or controlle!# !irectl$ or in!irectl$# b$ citi1ens of the Bnite! States)
L119M
Not%ithstan!ing the pro'ision of section one# -rticle hirteen# an! section eight# -rticle :ourteen# of the foregoing Constitution# !uring
the effecti'it$ of the *6ecuti'e -gree(ent entere! into b$ the Presi!ent of the Philippines %ith the Presi!ent of the Bnite! States on the
fourth of &ul$# nineteen hun!re! an! fort$Jsi6# pursuant to the pro'isions of Co((on%ealth -ct Nu(bere! Se'en hun!re! an! thirt$J
three# but in no case to e6ten! be$on! the thir! of &ul$# nineteen hun!re! an! se'ent$Jfour# the !isposition# e6ploitation# !e'elop(ent#
an! utili1ation of all agricultural# ti(ber# an! (ineral lan!s of the public !o(ain# %aters# (inerals# coals# petroleu(# an! other (ineral
oils# all forces an! sources of potential energ$# an! other natural resources of the Philippines# an! the operation of public utilities# shall#
if open to an$ person# be open to citi1ens of the Bnite! States an! to all for(s of business enterprise o%ne! or controlle!# !irectl$ or
in!irectl$# b$ citi1ens of the Bnite! States in the sa(e (anner as to# an! un!er the sa(e con!itions i(pose! upon# citi1ens of the
Philippines or corporations or associations o%ne! or controlle! b$ citi1ens of the Philippines.
he Parit$ -(en!(ent %as subse7uentl$ (o!ifie! b$ the 195> Re'ise! ra!e -gree(ent# also .no%n as the <aurelJ<angle$
-gree(ent# e(bo!ie! in Republic -ct No. 1955.
L11>M
THE PETROLEUM ACT OF 1454
AND THE CONCESSION SSTEM
+n the (eanti(e# Republic -ct No. 987#
L115M
also .no%n as the Petroleu( -ct of 19>9# %as appro'e! on &une 18# 19>9.
he Petroleu( -ct of 19>9 e(plo$e! the concession s$ste( for the e6ploitation of the nationNs petroleu( resources. -(ong the
.in!s of concessions it sanctione! %ere e6ploration an! e6ploitation concessions# %hich respecti'el$ grante! to the concessionaire the
e6clusi'e right to e6plore for
L11;M
or !e'elop
L117M
petroleu( %ithin specifie! areas.
Concessions (a$ be grante! onl$ to !ul$ 7ualifie! persons
L118M
%ho ha'e sufficient finances# organi1ation# resources# technical
co(petence# an! s.ills necessar$ to con!uct the operations to be un!erta.en.
L119M
Ne'ertheless# the Co'ern(ent reser'e! the right to un!erta.e such %or. itself.
L12AM
his procee!e! fro( the theor$ that all natural
!eposits or occurrences of petroleu( or natural gas in public an!2or pri'ate lan!s in the Philippines belong to the State.
L121M
*6ploration
an! e6ploitation concessions !i! not confer upon the concessionaire o%nership o'er the petroleu( lan!s an! petroleu( !eposits.
L122M
Ho%e'er# the$ !i! grant concessionaires the right to e6plore# !e'elop# e6ploit# an! utili1e the( for the perio! an! un!er the
con!itions !eter(ine! b$ the la%.
L129M
Concessions %ere grante! at the co(plete ris. of the concessionaire5 the Co'ern(ent !i! not guarantee the e6istence of
petroleu( or un!erta.e# in an$ case# title %arrant$.
L12>M
Concessionaires %ere re7uire! to sub(it infor(ation as (a$be re7uire! b$ the Secretar$ of -griculture an! Natural Resources#
inclu!ing reports of geological an! geoph$sical e6a(inations# as %ell as pro!uction reports.
L125M
*6ploration
L12;M
an!
e6ploitation
L127M
concessionaires %ere also re7uire! to sub(it %or. progra(s.
*6ploitation concessionaires# in particular# %ere oblige! to pa$ an annual e6ploitation ta6#
L128M
the ob8ect of %hich is to in!uce the
concessionaire to actuall$ pro!uce petroleu(# an! not si(pl$ to sit on the concession %ithout !e'eloping or e6ploiting it.
L129M
hese
concessionaires %ere also boun! to pa$ the Co'ern(ent ro$alt$# %hich %as not less than 12WD of the petroleu( pro!uce! an! sa'e!#
less that consu(e! in the operations of the concessionaire.
L19AM
Bn!er -rticle ;;# R.-. No. 987# the e6ploitation ta6 (a$ be cre!ite!
against the ro$alties so that if the concessionaire shall be actuall$ pro!ucing enough oil# it %oul! not actuall$ be pa$ing the e6ploitation
ta6.
L191M
:ailure to pa$ the annual e6ploitation ta6 for t%o consecuti'e $ears#
L192M
or the ro$alt$ !ue to the Co'ern(ent %ithin one $ear fro(
the !ate it beco(es !ue#
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constitute! groun!s for the cancellation of the concession. +n case of !ela$ in the pa$(ent of the ta6es or
ro$alt$ i(pose! b$ the la% or b$ the concession# a surcharge of 1D per (onth is e6acte! until the sa(e are pai!.
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-s a rule# title rights to all e7uip(ent an! structures that the concessionaire place! on the lan! belong to the e6ploration or
e6ploitation concessionaire.
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Bpon ter(ination of such concession# the concessionaire ha! a right to re(o'e the sa(e.
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he Secretar$ of -griculture an! Natural Resources %as tas.e! %ith carr$ing out the pro'isions of the la%# through the 0irector of
Mines# %ho acte! un!er the Secretar$Ns i((e!iate super'ision an! control.
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he -ct grante! the Secretar$ the authorit$ to inspect
an$ operation of the concessionaire an! to e6a(ine all the boo.s an! accounts pertaining to operations or con!itions relate! to
pa$(ent of ta6es an! ro$alties.
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he sa(e la% authori1e! the Secretar$ to create an -!(inistration Bnit an! a echnical "oar!.
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he -!(inistration Bnit %as
charge!# inter alia# %ith the enforce(ent of the pro'isions of the la%.
L1>AM
he echnical "oar! ha!# a(ong other functions# the !ut$ to
chec. on the perfor(ance of concessionaires an! to !eter(ine %hether the obligations i(pose! b$ the -ct an! its i(ple(enting
regulations %ere being co(plie! %ith.
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Eictorio Mario -. 0i(agiba# Chief <egal ,fficer of the "ureau of *nerg$ 0e'elop(ent# anal$1e! the benefits an! !ra%bac.s of the
concession s$ste( insofar as it applie! to the petroleu( in!ustr$)
(dvantages of Concession. ?hether it e(phasi1es inco(e ta6 or ro$alt$# the (ost positi'e aspect of the concession s$ste( is that the
StateNs financial in'ol'e(ent is 'irtuall$ ris. free an! a!(inistration is si(ple an! co(parati'el$ lo% in cost. :urther(ore# if there is a
co(petiti'e allocation of the resource lea!ing to substantial bonuses an!2or greater ro$alt$ couple! %ith a relati'el$ high le'el of
ta6ation# re'enue accruing to the State un!er the concession s$ste( (a$ co(pare fa'orabl$ %ith other financial arrange(ents.
Disadvantages of Concession. here are# ho%e'er# (a8or negati'e aspects to this s$ste(. "ecause the Co'ern(entNs role in the
tra!itional concession is passi'e# it is at a !istinct !isa!'antage in (anaging an! !e'eloping polic$ for the nationNs petroleu(
resource. his is true for se'eral reasons. :irst# e'en though (ost concession agree(ents contain co'enants re7uiring !iligence in
operations an! pro!uction# this establishes onl$ an in!irect an! passi'e control of the host countr$ in resource !e'elop(ent. Secon!#
an! (ore i(portantl$# the fact that the host countr$ !oes not !irectl$ participate in resource (anage(ent !ecisions inhibits its abilit$ to
train an! e(plo$ its nationals in petroleu( !e'elop(ent. his factor coul! !ela$ or pre'ent the countr$ fro( effecti'el$ engaging in the
!e'elop(ent of its resources. <astl$# a !irect role in (anage(ent is usuall$ necessar$ in or!er to obtain a .no%le!ge of the
international petroleu( in!ustr$ %hich is i(portant to an appreciation of the host countr$Ns resources in relation to those of other
countries.
L1>2M
,ther liabilities of the s$ste( ha'e also been note!)
6 6 6 there are functional i(plications %hich gi'e the concessionaire great econo(ic po%er arising fro( its e6clusi'e e7uit$
hol!ing. his inclu!es# first# appropriation of the returns of the un!erta.ing# sub8ect to a (o!est ro$alt$5 secon!# e6clusi'e (anage(ent
of the pro8ect5 thir!# control of pro!uction of the natural resource# such as 'olu(e of pro!uction# e6pansion# research an! !e'elop(ent5
an! fourth# e6clusi'e responsibilit$ for !o%nstrea( operations# li.e processing# (ar.eting# an! !istribution. +n short# e'en if no(inall$#
the state is the so'ereign an! o%ner of the natural resource being e6ploite!# it has been shorn of all ele(ents of control o'er such
natural resource because of the e6clusi'e nature of the contractual regi(e of the concession. he concession s$ste(# in'esting as it
!oes o%nership of natural resources# constitutes a consistent inconsistenc$ %ith the principle e(bo!ie! in our Constitution that natural
resources belong to the state an! shall not be alienate!# not to (ention the fact that the concession %as the be!roc. of the colonial
s$ste( in the e6ploitation of natural resources.
L1>9M
*'entuall$# the concession s$ste( faile! for reasons e6plaine! b$ 0i(agiba)
Not%ithstan!ing the goo! intentions of the Petroleu( -ct of 19>9# the concession s$ste( coul! not ha'e properl$ spurre! sustaine! oil
e6ploration acti'ities in the countr$# since it assu(e! that such a capitalJintensi'e# high ris. 'enture coul! be successfull$ un!erta.en
b$ a single in!i'i!ual or a s(all co(pan$. +n effect# concessionairesN fun!s %ere easil$ e6hauste!. Moreo'er# since the concession
s$ste( practicall$ close! its !oors to intereste! foreign in'estors# local capital %as stretche! to the li(its. he ol! s$ste( also faile! to
consi!er the highl$ sophisticate! technolog$ an! e6pertise re7uire!# %hich %oul! be a'ailable onl$ to (ultinational co(panies.
L1>>M
- shift to a ne% regi(e for the !e'elop(ent of natural resources thus see(e! i((inent.
PRESIDENTIAL DECREE NO. 87, THE 1473
CONSTITUTION AND THE SERVICE CONTRACT SSTEM
he pro(ulgation on 0ece(ber 91# 1972 of Presi!ential 0ecree No. 87#
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other%ise .no%n as H* ,+< *KP<,R-+,N -N0
0*E*<,PM*N -C ,: 1972 signale! such a transfor(ation. P.0. No. 87 per(itte! the go'ern(ent to e6plore for an! pro!uce
in!igenous petroleu( through P0$2>)*$ *+/-27*-0.Q
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PSer'ice contractsQ is a ter( that assu(es 'ar$ing (eanings to !ifferent people# an! it has carrie! (an$ na(es in !ifferent
countries# li.e P%or. contractsQ in +n!onesia# Pconcession agree(entsQ in -frica# Ppro!uctionJsharing agree(entsQ in the Mi!!le *ast#
an! Pparticipation agree(entsQ in <atin -(erica.
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- functional !efinition of Pser'ice contractsQ in the Philippines is pro'i!e! as follo%s)
- ser'ice contract is a contractual arrange(ent for engaging in the e6ploitation an! !e'elop(ent of petroleu(# (ineral# energ$# lan!
an! other natural resources b$ %hich a go'ern(ent or its agenc$# or a pri'ate person grante! a right or pri'ilege b$ the go'ern(ent
authori1es the other part$ 3ser'ice contractor4 to engage or participate in the e6ercise of such right or the en8o$(ent of the pri'ilege# in
that the latter pro'i!es financial or technical resources# un!erta.es the e6ploitation or pro!uction of a gi'en resource# or !irectl$
(anages the pro!ucti'e enterprise# operations of the e6ploration an! e6ploitation of the resources or the !isposition of (ar.eting or
resources.
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+n a ser'ice contract un!er P.0. No. 87# ser'ice an! technolog$ are furnishe! b$ the ser'ice contractor for %hich it shall be entitle!
to the stipulate! ser'ice fee.
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he contractor (ust be technicall$ co(petent an! financiall$ capable to un!erta.e the operations
re7uire! in the contract.
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:inancing is suppose! to be pro'i!e! b$ the Co'ern(ent to %hich all petroleu( pro!uce! belongs.
L151M
+n case the Co'ern(ent is
unable to finance petroleu( e6ploration operations# the contractor (a$ furnish ser'ices# technolog$ an! financing# an! the procee!s of
sale of the petroleu( pro!uce! un!er the contract shall be the source of fun!s for pa$(ent of the ser'ice fee an! the operating
e6penses !ue the contractor.
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he contractor shall un!erta.e# (anage an! e6ecute petroleu( operations# sub8ect to the go'ern(ent
o'erseeing the (anage(ent of the operations.
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he contractor pro'i!es all necessar$ ser'ices an! technolog$ an! the re7uisite
financing# perfor(s the e6ploration %or. obligations# an! assu(es all e6ploration ris.s such that if no petroleu( is pro!uce!# it %ill not
be entitle! to rei(burse(ent.
L15>M
,nce petroleu( in co((ercial 7uantit$ is !isco'ere!# the contractor shall operate the fiel! on behalf
of the go'ern(ent.
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P.0. No. 87 prescribe! (ini(u( ter(s an! con!itions for e'er$ ser'ice contract.
L15;M
+t also grante! the contractor certain
pri'ileges# inclu!ing e6e(ption fro( ta6es an! pa$(ent of tariff !uties#
L157M
an! per(itte! the repatriation of capital an! retention of
profits abroa!.
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,stensibl$# the ser'ice contract s$ste( ha! certain a!'antages o'er the concession regi(e.
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+t has been opine!# though# that#
in the Philippines# our concept of a ser'ice contract# at least in the petroleu( in!ustr$# %as basicall$ a concession regi(e %ith a
pro!uctionJsharing ele(ent.
