EN BANC
PE, BENITO CARINO, JOSEPH JUDE
G.R. No. 135385 December 6, 2000
ISAGANI CRUZ and CESAR EUROPA, petitioners,
vs.
SECRETARY OF ENVIRONMENT AND NATURAL
RESOURCES, SECRETARY OF BUDGET AND
MANAGEMENT and CHAIRMAN and COMMISSIONERS OF
THE NATIONAL COMMISSION ON INDIGENOUS
PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN,
BAYANI ASCARRAGA, EDTAMI MANSAYANGAN,
BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS,
ALFREMO CARPIANO, LIBERATO A. GABIN,
MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI
KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T.
ABASALA, DATU BALITUNGTUNG-ANTONIO D.
LUMANDONG, DATU MANTUMUKAW TEOFISTO
SABASALES, DATU EDUAARDO BANDA, DATU JOEL
UNAD, DATU RAMON BAYAAN, TIMUAY JOSE ANOY,
TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B.
ENDING, DATU SAHAMPONG MALANAW VI, DATU BEN
PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY, BAY
INAY DAYA-MELINDA S. REYMUNDO, BAI
TINANGHAGA HELINITA T. PANGAN, DATU
MAKAPUKAW ADOLINO L. SAWAY, DATU
MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY,
LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA
GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON,
ROSEMARIE G.
CARANTES, LYNETTE CARANTES-VIVAL, LANGLEY
SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT,
ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO
CAYETANO, CONCHITA G. DESCAGA, LEVY 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 DALUNHAY, RICO O. SULATAN, RAFFY
MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB,
MIRLANDO H. MANGKULINTAS, SAMIE SATURNO,
ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN,
PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S.
SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY
UGYUB, SALVADOR TIONGSON, VENANCIO APANG,
MADION MALID, SUKIM MALID, NENENG MALID,
MANGKATADONG AUGUSTO DIANO, JOSEPHINE M.
ALBESO, MORENO MALID, MARIO MANGCAL, FELAY
DIAMILING, SALOME P. SARZA, FELIPE P. BAGON,
SAMMY 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, represented by her father CORNELIO
MALID, MARCELINO M. LADRA, represented by her father
MONICO D. LADRA, JENNYLYN MALID, represented by her
father TONY MALID, ARIEL M. EVANGELISTA, represented
by her mother LINAY BALBUENA, EDWARD M. EMUY,
SR., SUSAN BOLANIO, OND, PULA BATO B'LAAN
TRIBAL FARMER'S ASSOCIATION, INTER-PEOPLE'S
EXCHANGE, INC. and GREEN FORUM-WESTERN
VISAYAS, intervenors.
1
COMMISSION ON HUMAN RIGHTS, intervenor. the Solicitor General a consolidated Comment. The Solicitor
General is of the view that the IPRA is partly unconstitutional on
IKALAHAN INDIGENOUS PEOPLE and HARIBON
the ground that it grants ownership over natural resources to
FOUNDATION FOR THE CONSERVATION OF NATURAL
indigenous peoples and prays that the petition be granted in part.
RESOURCES, INC., intervenor.

On November 10, 1998, a group of intervenors, composed of

RESOLUTION
Sen. Juan Flavier, one of the authors of the IPRA, Mr. Ponciano
Bennagen, a member of the 1986 Constitutional Commission,
and the leaders and members of 112 groups of indigenous
PER CURIAM:
peoples (Flavier, et. al), filed their Motion for Leave to Intervene.
They join the NCIP in defending the constitutionality of IPRA
and praying for the dismissal of the petition.
Petitioners Isagani Cruz and Cesar Europa brought this suit for
prohibition and mandamus as citizens and taxpayers, assailing
the constitutionality of certain provisions of Republic Act No.
On March 22, 1999, the Commission on Human Rights (CHR)
8371 (R.A. 8371), otherwise known as the Indigenous Peoples
likewise filed a Motion to Intervene and/or to Appear as Amicus
Rights Act of 1997 (IPRA), and its Implementing Rules and
Curiae. The CHR asserts that IPRA is an expression of the
Regulations (Implementing Rules).
principle of parens patriae and that the State has the
responsibility to protect and guarantee the rights of those who are
at a serious disadvantage like indigenous peoples. For this reason
In its resolution of September 29, 1998, the Court required
it prays that the petition be dismissed.
respondents to comment.1 In compliance, respondents
Chairperson and Commissioners of the National Commission on
Indigenous Peoples (NCIP), the government agency created
On March 23, 1999, another group, composed of the Ikalahan
under the IPRA to implement its provisions, filed on October 13,
Indigenous People and the Haribon Foundation for the
1998 their Comment to the Petition, in which they defend the
Conservation of Natural Resources, Inc. (Haribon, et al.), filed a
constitutionality of the IPRA and pray that the petition be
motion to Intervene with attached Comment-in-Intervention.
dismissed for lack of merit.
They agree with the NCIP and Flavier, et al. that IPRA is
consistent with the Constitution and pray that the petition for
prohibition and mandamus be dismissed.
On October 19, 1998, respondents Secretary of the Department
of Environment and Natural Resources (DENR) and Secretary of
the Department of Budget and Management (DBM) filed through
2
The motions for intervention of the aforesaid groups and
organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the
parties and intervenors filed their respective memoranda in which
they reiterate the arguments adduced in their earlier pleadings
and during the hearing.
Petitioners assail the constitutionality of the following provisions
of the IPRA and its Implementing Rules on the ground that they
amount to an unlawful deprivation of the State’s ownership over
lands of the public domain as well as minerals and other natural
resources therein, in violation of the regalian doctrine embodied
in Section 2, Article XII of the Constitution:
"(1) Section 3(a) which defines the extent and coverage of
ancestral domains, and Section 3(b) which, in turn, defines
ancestral lands;
"(2) Section 5, in relation to section 3(a), which provides that
ancestral domains including inalienable public lands, bodies of
water, mineral and other resources found within ancestral
domains are private but community property of the indigenous
peoples;
"(3) Section 6 in relation to section 3(a) and 3(b) which defines
the composition of ancestral domains and ancestral lands;
"(4) Section 7 which recognizes and enumerates the rights of the
indigenous peoples over the ancestral domains;
(5) Section 8 which recognizes and enumerates the rights of the
indigenous peoples over the ancestral lands;
"(6) Section 57 which provides for priority rights of the
indigenous peoples in the harvesting, extraction, development or
exploration of minerals and other natural resources within the
areas claimed to be their ancestral domains, and the right to enter
into agreements with nonindigenous peoples for the development
and utilization of natural resources therein for a period not
exceeding 25 years, renewable for not more than 25 years; and
"(7) Section 58 which gives the indigenous peoples the
responsibility to maintain, develop, protect and conserve the
ancestral domains and portions thereof which are found to be
necessary for critical watersheds, mangroves, wildlife
sanctuaries, wilderness, protected areas, forest cover or
reforestation."2
Petitioners also content that, by providing for an all-
encompassing definition of "ancestral domains" and "ancestral
lands" which might even include private lands found within said
areas, Sections 3(a) and 3(b) violate the rights of private
landowners.3
3
In addition, petitioners question the provisions of the IPRA
defining the powers and jurisdiction of the NCIP and making
customary law applicable to the settlement of disputes involving
ancestral domains and ancestral lands on the ground that these
provisions violate the due process clause of the Constitution.4
These provisions are:
"(1) sections 51 to 53 and 59 which detail the process of
delineation and recognition of ancestral domains and which vest
on the NCIP the sole authority to delineate ancestral domains and
ancestral lands;
"(2) Section 52[i] which provides that upon certification by the
NCIP that a particular area is an ancestral domain and upon
notification to the following officials, namely, the Secretary of
Environment and Natural Resources, Secretary of Interior and
Local Governments, Secretary of Justice and Commissioner of
the National Development Corporation, the jurisdiction of said
officials over said area terminates;
"(3) Section 63 which provides the customary law, traditions and
practices of indigenous peoples shall be applied first with respect
to property rights, claims of ownership, hereditary succession and
settlement of land disputes, and that any doubt or ambiguity in
the interpretation thereof shall be resolved in favor of the
indigenous peoples;
"(4) Section 65 which states that customary laws and practices
shall be used to resolve disputes involving indigenous peoples;
and
"(5) Section 66 which vests on the NCIP the jurisdiction over all
claims and disputes involving rights of the indigenous peoples."5
Finally, petitioners assail the validity of Rule VII, Part II, Section
1 of the NCIP Administrative Order No. 1, series of 1998, which
provides that "the administrative relationship of the NCIP to the
Office of the President is characterized as a lateral but
autonomous relationship for purposes of policy and program
coordination." They contend that said Rule infringes upon the
President’s power of control over executive departments under
Section 17, Article VII of the Constitution.6
Petitioners pray for the following:
"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63,
65 and 66 and other related provisions of R.A. 8371 are
unconstitutional and invalid;
"(2) The issuance of a writ of prohibition directing the
Chairperson and Commissioners of the NCIP to cease and desist
from implementing the assailed provisions of R.A. 8371 and its
Implementing Rules;
4
"(3) The issuance of a writ of prohibition directing the Secretary
of the Department of Environment and Natural Resources to
cease and desist from implementing Department of Environment
and Natural Resources Circular No. 2, series of 1998;
"(4) The issuance of a writ of prohibition directing the Secretary
of Budget and Management to cease and desist from disbursing
public funds for the implementation of the assailed provisions of
R.A. 8371; and
"(5) The issuance of a writ of mandamus commanding the
Secretary of Environment and Natural Resources to comply with
his duty of carrying out the State’s constitutional mandate to
control and supervise the exploration, development, utilization
and conservation of Philippine natural resources."7
After due deliberation on the petition, the members of the Court
voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an
opinion, which the Chief Justice and Justices Bellosillo,
Quisumbing, and Santiago join, sustaining the validity of the
challenged provisions of R.A. 8371. Justice Puno also filed a
separate opinion sustaining all challenged provisions of the law
with the exception of Section 1, Part II, Rule III of NCIP
Administrative Order No. 1, series of 1998, the Rules and
Regulations Implementing the IPRA, and Section 57 of the IPRA
which he contends should be interpreted as dealing with the
large-scale exploitation of natural resources and should be read in
conjunction with Section 2, Article XII of the 1987 Constitution.
On the other hand, Justice Mendoza voted to dismiss the petition
solely on the ground that it does not raise a justiciable
controversy and petitioners do not have standing to question the
constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition.
Justice Panganiban filed a separate opinion expressing the view
that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of
R.A. 8371 are unconstitutional. He reserves judgment on the
constitutionality of Sections 58, 59, 65, and 66 of the law, which
he believes must await the filing of specific cases by those whose
rights may have been violated by the IPRA. Justice Vitug also
filed a separate opinion expressing the view that Sections 3(a), 7,
and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo,
Buena, Gonzaga-Reyes, and De Leon join in the separate
opinions of Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary
majority was not obtained, the case was redeliberated upon.
However, after redeliberation, the voting remained the same.
Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil
Procedure, the petition is DISMISSED.
Attached hereto and made integral parts thereof are the separate
opinions of Justices Puno, Vitug, Kapunan, Mendoza, and
Panganiban.
SO ORDERED.
5
 7 Transcript of Stenographic Notes of the hearing held on April
13, 1999, pp. 5-6.
Davide, Jr., C.J., Bellosillo, Melo, Quisumbing, Pardo, Buena,
Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr., JJ., concur.
Puno, Vitug, Kapunan, Mendoza and Panganiban JJ., see
separate opinion
The Lawphil Project - Arellano Law Foundation

