Article 12 Section 9 of the 1987 Constitution

The Congress may establish an independent economic and planning agency

headed by the President, which shall, after consultations with the appropriate
public agencies, various private sectors and local government units, recommend to
Congress, and implement continuing integrated and coordinated programs and
policies for national development.
Until the Congress provides otherwise, the National Economic and Development
Authority shall function as the Independent planning agency of the government.

On the basis of the constitution, an Independent Economic Planning agency headed by the
President is to be established. This mandate requires that:
1. A Central Economic Planning Body is Needed Economic planning is an
essential part of development policy which affects the direction of the growth of the
nation. Such economic planning may cover the whole economy, or only certain
sectors of the society or of a particular region of the country. 1

2. The following Features and Functions are to be present the following are the
features and functions of the economic and planning agency which
Congress is mandated to establish:
a. It is Independent
b. It is a central body for Economic Planning and Policy
c. It is headed by the President making it the highest economic policy
planning organ
d. It shall prepare programs and policies for national development
e. It shall prepare such programs and policies for approval of Congress
f. It shall prepare, recommend and implement continuing, integrated and
policies for national development.
f.1 Continuing it means a continuing process of preparation, review and
implementation, evaluation and follow-up.
f.2. Integrated it means it has to present a unified set of policies
f.3. Coordinated it means there is a need for cooperation and interaction
among all since it is essential to success of any developmental plan 2

1 http://www.slideshare.net/JudithFtlvr/article-12-national-economy-and-patrimony

2 Ibid.
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NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY (NEDA) this is the

body that shall function as the independent planning agency of the government. 3
The National Economic and Development Authority (NEDA), as mandated by the Philippine
Constitution, is the country's social and economic development planning and policy
coordinating agency. It consists of the NEDA Board and the NEDA Secretariat. The NEDA
ensures that the plans and programs of various agencies are in consonance with one another.
The NEDA provides the strategic directions that will guide government and the private
sector in crafting development policies to attain sustainable economic growth with equitable
distribution of wealth.4
NEDA is highly regarded as the authority in macroeconomic forecasting and policy analysis
and research. It provides high-level advice to policymakers in Congress and the Executive
Branch. Its key responsibilities include:

Coordination of such activities as the formulation of policies, plans and programs to

efficiently set the broad parameters for national and sub-national (area-wide,
regional and local development);

Review, evaluation, and monitoring of infrastructure projects identified under the

Comprehensive and Integrated Infrastructure Program (CIIP) consistent with the
governments thrust of increasing investment spending for the growing demand on
quality infrastructure facilities; and

Undertaking of short-term policy reviews to provide critical analyses of development

issues and policy alternatives to decision-makers.5

The powers and functions of the NEDA reside in the NEDA Board. It is the Philippines'
premier social and economic development planning and policy coordinating body. The
Board is composed of the President as chairman, the Secretary of Socio-Economic
Planning and NEDA Director-General as vice-chairman, and the following as
members: the Executive Secretary and the Secretaries of Finance, Trade and Industry,
Agriculture, Environment and Natural Resources, Public Works and Highways, Budget and
Management, Labor and Employment, and Interior and Local Government.
The following have since been added as members to the Board: the Secretaries of Health,
Foreign Affairs, and Agrarian Reform (per Memorandum Order No. 164, dated 21 March
1988); the Secretary of Science and Technology (per Memorandum Order No. 235, dated 19
May 1989); and the Secretary of Transportation and Communications (per Memorandum
Order No. 321, dated 26 September 1990). In addition, the Secretary of Energy (per Republic
Act No. 7638, approved December 9, 1992) and the Governor of the Bangko Sentral ng
Pilipinas (per Section 124 of Republic Act No. 7653, approved June 14, 1993).
On April 22, 2006, the NEDA Board was reconstituted through Administrative Order No.
148, adding eight new members and replacing five original members.
3 Ibid.
4 http://www.dbm.gov.ph/wp-content/OPCCB/OPIF_2007/neda3.pdf

5 http://www.neda.gov.ph/about-neda/

To update, President Dutertes economic team had given the 10-point agenda of the
current administration. They are:
Continue and maintain current macroeconomic policies, including fiscal, monetary
and trade policies

Instituting progressive tax reform and more effective tax collection while indexing
taxes to inflation, in line with the plan to submit to Congress a tax reform package by
September;

Increasing competitiveness and the ease of doing business, drawing upon successful
models used to attract business to local cities such as Davao, as well as pursuing the
relaxation of the Constitutional restrictions on foreign ownership, except with
regards land ownership, in order to attract foreign direct investments;

Accelerating annual infrastructure spending to account for 5 percent of the gross

domestic product, with public-private partnerships playing a key role;

Promoting rural and value chain development toward increasing agricultural and
rural enterprise productivity and rural tourism;

Ensuring security of land tenure to encourage investments and address bottlenecks in

land management and titling agencies;

Investing in human capital development, including health and education systems, as

well as matching skills and training to meet the demands of businesses and the
private sector;

Promoting science, technology and the creative arts to enhance innovation and
creative capacity towards self-sustaining and inclusive development;

Improving social protection programs, including the governments conditional cash

transfer program, in order to protect the poor against instability and economic
shocks; and

Strengthening the implementation of the Responsible Parenthood and Reproductive

Health Law to enable, especially, poor couples to make informed choices on financial
and family planning.