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,n &anuar$ 17# 1979# then Presi!ent :er!inan! *. Marcos proclai(e! the ratification of a ne% Constitution.
L1;1M
-rticle K+E on the
National *cono($ an! Patri(on$ containe! pro'isions si(ilar to the 1995 Constitution %ith regar! to :ilipino participation in the
nationNs natural resources. Section 8# -rticle K+E thereof pro'i!es)
S*C. 8. -ll lan!s of the public !o(ain# %aters# (inerals# coal# petroleu( an! other (ineral oils# all forces of potential energ$# fisheries#
%il!life# an! other natural resources of the Philippines belong to the State. ?ith the e6ception of agricultural# in!ustrial or co((ercial#
resi!ential an! resettle(ent lan!s of the public !o(ain# natural resources shall not be alienate!# an! no license# concession# or lease
for the e6ploration# !e'elop(ent# e6ploitation# or utili1ation of an$ of the natural resources shall be grante! for a perio! e6cee!ing
t%ent$Jfi'e $ears# rene%able for not (ore than t%ent$Jfi'e $ears# e6cept as to %ater rights for irrigation# %ater suppl$# fisheries# or
in!ustrial uses other than the !e'elop(ent of %ater po%er# in %hich cases beneficial use (a$ be the (easure an! the li(it of the grant.
?hile Section 9 of the sa(e -rticle (aintaine! the :ilipinoJonl$ polic$ in the en8o$(ent of natural resources# it also allo%e!
:ilipinos# upon authorit$ of the "atasang Pa(bansa# to enter into ser'ice contracts %ith an$ person or entit$ for the e6ploration or
utili1ation of natural resources.
S*C. 9. he !isposition# e6ploration# !e'elop(ent# e6ploitation# or utili1ation of an$ of the natural resources of the Philippines shall be
li(ite! to citi1ens# or to corporations or associations at least si6t$ per centu( of %hich is o%ne! b$ such citi1ens. T.$ B7-707/1
P7<'7/07, )/ -.$ /7-)+/7( )/-$2$0-, <7; 7((+: 0&*. *)-)?$/0, *+2%+27-)+/0 +2 700+*)7-)+/0 -+ $/-$2 )/-+ 0$2>)*$ *+/-27*-0 ,+2
,)/7/*)7(, -$*./)*7(, <7/71$<$/-, +2 +-.$2 ,+2<0 +, 700)0-7/*$ :)-. 7/; %$20+/ +2 $/-)-; ,+2 -.$ $=%(+27-)+/, +2 &-)()?7-)+/ +,
7/; +, -.$ /7-&27( 2$0+&2*$0. *6isting 'ali! an! bin!ing ser'ice contracts for financial# technical# (anage(ent# or other for(s of
assistance are hereb$ recogni1e! as such. L*(phasis supplie!.M
he concept of ser'ice contracts# accor!ing to one !elegate# %as borro%e! fro( the (etho!s follo%e! b$ +n!ia# Pa.istan an!
especiall$ +n!onesia in the e6ploration of petroleu( an! (ineral oils.
L1;2M
he pro'ision allo%ing such contracts# accor!ing to another#
%as inten!e! to Penhance the proper !e'elop(ent of our natural resources since :ilipino citi1ens lac. the nee!e! capital an! technical
.no%Jho% %hich are essential in the proper e6ploration# !e'elop(ent an! e6ploitation of the natural resources of the countr$.Q
L1;9M
he original i!ea %as to authori1e the go'ern(ent# not pri'ate entities# to enter into ser'ice contracts %ith foreign entities.
L1;>M
-s
finall$ appro'e!# ho%e'er# a citi1en or pri'ate entit$ coul! be allo%e! b$ the National -sse(bl$ to enter into such ser'ice contract.
L1;5M
he prior appro'al of the National -sse(bl$ %as !ee(e! sufficient to protect the national interest.
L1;;M
Notabl$# none of the la%s
allo%ing ser'ice contracts %ere passe! b$ the "atasang Pa(bansa. +n!ee!# all of the( %ere enacte! b$ presi!ential !ecree.
,n March 19# 1979# shortl$ after the ratification of the ne% Constitution# the Presi!ent pro(ulgate! Presi!ential 0ecree No. 151.
L1;7M
he la% allo%e! :ilipino citi1ens or entities %hich ha'e ac7uire! lan!s of the public !o(ain or %hich o%n# hol! or control such
lan!s to enter into ser'ice contracts for financial# technical# (anage(ent or other for(s of assistance %ith an$ foreign persons or entit$
for the e6ploration# !e'elop(ent# e6ploitation or utili1ation of sai! lan!s.
L1;8M
Presi!ential 0ecree No. >;9#
L1;9M
also .no%n as H* M+N*R-< R*S,BRC*S 0*E*<,PM*N 0*CR** ,: 197># %as enacte!
on Ma$ 17# 197>. Section >> of the !ecree# as a(en!e!# pro'i!e! that a lessee of a (ining clai( (a$ enter into a ser'ice contract
%ith a 7ualifie! !o(estic or foreign contractor for the e6ploration# !e'elop(ent an! e6ploitation of his clai(s an! the processing an!
(ar.eting of the pro!uct thereof.
Presi!ential 0ecree No. 7A>
L17AM
3H* :+SH*R+*S 0*CR** ,: 19754# appro'e! on Ma$ 1;# 1975# allo%e! :ilipinos engage! in
co((ercial fishing to enter into contracts for financial# technical or other for(s of assistance %ith an$ foreign person# corporation or
entit$ for the pro!uction# storage# (ar.eting an! processing of fish an! fisher$2a7uatic pro!ucts.
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Presi!ential 0ecree No. 7A5
L172M
3H* R*E+S*0 :,R*SRF C,0* ,: H* PH+<+PP+N*S4# appro'e! on Ma$ 19# 1975# allo%e!
Pforest pro!ucts licensees# lessees# or per(itees to enter into ser'ice contracts for financial# technical# (anage(ent# or other for(s of
assistance . . . %ith an$ foreign person or entit$ for the e6ploration# !e'elop(ent# e6ploitation or utili1ation of the forest resources.Q
L179M
Fet another la% allo%ing ser'ice contracts# this ti(e for geother(al resources# %as Presi!ential 0ecree No. 1>>2#
L17>M
%hich %as
signe! into la% on &une 11# 1978. Section 1 thereof authori1e! the Co'ern(ent to enter into ser'ice contracts for the e6ploration#
e6ploitation an! !e'elop(ent of geother(al resources %ith a foreign contractor %ho (ust be technicall$ an! financiall$ capable of
un!erta.ing the operations re7uire! in the ser'ice contract.
hus# 'irtuall$ the entire range of the countr$Ns natural resources Ofro( petroleu( an! (inerals to geother(al energ$# fro( public
lan!s an! forest resources to fisher$ pro!ucts O %as %ell co'ere! b$ apparent legal authorit$ to engage in the !irect participation or
in'ol'e(ent of foreign persons or corporations 3other%ise !is7ualifie!4 in the e6ploration an! utili1ation of natural resources through
ser'ice contracts.
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THE 1487 CONSTITUTION AND TECHNICAL
OR FINANCIAL ASSISTANCE AGREEMENTS
-fter the :ebruar$ 198; *!sa Re'olution# Cora1on C. -7uino too. the reins of po%er un!er a re'olutionar$ go'ern(ent. ,n
March 25# 198;# Presi!ent -7uino issue! Procla(ation No. 9#
L17;M
pro(ulgating the Pro'isional Constitution# (ore popularl$ referre! to
as the :ree!o( Constitution. "$ authorit$ of the sa(e Procla(ation# the Presi!ent create! a Constitutional Co((ission 3C,NC,M4 to
!raft a ne% constitution# %hich too. effect on the !ate of its ratification on :ebruar$ 2# 1987.
L177M
he 1987 Constitution retaine! the Regalian !octrine. he first sentence of Section 2# -rticle K++ states) P-ll lan!s of the public
!o(ain# %aters# (inerals# coal# petroleu(# an! other (ineral oils# all forces of potential energ$# fisheries# forests or ti(ber# %il!life# flora
an! fauna# an! other natural resources are o%ne! b$ the State.Q
<i.e the 1995 an! 1979 Constitutions before it# the 1987 Constitution# in the secon! sentence of the sa(e pro'ision# prohibits the
alienation of natural resources# e6cept agricultural lan!s.
he thir! sentence of the sa(e paragraph is ne%) Phe e6ploration# !e'elop(ent an! utili1ation of natural resources shall be
un!er the ,&(( *+/-2+( 7/@ 0&%$2>)0)+/ +, -.$ S-7-$.Q he constitutional polic$ of the StateNs Pfull control an! super'isionQ o'er natural
resources procee!s fro( the concept of ura regalia# as %ell as the recognition of the i(portance of the countr$Ns natural resources# not
onl$ for national econo(ic !e'elop(ent# but also for its securit$ an! national !efense.
L178M
Bn!er this pro'ision# the State assu(es Pa
(ore !$na(ic roleQ in the e6ploration# !e'elop(ent an! utili1ation of natural resources.
L179M
Conspicuousl$ absent in Section 2 is the pro'ision in the 1995 an! 1979 Constitutions authori1ing the State to grant licenses#
concessions# or leases for the e6ploration# e6ploitation# !e'elop(ent# or utili1ation of natural resources. "$ such o(ission# the
utili1ation of inalienable lan!s of public !o(ain through Plicense# concession or leaseQ is no longer allo%e! un!er the 1987 Constitution.
L18AM
Ha'ing o(itte! the pro'ision on the concession s$ste(# Section 2 procee!e! to intro!uce Punfa(iliar languageQ)
L181M
he State (a$ !irectl$ un!erta.e such acti'ities or it (a$ enter into coJpro!uction# 8oint 'enture# or pro!uctionJsharing agree(ents %ith
:ilipino citi1ens# or corporations or associations at least si6t$ per centum of %hose capital is o%ne! b$ such citi1ens.
Consonant %ith the StateNs Pfull super'ision an! controlQ o'er natural resources# Section 2 offers the State t%o Poptions.Q
L182M
,ne#
the State (a$ !irectl$ un!erta.e these acti'ities itself5 or t%o# it (a$ enter into coJpro!uction# 8oint 'enture# or pro!uctionJsharing
agree(ents %ith :ilipino citi1ens# or entities at least ;AD of %hose capital is o%ne! b$ such citi1ens.
- thir! option is foun! in the thir! paragraph of the sa(e section)
he Congress (a$# b$ la%# allo% s(allJscale utili1ation of natural resources b$ :ilipino citi1ens# as %ell as cooperati'e fish far(ing# %ith
priorit$ to subsistence fisher(en an! fishJ%or.ers in ri'ers# la.es# ba$s# an! lagoons.
?hile the secon! an! thir! options are li(ite! onl$ to :ilipino citi1ens or# in the case of the for(er# to corporations or associations
at least ;AD of the capital of %hich is o%ne! b$ :ilipinos# a fourth allo%s the participation of foreignJo%ne! corporations. he fourth
an! fifth paragraphs of Section 2 pro'i!e)
he Presi!ent (a$ enter into agree(ents %ith foreignJo%ne! corporations in'ol'ing either technical or financial assistance for largeJ
scale e6ploration# !e'elop(ent# an! utili1ation of (inerals# petroleu(# an! other (ineral oils accor!ing to the general ter(s an!
con!itions pro'i!e! b$ la%# base! on real contributions to the econo(ic gro%th an! general %elfare of the countr$. +n such
agree(ents# the State shall pro(ote the !e'elop(ent an! use of local scientific an! technical resources.
he Presi!ent shall notif$ the Congress of e'er$ contract entere! into in accor!ance %ith this pro'ision# %ithin thirt$ !a$s fro( its
e6ecution.
-lthough Section 2 sanctions the participation of foreignJo%ne! corporations in the e6ploration# !e'elop(ent# an! utili1ation of
natural resources# it i(poses certain li(itations or con!itions to agree(ents %ith such corporations.
:irst# the %72-)$0 to :--s. ,nl$ the Presi!ent# in behalf of the State# (a$ enter into these agree(ents# an! onl$
%ith corporations. "$ contrast# un!er the 1979 Constitution# a :ilipino citi1en# corporation or association (a$ enter into a ser'ice
contract %ith a Pforeign person or entit$.Q
Secon!# the 0)?$ of the acti'ities) onl$ largeJscale e6ploration# !e'elop(ent# an! utili1ation is allo%e!. he ter( PlargeJscale
usuall$ refers to 'er$ capitalJintensi'e acti'ities.Q
L189M
hir!# the /7-&27( 2$0+&2*$0 0&'K$*- +, -.$ 7*-)>)-)$0 is restricte! to (inerals# petroleu( an! other (ineral oils# the intent being
to li(it ser'ice contracts to those areas %here :ilipino capital (a$ not be sufficient.
L18>M
:ourth# *+/0)0-$/*; :)-. -.$ %2+>)0)+/0 +, 0-7-&-$. he agree(ents (ust be in accor!ance %ith the ter(s an! con!itions
pro'i!e! b$ la%.
:ifth# Section 2 prescribes certain 0-7/@72@0 for entering into such agree(ents. he agree(ents (ust be base! on real
contributions to econo(ic gro%th an! general %elfare of the countr$.
Si6th# the agree(ents (ust contain 2&@)<$/-72; 0-)%&(7-)+/0 for the pro(otion of the !e'elop(ent an! use of local scientific
an! technical resources.
Se'enth# the /+-),)*7-)+/ re7uire(ent. he Presi!ent shall notif$ Congress of e'er$ financial or technical assistance agree(ent
entere! into %ithin thirt$ !a$s fro( its e6ecution.
:inall$# the 0*+%$ of the agree(ents. ?hile the 1979 Constitution referre! to Pser'ice contracts for financial# technical#
(anage(ent# or other for(s of assistanceQ the 1987 Constitution pro'i!es for Pagree(ents. . . in'ol'ing either financial or technical
assistance.Q +t bears noting that the phrases Pser'ice contractsQ an! P(anage(ent or other for(s of assistanceQ in the earlier
constitution ha'e been o(itte!.
"$ 'irtue of her legislati'e po%ers un!er the Pro'isional Constitution#
L185M
Presi!ent -7uino# on &ul$ 1A# 1987# signe! into la% *.,.