SEPARATE OPINION
Footnotes

PUNO, J.:
1 Rollo, p. 114.

PRECIS
2 Petition, Rollo, pp. 16-23.

A classic essay on the utility of history was written in 1874 by

3 Id. at 23-25. Friedrich Nietzsche entitled "On the Uses and Disadvantages of
History for Life." Expounding on Nietzsche's essay, Judge
Richard Posner1 wrote:2
4 Section 1, Article III of the Constitution states: "No person
shall be deprived of life, liberty or property without due process
of law, nor shall any person be denied the equal protection of the "Law is the most historically oriented, or if you like the most
laws." backward-looking, the most 'past-dependent,' of the professions.
It venerates tradition, precedent, pedigree, ritual, custom, ancient
practices, ancient texts, archaic terminology, maturity, wisdom,
5 Rollo, pp. 25-27. seniority, gerontocracy, and interpretation conceived of as a
method of recovering history. It is suspicious of innovation,
discontinuities, 'paradigm shifts,' and the energy and brashness of
6 Id. at 27-28. youth. These ingrained attitudes are obstacles to anyone who
wants to re-orient law in a more pragmatic direction. But, by the

6
same token, pragmatic jurisprudence must come to terms with D. The Philippine Constitutions
history."

II. The Indigenous Peoples Rights Act (IPRA).

When Congress enacted the Indigenous Peoples Rights Act
(IPRA), it introduced radical concepts into the Philippine legal
system which appear to collide with settled constitutional and A. Indigenous Peoples
jural precepts on state ownership of land and other natural
resources. The sense and subtleties of this law cannot be
appreciated without considering its distinct sociology and the 1. Indigenous Peoples: Their History
labyrinths of its history. This Opinion attempts to interpret IPRA
by discovering its soul shrouded by the mist of our history. After
all, the IPRA was enacted by Congress not only to fulfill the 2. Their Concept of Land
constitutional mandate of protecting the indigenous cultural
communities' right to their ancestral land but more importantly,
to correct a grave historical injustice to our indigenous people. III. The IPRA is a Novel Piece of Legislation.

This Opinion discusses the following: A. Legislative History

I. The Development of the Regalian Doctrine in the Philippine IV. The Provisions of the IPRA Do Not Contravene the
Legal System. Constitution.

A. The Laws of the Indies A. Ancestral domains and ancestral lands are the private property
of indigenous peoples and do not constitute part of the land of the
public domain.
B. Valenton v. Murciano

1. The right to ancestral domains and ancestral lands: how

C. The Public Land Acts and the Torrens System acquired

7
2. The concept of native title ownership over the natural resources, control and supervision in
their development and exploitation.

(a) Cariño v. Insular Government

(a) Section 1, Part II, Rule III of the Implementing Rules goes
beyond the parameters of Section 7(a) of the law on ownership of
(b) Indian Title to land ancestral domains and is ultra vires.

(c) Why the Cariño doctrine is unique (b) The small-scale utilization of natural resources in Section 7
(b) of the IPRA is allowed under Paragraph 3, Section 2, Article
XII of the 1987 Consitution.
3. The option of securing a torrens title to the ancestral land

(c) The large-scale utilization of natural resources in Section 57

B. The right of ownership and possession by the ICCs/IPs to their of the IPRA may be harmonized with Paragraphs 1 and 4,
ancestral domains is a limited form of ownership and does not Section 2, Article XII of the 1987 Constitution.
include the right to alienate the same.

V. The IPRA is a Recognition of Our Active Participation in the

1. The indigenous concept of ownership and customary law International Indigenous Movement.

C. Sections 7 (a), 7 (b) and 57 of the IPRA do not violate the DISCUSSION
Regalian Doctrine enshrined in Section 2, Article XII of the 1987
Constitution.
I. THE DEVELOPMENT OF THE REGALIAN DOCTRINE IN
THE PHILIPPINE LEGAL SYSTEM.
1. The rights of ICCs/IPs over their ancestral domains and lands

A. The Laws of the Indies

2. The right of ICCs/IPs to develop lands and natural resources
within the ancestral domains does not deprive the State of