The Duterte administrations 10-point agenda emphasizes the need to maintain accelerated
economic growth while ensuring that gains are broadly shared by the Filipino people, the
statement read.
It was also anchored on the long-term Filipino 2040 vision and the next medium-term
Philippine Development Planning (PDP) cycle, both led by NEDA, it added, referring to the
AmBisyon Natin 2040 vision.
Launched in March, AmBisyon Natin 2040 was aimed at tripling Filipinos per capita
income to about $11,000 in 25 years time such that the country would become a highincome country in 2040 by implementing right policies as well as efficiency and
productivity improvements.6

6 http://business.inquirer.net/211096/duterte-economic-team-to-present-10point-agenda-before-bizmen#ixzz4IgiJbDvB
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A survey conducted early this year in line with the AmBisyon Natin 2040 visioning exercise
showed that the majority of Filipinos aspire for a simple and comfortable life, which NEDA
had said reflected middle-class lifestyleearning enough, educating all children until college,
owning a car, owning a medium-sized house, finding time to relax with family and friends,
owning a business, and being able to travel around the country. 7
Questions:
1. What are the features and functions of the economic and planning agency
which Congress is mandated to establish:
Answer:
a.
b.
c.
d.
e.
f.

It is Independent
It is a central body for Economic Planning and Policy
It is headed by the President making it the highest economic policy planning organ
It shall prepare programs and policies for national development
It shall prepare such programs and policies for approval of Congress
It shall prepare, recommend and implement continuing, integrated and policies for
national development.

2. What is the main function of the National Economic and Development Authority?
Answer:
To be the country's social and economic development planning and policy
coordinating agency. It shall provide the strategic directions that will guide
government and the private sector in crafting development policies to attain
sustainable economic growth with equitable distribution of wealth.

Article 12 Section 10 of the 1987 Constitution

The Congress shall, upon recommendation of the economic and planning agency,
when the national interest dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of whose capital is owned by
such citizens , or such higher percentage as Congress may prescribe, certain areas
of investments. The congress shall enact measures that will encourage the
formation and operation of enterprise whose capital is wholly-owned by Filipino.
In the grant of rights, privileges, and concessions covering the national economy
and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its
national jurisdiction and in accordance with its national goals and priorities.

7 Ibid.
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Case: Manila Prince Hotel vs GSIS

MANILA PRINCE HOTEL, petitioner, vs. GOVERNMENT SERVICE INSURANCE

SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and
OFFICE OF THE GOVERNMENT CORPORATE COUNSEL, respondents.

G.R. No. 122156. February 3, 1997

Facts: Respondent GSIS, pursuant to the privatization program under Proclamation No. 50
dated December 8, 1986, decided to sell through a public bidding 30-51% of the shares of
respindent Manila Hotel Corporation (MHC). The winning bidder "is to provide
management expertise and/or an international marketing/reservation system, and financial
suppport to strengthen the profitability and performance of the Manila Hotel. Sept 18, 1995two bidders participated in the auction; one was petitioner Manila Prince Hotel Corp, who
wanted to buy 51% of the shares at Php41.85 each, and Renong Berhad, a Malaysian firm,
which bid for the same number of shares at Php44 each. Pertinent provisions of bidding
rules are the following:
- if for any reason, the Highest Bidder cannot be awarded the Block of shares, GSIS may offer
this to other Qualified bidders
- the highest bidder will only be declared the winner after 1) execution of the necessary
contracts with GSIS/MHC and 2)securing the requisite approvals of the GSIS/MHC,
Committee on Privatization and Office of the Government Corporate Counsel
On Sept 28, 1995-pending the declaration of Renong Berhad as the winning bidder,
petitioner matched the bid price of the Malaysian firm. Moreover, on Oct 10, 1995-petitioner
sent a manager's check issued by Philtrust Bank as bid security. On Oct 17, 1995-petitioner,
wishing to stop the alleged "hurried" sale to the foreign firm, filed the case in the SC. On Oct
18, 1995-Supreme Court issues TRO.
The Petitioner: (Manila Prince Hotel) argued the following:
1.

It invoked Art12, Sec10, Par.2, and argues that the Manila Hotel was covered by the
phrase "national patrimony" and hence cannot be sold to foreigners; selling 51%
would be tantamount to owning the business of a hotel which is owned by the GSIS, a
GOCC, the hotel business of respondent GSIS being a part of the tourism industry
which undoubtedly is part of the national economy.