No. 211 prescribing the interi( proce!ures in the processing an! appro'al of applications for the e6ploration# !e'elop(ent an!
utili1ation of (inerals. he o(ission in the 1987 Constitution of the ter( Pser'ice contractsQ not%ithstan!ing# the sai! *.,. still referre!
to the( in Section 2 thereof)
S*C. 2. -pplications for the e6ploration# !e'elop(ent an! utili1ation of (ineral resources# inclu!ing rene%al applications an!
applications for appro'al of operating agree(ents an! (ining 0$2>)*$ *+/-27*-0# shall be accepte! an! processe! an! (a$ be
appro'e! 6 6 6. L*(phasis supplie!.M
he sa(e la% pro'i!e! in its Section 9 that the Pprocessing# e'aluation an! appro'al of all (ining applications . . . operating
agree(ents an! 0$2>)*$ *+/-27*-0 . . . shall be go'erne! b$ Presi!ential 0ecree No. >;9# as a(en!e!# other e6isting (ining la%s#
an! their i(ple(enting rules an! regulations. . . .Q
-s earlier state!# on the 25
th
also of &ul$ 1987# the Presi!ent issue! *.,. No. 279 b$ authorit$ of %hich the sub8ect ?MCP :--
%as e6ecute! on March 9A# 1995.
,n March 9# 1995# Presi!ent Ra(os signe! into la% R.-. No. 79>2. Section 15 thereof !eclares that the -ct Pshall go'ern the
e6ploration# !e'elop(ent# utili1ation# an! processing of all (ineral resources.Q Such !eclaration not%ithstan!ing# R.-. No. 79>2 !oes
not actuall$ co'er all the (o!es through %hich the State (a$ un!erta.e the e6ploration# !e'elop(ent# an! utili1ation of natural
resources.
he State# being the o%ner of the natural resources# is accor!e! the pri(ar$ po%er an! responsibilit$ in the e6ploration#
!e'elop(ent an! utili1ation thereof. -s such# it (a$ un!erta.e these acti'ities through four (o!es)
he State (a$ !irectl$ un!erta.e such acti'ities.
324 he State (a$ enter into coJpro!uction# 8oint 'enture or pro!uctionJsharing agree(ents %ith :ilipino citi1ens or 7ualifie!
corporations.
394 Congress (a$# b$ la%# allo% s(allJscale utili1ation of natural resources b$ :ilipino citi1ens.
3>4 :or the largeJscale e6ploration# !e'elop(ent an! utili1ation of (inerals# petroleu( an! other (ineral oils# the Presi!ent
(a$ enter into agree(ents %ith foreignJo%ne! corporations in'ol'ing technical or financial assistance.
L18;M
*6cept to charge the Mines an! Ceosciences "ureau of the 0*NR %ith perfor(ing researches an! sur'e$s#
L187M
an! a passing
(ention of go'ern(entJo%ne! or controlle! corporations#
L188M
R.-. No. 79>2 !oes not specif$ ho% the State shoul! go about the first
(o!e. he thir! (o!e# on the other han!# is go'erne! b$ Republic -ct No. 7A7;
L189M
3the PeopleNs S(allJScale Mining -ct of 19914 an!
other pertinent la%s.
L19AM
R.-. No. 79>2 pri(aril$ concerns itself %ith the secon! an! fourth (o!es.
Mineral pro!uction sharing# coJpro!uction an! 8oint 'enture agree(ents are collecti'el$ classifie! b$ R.-. No. 79>2 as P(ineral
agree(ents.Q
L191M
he Co'ern(ent participates the least in a (ineral pro!uction sharing agree(ent 3MPS-4. +n an MPS-# the
Co'ern(ent grants the contractor
L192M
the e6clusi'e right to con!uct (ining operations %ithin a contract area
L199M
an! shares in the gross
output.
L19>M
he MPS- contractor pro'i!es the financing# technolog$# (anage(ent an! personnel necessar$ for the agree(entNs
i(ple(entation.
L195M
he total go'ern(ent share in an MPS- is the e6cise ta6 on (ineral pro!ucts un!er Republic -ct No. 7729#
L19;M
a(en!ing Section 1513a4 of the National +nternal Re'enue Co!e# as a(en!e!.
L197M
+n a coJpro!uction agree(ent 3C-4#
L198M
the Co'ern(ent pro'i!es inputs to the (ining operations other than the (ineral resource#
L199M
%hile in a 8oint 'enture agree(ent 3&E-4# %here the Co'ern(ent en8o$s the greatest participation# the Co'ern(ent an! the &E-
contractor organi1e a co(pan$ %ith both parties ha'ing e7uit$ shares.
L2AAM
-si!e fro( earnings in e7uit$# the Co'ern(ent in a &E- is
also entitle! to a share in the gross output.
L2A1M
he Co'ern(ent (a$ enter into a C-
L2A2M
or &E-
L2A9M
%ith one or (ore contractors. he
Co'ern(entNs share in a C- or &E- is set out in Section 81 of the la%)
he share of the Co'ern(ent in coJpro!uction an! 8oint 'enture agree(ents shall be negotiate! b$ the Co'ern(ent an! the contractor
ta.ing into consi!eration the) 3a4 capital in'est(ent of the pro8ect# 3b4 the ris.s in'ol'e!# 3c4 contribution of the pro8ect to the econo($#
an! 3!4 other factors that %ill pro'i!e for a fair an! e7uitable sharing bet%een the Co'ern(ent an! the contractor. he Co'ern(ent
shall also be entitle! to co(pensations for its other contributions %hich shall be agree! upon b$ the parties# an! shall consist# a(ong
other things# the contractorNs inco(e ta6# e6cise ta6# special allo%ance# %ithhol!ing ta6 !ue fro( the contractorNs foreign stoc.hol!ers
arising fro( !i'i!en! or interest pa$(ents to the sai! foreign stoc.hol!ers# in case of a foreign national an! all such other ta6es# !uties
an! fees as pro'i!e! for un!er e6isting la%s.
-ll (ineral agree(ents grant the respecti'e contractors the e6clusi'e right to con!uct (ining operations an! to e6tract all (ineral
resources foun! in the contract area.
L2A>M
- P7ualifie! personQ (a$ enter into an$ of the (ineral agree(ents %ith the Co'ern(ent.
L2A5M
-
P7ualifie! personQ is
an$ citi1en of the Philippines %ith capacit$ to contract# or a corporation# partnership# association# or cooperati'e organi1e! or authori1e!
for the purpose of engaging in (ining# %ith technical an! financial capabilit$ to un!erta.e (ineral resources !e'elop(ent an! !ul$
registere! in accor!ance %ith la% at least si6t$ per centum 3;AD4 of the capital of %hich is o%ne! b$ citi1ens of the Philippines 6 6 6.
L2A;M
he fourth (o!e in'ol'es Pfinancial or technical assistance agree(ents.Q -n :-- is !efine! as Pa contract in'ol'ing financial or
technical assistance for largeJscale e6ploration# !e'elop(ent# an! utili1ation of natural resources.Q
L2A7M
-n$ 7ualifie! person %ith
technical an! financial capabilit$ to un!erta.e largeJscale e6ploration# !e'elop(ent# an! utili1ation of natural resources in the
Philippines (a$ enter into such agree(ent !irectl$ %ith the Co'ern(ent through the 0*NR.
L2A8M
:or the purpose of granting an :--# a
legall$ organi1e! foreignJo%ne! corporation 3an$ corporation# partnership# association# or cooperati'e !ul$ registere! in accor!ance
%ith la% in %hich less than 5AD of the capital is o%ne! b$ :ilipino citi1ens4
L2A9M
is !ee(e! a P7ualifie! person.Q
L21AM
,ther than the !ifference in contractorsN 7ualifications# the principal !istinction bet%een (ineral agree(ents an! :--s is the
(a6i(u( contract area to %hich a 7ualifie! person (a$ hol! or be grante!.
L211M
P<argeJscaleQ un!er R.-. No. 79>2 is !eter(ine! b$ the
si1e of the contract area# as oppose! to the a(ount in'este! 3BS V5A#AAA#AAA.AA4# %hich %as the stan!ar! un!er *.,. 279.
<i.e a C- or a &E-# an :-- is sub8ect to negotiation.
L212M
he Co'ern(entNs contributions# in the for( of ta6es# in an :-- is
i!entical to its contributions in the t%o (ineral agree(ents# sa'e that in an :--)
he collection of Co'ern(ent share in financial or technical assistance agree(ent shall co((ence after the financial or technical
assistance agree(ent contractor has full$ reco'ere! its preJoperating e6penses# e6ploration# an! !e'elop(ent e6pen!itures# inclusi'e.
L219M
III
Ha'ing e6a(ine! the histor$ of the constitutional pro'ision an! statutes enacte! pursuant thereto# a consi!eration of the
substanti'e issues presente! b$ the petition is no% in or!er.
THE EFFECTIVIT OF
E#ECUTIVE ORDER NO. 874
Petitioners argue that *.,. No. 279# the la% in force %hen the ?MC :-- %as e6ecute!# !i! not co(e into effect.
*.,. No. 279 %as signe! into la% b$ then Presi!ent -7uino on &ul$ 25# 1987# t%o !a$s before the opening of Congress on &ul$
27# 1987.
L21>M
Section 8 of the *.,. states that the sa(e Pshall ta.e effect )<<$@)7-$(;.Q his pro'ision# accor!ing to petitioners# runs
counter to Section 1 of *.,. No. 2AA#
L215M
%hich pro'i!es)
S*C+,N 1. <a%s shall ta.e effect 7,-$2 ,),-$$/ @7;0 ,+((+:)/1 -.$ *+<%($-)+/ +, -.$)2 %&'()*7-)+/ either in the ,fficial Ca1ette or in
a ne%spaper of general circulation in the Philippines# unless it is other%ise pro'i!e!.
L21;M
L*(phasis supplie!.M
,n that pre(ise# petitioners conten! that *.,. No. 279 coul! ha'e onl$ ta.en effect fifteen !a$s after its publication at %hich ti(e
Congress ha! alrea!$ con'ene! an! the Presi!entNs po%er to legislate ha! cease!.
Respon!ents# on the other han!# counter that the 'ali!it$ of *.,. No. 279 %as settle! in *iners (ssociation of the Philippines v.
4actoran# supra. his is of course incorrect for the issue in *iners (ssociation %as not the 'ali!it$ of *.,. No. 279 but that of 0-,
Nos. 57 an! 82 %hich %ere issue! pursuant thereto.
Ne'ertheless# petitionersN contentions ha'e no (erit.
+t bears noting that there is nothing in *.,. No. 2AA that pre'ents a la% fro( ta.ing effect on a !ate other than O e'en before O the
15J!a$ perio! after its publication. ?here a la% pro'i!es for its o%n !ate of effecti'it$# such !ate pre'ails o'er that prescribe! b$ *.,.
No. 2AA. +n!ee!# this is the 'er$ essence of the phrase Punless it is other%ise pro'i!e!Q in Section 1 thereof. Section 1# *.,. No. 2AA#
therefore# applies onl$ %hen a statute !oes not pro'i!e for its o%n !ate of effecti'it$.
?hat )0 (an!ator$ un!er *.,. No. 2AA# an! %hat !ue process re7uires# as this Court hel! in +a?ada v. +uvera#
L217M
is the
publication of the la% for
%ithout such notice an! publication# there %oul! be no basis for the application of the (a6i( Pignorantia legis nLe(ine(M e6cusat.Q +t
%oul! be the height of in8ustice to punish or other%ise bur!en a citi1en for the transgression of a la% of %hich he ha! no notice
%hatsoe'er# not e'en a constructi'e one.
?hile the effecti'it$ clause of *.,. No. 279 !oes not re7uire its publication# it is not a groun! for its in'ali!ation since the
Constitution# being Pthe fun!a(ental# para(ount an! supre(e la% of the nation#Q is !ee(e! %ritten in the la%.
L218M
Hence# the !ue
process clause#
L219M
%hich# so +a?ada hel!# (an!ates the publication of statutes# is rea! into Section 8 of *.,. No. 279. -!!itionall$#
Section 1 of *.,. No. 2AA %hich pro'i!es for publication Peither in the ,fficial Ca1ette or in a ne%spaper of general circulation in the
Philippines#Q fin!s suppletor$ application. +t is significant to note that *.,. No. 279 %as actuall$ publishe! in the ,fficial Ca1ette
L22AM
on
-ugust 9# 1987.
:ro( a rea!ing then of Section 8 of *.,. No. 279# Section 1 of *.,. No. 2AA# an! +a?ada v. +uvera# this Court hol!s that *.,. No.
279 beca(e effecti'e )<<$@)7-$(; upon its publication in the ,fficial Ca1ette on -ugust 9# 1987.
hat such effecti'it$ too. place after the con'ening of the first Congress is irrele'ant. -t the ti(e Presi!ent -7uino issue! *.,.
No. 279 on &ul$ 25# 1987# she %as still 'ali!l$ e6ercising legislati'e po%ers un!er the Pro'isional Constitution.
L221M
-rticle KE+++
3ransitor$ Pro'isions4 of the 1987 Constitution e6plicitl$ states)
S*C. ;. he incu(bent Presi!ent shall continue to e6ercise legislati'e po%ers until the first Congress is con'ene!.
he con'ening of the first Congress (erel$ preclu!e! the e6ercise of legislati'e po%ers b$ Presi!ent -7uino5 it !i! not pre'ent the
effecti'it$ of la%s she ha! pre'iousl$ enacte!.
T.$2$ *7/ '$ /+ G&$0-)+/, -.$2$,+2$, -.7- E.O. N+. 874 )0 7/ $,,$*-)>$, 7/@ 7 >7()@(; $/7*-$@, 0-7-&-$.
THE CONSTITUTIONALIT
OF THE WMCP FTAA
Petitioners sub(it that# in accor!ance %ith the te6t of Section 2# -rticle K++ of the Constitution# :--s shoul! be li(ite! to
P-$*./)*7( or ,)/7/*)7( assistanceQ onl$. he$ obser'e# ho%e'er# that# contrar$ to the language of the Constitution# the ?MCP :--
allo%s ?MCP# a full$ foreignJo%ne! (ining corporation# to e6ten! (ore than (ere financial or technical assistance to the State# for it
per(its ?MCP to (anage an! operate e'er$ aspect of the (ining acti'it$.