8
The capacity of the State to own or acquire property is the state's
power of dominium.3 This was the foundation for the early
Spanish decrees embracing the feudal theory of jura regalia. The
"Regalian Doctrine" or jura regalia is a Western legal concept
that was first introduced by the Spaniards into the country
through the Laws of the Indies and the Royal Cedulas. The Laws
of the Indies, i.e., more specifically, Law 14, Title 12, Book 4 of
the Novisima Recopilacion de Leyes de las Indias, set the policy
of the Spanish Crown with respect to the Philippine Islands in the
following manner:
"We, having acquired full sovereignty over the Indies, and all
lands, territories, and possessions not heretofore ceded away by
our royal predecessors, or by us, or in our name, still pertaining
to the royal crown and patrimony, it is our will that all lands
which are held without proper and true deeds of grant be restored
to us as they belong to us, in order that after reserving before all
what to us or to our viceroys, audiencias, and governors may
seem necessary for public squares, ways, pastures, and commons
in those places which are peopled, taking into consideration not
only their present condition, but also their future and their
probable increase, and after distributing to the natives what may
be necessary for tillage and pasturage, confirming them in what
they now have and giving them more if necessary, all the rest of
said lands may remain free and unencumbered for us to dispose
of as we may wish.
We therefore order and command that all viceroys and presidents
of pretorial courts designate at such time as shall to them seem
most expedient, a suitable period within which all possessors of
tracts, farms, plantations, and estates shall exhibit to them and to
the court officers appointed by them for this purpose, their title
deeds thereto. And those who are in possession by virtue of
proper deeds and receipts, or by virtue of just prescriptive right
shall be protected, and all the rest shall be restored to us to be
disposed of at our will."4
The Philippines passed to Spain by virtue of "discovery" and
conquest. Consequently, all lands became the exclusive
patrimony and dominion of the Spanish Crown. The Spanish
Government took charge of distributing the lands by issuing
royal grants and concessions to Spaniards, both military and
civilian.5 Private land titles could only be acquired from the
government either by purchase or by the various modes of land
grant from the Crown.6
The Laws of the Indies were followed by the Ley Hipotecaria, or
the Mortgage Law of 1893.7 The Spanish Mortgage Law
provided for the systematic registration of titles and deeds as well
as possessory claims. The law sought to register and tax lands
pursuant to the Royal Decree of 1880. The Royal Decree of
1894, or the "Maura Law," was partly an amendment of the
Mortgage Law as well as the Laws of the Indies, as already
amended by previous orders and decrees.8 This was the last
Spanish land law promulgated in the Philippines. It required the
"adjustment" or registration of all agricultural lands, otherwise
the lands shall revert to the state.
Four years later, by the Treaty of Paris of December 10, 1898,
Spain ceded to the government of the United States all rights,
interests and claims over the national territory of the Philippine
9
Islands. In 1903, the United States colonial government, through
the Philippine Commission, passed Act No. 926, the first Public
Land Act.
B. Valenton v. Murciano
In 1904, under the American regime, this Court decided the case
of Valenton v. Murciano.9
Valenton resolved the question of which is the better basis for
ownership of land: long-time occupation or paper title. Plaintiffs
had entered into peaceful occupation of the subject land in 1860.
Defendant's predecessor-in-interest, on the other hand, purchased
the land from the provincial treasurer of Tarlac in 1892. The
lower court ruled against the plaintiffs on the ground that they
had lost all rights to the land by not objecting to the
administrative sale. Plaintiffs appealed the judgment, asserting
that their 30-year adverse possession, as an extraordinary period
of prescription in the Partidas and the Civil Code, had given them
title to the land as against everyone, including the State; and that
the State, not owning the land, could not validly transmit it.
The Court, speaking through Justice Willard, decided the case on
the basis of "those special laws which from earliest time have
regulated the disposition of the public lands in the colonies."10
The question posed by the Court was: "Did these special laws
recognize any right of prescription as against the State as to these
lands; and if so, to what extent was it recognized?"
Prior to 1880, the Court said, there were no laws specifically
providing for the disposition of land in the Philippines. However,
it was understood that in the absence of any special law to govern
a specific colony, the Laws of the Indies would be followed.
Indeed, in the Royal Order of July 5, 1862, it was decreed that
until regulations on the subject could be prepared, the authorities
of the Philippine Islands should follow strictly the Laws of the
Indies, the Ordenanza of the Intendentes of 1786, and the Royal
Cedula of 1754.11
Quoting the preamble of Law 14, Title 12, Book 4 of the
Recopilacion de Leyes de las Indias, the court interpreted it as
follows:
"In the preamble of this law there is, as is seen, a distinct
statement that all those lands belong to the Crown which have
not been granted by Philip, or in his name, or by the kings who
preceded him. This statement excludes the idea that there might
be lands not so granted, that did not belong to the king. It
excludes the idea that the king was not still the owner of all
ungranted lands, because some private person had been in the
adverse occupation of them. By the mandatory part of the law all
the occupants of the public lands are required to produce before
the authorities named, and within a time to be fixed by them,
their title papers. And those who had good title or showed
prescription were to be protected in their holdings. It is apparent
that it was not the intention of the law that mere possession for a
length of time should make the possessors the owners of the land
possessed by them without any action on the part of the
authorities."12
10
The preamble stated that all those lands which had not been
granted by Philip, or in his name, or by the kings who preceded
him, belonged to the Crown.13 For those lands granted by the
king, the decree provided for a system of assignment of such
lands. It also ordered that all possessors of agricultural land
should exhibit their title deed, otherwise, the land would be
restored to the Crown.14
The Royal Cedula of October 15, 1754 reinforced the
Recopilacion when it ordered the Crown's principal subdelegate
to issue a general order directing the publication of the Crown's
instructions:
"x x x to the end that any and all persons who, since the year
1700, and up to the date of the promulgation and publication of
said order, shall have occupied royal lands, whether or not x x x
cultivated or tenanted, may x x x appear and exhibit to said
subdelegates the titles and patents by virtue of which said lands
are occupied. x x x. Said subdelegates will at the same time warn
the parties interested that in case of their failure to present their
title deeds within the term designated, without a just and valid
reason therefor, they will be deprived of and evicted from their
lands, and they will be granted to others."15
On June 25, 1880, the Crown adopted regulations for the
adjustment of lands "wrongfully occupied" by private individuals
in the Philippine Islands. Valenton construed these regulations
together with contemporaneous legislative and executive
interpretations of the law, and concluded that plaintiffs' case
fared no better under the 1880 decree and other laws which