2. The petitioner should be preferred over its Malaysian counterpart after it has
matched the bid, since the bidding rules state 'if for any reason, the Highest Bidder
cannot be awarded the Block of shares, GSIS may offer this to other Qualified bidders,
which is them.
On the other hand, the Respondents (Govt Service Insurance System, Manila Hotel Corp,
COP, OGCC) take exceptions:
1. Art. XII Sec. 10 is merely a state policy and thus not a self-executing provision
and requiring implementing law.
2. Manila Hotel does not fall under national patrimony (which refers to public
domain and natural resources).
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3. Mandate of the Constitution is to the State, not the GSIS which has its own
separate and distinct personality.
4. Constitutional provision on national patrimony does not apply because 51% of
the property hardly constitutes the building and the land upon which the
building stands.
5. Petitioners are estopped from questioning since at the beginning they did not
question the bidding of foreign entities.
6. Reliance on the bidding rule (to justify matching bid as valid) is misplaced.
The privilege of submitting a matching bid has not yet arisen since it only
takes place if Highest Bidder cannot be awarded the block of shares.

ISSUE: Whether or not petitioner should be preferred after it has match the bid offered of
Malaysian firm under Section 10, second paragraph of Article 12 of the 1987 Constitution?

RULING: Yes. According to Justice Bellosillo, ponente of the case at bar, Section 10,
second paragraph, Article 12 of the 1987 Constitution is a mandatory provision, a positive
command which is complete in itself and needs no further guidelines or implementing laws
to enforce it. From its very words the provision does not require any legislation to put it in
operation. It is per se judicially enforceable.
A constitution is a system of fundamental laws for the governance and administration of a
nation. It is supreme, imperious, absolute and unalterable except by the authority from
which it emanates. Since the constitution is the fundamental, paramount and supreme law of
the nation, it is deemed written in every statute and contract. Article 12, Section 10,
paragraph 2 of the 1987 Constitution provides that "in the grant of rights, privileges, and
concessions covering the national economy and patrimony, the State shall give preference to
qualified Filipinos." It means just that qualified Filipinos shall be preferred.

When the Constitution speaks of "national patrimony", it refers not only to the natural
resources of the Philippines but also to the cultural heritage of the Filipinos. For more than
eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and
frustrations of the Filipinos; its existence is impressed with public interest; its own
historicity associated with our struggle for sovereignty, independence and
nationhood. Verily, Manila Hotel has become part of our national economy and
patrimony. For sure, 51% of the equity of the MHC comes within the purview of the
constitutional shelter for it comprises the majority and controlling stock, so that anyone who
acquires or owns the 51% will have actual control and management of the hotel. In this
instance, 51% of the MHC cannot be disassociated from the hotel and the land on which the
hotel edifice stands. Consequently, the court cannot sustain respondents claim that
the Filipino First Policy provision is not applicable since what is being sold is only 51% of
the outstanding shares of the corporation, not the Hotel building nor the land upon which
the building stands.
In the instant case, where a foreign firm submits the highest bid in a public bidding
concerning the grant of rights, privileges and concessions covering the national economy and
patrimony, thereby exceeding the bid of a Filipino, there is no question that the Filipino will
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have to be allowed to match the bid of the foreign entity. And if the Filipino matches the bid
of a foreign firm the award should go to the Filipino. It must be so if we are to give life and
meaning to the Filipino First Policy provision of the 1987 Constitution.
In the granting of economic rights, privileges, and concessions, when a choice has to be made
between a qualified foreigner and a qualified Filipino, the latter shall be chosen over the
former.

Hi groupmate, baka interested ka lang, nilagay ko na rin

yung na-research ko para sa Section 10.
Article 12 Section 10 of the 1987 Constitution
The Congress shall, upon recommendation of the economic and planning agency,
when the national interest dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of whose capital is owned by
such citizens , or such higher percentage as Congress may prescribe, certain areas
of investments. The congress shall enact measures that will encourage the
formation and operation of enterprise whose capital is wholly-owned by Filipino.
In the grant of rights, privileges, and concessions covering the national economy
and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its
national jurisdiction and in accordance with its national goals and priorities.

Filipinization of certain areas of investments. Congress shall reserve citizens of the

Philippines or to corporations or associations at least 60% of whose capital is owned by such
citizens or such higher percentage as Congress may prescribe (up to 100%), certain
traditional areas of investments, upon certain conditions:
(1) There is a recommendation by the economic and planning agency ; and
(2) The national interest so dictates. In the grant of rights, privileges, and concessions
covering the national economy and patrimony, the State shall give preference to qualified
Filipinos. The State shall regulate and exercise authority over foreign investments within its
national jurisdiction and in accordance with its national goals and priorities.
Existing laws limiting certain activities to Filipino citizens or corporations. Under the
present laws, activities in the following, among others, are limited to Filipino citizens or
corporations wholly- owned by Filipino citizens:
(1) Operation of rural banks:
(2) Engaging in the retail of trade business;
(3) Operations of registered overseas shipping;
(4) Engaging in the rice and corn industry;
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(5) Engaging in tax-free cottage industries;

(6) Contracts for the supply of materials, equipment, goods and commodities for the
government; and
(7) Operations of atomics energy facilities.

Regulation of foreign investments:

(1) Sources of investment.
(2) Kinds of investment.
(3) Benefits and negative aspects of foreign direct investments.
(4) Need for foreign investment in the Philippines.
(5) Foreign investment policy.
(6) Objective of regulation.8

Case: Manila Prince Hotel vs GSIS

8 http://www.slideshare.net/JudithFtlvr/article-12-national-economy-andpatrimony
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