L222M
PetitionersN sub(ission is %ellJta.en. +t is a car!inal rule in the interpretation of constitutions that the instru(ent (ust be so
construe! as to gi'e effect to the intention of the people %ho a!opte! it.
L229M
his intention is to be sought in the constitution itself# an!
the apparent (eaning of the %or!s is to be ta.en as e6pressing it# e6cept in cases %here that assu(ption %oul! lea! to absur!it$#
a(biguit$# or contra!iction.
L22>M
?hat the Constitution sa$s accor!ing to the te6t of the pro'ision# therefore# co(pels acceptance an!
negates the po%er of the courts to alter it# base! on the postulate that the fra(ers an! the people (ean %hat the$ sa$.
L225M
-ccor!ingl$#
follo%ing the literal te6t of the Constitution# assistance accor!e! b$ foreignJo%ne! corporations in the largeJscale e6ploration#
!e'elop(ent# an! utili1ation of petroleu(# (inerals an! (ineral oils shoul! be li(ite! to PtechnicalQ or PfinancialQ assistance onl$.
?MCP ne'ertheless sub(its that the %or! PtechnicalQ in the fourth paragraph of Section 2 of *.,. No. 279 enco(passes a Pbroa!
nu(ber of possible ser'ices#Q perhaps# Pscientific an!2or technological in basis.Q
L22;M
+t thus posits that it (a$ also %ell inclu!e Pthe area
of <7/71$<$/- +2 +%$27-)+/0 . . . so long as such assistance re7uires speciali1e! .no%le!ge or s.ills# an! are relate! to the
e6ploration# !e'elop(ent an! utili1ation of (ineral resources.Q
L227M
his Court is not persua!e!. -s priorl$ pointe! out# the phrase P(anage(ent or other for(s of assistanceQ in the 1979
Constitution %as !elete! in the 1987 Constitution# %hich allo%s onl$ Ptechnical or financial assistance.Q Casus omisus pro omisso
habendus est. - person# ob8ect or thing o(itte! fro( an enu(eration (ust be hel! to ha'e been o(itte! intentionall$.
L228M
-s %ill be
sho%n later# the (anage(ent or operation of (ining acti'ities b$ foreign contractors# %hich is the pri(ar$ feature of ser'ice contracts#
%as precisel$ the e'il that the !rafters of the 1987 Constitution sought to era!icate.
Respon!ents insist that Pagree(ents in'ol'ing technical or financial assistanceQ is 8ust another ter( for ser'ice contracts. he$
conten! that the procee!ings of the C,NC,M in!icate Pthat although the ter(inolog$ Xser'ice contractN %as a'oi!e! Lb$ the
ConstitutionM# the concept it represente! %as not.Q he$ a!! that PLtMhe concept is e(bo!ie! in the phrase Xagree(ents in'ol'ing
financial or technical assistance.NQ
L229M
-n! point out ho% (e(bers of the C,NC,M referre! to these agree(ents as Pser'ice
contracts.Q :or instance)
SR. -N. -( + correct in thin.ing that the onl$ !ifference bet%een these ,&-&2$ 0$2>)*$ *+/-27*-0 7/@ -.$ %70- 0$2>)*$ *+/-27*-0
&/@$2 M2. M72*+0 is the general la% to be enacte! b$ the legislature an! the notification of Congress b$ the Presi!entR hat is the
onl$ !ifference# is it notR
MR. E+<<*C-S. hat is right.
SR. -N. So those are the safeguar!sLRM
MR. E+<<*C-S. Fes. here %as no la% at all go'erning ser'ice contracts before.
SR. -N. han. $ou# Ma!a( Presi!ent.
L29AM
L*(phasis supplie!.M
?MCP also cites the follo%ing state(ents of Co((issioners Cascon# Carcia# Nolle!o an! a!eo %ho allu!e! to ser'ice contracts
as the$ e6plaine! their respecti'e 'otes in the appro'al of the !raft -rticle)
MR. C-SC,N. Mr. Presi!ing ,fficer# + 'ote no pri(aril$ because of t%o reasons) ,ne# the pro'ision on ser'ice contracts. + felt that if
%e %oul! *+/0-)-&-)+/7()?$ 7/; %2+>)0)+/ +/ 0$2>)*$ *+/-27*-0# this shoul! al%a$s be %ith the concurrence of Congress an! not
gui!e! onl$ b$ a general la% to be pro(ulgate! b$ Congress. 6 6 6.
L291M
L*(phasis supplie!.M
6 6 6.
MR. C-RC+-. han. $ou.
+ 'ote no. 6 6 6.
S$2>)*$ *+/-27*-0 72$ 1)>$/ *+/0-)-&-)+/7( ($1)-)<)?7-)+/ )/ S$*-)+/ 3, $>$/ :.$/ -.$; .7>$ '$$/ %2+>$/ -+ '$ )/)<)*7( -+ -.$
)/-$2$0-0 +, -.$ /7-)+/, %2+>)@)/1 70 -.$; @+ -.$ ($17( (++%.+($ ,+2 -.$ $=%(+)-7-)+/ +, +&2 /7-&27( 2$0+&2*$0 ,+2 -.$ '$/$,)- +,
,+2$)1/ )/-$2$0-0. he$ constitute a serious negation of :ilipino control on the use an! !isposition of the nationNs natural resources#
especiall$ %ith regar! to those %hich are nonrene%able.
L292M
L*(phasis supplie!.M
6 6 6
MR. N,<<*0,. ?hile there are ob8ectionable pro'isions in the -rticle on National *cono($ an! Patri(on$# going o'er sai! pro'isions
(eticulousl$# setting asi!e pre8u!ice an! personalities %ill re'eal that the article contains a balance! set of pro'isions. + hope the
forthco(ing Congress %ill i(ple(ent such pro'isions ta.ing into account that :ilipinos shoul! ha'e real control o'er our econo($ an!
patri(on$# an! if foreign e7uit$ is per(itte!# the sa(e (ust be subor!inate! to the i(perati'e !e(an!s of the national interest.
6 6 6.
I- )0 7(0+ <; &/@$20-7/@)/1 -.7- 0$2>)*$ *+/-27*-0 )/>+(>)/1 ,+2$)1/ *+2%+27-)+/0 +2 $/-)-)$0 72$ 2$0+2-$@ -+ +/(; :.$/ /+
F)()%)/+ $/-$2%2)0$ +2 F)()%)/+A*+/-2+(($@ $/-$2%2)0$ *+&(@ %+00)'(; &/@$2-7H$ -.$ $=%(+27-)+/ +2 $=%(+)-7-)+/ +, +&2 /7-&27(
2$0+&2*$0 7/@ -.7- *+<%$/07-)+/ &/@$2 0&*. *+/-27*-0 *7//+- 7/@ 0.+&(@ /+- $G&7( :.7- 0.+&(@ %$2-7)/ -+ +:/$20.)% +,
*7%)-7(. I/ +-.$2 :+2@0, -.$ 0$2>)*$ *+/-27*- 0.+&(@ /+- '$ 7/ )/0-2&<$/- -+ *)2*&<>$/- -.$ '70)* %2+>)0)+/, -.7- -.$
$=%(+27-)+/ 7/@ $=%(+)-7-)+/ +, /7-&27( 2$0+&2*$0 0.+&(@ '$ -2&(; ,+2 -.$ '$/$,)- +, F)()%)/+0.
han. $ou# an! + 'ote $es.
L299M
L*(phasis supplie!.M
6 6 6.
MR. -0*,. Nais .o la(ang ipali%anag ang a.ing boto.
Matapos suriin ang .alaga$an ng Pilipinas# ang saligang suliranin# pangunahin ang salitang Pi(per$alis(o.Q -ng ibig sabihin nito a$
ang siste(a ng lipunang pinaghaharian ng iilang (onopol$ong .apitalista at ang salitang Pi(per$alis(oQ a$ buha$ na buha$ sa
National *cono($ an! Patri(on$ na nating gina%a. Sa pa(a(agitan ng salitang Pbase! on#Q naroroon na ang free tra!e sapag.at
ta$o a$ (ananatiling tagapaglu%as ng hila% na sang.ap at tagaang.at ng $aring pro!u.to. Pangala%a# /72+2++/ %7 2)/ ang parit$
rights# 7/1 0$2>)*$ *+/-27*-# ang ;AJ>A e7uit$ sa natural resources. H7'7/1 /71.).)27% 7/1 07<'7;7/7/1 P)()%)/+, 1)/717(&17@
/7<7/ /1 <17 @7;&.7/ 7/1 7-)/1 ()H70 /7 ;7<7/. E7)(7/ <7/ 7/1 A2-)*($ +/ N7-)+/7( E*+/+<; 7/@ P7-2)<+/; 7; .)/@)
/71%77()0 07 %71H77()%)/ /1 7-)/1 $H+/+<);7 07 H7<7; /1 <17 @7;&.7/. -ng solus$on sa suliranin ng bansa a$ !ala%a la(ang)
ang pagpapatupa! ng tuna$ na repor(a sa lupa at ang national in!ustriali1ation. +to ang tinata%ag na(ing pagsi.at ng ara% sa
Silangan. Ngunit ang (ga lan!lor!s an! big business(en at ang (ga .o(pra!or a$ nagsasabi na ang free tra!e na ito# ang
.ahulugan para sa a(in# a$ ipinipilit sa ating sa(ba$anan na ang ara% a$ sisi.at sa Ganluran. Gailan (an hin!i pu%e!eng su(i.at
ang ara% sa Ganluran. + 'ote no.
L29>M
L*(phasis supplie!.M
his Court is li.e%ise not persua!e!.
-s earlier note!# the phrase Pser'ice contractsQ has been !elete! in the 1987 ConstitutionNs -rticle on National *cono($ an!
Patri(on$. +f the C,NC,M inten!e! to retain the concept of ser'ice contracts un!er the 1979 Constitution# it coul! ha'e si(pl$
a!opte! the ol! ter(inolog$ 3Pser'ice contractsQ4 instea! of e(plo$ing ne% an! unfa(iliar ter(s 3Pagree(ents . . . in'ol'ing either
technical or financial assistanceQ4. Such a !ifference bet%een the language of a pro'ision in a re'ise! constitution an! that of a si(ilar
pro'ision in the prece!ing constitution is 'ie%e! as in!icati'e of a !ifference in purpose.
L295M
+f# as respon!ents suggest# the concept of
Ptechnical or financial assistanceQ agree(ents is i!entical to that of Pser'ice contracts#Q the C,NC,M %oul! not ha'e bothere! to fit the
sa(e !og %ith a ne% collar. o uphol! respon!entsN theor$ %oul! re!uce the first to a (ere euphe(is( for the secon! an! ren!er the
change in phraseolog$ (eaningless.
-n e6a(ination of the reason behin! the change confir(s that technical or financial assistance agree(ents are not s$non$(ous
to ser'ice contracts.
LMhe Court in construing a Constitution shoul! bear in (in! the ob8ect sought to be acco(plishe! b$ its a!option# an! the e'ils# if an$#
sought to be pre'ente! or re(e!ie!. - !oubtful pro'ision %ill be e6a(ine! in light of the histor$ of the ti(es# an! the con!ition an!
circu(stances un!er %hich the Constitution %as fra(e!. he ob8ect is to ascertain the reason %hich in!uce! the fra(ers of the
Constitution to enact the particular pro'ision an! the purpose sought to be acco(plishe! thereb$# in or!er to construe the %hole as to
(a.e the %or!s consonant to that reason an! calculate! to effect that purpose.
L29;M
-s the follo%ing 7uestion of Co((issioner Huesa!a an! Co((issioner EillegasN ans%er sho%s the !rafters inten!e! to !o a%a$
%ith ser'ice contracts %hich %ere use! to circu('ent the capitali1ation 3;ADJ>AD4 re7uire(ent)
MS. HB*S-0-. he 1979 Constitution use! the %or!s Pser'ice contracts.Q +n this particular Section 9# is there a safeguar! against the
possible control of foreign interests if the :ilipinos go into copro!uction %ith the(R
MR. E+<<*C-S. Fes. +n fact# the @$($-)+/ +, -.$ %.270$ L0$2>)*$ *+/-27*-0M :70 +&2 ,)20- 7--$<%- -+ 7>+)@ 0+<$ +, -.$ 7'&0$0
)/ -.$ %70- 2$1)<$ )/ -.$ &0$ +, 0$2>)*$ *+/-27*-0 -+ 1+ 72+&/@ -.$ 36A56 7227/1$<$/-. he safeguar! that has been intro!uce! O
an! this# of course can be refine! O is foun! in Section 9# lines 25 to 9A# %here Congress %ill ha'e to concur %ith the Presi!ent on an$
agree(ent entere! into bet%een a foreignJo%ne! corporation an! the go'ern(ent in'ol'ing technical or financial assistance for largeJ
scale e6ploration# !e'elop(ent an! utili1ation of natural resources.
L297M
L*(phasis supplie!.M
+n a subse7uent !iscussion# Co((issioner Eillegas alla$e! the fears of Co((issioner Huesa!a regar!ing the participation of
foreign interests in Philippine natural resources# %hich %as suppose! to be restricte! to :ilipinos.
MS. HB*S-0-. -nother point of clarification is the phrase Pan! utili1ation of natural resources shall be un!er the full control an!
super'ision of the State.Q +n the 1979 Constitution# this %as li(ite! to citi1ens of the Philippines5 but it %as re(o'e! an! substitute! b$
Pshall be un!er the full control an! super'ision of the State.Q ?as the concept change! so that these particular resources %oul! be
li(ite! to citi1ens of the PhilippinesR ,r %oul! these resources onl$ be un!er the full control an! super'ision of the State5 (eaning#
nonciti1ens %oul! ha'e access to these natural resourcesR +s that the un!erstan!ingR
MR. E+<<*C-S. No# Mr. EiceJPresi!ent# if the Co((issioner rea!s the ne6t sentence# it states)
Such acti'ities (a$ be !irectl$ un!erta.en b$ the State# or it (a$ enter into coJpro!uction# 8oint 'enture# pro!uctionJsharing agree(ents
%ith :ilipino citi1ens.
So %e are still li(iting it onl$ to :ilipino citi1ens.
6 6 6.