followed it, than it did under the earlier ones. Thus as a general
doctrine, the Court stated:
"While the State has always recognized the right of the occupant
to a deed if he proves a possession for a sufficient length of time,
yet it has always insisted that he must make that proof before the
proper administrative officers, and obtain from them his deed,
and until he did that the State remained the absolute owner."16
In conclusion, the Court ruled: "We hold that from 1860 to 1892
there was no law in force in these Islands by which the plaintiffs
could obtain the ownership of these lands by prescription,
without any action by the State."17 Valenton had no rights other
than those which accrued to mere possession. Murciano, on the
other hand, was deemed to be the owner of the land by virtue of
the grant by the provincial secretary. In effect, Valenton upheld
the Spanish concept of state ownership of public land.
As a fitting observation, the Court added that "[t]he policy
pursued by the Spanish Government from earliest times,
requiring settlers on the public lands to obtain title deeds therefor
from the State, has been continued by the American Government
in Act No. 926."18
C. The Public Land Acts and the Torrens System
Act No. 926, the first Public Land Act, was passed in pursuance
of the provisions of the the Philippine Bill of 1902. The law
11
governed the disposition of lands of the public domain. It
prescribed rules and regulations for the homesteading, selling,
and leasing of portions of the public domain of the Philippine
Islands, and prescribed the terms and conditions to enable
persons to perfect their titles to public lands in the Islands. It also
provided for the "issuance of patents to certain native settlers
upon public lands," for the establishment of town sites and sale
of lots therein, for the completion of imperfect titles, and for the
cancellation or confirmation of Spanish concessions and grants in
the Islands." In short, the Public Land Act operated on the
assumption that title to public lands in the Philippine Islands
remained in the government;19 and that the government's title to
public land sprung from the Treaty of Paris and other subsequent
treaties between Spain and the United States.20 The term "public
land" referred to all lands of the public domain whose title still
remained in the government and are thrown open to private
appropriation and settlement,21 and excluded the patrimonial
property of the government and the friar lands.22
Act No. 926 was superseded in 1919 by Act 2874, the second
Public Land Act. This new law was passed under the Jones Law.
It was more comprehensive in scope but limited the exploitation
of agricultural lands to Filipinos and Americans and citizens of
other countries which gave Filipinos the same privileges.23 After
the passage of the 1935 Constitution, Act 2874 was amended in
1936 by Commonwealth Act No. 141. Commonwealth Act No.
141 remains the present Public Land Law and it is essentially the
same as Act 2874. The main difference between the two relates
to the transitory provisions on the rights of American citizens and
corporations during the Commonwealth period at par with
Filipino citizens and corporations.24
Grants of public land were brought under the operation of the
Torrens system under Act 496, or the Land Registration Law of
1903. Enacted by the Philippine Commission, Act 496 placed all
public and private lands in the Philippines under the Torrens
system. The law is said to be almost a verbatim copy of the
Massachussetts Land Registration Act of 1898,25 which, in turn,
followed the principles and procedure of the Torrens system of
registration formulated by Sir Robert Torrens who patterned it
after the Merchant Shipping Acts in South Australia. The Torrens
system requires that the government issue an official certificate
of title attesting to the fact that the person named is the owner of
the property described therein, subject to such liens and
encumbrances as thereon noted or the law warrants or reserves.26
The certificate of title is indefeasible and imprescriptible and all
claims to the parcel of land are quieted upon issuance of said
certificate. This system highly facilitates land conveyance and
negotiation.27
D. The Philippine Constitutions
The Regalian doctrine was enshrined in the 1935 Constitution.
One of the fixed and dominating objectives of the 1935
Constitutional Convention was the nationalization and
conservation of the natural resources of the country.28 There was
an overwhelming sentiment in the Convention in favor of the
principle of state ownership of natural resources and the adoption
of the Regalian doctrine.29 State ownership of natural resources
was seen as a necessary starting point to secure recognition of the
state's power to control their disposition, exploitation,
development, or utilization.30 The delegates to the Constitutional
Convention very well knew that the concept of State ownership
12
of land and natural resources was introduced by the Spaniards,
however, they were not certain whether it was continued and
applied by the Americans. To remove all doubts, the Convention
approved the provision in the Constitution affirming the Regalian
doctrine.31
Thus, the 1935 Constitution, in Section 1 of Article XIII on
"Conservation and Utilization of Natural Resources," reads as
follows:
"Sec. 1. All agricultural, timber, and mineral lands of the public
domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to
citizens of the Philippines, or to corporations or associations at
least sixty per centum of the capital of which is owned by such
citizens, subject to any existing right, grant, lease, or concession
at the time of the inauguration of the Government established
under this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no license,
concession, or lease for the exploitation, development, or
utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may
be the measure and the limit of the grant."
The 1973 Constitution reiterated the Regalian doctrine in Section
8, Article XIV on the "National Economy and the Patrimony of
the Nation," to wit:
"Sec. 8. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, wildlife, and other natural resources of the Philippines
belong to the State. With the exception of agricultural, industrial
or commercial, residential, and resettlement lands of the public
domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development,
exploitation, or utilization of any of the natural resources shall be
granted for a period exceeding twenty-five years, renewable for
not more than twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may
be the measure and the limit of the grant."
The 1987 Constitution reaffirmed the Regalian doctrine in
Section 2 of Article XII on "National Economy and Patrimony,"
to wit:
"Sec. 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be
alienated. The exploration, development and utilization of natural
resources shall be under the full control and supervision of the
State. The State may directly undertake such activities or it may
13
enter into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or associations
at least sixty per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding
twenty-five years, renewable for not more than twenty-five years,
and under such terms and conditions as may be provided by law.
In cases of water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
The IPRA recognizes the existence of the indigenous cultural
communities or indigenous peoples (ICCs/IPs) as a distinct sector
in Philippine society. It grants these people the ownership and
possession of their ancestral domains and ancestral lands, and
defines the extent of these lands and domains. The ownership
given is the indigenous concept of ownership under customary
law which traces its origin to native title.
Other rights are also granted the ICCs/IPs, and these are:

x x x."
- the right to develop lands and natural resources;

Simply stated, all lands of the public domain as well as all natural
resources enumerated therein, whether on public or private land, - the right to stay in the territories;
belong to the State. It is this concept of State ownership that
petitioners claim is being violated by the IPRA.
- the right in case of displacement;

II. THE INDIGENOUS PEOPLES RIGHTS ACT.

- the right to safe and clean air and water;

Republic Act No. 8371 is entitled "An Act to Recognize, Protect

and Promote the Rights of Indigenous Cultural Communities/ - the right to claim parts of reservations;
Indigenous Peoples, Creating a National Commission on
Indigenous Peoples, Establishing Implementing Mechanisms,
Appropriating Funds Therefor, and for Other Purposes." It is - the right to resolve conflict;32
simply known as "The Indigenous Peoples Rights Act of 1997"
or the IPRA.
- the right to ancestral lands which include

14
a. the right to transfer land/property to/among members of the
same ICCs/IPs, subject to customary laws and traditions of the
community concerned;
b. the right to redemption for a period not exceeding 15 years
from date of transfer, if the transfer is to a non-member of the
ICC/IP and is tainted by vitiated consent of the ICC/IP, or if the
transfer is for an unconscionable consideration.33
Within their ancestral domains and ancestral lands, the ICCs/IPs
are given the right to self-governance and empowerment,34
social justice and human rights,35 the right to preserve and
protect their culture, traditions, institutions and community
intellectual rights, and the right to develop their own sciences and
technologies.36
To carry out the policies of the Act, the law created the National
Commission on Indigenous Peoples (NCIP). The NCIP is an
independent agency under the Office of the President and is
composed of seven (7) Commissioners belonging to ICCs/IPs
from each of the ethnographic areas- Region I and the
Cordilleras; Region II; the rest of Luzon; Island groups including
Mindoro, Palawan, Romblon, Panay and the rest of the Visayas;
Northern and Western Mindanao; Southern and Eastern
Mindanao; and Central Mindanao.37 The NCIP took over the
functions of the Office for Northern Cultural Communities and
the Office for Southern Cultural Communities created by former
President Corazon Aquino which were merged under a
revitalized structure.38
Disputes involving ICCs/IPs are to be resolved under customary
laws and practices. When still unresolved, the matter may be
brought to the NCIP, which is granted quasi-judicial powers.39
The NCIP's decisions may be appealed to the Court of Appeals
by a petition for review.
Any person who violates any of the provisions of the Act such as,
but not limited to, unauthorized and/or unlawful intrusion upon
ancestral lands and domains shall be punished in accordance with
customary laws or imprisoned from 9 months to 12 years and/or
fined from ₱100,000.00 to ₱500,000.00 and obliged to pay
damages.40
A. Indigenous Peoples
The IPRA is a law dealing with a specific group of people, i.e.,
the Indigenous Cultural Communities (ICCs) or the Indigenous
Peoples (IPs). The term "ICCs" is used in the 1987 Constitution
while that of "IPs" is the contemporary international language in
the International Labor Organization (ILO) Convention 16941
and the United Nations (UN) Draft Declaration on the Rights of
Indigenous Peoples.42
ICCs/IPs are defined by the IPRA as:
"Sec. 3 [h]. Indigenous Cultural Communities/ Indigenous
Peoples- refer to a group of people or homogeneous societies
identified by self-ascription and ascription by others, who have
15
continuously lived as organized community on communally
bounded and defined territory, and who have, under claims of
ownership since time immemorial, occupied, possessed and
utilized such territories, sharing common bonds of language,
customs, traditions and other distinctive cultural traits, or who
have, through resistance to political, social and cultural inroads
of colonization, non-indigenous religions and cultures, became
historically differentiated from the majority of Filipinos.
ICCs/IPs shall likewise include peoples who are regarded as
indigenous on account of their descent from the populations
which inhabited the country, at the time of conquest or
colonization, or at the time of inroads of non-indigenous religions
and cultures, or the establishment of present state boundaries,
who retain some or all of their own social, economic, cultural and
political institutions, but who may have been displaced from their
traditional domains or who may have resettled outside their
ancestral domains."
Indigenous Cultural Communities or Indigenous Peoples refer to
a group of people or homogeneous societies who have
continuously lived as an organized community on communally
bounded and defined territory. These groups of people have
actually occupied, possessed and utilized their territories under
claim of ownership since time immemorial. They share common
bonds of language, customs, traditions and other distinctive
cultural traits, or, they, by their resistance to political, social and
cultural inroads of colonization, non-indigenous religions and
cultures, became historically differentiated from the Filipino
majority. ICCs/IPs also include descendants of ICCs/IPs who
inhabited the country at the time of conquest or colonization,
who retain some or all of their own social, economic, cultural and
political institutions but who may have been displaced from their
traditional territories or who may have resettled outside their
ancestral domains.
1. Indigenous Peoples: Their History
Presently, Philippine indigenous peoples inhabit the interiors and
mountains of Luzon, Mindanao, Mindoro, Negros, Samar, Leyte,
and the Palawan and Sulu group of islands. They are composed
of 110 tribes and are as follows:
1. In the Cordillera Autonomous Region- Kankaney, Ibaloi,
Bontoc, Tinggian or Itneg, Ifugao, Kalinga, Yapayao, Aeta or
Agta or Pugot, and Bago of Ilocos Norte and Pangasinan; Ibanag
of Isabela, Cagayan; Ilongot of Quirino and Nueva Vizcaya;
Gaddang of Quirino, Nueva Vizcaya, Itawis of Cagayan; Ivatan
of Batanes, Aeta of Cagayan, Quirino and Isabela.
2. In Region III- Aetas.
3. In Region IV- Dumagats of Aurora, Rizal; Remontado of
Aurora, Rizal, Quezon; Alangan or Mangyan, Batangan, Buid or
Buhid, Hanunuo and Iraya of Oriental and Occidental Mindoro;
Tadyawan of Occidental Mindoro; Cuyonon, Palawanon,
Tagbanua and Tao't bato of Palawan.
4. In Region V- Aeta of Camarines Norte and Camarines Sur;
Aeta-Abiyan, Isarog, and Kabihug of Camarines Norte; Agta,
16
and Mayon of Camarines Sur; Itom of Albay, Cimaron of
Sorsogon; and the Pullon of Masbate and Camarines Sur.
5. In Region VI- Ati of Negros Occidental, Iloilo and Antique,
Capiz; the Magahat of Negros Occidental; the Corolano and
Sulod.
6. In Region VII- Magahat of Negros Oriental and Eskaya of
Bohol.
7. In Region IX- the Badjao numbering about 192,000 in Tawi-
Tawi, Zamboanga del Sur; the Kalibugan of Basilan, the Samal,
Subanon and Yakat.
8. Region X- Numbering 1.6 million in Region X alone, the IPs
are: the Banwaon, Bukidnon, Matigsalog, Talaanding of
Bukidnon; the Camiguin of Camiguin Island; the Higa-unon of
Agusan del Norte, Agusan del Sur, Bukidnon and Misamis
Occidental; the Tigwahanon of Agusan del Sur, Misamis Oriental
and and Misamis Occidental, the Manobo of the Agusan
provinces, and the Umayamnon of Agusan and Bukidnon.
9. In Region XI- There are about 1,774,065 IPs in Region XI.
They are tribes of the Dibabaon, Mansaka of Davao del Norte;
B'laan, Kalagan, Langilad, T'boli and Talaingod of Davao del
Sur; Mamamanua of Surigao del Sur; Mandaya of the Surigao
provinces and Davao Oriental; Manobo Blit of South Cotabato;
the Mangguangon of Davao and South Cotabato; Matigsalog of
Davao del Norte and Del Sur; Tagakaolo, Tasaday and Ubo of
South Cotabato; and Bagobo of Davao del sur and South
Cotabato.
10. In Region XII- Ilianen, Tiruray, Maguindanao, Maranao,
Tausug, Yakan/Samal, and Iranon.43
How these indigenous peoples came to live in the Philippines
goes back to as early as 25,000 to 30,000 B.C.
Before the time of Western contact, the Philippine archipelago
was peopled largely by the Negritos, Indonesians and Malays.44
The strains from these groups eventually gave rise to common
cultural features which became the dominant influence in ethnic
reformulation in the archipelago. Influences from the Chinese
and Indian civilizations in the third or fourth millenium B.C.
augmented these ethnic strains. Chinese economic and socio-
cultural influences came by way of Chinese porcelain, silk and
traders. Indian influence found their way into the religious-
cultural aspect of pre-colonial society.45
The ancient Filipinos settled beside bodies of water. Hunting and
food gathering became supplementary activities as reliance on
them was reduced by fishing and the cultivation of the soil.46
From the hinterland, coastal, and riverine communities, our
ancestors evolved an essentially homogeneous culture, a
basically common way of life where nature was a primary factor.
Community life throughout the archipelago was influenced by,
and responded to, common ecology. The generally benign
17
tropical climate and the largely uniform flora and fauna favored
similarities, not differences.47 Life was essentially subsistence
Laws were either customary or written. Customary laws were
but not harsh.48
handed down orally from generation to generation and
constituted the bulk of the laws of the barangay. They were
preserved in songs and chants and in the memory of the elder
The early Filipinos had a culture that was basically Malayan in
persons in the community.54 The written laws were those that
structure and form. They had languages that traced their origin to
the chieftain and his elders promulgated from time to time as the
the Austronesian parent-stock and used them not only as media
necessity arose.55 The oldest known written body of laws was
of daily communication but also as vehicles for the expression of
the Maragtas Code by Datu Sumakwel at about 1250 A.D. Other
their literary moods.49 They fashioned concepts and beliefs
old codes are the Muslim Code of Luwaran and the Principal
about the world that they could not see, but which they sensed to
Code of Sulu.56 Whether customary or written, the laws dealt
be part of their lives.50 They had their own religion and religious
with various subjects, such as inheritance, divorce, usury, loans,
beliefs. They believed in the immortality of the soul and life after
partnership, crime and punishment, property rights, family
death. Their rituals were based on beliefs in a ranking deity
relations and adoption. Whenever disputes arose, these were
whom they called Bathalang Maykapal, and a host of other
decided peacefully through a court composed by the chieftain as
deities, in the environmental spirits and in soul spirits. The early
"judge" and the barangay elders as "jury." Conflicts arising
Filipinos adored the sun, the moon, the animals and birds, for
between subjects of different barangays were resolved by