MS. HB*S-0-. Coing bac. to Section 9# the section suggests that)
he e6ploration# !e'elop(ent# an! utili1ation of natural resourcesU (a$ be !irectl$ un!erta.en b$ the State# or it (a$ enter into coJ
pro!uction# 8oint 'enture or pro!uctionJsharing agree(ent %ith . . . corporations or associations at least si6t$ per cent of %hose 'oting
stoc. or controlling interest is o%ne! b$ such citi1ens.
<ines 25 to 9A# on the other han!# suggest that in the largeJscale e6ploration# !e'elop(ent an! utili1ation of natural resources# the
Presi!ent %ith the concurrence of Congress (a$ enter into agree(ents %ith foreignJo%ne! corporations e'en for technical or financial
assistance.
+ %on!er if this part of Section 9 contra!icts the secon! part. + a( raising this point for fear that foreign in'estors %ill use their
enor(ous capital resources to facilitate the actual e6ploitation or e6ploration# !e'elop(ent an! effecti'e !isposition of our natural
resources to the !etri(ent of :ilipino in'estors. + a( not sa$ing that %e shoul! not consi!er borro%ing (one$ fro( foreign
sources. ?hat + refer to is that foreign interest shoul! be allo%e! to participate onl$ to the e6tent that the$ len! us (one$ an! gi'e us
technical assistance %ith the appropriate go'ern(ent per(it. +n this %a$# %e can insure the en8o$(ent of our natural resources b$ our
o%n people.
MR. E+<<*C-S. A*-&7((;, -.$ 0$*+/@ %2+>)0)+/ 7'+&- -.$ P2$0)@$/- @+$0 /+- %$2<)- ,+2$)1/ )/>$0-+20 -+ %72-)*)%7-$. I- )0 +/(;
-$*./)*7( +2 ,)/7/*)7( 700)0-7/*$ N -.$; @+ /+- +:/ 7/;-.)/1 N '&- +/ *+/@)-)+/0 -.7- .7>$ -+ '$ @$-$2<)/$@ '; (7: :)-. -.$
*+/*&22$/*$ +, C+/12$00. S+, )- )0 >$2; 2$0-2)*-)>$.
I, -.$ C+<<)00)+/$2 :)(( 2$<$<'$2, -.)0 2$<+>$0 -.$ %+00)')()-; ,+2 0$2>)*$ *+/-27*-0 :.)*. :$ 07)@ ;$0-$2@7; :$2$ 7>$/&$0
&0$@ )/ -.$ %2$>)+&0 2$1)<$ -+ 1+ 72+&/@ -.$ 36A56 2$G&)2$<$/-.
L298M
L*(phasis supplie!.M
he present Chief &ustice# then a (e(ber of the C,NC,M# also referre! to this li(itation in scope in proposing an a(en!(ent to
the ;AJ>A re7uire(ent)
MR. 0-E+0*. Ma$ + be allo%e! to e6plain the proposalR
MR. M--M",NC. Sub8ect to the threeJ(inute rule# Ma!a( Presi!ent.
MR. 0-E+0*. +t %ill not ta.e three (inutes.
he Co((ission ha! 8ust appro'e! the Prea(ble. I/ -.$ P2$7<'($ :$ *($72(; 0-7-$@ -.7- -.$ F)()%)/+ %$+%($ 72$ 0+>$2$)1/ 7/@
-.7- +/$ +, -.$ +'K$*-)>$0 ,+2 -.$ *2$7-)+/ +2 $0-7'()0.<$/- +, 7 1+>$2/<$/- )0 -+ *+/0$2>$ 7/@ @$>$(+% -.$ /7-)+/7(
%7-2)<+/;. T.$ )<%()*7-)+/ )0 -.7- -.$ /7-)+/7( %7-2)<+/; +2 +&2 /7-&27( 2$0+&2*$0 72$ $=*(&0)>$(; 2$0$2>$@ ,+2 -.$ F)()%)/+
%$+%($. N+ 7()$/ <&0- '$ 7((+:$@ -+ $/K+;, $=%(+)- 7/@ @$>$(+% +&2 /7-&27( 2$0+&2*$0. A0 7 <7--$2 +, ,7*-, -.7- %2)/*)%($
%2+*$$@0 ,2+< -.$ ,7*- -.7- +&2 /7-&27( 2$0+&2*$0 72$ 1),-0 ,2+< G+@ -+ -.$ F)()%)/+ %$+%($ 7/@ )- :+&(@ '$ 7 '2$7*. +, -.7-
0%$*)7( '($00)/1 ,2+< G+@ ), :$ :)(( 7((+: 7()$/0 -+ $=%(+)- +&2 /7-&27( 2$0+&2*$0.
+ 'ote! in fa'or of the &a(ir proposal because )- )0 /+- 2$7((; $=%(+)-7-)+/ -.7- :$ 127/-$@ -+ -.$ 7()$/ *+2%+27-)+/0 '&- +/(; ,+2
-.$< -+ 2$/@$2 ,)/7/*)7( +2 -$*./)*7( 700)0-7/*$. I- )0 /+- ,+2 -.$< -+ $/K+; +&2 /7-&27( 2$0+&2*$0. Ma!a( Presi!ent# our natural
resources are !epleting5 our population is increasing b$ leaps an! boun!s. :ift$ $ears fro( no%# if %e %ill allo% these aliens to e6ploit
our natural resources# there %ill be no (ore natural resources for the ne6t generations of :ilipinos. +t (a$ last long if %e %ill begin
no%. Since 1995 the aliens ha'e been allo%e! to en8o$ to a certain e6tent the e6ploitation of our natural resources# an! %e beca(e
'icti(s of foreign !o(inance an! control. he aliens are intereste! in co(ing to the Philippines because the$ %oul! li.e to en8o$ the
bount$ of nature e6clusi'el$ inten!e! for :ilipinos b$ Co!.
-n! so + appeal to all# for the sa.e of the future generations# that if %e ha'e to pra$ in the Prea(ble Pto preser'e an! !e'elop the
national patri(on$ for the so'ereign :ilipino people an! for the generations to co(e#Q %e (ust at this ti(e !eci!e once an! for all that
our natural resources (ust be reser'e! onl$ to :ilipino citi1ens.
han. $ou.
L299M
L*(phasis supplie!.M
he opinion of another (e(ber of the C,NC,M is persuasi'e
L2>AM
an! lea'es no !oubt as to the intention of the fra(ers to
eli(inate ser'ice contracts altogether. He %rites)
Paragraph > of Section 2 specifies largeJscale# capitalJintensi'e# highl$ technological un!erta.ings for %hich the Presi!ent (a$ enter
into contracts %ith foreignJo%ne! corporations# an! enunciates strict con!itions that shoul! go'ern such contracts. 6 6 6.
his pro'ision balances the nee! for foreign capital an! technolog$ %ith the nee! to (aintain the national so'ereignt$. +t recogni1es the
fact that as long as :ilipinos can for(ulate their o%n ter(s in their o%n territor$# there is no !anger of relin7uishing so'ereignt$ to
foreign interests.
A2$ 0$2>)*$ *+/-27*-0 7((+:$@ &/@$2 -.$ /$: C+/0-)-&-)+/O N+. U/@$2 -.$ /$: C+/0-)-&-)+/, ,+2$)1/ )/>$0-+20 !,&((; 7()$/A
+:/$@" *7/ NOT %72-)*)%7-$ )/ F)()%)/+ $/-$2%2)0$0 $=*$%- -+ %2+>)@$: !1" T$*./)*7( A00)0-7/*$ ,+2 .)1.(; -$*./)*7(
$/-$2%2)0$0P 7/@ !8" F)/7/*)7( A00)0-7/*$ ,+2 (721$A0*7($ $/-$2%2)0$0.
T.$ )/-$/- +, -.)0 %2+>)0)+/, 70 :$(( 70 +-.$2 %2+>)0)+/0 +/ ,+2$)1/ )/>$0-<$/-0, )0 -+ %2$>$/- -.$ %27*-)*$ !%2$>7($/- )/ -.$
M72*+0 1+>$2/<$/-" +, 0H)2-)/1 -.$ 36/56 $G&7-)+/ &0)/1 -.$ *+>$2 +, 0$2>)*$ *+/-27*-0.
C851D
CE<%.70)0 0&%%()$@.D
:urther(ore# it appears that Propose! Resolution No. >9;#
L2>2M
%hich %as the !raft -rticle on National *cono($ an! Patri(on$#
a!opte! the concept of Pagree(ents . . . in'ol'ing either technical or financial assistanceQ containe! in the P0raft of the 198; B.P. <a%
Constitution Pro8ectQ 3B.P. <a% !raft4 %hich %as ta.en into consi!eration !uring the !eliberation of the C,NC,M.
L2>9M
he for(er# as
%ell as -rticle K++# as a!opte!# e(plo$e! the sa(e ter(inolog$# as the co(parati'e table belo% sho%s)


0R-: ,: H* BP <-?
C,NS+B+,N PR,&*C
PR,P,S*0 R*S,<B+,N N,.
>9; ,: H* C,NS+B+,N-<
C,MM+SS+,N
-R+C<* K++ ,: H* 1987
C,NS+B+,N
S*C. 1. -ll lan!s of the public
!o(ain# %aters# (inerals# coal#
petroleu( an! other (ineral oils#
all forces of potential energ$#
fisheries# flora an! fauna an!
other natural resources of the
Philippines are o%ne! b$ the
State. ?ith the e6ception of
agricultural lan!s# all other natural
resources shall not be
alienate!. he e6ploration#
!e'elop(ent an! utili1ation of
natural resources shall be un!er
the full control an! super'ision of
the State. Such acti'ities (a$ be
!irectl$ un!erta.en b$ the state#
or it (a$ enter into coJpro!uction#
8oint 'enture# pro!uction sharing
agree(ents %ith :ilipino citi1ens
or corporations or associations
si6t$ per cent of %hose 'oting
stoc. or controlling interest is
o%ne! b$ such citi1ens for a
perio! of not (ore than t%ent$J
fi'e $ears# rene%able for not (ore
than t%ent$Jfi'e $ears an! un!er
such ter(s an! con!itions as (a$
be pro'i!e! b$ la%. +n case as to
%ater rights for irrigation# %ater
suppl$# fisheries# or in!ustrial
uses other than the !e'elop(ent
of %ater po%er# beneficial use
S*C. 9. -ll lan!s of the public
!o(ain# %aters# (inerals# coal#
petroleu( an! other (ineral oils# all
forces of potential energ$# fisheries#
forests# flora an! fauna# an! other
natural resources are o%ne! b$ the
State. ?ith the e6ception of
agricultural lan!s# all other natural
resources shall not be
alienate!. he e6ploration#
!e'elop(ent# an! utili1ation of
natural resources shall be un!er the
full control an! super'ision of the
State. Such acti'ities (a$ be !irectl$
un!erta.en b$ the State# or it (a$
enter into coJpro!uction# 8oint
'enture# pro!uctionJsharing
agree(ents %ith :ilipino citi1ens or
corporations or associations at least
si6t$ per cent of %hose 'oting stoc.
or controlling interest is o%ne! b$
such citi1ens. Such agree(ents
shall be for a perio! of t%ent$Jfi'e
$ears# rene%able for not (ore than
t%ent$Jfi'e $ears# an! un!er such
ter( an! con!itions as (a$ be
pro'i!e! b$ la%. +n cases of %ater
rights for irrigation# %ater suppl$#
fisheries or in!ustrial uses other than
the !e'elop(ent for %ater po%er#
beneficial use (a$ be the (easure
S*C. 2. -ll lan!s of the public
!o(ain# %aters# (inerals# coal#
petroleu(# an! other (ineral oils# all
forces of potential energ$# fisheries#
forests or ti(ber# %il!life# flora an!
fauna# an! other natural resources
are o%ne! b$ the State. ?ith the
e6ception of agricultural lan!s# all
other natural resources shall not be
alienate!. he e6ploration#
!e'elop(ent# an! utili1ation of
natural resources shall be un!er the
full control an! super'ision of the
State. he State (a$ !irectl$
un!erta.e such acti'ities or it (a$
enter into coJpro!uction# 8oint
'enture# or pro!uctionJsharing
agree(ents %ith :ilipino citi1ens# or
corporations or associations at least
si6t$ per centum of %hose capital is
o%ne! b$ such citi1ens. Such
agree(ents (a$ be for a perio! not
e6cee!ing t%ent$Jfi'e $ears#
rene%able for not (ore than t%ent$J
fi'e $ears# an! un!er such ter(s
an! con!itions as (a$ be pro'i!e!
b$ la%. +n case of %ater rights for
irrigation# %ater suppl$# fisheries# or
in!ustrial uses other than the
!e'elop(ent of %ater po%er#
beneficial use (a$ be the (easure
(a$ be the (easure an! li(it of
the grant.

an! li(it of the grant.

an! li(it of the grant.

he State shall protect the nationNs
(arine %ealth in its archipelagic
%aters# territorial sea# an! e6clusi'e
econo(ic 1one# an! reser'e its use
an! en8o$(ent e6clusi'el$ to :ilipino
citi1ens.

he National -sse(bl$ (a$ b$
la% allo% s(all scale utili1ation of
natural resources b$ :ilipino
citi1ens.
he Congress (a$ b$ la% allo%
s(allJscale utili1ation of natural
resources b$ :ilipino citi1ens# as %ell
as cooperati'e fish far(ing in ri'ers#
la.es# ba$s# an! lagoons.
he Congress (a$# b$ la%# allo%
s(allJscale utili1ation of natural
resources b$ :ilipino citi1ens# as %ell
as cooperati'e fish far(ing# %ith
priorit$ to subsistence fisher(en an!
fishJ%or.ers in ri'ers# la.es# ba$s#
an! lagoons.

he National -sse(bl$# (a$# b$
t%oJthir!s 'ote of all its (e(bers
b$ special la% pro'i!e the ter(s
an! con!itions un!er %hich a
foreignJo%ne! corporation (a$
enter into agree(ents %ith the
go'ern(ent in'ol'ing$)-.$2
-$*./)*7( +2 ,)/7/*)7(
700)0-7/*$ for largeJscale
e6ploration# !e'elop(ent# or
utili1ation of natural
resources. L*(phasis supplie!.M

he Presi!ent %ith the concurrence
of Congress# b$ special la%# shall
pro'i!e the ter(s an! con!itions
un!er %hich a foreignJo%ne!
corporation (a$ enter into
agree(ents %ith the go'ern(ent
in'ol'ing $)-.$2 -$*./)*7( +2
,)/7/*)7( 700)0-7/*$ for largeJscale
e6ploration# !e'elop(ent# an!
utili1ation of natural
resources. L*(phasis supplie!.M

he Presi!ent (a$ enter into
agree(ents %ith foreignJo%ne!
corporations in'ol'ing$)-.$2
-$*./)*7( +2 ,)/7/*)7(
700)0-7/*$ for largeJscale
e6ploration# !e'elop(ent# an!
utili1ation of (inerals# petroleu(#
an! other (ineral oils accor!ing to
the general ter(s an! con!itions
pro'i!e! b$ la%# base! on real
contributions to the econo(ic gro%th
an! general %elfare of the
countr$. +n such agree(ents# the
State shall pro(ote the !e'elop(ent
an! use of local scientific an!
technical resources. L*(phasis
supplie!.M
he Presi!ent shall notif$ the
Congress of e'er$ contract entere!
into in accor!ance %ith this
pro'ision# %ithin thirt$ !a$s fro( its
e6ecution.

he insights of the proponents of the B.P. <a% !raft are# therefore# instructi'e in interpreting the phrase Ptechnical or financial
assistance.Q
+n his position paper entitle! Service Contracts: @ld Wine in #e$ BottlesA# Professor Pacifico -. -gabin# %ho %as a (e(ber of
the %or.ing group that prepare! the B.P. <a% !raft# critici1e! ser'ice contracts for the$ Plo!ge e6clusi'e (anage(ent an! control of the
enterprise to the ser'ice contractor# %hich is re(iniscent of the ol! concession regi(e. hus# not%ithstan!ing the pro'ision of the
Constitution that natural resources belong to the State# an! that these shall not be alienate!# the ser'ice contract s$ste( ren!ers
nugator$ the constitutional pro'isions cite!.Q
L2>>M
He elaborates)
<oo.ing at the Philippine (o!el# %e can !iscern the follo%ing 'estiges of the concession regi(e# thus)
1. "i!!ing of a selecte! area# or leasing the choice of the area to the intereste! part$ an! then negotiating the ter(s an! con!itions
of the contract5 3Sec. 5# P.0. 874
2. M7/71$<$/- +, -.$ $/-$2%2)0$ >$0-$@ +/ -.$ *+/-27*-+2, )/*(&@)/1 +%$27-)+/ +, -.$ ,)$(@ ), %$-2+($&< )0 @)0*+>$2$@5 3Sec.
8# P.0. 874
9. C+/-2+( +, %2+@&*-)+/ 7/@ +-.$2 <7--$20 0&*. 70 $=%7/0)+/ 7/@ @$>$(+%<$/-5 3Sec. 84
>. R$0%+/0)')()-; ,+2 @+:/0-2$7< +%$27-)+/0 N <72H$-)/1, @)0-2)'&-)+/, 7/@ %2+*$00)/1 <7; '$ :)-. -.$ *+/-27*-+2 3Sec. 845
5. ,%nership of e7uip(ent# (achiner$# fi6e! assets# an! other properties re(ain %ith contractor 3Sec. 12# P.0. 8745
;. Repatriation of capital an! retention of profits abroa! guarantee! to the contractor 3Sec. 19# P.0. 8745 an!
7. W.)($ -)-($ -+ -.$ %$-2+($&< @)0*+>$2$@ <7; /+<)/7((; '$ )/ -.$ /7<$ +, -.$ 1+>$2/<$/-, -.$ *+/-27*-+2 .70 7(<+0-
&/,$--$2$@ *+/-2+( +>$2 )-0 @)0%+0)-)+/ 7/@ 07($# an! e'en the !o(estic re7uire(ents of the countr$ is relegate! to a pro rata basis
3Sec. 84.
+n short# our 'ersion of the ser'ice contract is 8ust a rehash of the ol! concession regi(e 6 6 6. So(e people ha'e pulle! an ol! rabbit
out of a (agicianNs hat# an! foiste! it upon us as a ne% an! !ifferent ani(al.
T.$ 0$2>)*$ *+/-27*- 70 :$ H/+: )- .$2$ )0 7/-)-.$-)*7( -+ -.$ %2)/*)%($ +, 0+>$2$)1/-; +>$2 +&2 /7-&27( 2$0+&2*$0 2$0-7-$@ )/
-.$ 07<$ 72-)*($ +, -.$ C1473D C+/0-)-&-)+/ *+/-7)/)/1 -.$ %2+>)0)+/ ,+2 0$2>)*$ *+/-27*-0. I, -.$ 0$2>)*$ *+/-27*-+2 .7%%$/0 -+
'$ 7 ,+2$)1/ *+2%+27-)+/, -.$ *+/-27*- :+&(@ 7(0+ 2&/ *+&/-$2 -+ -.$ *+/0-)-&-)+/7( %2+>)0)+/ +/ /7-)+/7()?7-)+/ +2
F)()%)/)?7-)+/, +, -.$ $=%(+)-7-)+/ +, +&2 /7-&27( 2$0+&2*$0.
L2>5M
L*(phasis supplie!. Bn!erscoring in the original.M
Professor Merlin M. Magallona# also a (e(ber of the %or.ing group# %as harsher in his reproach of the s$ste()
6 6 6 the nationalistic phraseolog$ of the 1995 LConstitutionM %as retaine! b$ the L1979M Charter# but the essence of nationalis( %as
re!uce! to hollo% rhetoric. he 1979 Charter still pro'i!e! that the e6ploitation or !e'elop(ent of the countr$Ns natural resources be
li(ite! to :ilipino citi1ens or corporations o%ne! or controlle! b$ the(. Ho%e'er# the (artialJla% Constitution allo%e! the(# once these
resources are in their na(e# to enter into ser'ice contracts %ith foreign in'estors for financial# technical# (anage(ent# or other for(s of
assistance. Since foreign in'estors ha'e the capital resources# the actual e6ploitation an! !e'elop(ent# as %ell as the effecti'e
!isposition# of the countr$Ns natural resources# %oul! be un!er their !irection# an! control# relegating the :ilipino in'estors to the role of
secon!Jrate partners in 8oint 'entures.
T.2+&1. -.$ )/0-2&<$/-7()-; +, -.$ 0$2>)*$ *+/-27*-, -.$ 1473 C+/0-)-&-)+/ .7@ ($1)-)<)?$@ 7- -.$ .)1.$0- ($>$( +, 0-7-$ %+()*;
-.7- :.)*. :70 %2+.)')-$@ &/@$2 -.$ 1473 C+/0-)-&-)+/, /7<$(;: -.$ $=%(+)-7-)+/ +, -.$ *+&/-2;F0 /7-&27( 2$0+&2*$0 '; ,+2$)1/
/7-)+/7(0. T.$ @270-)* )<%7*- +, C-.)0D *+/0-)-&-)+/7( *.7/1$ '$*+<$0 <+2$ %2+/+&/*$@ :.$/ )- )0 *+/0)@$2$@ -.7- -.$ 7*-)>$
%72-; -+ 7/; 0$2>)*$ *+/-27*- <7; '$ 7 *+2%+27-)+/ :.+((; +:/$@ '; ,+2$)1/ )/-$2$0-0. I/ 0&*. 7 *70$, -.$ *)-)?$/0.)%
2$G&)2$<$/- )0 *+<%($-$(; 0$- 70)@$, %$2<)--)/1 ,+2$)1/ *+2%+27-)+/0 -+ +'-7)/ 7*-&7( %+00$00)+/, *+/-2+(, 7/@ C$/K+;<$/-D +,
-.$ *+&/-2;F0 /7-&27( 2$0+&2*$0.
L2>;M
L*(phasis supplie!.M
-ccor!ingl$# Professor -gabin reco((en!s that)
R$*+1/)?)/1 -.$ 0$2>)*$ *+/-27*- ,+2 :.7- )- )0, :$ .7>$ -+ $=%&/1$ )- ,2+< -.$ C+/0-)-&-)+/ 7/@ 2$7,,)2< +:/$20.)% +>$2 +&2
/7-&27( 2$0+&2*$0. hat is the onl$ %a$ %e can e6ercise effecti'e control o'er our natural resources.
his shoul! not (ean co(plete isolation of the countr$Ns natural resources fro( foreign in'est(ent. O-.$2 *+/-27*- ,+2<0 :.)*. 72$
($00 @$2+17-+2; -+ +&2 0+>$2$)1/-; 7/@ *+/-2+( +>$2 /7-&27( 2$0+&2*$0 N ()H$ -$*./)*7( 700)0-7/*$ 712$$<$/-0, ,)/7/*)7(
700)0-7/*$ C712$$<$/-0D, *+A%2+@&*-)+/ 712$$<$/-0, K+)/- >$/-&2$0, %2+@&*-)+/A0.72)/1 N *+&(@ 0-)(( '$ &-)()?$@ 7/@ 7@+%-$@
:)-.+&- >)+(7-)/1 *+/0-)-&-)+/7( %2+>)0)+/0. I/ +-.$2 :+2@0, :$ *7/ 7@+%- *+/-27*- ,+2<0 :.)*. 2$*+1/)?$ 7/@ 700$2- +&2
0+>$2$)1/-; 7/@ +:/$20.)% +>$2 /7-&27( 2$0+&2*$0, 7/@ :.$2$ -.$ ,+2$)1/ $/-)-; )0 K&0- 7 %&2$ *+/-27*-+2 )/0-$7@ +, -.$
'$/$,)*)7( +:/$2 +, +&2 $*+/+<)* 2$0+&2*$0.
L2>7M
L*(phasis supplie!.M
Still another (e(ber of the %or.ing group# Professor *!uar!o <abitag# propose! that)
2. S$2>)*$ *+/-27*-0 70 %27*-)*$@ &/@$2 -.$ 1473 C+/0-)-&-)+/ 0.+&(@ '$ @)0*+&271$@, )/0-$7@ -.$ 1+>$2/<$/- <7; '$
7((+:$@, 0&'K$*- -+ 7&-.+2)?7-)+/ '; 0%$*)7( (7: %700$@ '; 7/ $=-27+2@)/72; <7K+2)-; -+ $/-$2 )/-+ $)-.$2 -$*./)*7( +2 ,)/7/*)7(
700)0-7/*$. his is 8ustifie! b$ the fact that as presentl$ %or!e! in the 1979 Constitution# a ser'ice contract gi'es full control o'er the
contract area to the ser'ice contractor# for hi( to %or.# (anage an! !ispose of the procee!s or pro!uction. +t %as a subterfuge to get
aroun! the nationalit$ re7uire(ent of the constitution.
L2>8M
L*(phasis supplie!.M
+n the annotations on the propose! -rticle on National *cono($ an! Patri(on$# the B.P. <a% !raft su((ari1e! the rationale
therefor# thus)
5. he last paragraph is a (o!ification of the ser'ice contract pro'ision foun! in Section 9# -rticle K+E of the 1979 Constitution as
a(en!e!. his 1979 pro'ision shattere! the fra(e%or. of nationalis( in our fun!a(ental la% 3see Magallona# PNationalis( an! its
Sub'ersion in the ConstitutionQ4. hrough the ser'ice contract# the 1979 Constitution ha! legiti(i1e! that %hich %as prohibite! un!er
the 1995 constitutionTthe e6ploitation of the countr$Ns natural resources b$ foreign nationals. hrough the ser'ice contract# acts
prohibite! b$ the -ntiJ0u(($ <a% %ere recogni1e! as legiti(ate arrange(ents. S$2>)*$ *+/-27*-0 (+@1$ $=*(&0)>$ <7/71$<$/-
7/@ *+/-2+( +, -.$ $/-$2%2)0$ -+ -.$ 0$2>)*$ *+/-27*-+2, /+- &/()H$ -.$ +(@ *+/*$00)+/ 2$1)<$ :.$2$ -.$ *+/*$00)+/7)2$ .7@
*+<%($-$ *+/-2+( +>$2 -.$ *+&/-2;F0 /7-&27( 2$0+&2*$0, .7>)/1 '$$/ 1)>$/ $=*(&0)>$ 7/@ %($/72; 2)1.-0 -+ $=%(+)- 7 %72-)*&(72
2$0+&2*$ 7/@, )/ $,,$*-, .7>)/1 '$$/ 700&2$@ +, +:/$20.)% +, -.7- 2$0+&2*$ 7- -.$ %+)/- +, $=-27*-)+/ 3see -gabin# PSer'ice
Contracts) ,l! ?ine in Ne% "ottlesQ4. Ser'ice contracts# hence# are antithetical to the principle of so'ereignt$ o'er our natural
resources# as %ell as the constitutional pro'ision on nationali1ation or :ilipini1ation of the e6ploitation of our natural resources.
U/@$2 -.$ %2+%+0$@ %2+>)0)+/, +/(; -$*./)*7( 700)0-7/*$ +2 ,)/7/*)7( 700)0-7/*$ 712$$<$/-0 <7; '$ $/-$2$@ )/-+, 7/@ +/(; ,+2
(721$A0*7($ 7*-)>)-)$0. T.$0$ 72$ *+/-27*- ,+2<0 :.)*. 2$*+1/)?$ 7/@ 700$2- +&2 0+>$2$)1/-; 7/@ +:/$20.)% +>$2 /7-&27(
2$0+&2*$0 0)/*$ -.$ ,+2$)1/ $/-)-; )0 K&0- 7 %&2$ *+/-27*-+2 7/@ /+- 7 '$/$,)*)7( +:/$2 +, +&2 $*+/+<)* 2$0+&2*$0. T.$
%2+%+07( 2$*+1/)?$0 -.$ /$$@ ,+2 *7%)-7( 7/@ -$*./+(+1; -+ @$>$(+% +&2 /7-&27( 2$0+&2*$0 :)-.+&- 07*2),)*)/1 +&2 0+>$2$)1/-;
7/@ *+/-2+( +>$2 0&*. 2$0+&2*$0 '; -.$ 07,$1&72@ +, 7 0%$*)7( (7: :.)*. 2$G&)2$0 -:+A-.)2@0 >+-$ +, 7(( -.$ <$<'$20 +, -.$
L$1)0(7-&2$. his %ill ensure that such agree(ents %ill be !ebate! upon e6hausti'el$ an! thoroughl$ in the National -sse(bl$ to a'ert
pre8u!ice to the nation.