they seemed to consider the objects of Nature as something to be
arbitration in which a board composed of elders from neutral
respected. They venerated almost any object that was close to
barangays acted as arbiters.57
their daily life, indicating the importance of the relationship
between man and the object of nature.51
Baranganic society had a distinguishing feature: the absence of
private property in land. The chiefs merely administered the
The unit of government was the "barangay," a term that derived
lands in the name of the barangay. The social order was an
its meaning from the Malay word "balangay," meaning, a boat,
extension of the family with chiefs embodying the higher unity of
which transported them to these shores.52 The barangay was
the community. Each individual, therefore, participated in the
basically a family-based community and consisted of thirty to
community ownership of the soil and the instruments of
one hundred families. Each barangay was different and ruled by a
production as a member of the barangay.58 This ancient
chieftain called a "dato." It was the chieftain's duty to rule and
communalism was practiced in accordance with the concept of
govern his subjects and promote their welfare and interests. A
mutual sharing of resources so that no individual, regardless of
chieftain had wide powers for he exercised all the functions of
status, was without sustenance. Ownership of land was non-
government. He was the executive, legislator and judge and was
existent or unimportant and the right of usufruct was what
the supreme commander in time of war.53
regulated the development of lands.59 Marine resources and
18
fishing grounds were likewise free to all. Coastal communities
depended for their economic welfare on the kind of fishing
sharing concept similar to those in land communities.60
Recognized leaders, such as the chieftains and elders, by virtue of
their positions of importance, enjoyed some economic privileges
and benefits. But their rights, related to either land and sea, were
subject to their responsibility to protect the communities from
danger and to provide them with the leadership and means of
survival.61
Sometime in the 13th century, Islam was introduced to the
archipelago in Maguindanao. The Sultanate of Sulu was
established and claimed jurisdiction over territorial areas
represented today by Tawi-tawi, Sulu, Palawan, Basilan and
Zamboanga. Four ethnic groups were within this jurisdiction:
Sama, Tausug, Yakan and Subanon.62 The Sultanate of
Maguindanao spread out from Cotabato toward Maranao
territory, now Lanao del Norte and Lanao del Sur.63
The Muslim societies evolved an Asiatic form of feudalism
where land was still held in common but was private in use. This
is clearly indicated in the Muslim Code of Luwaran. The Code
contains a provision on the lease of cultivated lands. It, however,
has no provision for the acquisition, transfer, cession or sale of
land.64
The societies encountered by Magellan and Legaspi therefore
were primitive economies where most production was geared to
the use of the producers and to the fulfillment of kinship
obligations. They were not economies geared to exchange and
profit.65 Moreover, the family basis of barangay membership as
well as of leadership and governance worked to splinter the
population of the islands into numerous small and separate
communities.66
When the Spaniards settled permanently in the Philippines in
1565, they found the Filipinos living in barangay settlements
scattered along water routes and river banks. One of the first
tasks imposed on the missionaries and the encomenderos was to
collect all scattered Filipinos together in a reduccion.67 As early
as 1551, the Spanish government assumed an unvarying
solicitous attitude towards the natives.68 The Spaniards regarded
it a sacred "duty to conscience and humanity to civilize these less
fortunate people living in the obscurity of ignorance" and to
accord them the "moral and material advantages" of community
life and the "protection and vigilance afforded them by the same
laws."69
The Spanish missionaries were ordered to establish pueblos
where the church and convent would be constructed. All the new
Christian converts were required to construct their houses around
the church and the unbaptized were invited to do the same.70
With the reduccion, the Spaniards attempted to "tame" the
reluctant Filipinos through Christian indoctrination using the
convento/casa real/plaza complex as focal point. The reduccion,
to the Spaniards, was a "civilizing" device to make the Filipinos
law-abiding citizens of the Spanish Crown, and in the long run,
to make them ultimately adopt Hispanic culture and
civilization.71
19
All lands lost by the old barangays in the process of pueblo
organization as well as all lands not assigned to them and the
pueblos, were now declared to be crown lands or realengas,
belonging to the Spanish king. It was from the realengas that land
grants were made to non-Filipinos.72
The abrogation of the Filipinos' ancestral rights in land and the
introduction of the concept of public domain were the most
immediate fundamental results of Spanish colonial theory and
law.73 The concept that the Spanish king was the owner of
everything of value in the Indies or colonies was imposed on the
natives, and the natives were stripped of their ancestral rights to
land.74
Increasing their foothold in the Philippines, the Spanish
colonialists, civil and religious, classified the Filipinos according
to their religious practices and beliefs, and divided them into
three types . First were the Indios, the Christianized Filipinos,
who generally came from the lowland populations. Second, were
the Moros or the Muslim communities, and third, were the
infieles or the indigenous communities.75
The Indio was a product of the advent of Spanish culture. This
class was favored by the Spaniards and was allowed certain
status although below the Spaniards. The Moros and infieles
were regarded as the lowest classes.76
The Moros and infieles resisted Spanish rule and Christianity.
The Moros were driven from Manila and the Visayas to
Mindanao; while the infieles, to the hinterlands. The Spaniards
did not pursue them into the deep interior. The upland societies
were naturally outside the immediate concern of Spanish interest,
and the cliffs and forests of the hinterlands were difficult and
inaccessible, allowing the infieles, in effect, relative security.77
Thus, the infieles, which were peripheral to colonial
administration, were not only able to preserve their own culture
but also thwarted the Christianization process, separating
themselves from the newly evolved Christian community.78
Their own political, economic and social systems were kept
constantly alive and vibrant.
The pro-Christian or pro-Indio attitude of colonialism brought
about a generally mutual feeling of suspicion, fear, and hostility
between the Christians on the one hand and the non-Christians on
the other. Colonialism tended to divide and rule an otherwise
culturally and historically related populace through a colonial
system that exploited both the virtues and vices of the
Filipinos.79
President McKinley, in his instructions to the Philippine
Commission of April 7, 1900, addressed the existence of the
infieles:
"In dealing with the uncivilized tribes of the Islands, the
Commission should adopt the same course followed by Congress
in permitting the tribes of our North American Indians to
maintain their tribal organization and government, and under
which many of those tribes are now living in peace and
contentment, surrounded by civilization to which they are unable
20
or unwilling to conform. Such tribal government should,
however, be subjected to wise and firm regulation; and, without
undue or petty interference, constant and active effort should be
exercised to prevent barbarous practices and introduce civilized
customs."80
Placed in an alternative of either letting the natives alone or
guiding them in the path of civilization, the American
government chose "to adopt the latter measure as one more in
accord with humanity and with the national conscience."81
The Americans classified the Filipinos into two: the Christian
Filipinos and the non-Christian Filipinos. The term "non-
Christian" referred not to religious belief, but to a geographical
area, and more directly, "to natives of the Philippine Islands of a
low grade of civilization, usually living in tribal relationship
apart from settled communities."82
Like the Spaniards, the Americans pursued a policy of
assimilation. In 1903, they passed Act No. 253 creating the
Bureau of Non-Christian Tribes (BNCT). Under the Department
of the Interior, the BNCT's primary task was to conduct
ethnographic research among unhispanized Filipinos, including
those in Muslim Mindanao, with a "special view to determining
the most practicable means for bringing about their advancement
in civilization and prosperity." The BNCT was modeled after the
bureau dealing with American Indians. The agency took a keen
anthropological interest in Philippine cultural minorities and
produced a wealth of valuable materials about them.83
The 1935 Constitution did not carry any policy on the non-
Christian Filipinos. The raging issue then was the conservation of
the national patrimony for the Filipinos.
In 1957, the Philippine Congress passed R.A. No. 1888, an "Act
to effectuate in a more rapid and complete manner the economic,
social, moral and political advancement of the non-Christian
Filipinos or national cultural minorities and to render real,
complete, and permanent the integration of all said national
cultural minorities into the body politic, creating the Commission
on National Integration charged with said functions." The law
called for a policy of integration of indigenous peoples into the
Philippine mainstream and for this purpose created the
Commission on National Integration (CNI).84 The CNI was
given, more or less, the same task as the BNCT during the
American regime. The post-independence policy of integration
was like the colonial policy of assimilation understood in the
context of a guardian-ward relationship.85
The policy of assimilation and integration did not yield the
desired result. Like the Spaniards and Americans, government
attempts at integration met with fierce resistance. Since World
War II, a tidal wave of Christian settlers from the lowlands of
Luzon and the Visayas swamped the highlands and wide open
spaces in Mindanao.86 Knowledge by the settlers of the Public
Land Acts and the Torrens system resulted in the titling of
several ancestral lands in the settlers' names. With government
initiative and participation, this titling displaced several
indigenous peoples from their lands. Worse, these peoples were
also displaced by projects undertaken by the national government
in the name of national development.87
21
 which provided a mechanism for the expeditious resolution of
land problems involving small settlers, landowners, and tribal
It was in the 1973 Constitution that the State adopted the
Filipinos.92
following provision:

Despite the promulgation of these laws, from 1974 to the early

"The State shall consider the customs, traditions, beliefs, and
1980's, some 100,000 Kalingas and Bontoks of the Cordillera
interests of national cultural communities in the formulation and
region were displaced by the Chico River dam project of the
implementation of State policies."88
National Power Corporation (NPC). The Manobos of Bukidnon
saw their land bulldozed by the Bukidnon Sugar Industries
Company (BUSCO). In Agusan del Sur, the National
For the first time in Philippine history, the "non-Christian tribes"
Development Company was authorized by law in 1979 to take
or the "cultural minorities" were addressed by the highest law of
approximately 40,550 hectares of land that later became the
the Republic, and they were referred to as "cultural
NDC-Guthrie plantation in Agusan del Sur. Most of the land was
communities." More importantly this time, their "uncivilized"
possessed by the Agusan natives.93 Timber concessions, water
culture was given some recognition and their "customs,
projects, plantations, mining, and cattle ranching and other
traditions, beliefs and interests" were to be considered by the
projects of the national government led not only to the eviction of
State in the formulation and implementation of State policies.
the indigenous peoples from their land but also to the reduction
President Marcos abolished the CNI and transferred its functions
and destruction of their natural environment.94
to the Presidential Adviser on National Minorities (PANAMIN).
The PANAMIN was tasked to integrate the ethnic groups that
sought full integration into the larger community, and at the same
The Aquino government signified a total shift from the policy of
time "protect the rights of those who wish to preserve their
integration to one of preservation. Invoking her powers under the
original lifeways beside the larger community."89 In short, while
Freedom Constitution, President Aquino created the Office of
still adopting the integration policy, the decree recognized the
Muslim Affairs, Office for Northern Cultural Communities and
right of tribal Filipinos to preserve their way of life.90
the Office for Southern Cultural Communities all under the
Office of the President.95
In 1974, President Marcos promulgated P.D. No. 410, otherwise
known as the Ancestral Lands Decree. The decree provided for
The 1987 Constitution carries at least six (6) provisions which
the issuance of land occupancy certificates to members of the
insure the right of tribal Filipinos to preserve their way of life.96
national cultural communities who were given up to 1984 to
This Constitution goes further than the 1973 Constitution by
register their claims.91 In 1979, the Commission on the
expressly guaranteeing the rights of tribal Filipinos to their
Settlement of Land Problems was created under E.O. No. 561
22
ancestral domains and ancestral lands. By recognizing their right
to their ancestral lands and domains, the State has effectively
upheld their right to live in a culture distinctly their own.
2. Their Concept of Land
Indigenous peoples share distinctive traits that set them apart
from the Filipino mainstream. They are non-Christians. They live
in less accessible, marginal, mostly upland areas. They have a
system of self-government not dependent upon the laws of the
central administration of the Republic of the Philippines. They
follow ways of life and customs that are perceived as different
from those of the rest of the population.97 The kind of response
the indigenous peoples chose to deal with colonial threat worked
well to their advantage by making it difficult for Western
concepts and religion to erode their customs and traditions. The
"infieles societies" which had become peripheral to colonial
administration, represented, from a cultural perspective, a much
older base of archipelagic culture. The political systems were still
structured on the patriarchal and kinship oriented arrangement of
power and authority. The economic activities were governed by
the concepts of an ancient communalism and mutual help. The
social structure which emphasized division of labor and
distinction of functions, not status, was maintained. The cultural
styles and forms of life portraying the varieties of social
courtesies and ecological adjustments were kept constantly
vibrant.98
Land is the central element of the indigenous peoples' existence.
There is no traditional concept of permanent, individual, land
ownership. Among the Igorots, ownership of land more
accurately applies to the tribal right to use the land or to
territorial control. The people are the secondary owners or
stewards of the land and that if a member of the tribe ceases to
work, he loses his claim of ownership, and the land reverts to the
beings of the spirit world who are its true and primary owners.
Under the concept of "trusteeship," the right to possess the land
does not only belong to the present generation but the future ones
as well.99
Customary law on land rests on the traditional belief that no one
owns the land except the gods and spirits, and that those who
work the land are its mere stewards.100 Customary law has a
strong preference for communal ownership, which could either
be ownership by a group of individuals or families who are
related by blood or by marriage,101 or ownership by residents of
the same locality who may not be related by blood or marriage.
The system of communal ownership under customary laws draws
its meaning from the subsistence and highly collectivized mode
of economic production. The Kalingas, for instance, who are
engaged in team occupation like hunting, foraging for forest
products, and swidden farming found it natural that forest areas,
swidden farms, orchards, pasture and burial grounds should be
communally-owned.102 For the Kalingas, everybody has a
common right to a common economic base. Thus, as a rule,
rights and obligations to the land are shared in common.
Although highly bent on communal ownership, customary law on
land also sanctions individual ownership. The residential lots and
terrace rice farms are governed by a limited system of individual
ownership. It is limited because while the individual owner has
23
the right to use and dispose of the property, he does not possess
all the rights of an exclusive and full owner as defined under our
Civil Code.103 Under Kalinga customary law, the alienation of
individually-owned land is strongly discouraged except in
marriage and succession and except to meet sudden financial
needs due to sickness, death in the family, or loss of crops.104
Moreover, and to be alienated should first be offered to a clan-
member before any village-member can purchase it, and in no
case may land be sold to a non-member of the ili.105
Land titles do not exist in the indigenous peoples' economic and
social system. The concept of individual land ownership under
the civil law is alien to them. Inherently colonial in origin, our
national land laws and governmental policies frown upon
indigenous claims to ancestral lands. Communal ownership is
looked upon as inferior, if not inexistent.106
III. THE IPRA IS A NOVEL PIECE OF LEGISLATION.
A. The Legislative History of the IPRA
It was to address the centuries-old neglect of the Philippine
indigenous peoples that the Tenth Congress of the Philippines, by
their joint efforts, passed and approved R.A. No. 8371, the
Indigenous Peoples Rights Act (IPRA) of 1997. The law was a
consolidation of two Bills- Senate Bill No. 1728 and House Bill
No. 9125.
Principally sponsored by Senator Juan M. Flavier,107 Senate Bill
No. 1728 was a consolidation of four proposed measures referred
to the Committees on Cultural Communities, Environment and
Natural Resources, Ways and Means, as well as Finance. It
adopted almost en toto the comprehensive version of Senate Bill
Nos. 1476 and 1486 which was a result of six regional
consultations and one national consultation with indigenous
peoples nationwide.108 At the Second Regular Session of the
Tenth Congress, Senator Flavier, in his sponsorship speech, gave
a background on the situation of indigenous peoples in the
Philippines, to wit:
"The Indigenous Cultural Communities, including the Bangsa
Moro, have long suffered from the dominance and neglect of
government controlled by the majority. Massive migration of
their Christian brothers to their homeland shrunk their territory
and many of the tribal Filipinos were pushed to the hinterlands.
Resisting the intrusion, dispossessed of their ancestral land and
with the massive exploitation of their natural resources by the
elite among the migrant population, they became marginalized.
And the government has been an indispensable party to this
insidious conspiracy against the Indigenous Cultural
Communities (ICCs). It organized and supported the resettlement
of people to their ancestral land, which was massive during the
Commonwealth and early years of the Philippine Republic.
Pursuant to the Regalian Doctrine first introduced to our system
by Spain through the Royal Decree of 13 February 1894 or the
Maura Law, the government passed laws to legitimize the
wholesale landgrabbing and provide for easy titling or grant of
lands to migrant homesteaders within the traditional areas of the
ICCs."109
24
Senator Flavier further declared:
"The IPs are the offsprings and heirs of the peoples who have
first inhabited and cared for the land long before any central
government was established. Their ancestors had territories over
which they ruled themselves and related with other tribes. These
territories- the land- include people, their dwelling, the
mountains, the water, the air, plants, forest and the animals. This
is their environment in its totality. Their existence as indigenous
peoples is manifested in their own lives through political,
economic, socio-cultural and spiritual practices. The IPs culture
is the living and irrefutable proof to this.
Their survival depends on securing or acquiring land rights;
asserting their rights to it; and depending on it. Otherwise, IPs
shall cease to exist as distinct peoples."110
To recognize the rights of the indigenous peoples effectively,
Senator Flavier proposed a bill based on two postulates: (1) the
concept of native title; and (2) the principle of parens patriae.
According to Senator Flavier, "[w]hile our legal tradition
subscribes to the Regalian Doctrine reinstated in Section 2,
Article XII of the 1987 Constitution," our "decisional laws" and
jurisprudence passed by the State have "made exception to the
doctrine." This exception was first laid down in the case of
Cariño v. Insular Government where:
"x x x the court has recognized long occupancy of land by an
indigenous member of the cultural communities as one of private
ownership, which, in legal concept, is termed "native title." This
ruling has not been overturned. In fact, it was affirmed in
subsequent cases."111
Following Cariño, the State passed Act No. 926, Act No. 2874,
C.A. No. 141, P.D. 705, P.D. 410, P.D. 1529, R.A. 6734 (the
Organic Act for the Autonomous Region of Muslim Mindanao).
These laws, explicitly or implicitly, and liberally or restrictively,
recognized "native title" or "private right" and the existence of
ancestral lands and domains. Despite the passage of these laws,
however, Senator Flavier continued:
"x x x the executive department of government since the
American occupation has not implemented the policy. In fact, it
was more honored in its breach than in its observance, its wanton
disregard shown during the period unto the Commonwealth and
the early years of the Philippine Republic when government
organized and supported massive resettlement of the people to
the land of the ICCs."
Senate Bill No. 1728 seeks to genuinely recognize the IPs right to
own and possess their ancestral land. The bill was prepared also
under the principle of parens patriae inherent in the supreme
power of the State and deeply embedded in Philippine legal
tradition. This principle mandates that persons suffering from
serious disadvantage or handicap, which places them in a
position of actual inequality in their relation or transaction with
others, are entitled to the protection of the State.
25
 Rep. Andolana stressed that H.B. No. 9125 is based on the policy
of preservation as mandated in the Constitution. He also
Senate Bill No. 1728 was passed on Third Reading by twenty-
emphasized that the rights of IPs to their land was enunciated in
one (21) Senators voting in favor and none against, with no
Cariño v. Insular Government which recognized the fact that they
abstention.112
had vested rights prior to the establishment of the Spanish and
American regimes.115
House Bill No. 9125 was sponsored by Rep. Zapata, Chairman of
the Committee on Cultural Communities. It was originally
After exhaustive interpellation, House Bill No. 9125, and its
authored and subsequently presented and defended on the floor
corresponding amendments, was approved on Second Reading
by Rep. Gregorio Andolana of North Cotabato.113
with no objections.

Rep. Andolana's sponsorhip speech reads as follows:

IV. THE PROVISIONS OF THE IPRA DO NOT
CONTRAVENE THE CONSTITUTION.
"This Representation, as early as in the 8th Congress, filed a bill
of similar implications that would promote, recognize the rights
A. Ancestral Domains and Ancestral Lands are the Private
of indigenous cultural communities within the framework of
Property of Indigenous Peoples and Do Not Constitute Part of the
national unity and development.
Land of the Public Domain.