L2>9M
L*(phasis supplie!.M
he B.P. <a% !raft proponents 'ie%e! ser'ice contracts un!er the 1979 Constitution as grants of beneficial o%nership of the
countr$Ns natural resources to foreign o%ne! corporations. ?hile# in theor$# the State o%ns these natural resources O an! :ilipino
citi1ens# their beneficiaries O ser'ice contracts actuall$ 'este! foreigners %ith the right to !ispose# e6plore for# !e'elop# e6ploit# an!
utili1e the sa(e. :oreigners# not :ilipinos# beca(e the beneficiaries of Philippine natural resources. his arrange(ent is clearl$
inco(patible %ith the constitutional i!eal of nationali1ation of natural resources# %ith the Regalian !octrine# an! on a broa!er
perspecti'e# %ith Philippine so'ereignt$.
he proponents ne'ertheless ac.no%le!ge! the nee! for capital an! technical .no%Jho% in the largeJscale e6ploitation#
!e'elop(ent an! utili1ation of natural resources O the secon! paragraph of the propose! !raft itself being an a!(ission of such
scarcit$. Hence# the$ reco((en!e! a co(pro(ise to reconcile the nationalistic pro'isions !ating bac. to the 1995 Constitution# %hich
reser'e! all natural resources e6clusi'el$ to :ilipinos# an! the (ore liberal 1979 Constitution# %hich allo%e! foreigners to participate in
these resources through ser'ice contracts. Such a co(pro(ise calle! for the a!option of a ne% s$ste( in the e6ploration#
!e'elop(ent# an! utili1ation of natural resources in the for( of technical agree(ents or financial agree(ents %hich# necessaril$# are
!istinct concepts fro( ser'ice contracts.
he replace(ent of Pser'ice contractsQ %ith Pagree(entsU in'ol'ing either technical or financial assistance#Q as %ell as the
!eletion of the phrase P(anage(ent or other for(s of assistance#Q assu(es greater significance %hen note is ta.en that the B.P. <a%
!raft propose! other e7uall$ crucial changes that %ere ob'iousl$ hee!e! b$ the C,NC,M. hese inclu!e the abrogation of the
concession s$ste( an! the a!option of ne% PoptionsQ for the State in the e6ploration# !e'elop(ent# an! utili1ation of natural
resources. he proponents !ee(e! these changes to be (ore consistent %ith the StateNs o%nership of# an! its Pfull control an!
super'isionQ 3a phrase also e(plo$e! b$ the fra(ers4 o'er# such resources. he Pro8ect e6plaine!)
9. +n line %ith the State o%nership of natural resources# the State shoul! ta.e a (ore acti'e role in the e6ploration# !e'elop(ent#
an! utili1ation of natural resources# than the present practice of granting licenses# concessions# or leases O hence the pro'ision that
sai! acti'ities shall be un!er the full control an! super'ision of the State. here are three (a8or sche(es b$ %hich the State coul!
un!erta.e these acti'ities) first# !irectl$ b$ itself5 secon!# b$ 'irtue of coJpro!uction# 8oint 'enture# pro!uction sharing agree(ents %ith
:ilipino citi1ens or corporations or associations si6t$ per cent 3;AD4 of the 'oting stoc. or controlling interests of %hich are o%ne! b$
such citi1ens5 or thir!# %ith a foreignJo%ne! corporation# in cases of largeJscale e6ploration# !e'elop(ent# or utili1ation of natural
resources through agree(ents in'ol'ing either technical or financial assistance onl$. 6 6 6.
-t present# un!er the licensing concession or lease sche(es# the go'ern(ent benefits fro( such benefits onl$ through fees# charges#
a! 'alore( ta6es an! inco(e ta6es of the e6ploiters of our natural resources. Such benefits are 'er$ (ini(al co(pare! %ith the
enor(ous profits reape! b$ theses licensees# grantees# concessionaires. Moreo'er# so(e of the( !isregar! the conser'ation of
natural resources an! !o not protect the en'iron(ent fro( !egra!ation. he propose! role of the State %ill enable it to a greater share
in the profits O it can also acti'el$ husban! its natural resources an! engage in !e'elop(ental progra(s that %ill be beneficial to the(.
>. -si!e fro( the three (a8or sche(es for the e6ploration# !e'elop(ent# an! utili1ation of our natural resources# the State (a$# b$
la%# allo% :ilipino citi1ens to e6plore# !e'elop# utili1e natural resources in s(allJscale. his is in recognition of the plight of (arginal
fisher(en# forest !%ellers# gol! panners# an! others si(ilarl$ situate! %ho e6ploit our natural resources for their !ail$ sustenance an!
sur'i'al.
L25AM
Professor -gabin# in particular# after ta.ing pains to illustrate the si(ilarities bet%een the t%o s$ste(s# conclu!e! that the ser'ice
contract regi(e %as but a PrehashQ of the concession s$ste(. P,l! %ine in ne% bottles#Q as he put it. T.$ 2$K$*-)+/ +, -.$ 0$2>)*$
*+/-27*- 2$1)<$, -.$2$,+2$, )0 )/ *+/0+/7/*$ :)-. -.$ 7'+()-)+/ +, -.$ *+/*$00)+/ 0;0-$<.
+n light of the !eliberations of the C,NC,M# the te6t of the Constitution# an! the a!option of other propose! changes# there is no
!oubt that the fra(ers consi!ere! an! share! the intent of the B.P. <a% proponents in e(plo$ing the phrase Pagree(ents . . . in'ol'ing
either technical or financial assistance.Q
?hile certain co((issioners (a$ ha'e (entione! the ter( Pser'ice contractsQ !uring the C,NC,M !eliberations# the$ (a$ not
ha'e been necessaril$ referring to the concept of ser'ice contracts un!er the 1979 Constitution. -s note! earlier# Pser'ice contractsQ is
a ter( that assu(es !ifferent (eanings to !ifferent people.
L251M
he co((issioners (a$ ha'e been using the ter( loosel$# an! not in its
technical an! legal sense# to refer# in general# to agree(ents concerning natural resources entere! into b$ the Co'ern(ent %ith foreign
corporations. hese loose state(ents !o not necessaril$ translate to the a!option of the 1979 Constitution pro'ision allo%ing ser'ice
contracts.
+t is true that# as sho%n in the earlier 7uote! portions of the procee!ings in C,NC,M# in response to Sr. anNs 7uestion#
Co((issioner Eillegas co((ente! that# other than congressional notification# the onl$ !ifference bet%een PfutureQ an! PpastQ Pser'ice
contractsQ is the re7uire(ent of a general la% as there %ere no la%s pre'iousl$ authori1ing the sa(e.
L252M
Ho%e'er# such re(ar. is far
out%eighe! b$ his (ore categorical state(ent in his e6change %ith Co((issioner Huesa!a that the !raft article P!oes not per(it
foreign in'estors to participateQ in the nationNs natural resources O %hich %as e6actl$ %hat ser'ice contracts !i! O e6cept to pro'i!e
Ptechnical or financial assistance.Q
L259M
+n the case of the other co((issioners# Co((issioner Nolle!o hi(self clarifie! in his %or. that the present charter prohibits
ser'ice contracts.
L25>M
Co((issioner Cascon %as not totall$ a'erse to foreign participation# but fa'ore! stricter restrictions in the for( of
(a8orit$ congressional concurrence.
L255M
,n the other han!# Co((issioners Carcia an! a!eo (a$ ha'e 'eere! to the e6tre(e si!e of
the spectru( an! their ob8ections (a$ be interprete! as 'otes against an$ foreign participation in our natural resources %hatsoe'er.
?MCP cites ,pinion No. 75# s. 1987#
L25;M
an! ,pinion No. 175# s. 199A
L257M
of the Secretar$ of &ustice# e6pressing the 'ie% that a
financial or technical assistance agree(ent Pis no !ifferent in conceptQ fro( the ser'ice contract allo%e! un!er the 1979
Constitution. his Court is not# ho%e'er# boun! b$ this interpretation. ?hen an a!(inistrati'e or e6ecuti'e agenc$ ren!ers an opinion
or issues a state(ent of polic$# it (erel$ interprets a preJe6isting la%5 an! the a!(inistrati'e interpretation of the la% is at best a!'isor$#
for it is the courts that finall$ !eter(ine %hat the la% (eans.
L258M
+n an$ case# the constitutional pro'ision allo%ing the Presi!ent to enter into :--s %ith foreignJo%ne! corporations is an
e6ception to the rule that participation in the nationNs natural resources is reser'e! e6clusi'el$ to :ilipinos. -ccor!ingl$# such pro'ision
(ust be construe! strictl$ against their en8o$(ent b$ nonJ:ilipinos. -s Co((issioner Eillegas e(phasi1e!# the pro'ision is P'er$
restricti'e.Q
L259M
Co((issioner Nolle!o also re(ar.e! that Pentering into ser'ice contracts is an e6ception to the rule on protection of
natural resources for the interest of the nation an!# therefore# being an e6ception# it shoul! be sub8ect# %hene'er possible# to stringent
rules.Q
L2;AM
+n!ee!# e6ceptions shoul! be strictl$ but reasonabl$ construe!5 the$ e6ten! onl$ so far as their language fairl$ %arrants an!
all !oubts shoul! be resol'e! in fa'or of the general pro'ision rather than the e6ception.
L2;1M
?ith the foregoing !iscussion in (in!# this Court fin!s that R.-. No. 79>2 is in'ali! insofar as sai! -ct authori1es ser'ice
contracts. -lthough the statute e(plo$s the phrase Pfinancial an! technical agree(entsQ in accor!ance %ith the 1987 Constitution# it
actuall$ treats these agree(ents as ser'ice contracts that grant beneficial o%nership to foreign contractors contrar$ to the fun!a(ental
la%.
Section 99# %hich is foun! un!er Chapter E+ 3:inancial or echnical -ssistance -gree(ent4 of R.-. No. 79>2 states)
S*C. 99. "ligibility.T-n$ 7ualifie! person %ith technical an! financial capabilit$ -+ &/@$2-7H$ (721$A0*7($ $=%(+27-)+/, @$>$(+%<$/-,
7/@ &-)()?7-)+/ +, <)/$27( 2$0+&2*$0 in the Philippines (a$ enter into a financial or technical assistance agree(ent !irectl$ %ith the
Co'ern(ent through the 0epart(ent. L*(phasis supplie!.M
PE=%(+27-)+/#Q as !efine! b$ R.-. No. 79>2#
(eans the searching or prospecting for (ineral resources b$ geological# geoche(ical or geoph$sical sur'e$s# re(ote sensing# test
pitting# tren!ing# !rilling# shaft sin.ing# tunneling or an$ other (eans for the purpose of !eter(ining the e6istence# e6tent# 7uantit$ an!
7ualit$ thereof an! the feasibilit$ of (ining the( for profit.
L2;2M
- legall$ organi1e! foreignJo%ne! corporation (a$ be grante! an e6ploration per(it#
L2;9M
%hich 'ests it %ith the right to con!uct
e6ploration for all (inerals in specifie! areas#
L2;>M
i.e.# to enter# occup$ an! e6plore the sa(e.
L2;5M
*'entuall$# the foreignJo%ne!
corporation# as such per(ittee# (a$ appl$ for a financial an! technical assistance agree(ent.
L2;;M
LD$>$(+%<$/-M is
the %or. un!erta.en to e6plore an! prepare an ore bo!$ or a (ineral !eposit for (ining# inclu!ing the construction of necessar$
infrastructure an! relate! facilities.
L2;7M
PU-)()?7-)+/Q P(eans the e6traction or !isposition of (inerals.Q
L2;8M
- stipulation that the proponent shall !ispose of the (inerals an!
b$pro!ucts pro!uce! at the highest price an! (ore a!'antageous ter(s an! con!itions as pro'i!e! for un!er the i(ple(enting rules
an! regulations is re7uire! to be incorporate! in e'er$ :--.
L2;9M
- foreignJo%ne!2Jcontrolle! corporation (a$ li.e%ise be grante! a (ineral processing per(it.
L27AM
PMineral processingQ is the
(illing# beneficiation or upgra!ing of ores or (inerals an! roc.s or b$ si(ilar (eans to con'ert the sa(e into (ar.etable pro!ucts.
L271M
-n :-- contractor (a.es a %arrant$ that the (ining +%$27-)+/0 shall be con!ucte! in accor!ance %ith the pro'isions of R.-.
No. 79>2 an! its i(ple(enting rules
L272M
an! for %or. progra(s an! (ini(u( e6pen!itures an! co((it(ents.
L279M
-n! it obliges itself to
furnish the Co'ern(ent recor!s of geologic# accounting# an! other rele'ant !ata for its (ining operation.
L27>M
PM)/)/1 +%$27-)+/#Q as the la% !efines it# (eans <)/)/1 7*-)>)-)$0 in'ol'ing $=%(+27-)+/, ,$70)')()-;, @$>$(+%<$/-, &-)()?7-)+/#
an! %2+*$00)/1.
L275M
he un!erl$ing assu(ption in all these pro'isions is that the foreign contractor (anages the (ineral resources# 8ust li.e the
foreign contractor in a ser'ice contract.
:urther(ore# Chapter K++ of the -ct grants foreign contractors in :--s the sa(e au6iliar$ (ining rights that it grants contractors
in (ineral agree(ents 3MPS-# C- an! &E4.
L27;M
Parentheticall$# Sections 72 to 75 use the ter( Pcontractor#Q %ithout !istinguishing
bet%een :-- an! (ineral agree(ent contractors. -n! so !oes Phol!ers of (ining rightsQ in Section 7;. - foreign contractor (a$
e'en con'ert its :-- into a (ineral agree(ent if the econo(ic 'iabilit$ of the contract area is foun! to be ina!e7uate to 8ustif$ largeJ
scale (ining operations#
L277M
pro'i!e! that it re!uces its e7uit$ in the corporation# partnership# association or cooperati'e to fort$ percent
3>AD4.
L278M
:inall$# un!er the -ct# an :-- contractor %arrants that it Phas or has access to all the financing# <7/71$2)7(# an! technical
e6pertise. . . .Q
L279M
his suggests that an :-- contractor is boun! to pro'i!e so(e <7/71$<$/- assistance O a for( of assistance that
has been eli(inate! an!# therefore# proscribe! b$ the present Charter.
"$ allo%ing foreign contractors to (anage or operate all the aspects of the (ining operation# the abo'eJcite! pro'isions of R.-.
No. 79>2 ha'e in effect con'e$e! beneficial o%nership o'er the nationNs (ineral resources to these contractors# lea'ing the State %ith
nothing but bare title thereto.
Moreo'er# the sa(e pro'isions# %hether b$ !esign or ina!'ertence# per(it a circu('ention of the constitutionall$ or!aine! ;ADJ
>AD capitali1ation re7uire(ent for corporations or associations engage! in the e6ploitation# !e'elop(ent an! utili1ation of Philippine
natural resources.
+n su(# the Court fin!s the follo%ing pro'isions of R.-. No. 79>2 to be 'iolati'e of Section 2# -rticle K++ of the Constitution)
314 he pro'iso in Section 9 3a74# %hich !efines P7ualifie! person#Q to %it)
Provided# hat a legall$ organi1e! foreignJo%ne! corporation shall be !ee(e! a 7ualifie! person for purposes of granting an
e6ploration per(it# financial or technical assistance agree(ent or (ineral processing per(it.
324 Section 29#
L28AM
%hich specifies the rights an! obligations of an e6ploration per(ittee# insofar as sai! section applies to a
financial or technical assistance agree(ent#
394 Section 99# %hich prescribes the eligibilit$ of a contractor in a financial or technical assistance agree(ent5
3>4 Section 95#
L281M
%hich enu(erates the ter(s an! con!itions for e'er$ financial or technical assistance agree(ent5
354 Section 99#
L282M
%hich allo%s the contractor in a financial an! technical assistance agree(ent to con'ert the sa(e into a
(ineral pro!uctionJsharing agree(ent5
3;4 Section 5;#
L289M
%hich authori1es the issuance of a (ineral processing per(it to a contractor in a financial an! technical
assistance agree(ent5
he follo%ing pro'isions of the sa(e -ct are li.e%ise 'oi! as the$ are !epen!ent on the foregoing pro'isions an! cannot stan! on
their o%n)
314 Section 9 3g4#
L28>M
%hich !efines the ter( Pcontractor#Q insofar as it applies to a financial or technical assistance
agree(ent.
Section 9>#
L285M
%hich prescribes the (a6i(u( contract area in a financial or technical assistance agree(ents5
Section 9;#
L28;M
%hich allo%s negotiations for financial or technical assistance agree(ents5
Section 97#
L287M
%hich prescribes the proce!ure for filing an! e'aluation of financial or technical assistance agree(ent proposals5
Section 98#
L288M
%hich li(its the ter( of financial or technical assistance agree(ents5
Section >A#
L289M
%hich allo%s the assign(ent or transfer of financial or technical assistance agree(ents5
Section >1#
L29AM
%hich allo%s the %ith!ra%al of the contractor in an :--5
he secon! an! thir! paragraphs of Section 81#
L291M
%hich pro'i!e for the Co'ern(entNs share in a financial an! technical
assistance agree(ent5 an!
Section 9A#
L292M
%hich pro'i!es for incenti'es to contractors in :--s insofar as it applies to sai! contractors5
?hen the parts of the statute are so (utuall$ !epen!ent an! connecte! as con!itions# consi!erations# in!uce(ents# or
co(pensations for each other# as to %arrant a belief that the legislature inten!e! the( as a %hole# an! that if all coul! not be carrie!
into effect# the legislature %oul! not pass the resi!ue in!epen!entl$# then# if so(e parts are unconstitutional# all the pro'isions %hich
are thus !epen!ent# con!itional# or connecte!# (ust fall %ith the(.
L299M
here can be little !oubt that the ?MCP :-- itself is a ser'ice contract.
Section 1.9 of the ?MCP :-- grants ?MCP Pthe e6clusi'e right to e6plore# e6ploit# utiliseL#M process an! !ispose of all Minerals
pro!ucts an! b$Jpro!ucts thereof that (a$ be pro!uce! fro( the Contract -rea.Q
L29>M
he :-- also i(bues ?MCP %ith the follo%ing
rights)
3b4 to e6tract an! carr$ a%a$ an$ Mineral sa(ples fro( the Contract area for the purpose of con!ucting tests an! stu!ies in respect
thereof5
3c4 to !eter(ine the (ining an! treat(ent processes to be utilise! !uring the 0e'elop(ent2,perating Perio! an! the pro8ect facilities
to be constructe! !uring the 0e'elop(ent an! Construction Perio!5
3!4 ha'e the right of possession of the Contract -rea# %ith full right of ingress an! egress an! the right to occup$ the sa(e# sub8ect to
the pro'isions of Presi!ential 0ecree No. 512 3if applicable4 an! not be pre'ente! fro( entr$ into pri'ate an!s b$ surface o%ners an!2or
occupants thereof %hen prospecting# e6ploring an! e6ploiting for (inerals therein5
6 6 6
3f4 to construct roa!%a$s# (ining# !rainage# po%er generation an! trans(ission facilities an! all other t$pes of %or.s on the Contract
-rea5
3g4 to erect# install or place an$ t$pe of i(pro'e(ents# supplies# (achiner$ an! other e7uip(ent relating to the Mining ,perations
an! to use# sell or other%ise !ispose of# (o!if$# re(o'e or !i(inish an$ an! all parts thereof5
3h4 en8o$# sub8ect to pertinent la%s# rules an! regulations an! the rights of thir! Parties# ease(ent rights an! the use of ti(ber# san!#
cla$# stone# %ater an! other natural resources in the Contract -rea %ithout cost for the purposes of the Mining ,perations5
6 6 6
3l4 ha'e the right to (ortgage# charge or encu(ber all or part of its interest an! obligations un!er this -gree(ent# the plant#
e7uip(ent an! infrastructure an! the Minerals pro!uce! fro( the Mining ,perations5
6 6 6.
L295M
-ll (aterials# e7uip(ent# plant an! other installations erecte! or place! on the Contract -rea re(ain the propert$ of ?MCP# %hich
has the right to !eal %ith an! re(o'e such ite(s %ithin t%el'e (onths fro( the ter(ination of the :--.
L29;M
Pursuant to Section 1.2 of the :--# ?MCP shall pro'i!e PLallM financing# technolog$# (anage(ent an! personnel necessar$ for
the Mining ,perations.Q he (ining co(pan$ bin!s itself to Pperfor( all Mining ,perations . . . pro'i!ing all necessar$ ser'ices#
technolog$ an! financing in connection there%ith#Q
L297M
an! to Pfurnish all (aterials# labour# e7uip(ent an! other installations that (a$ be
re7uire! for carr$ing on all Mining ,perations.Q
L298M
?MCP (a$ (a.e e6pansions# i(pro'e(ents an! replace(ents of the (ining
facilities an! (a$ a!! such ne% facilities as it consi!ers necessar$ for the (ining operations.
L299M
hese contractual stipulations# ta.en together# grant ?MCP beneficial o%nership o'er natural resources that properl$ belong to
the State an! are inten!e! for the benefit of its citi1ens. hese stipulations are abhorrent to the 1987 Constitution. he$ are precisel$
the 'ices that the fun!a(ental la% see.s to a'oi!# the e'ils that it ai(s to suppress. Conse7uentl$# the contract fro( %hich the$ spring
(ust be struc. !o%n.
+n arguing against the annul(ent of the :--# ?MCP in'o.es the -gree(ent on the Pro(otion an! Protection of +n'est(ents
bet%een the Philippine an! -ustralian Co'ern(ents# %hich %as signe! in Manila on &anuar$ 25# 1995 an! %hich entere! into force on
0ece(ber 8# 1995.
6 6 6. -rticle 2 314 of sai! treat$ states that it applies to in'est(ents %hene'er (a!e an! thus the fact that L?MCPNsM :-- %as
entere! into prior to the entr$ into force of the treat$ !oes not preclu!e the Philippine Co'ern(ent fro( protecting L?MCPNsM in'est(ent
in LthatM :--. <i.e%ise# -rticle 9 314 of the treat$ pro'i!es that LEach Part shall enco!ra"e and pro#ote invest#ents in its area
b investors o$ the other Part and shall [ad#it] s!ch invest#ents in accordance %ith its Constit!tion, &a%s, re"!lations and
invest#ent policies' and in Article ( )2*, it states that +Each Part shall ens!re that invest#ents are accorded $air and
e,!itable treat#ent.M he latter stipulation in!icates that it %as inten!e! to i(pose an obligation upon a Part$ to affor! fair an!
e7uitable treat(ent to the in'est(ents of the other Part$ an! that a failure to pro'i!e such treat(ent b$ or un!er the la%s of the Part$
(a$ constitute a breach of the treat$. Si(pl$ state!# the Philippines coul! not# un!er sai! treat$# rel$ upon the ina!e7uacies of its o%n
la%s to !epri'e an -ustralian in'estor 3li.e L?MCPM4 of fair an! e7uitable treat(ent b$ in'ali!ating L?MCPNsM :-- %ithout li.e%ise
nullif$ing the ser'ice contracts entere! into before the enact(ent of R- 79>2 such as those (entione! in P0 87 or *, 279.
his beco(es (ore significant in the light of the fact that L?MCPNsM :-- %as e6ecute! not b$ a (ere :ilipino citi1en# but b$ the
Philippine Co'ern(ent itself# through its Presi!ent no less# %hich# in entering into sai! treat$ is assu(e! to be a%are of the e6isting
Philippine la%s on ser'ice contracts o'er the e6ploration# !e'elop(ent an! utili1ation of natural resources. he e6ecution of the :--
b$ the Philippine Co'ern(ent assures the -ustralian Co'ern(ent that the :-- is in accor!ance %ith e6isting Philippine la%s.
L9AAM
L*(phasis an! italics b$ pri'ate respon!ents.M
he in'ali!ation of the sub8ect :--# it is argue!# %oul! constitute a breach of sai! treat$ %hich# in turn# %oul! a(ount to a
'iolation of Section 9# -rticle ++ of the Constitution a!opting the generall$ accepte! principles of international la% as part of the la% of the
lan!. ,ne of these generall$ accepte! principles is pacta sunt servanda# %hich re7uires the perfor(ance in goo! faith of treat$
obligations.
*'en assu(ing arguendo that ?MCP is correct in its interpretation of the treat$ an! its assertion that Pthe Philippines coul!
not . . . !epri'e an -ustralian in'estor 3li.e L?MCPM4 of fair an! e7uitable treat(ent b$ in'ali!ating L?MCPNsM :-- %ithout li.e%ise
nullif$ing the ser'ice contracts entere! into before the enact(ent of R- 79>2 . . .#Q the annul(ent of the :-- %oul! not constitute a
breach of the treat$ in'o.e!. :or this !ecision herein in'ali!ating the sub8ect :-- for(s part of the legal s$ste( of the Philippines.
L9A1M
he e7ual protection clause
L9A2M
guarantees that such !ecision shall appl$ to all contracts belonging to the sa(e class# hence#
uphol!ing rather than 'iolating# the Pfair an! e7uitable treat(entQ stipulation in sai! treat$.
,ne other (atter re7uires clarification. Petitioners conten! that# consistent %ith the pro'isions of Section 2# -rticle K++ of the
Constitution# the Presi!ent (a$ enter into agree(ents in'ol'ing P$)-.$2 technical +2 financial assistanceQ onl$. he agree(ent in
7uestion# ho%e'er# is a technical 7/@ financial assistance agree(ent.
PetitionersN contention !oes not lie. o a!here to the literal language of the Constitution %oul! lea! to absur! conse7uences.
L9A9M
-s ?MCP correctl$ put it)
6 6 6 such a theor$ of petitioners %oul! co(pel the go'ern(ent 3through the Presi!ent4 to enter into contract %ith t%o 324 foreignJo%ne!
corporations# one for financial assistance agree(ent an! %ith the other# for technical assistance o'er one an! the sa(e (ining area or
lan!5 or to e6ecute t%o 324 contracts %ith onl$ one foreignJo%ne! corporation %hich has the capabilit$ to pro'i!e both financial an!
technical assistance# one for financial assistance an! another for technical assistance# o'er the sa(e (ining area. Such an absur!
result is !efinitel$ not sanctione! un!er the canons of constitutional construction.
L9A>M
LBn!erscoring in the original.M
Surel$# the fra(ers of the 1987 Charter !i! not conte(plate such an absur! result fro( their use of Peither2or.Q - constitution is not
to be interprete! as !e(an!ing the i(possible or the i(practicable5 an! unreasonable or absur! conse7uences# if possible# shoul! be
a'oi!e!.
L9A5M
Courts are not to gi'e %or!s a (eaning that %oul! lea! to absur! or unreasonable conse7uences an! a literal
interpretation is to be re8ecte! if it %oul! be un8ust or lea! to absur! results.
L9A;M
hat is a strong argu(ent against its a!option.
L9A7M
-ccor!ingl$# petitionersN interpretation (ust be re8ecte!.
he foregoing !iscussion has ren!ere! unnecessar$ the resolution of the other issues raise! b$ the petition.
WHEREFORE# the petition is .R(#+"D. he Court hereb$ !eclares unconstitutional an! 'oi!)
314 he follo%ing pro'isions of Republic -ct No. 79>2)
3a4 he pro'iso in Section 9 3a74#
3b4 Section 29#
3c4 Section 99 to >1#
3!4 Section 5;#
3e4 he secon! an! thir! paragraphs of Section 81# an!
3f4 Section 9A.
324 -ll pro'isions of 0epart(ent of *n'iron(ent an! Natural Resources -!(inistrati'e ,r!er 9;J>A# s. 199; %hich are not in
confor(it$ %ith this 0ecision# an!
394 he :inancial an! echnical -ssistance -gree(ent bet%een the Co'ern(ent of the Republic of the Philippines an! ?MC
Philippines# +nc.
SO ORDERED.
Davide% ,r.% C.,.% Puno% -uisumbing% Carpio% Corona% Calleo% Sr.% an! +inga. ,,.% concur.
1itug% ,.% see Separate ,pinion.
Panganiban% ,.% see Separate ,pinion.
/nares)Santiago% Sandoval).utierre! an! (ustria)*artine!% ,,.% 8oins &. PanganibanNs separate opinion.
(!cuna# no part# one of the parties %as a client.