Apart from this, Mr. Speaker, is our obligation, the government's

The IPRA grants to ICCs/IPs a distinct kind of ownership over
obligation to assure and ascertain that these rights shall be well-
ancestral domains and ancestral lands. Ancestral lands are not the
preserved and the cultural traditions as well as the indigenous
same as ancestral domains. These are defined in Section 3 [a] and
laws that remained long before this Republic was established
[b] of the Indigenous Peoples Right Act, viz:
shall be preserved and promoted. There is a need, Mr. Speaker, to
look into these matters seriously and early approval of the
substitute bill shall bring into reality the aspirations, the hope and
"Sec. 3 a) Ancestral Domains. - Subject to Section 56 hereof,
the dreams of more than 12 million Filipinos that they be
refer to all areas generally belonging to ICCs/IPs comprising
considered in the mainstream of the Philippine society as we
lands, inland waters, coastal areas, and natural resources therein,
fashion for the year 2000." 114
held under a claim of ownership, occupied or possessed by
ICCs/IPs by themselves or through their ancestors, communally

26
or individually since time immemorial, continuously to the
present except when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a consequence of
government projects or any other voluntary dealings entered into
by government and private individuals/corporations, and which
are necessary to ensure their economic, social and cultural
welfare. It shall include ancestral lands, forests, pasture,
residential, agricultural, and other lands individually owned
whether alienable and disposable or otherwise, hunting grounds,
burial grounds, worship areas, bodies of water, mineral and other
natural resources, and lands which may no longer be exclusively
occupied by ICCs/IPs but from which they traditionally had
access to for their subsistence and traditional activities,
particularly the home ranges of ICCs/IPs who are still nomadic
and/or shifting cultivators;
b) Ancestral Lands.- Subject to Section 56 hereof, refers to land
occupied, possessed and utilized by individuals, families and
clans who are members of the ICCs/IPs since time immemorial,
by themselves or through their predecessors-in-interest, under
claims of individual or traditional group ownership,
continuously, to the present except when interrupted by war,
force majeure or displacement by force, deceit, stealth, or as a
consequence of government projects and other voluntary dealings
entered into by government and private individuals/corporations,
including, but not limited to, residential lots, rice terraces or
paddies, private forests, swidden farms and tree lots."
Ancestral domains are all areas belonging to ICCs/IPs held under
a claim of ownership, occupied or possessed by ICCs/IPs by
themselves or through their ancestors, communally or
individually since time immemorial, continuously until the
present, except when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a consequence of
government projects or any other voluntary dealings with
government and/or private individuals or corporations. Ancestral
domains comprise lands, inland waters, coastal areas, and natural
resources therein and includes ancestral lands, forests, pasture,
residential, agricultural, and other lands individually owned
whether alienable or not, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural
resources. They also include lands which may no longer be
exclusively occupied by ICCs/IPs but from which they
traditionally had access to for their subsistence and traditional
activities, particularly the home ranges of ICCs/IPs who are still
nomadic and/or shifting cultivators.116
Ancestral lands are lands held by the ICCs/IPs under the same
conditions as ancestral domains except that these are limited to
lands and that these lands are not merely occupied and possessed
but are also utilized by the ICCs/IPs under claims of individual or
traditional group ownership. These lands include but are not
limited to residential lots, rice terraces or paddies, private forests,
swidden farms and tree lots.117
The procedures for claiming ancestral domains and lands are
similar to the procedures embodied in Department
Administrative Order (DAO) No. 2, series of 1993, signed by
then Secretary of the Department of Environment and Natural
Resources (DENR) Angel Alcala.118 DAO No. 2 allowed the
delineation of ancestral domains by special task forces and
ensured the issuance of Certificates of Ancestral Land Claims
27
(CALC's) and Certificates of Ancestral Domain Claims
(CADC's) to IPs.
The identification and delineation of these ancestral domains and
lands is a power conferred by the IPRA on the National
Commission on Indigenous Peoples (NCIP).119 The guiding
principle in identification and delineation is self-delineation.120
This means that the ICCs/IPs have a decisive role in determining
the boundaries of their domains and in all the activities pertinent
thereto.121
The procedure for the delineation and recognition of ancestral
domains is set forth in Sections 51 and 52 of the IPRA. The
identification, delineation and certification of ancestral lands is in
Section 53 of said law.
Upon due application and compliance with the procedure
provided under the law and upon finding by the NCIP that the
application is meritorious, the NCIP shall issue a Certificate of
Ancestral Domain Title (CADT) in the name of the community
concerned.122 The allocation of lands within the ancestral
domain to any individual or indigenous corporate (family or clan)
claimants is left to the ICCs/IPs concerned to decide in
accordance with customs and traditions.123 With respect to
ancestral lands outside the ancestral domain, the NCIP issues a
Certificate of Ancestral Land Title (CALT).124
CADT's and CALT's issued under the IPRA shall be registered
by the NCIP before the Register of Deeds in the place where the
property is situated.125
(1) Right to Ancestral Domains and Ancestral Lands: How
Acquired
The rights of the ICCs/IPs to their ancestral domains and
ancestral lands may be acquired in two modes: (1) by native title
over both ancestral lands and domains; or (2) by torrens title
under the Public Land Act and the Land Registration Act with
respect to ancestral lands only.
(2) The Concept of Native Title
Native title is defined as:
"Sec. 3 [l]. Native Title- refers to pre-conquest rights to lands and
domains which, as far back as memory reaches, have been held
under a claim of private ownership by ICCs/IPs, have never been
public lands and are thus indisputably presumed to have been
held that way since before the Spanish Conquest."126
Native title refers to ICCs/IPs' preconquest rights to lands and
domains held under a claim of private ownership as far back as
memory reaches. These lands are deemed never to have been
public lands and are indisputably presumed to have been held
28
that way since before the Spanish Conquest. The rights of
ICCs/IPs to their ancestral domains (which also include ancestral
lands) by virtue of native title shall be recognized and
respected.127 Formal recognition, when solicited by ICCs/IPs
concerned, shall be embodied in a Certificate of Ancestral
Domain Title (CADT), which shall recognize the title of the
concerned ICCs/IPs over the territories identified and
delineated.128
Like a torrens title, a CADT is evidence of private ownership of
land by native title. Native title, however, is a right of private
ownership peculiarly granted to ICCs/IPs over their ancestral
lands and domains. The IPRA categorically declares ancestral
lands and domains held by native title as never to have been
public land. Domains and lands held under native title are,
therefore, indisputably presumed to have never been public lands
and are private.
(a) Cariño v. Insular Government129
The concept of native title in the IPRA was taken from the 1909
case of Cariño v. Insular Government.130 Cariño firmly
established a concept of private land title that existed irrespective
of any royal grant from the State.
In 1903, Don Mateo Cariño, an Ibaloi, sought to register with the
land registration court 146 hectares of land in Baguio
Municipality, Benguet Province. He claimed that this land had
been possessed and occupied by his ancestors since time
immemorial; that his grandfather built fences around the property
for the holding of cattle and that his father cultivated some parts
of the land. Cariño inherited the land in accordance with Igorot
custom. He tried to have the land adjusted under the Spanish land
laws, but no document issued from the Spanish Crown.131 In
1901, Cariño obtained a possessory title to the land under the
Spanish Mortgage Law.132 The North American colonial
government, however, ignored his possessory title and built a
public road on the land prompting him to seek a Torrens title to
his property in the land registration court. While his petition was
pending, a U.S. military reservation133 was proclaimed over his
land and, shortly thereafter, a military detachment was detailed
on the property with orders to keep cattle and trespassers,
including Cariño, off the land.134
In 1904, the land registration court granted Cariño's application
for absolute ownership to the land. Both the Government of the
Philippine Islands and the U.S. Government appealed to the
C.F.I. of Benguet which reversed the land registration court and
dismissed Cariño's application. The Philippine Supreme
Court135 affirmed the C.F.I. by applying the Valenton ruling.
Cariño took the case to the U.S. Supreme Court.136 On one
hand, the Philippine government invoked the Regalian doctrine
and contended that Cariño failed to comply with the provisions of
the Royal Decree of June 25, 1880, which required registration of
land claims within a limited period of time. Cariño, on the other,
asserted that he was the absolute owner of the land jure gentium,
and that the land never formed part of the public domain.
In a unanimous decision written by Justice Oliver Wendell
Holmes, the U.S. Supreme Court held:
29
 "The acquisition of the Philippines was not like the settlement of
the white race in the United States. Whatever consideration may
"It is true that Spain, in its earlier decrees, embodied the
have been shown to the North American Indians, the dominant
universal feudal theory that all lands were held from the Crown,
purpose of the whites in America was to occupy land. It is
and perhaps the general attitude of conquering nations toward
obvious that, however stated, the reason for our taking over the
people not recognized as entitled to the treatment accorded to
Philippines was different. No one, we suppose, would deny that,
those in the same zone of civilization with themselves. It is true,
so far as consistent with paramount necessities, our first object in
also, that in legal theory, sovereignty is absolute, and that, as
the internal administration of the islands is to do justice to the
against foreign nations, the United States may assert, as Spain
natives, not to exploit their country for private gain. By the
asserted, absolute power. But it does not follow that, as against
Organic Act of July 1, 1902, chapter 1369, section 12 (32
the inhabitants of the Philippines, the United States asserts that
Statutes at Large, 691), all the property and rights acquired there
Spain had such power. When theory is left on one side,
by the United States are to be administered 'for the benefit of the
sovereignty is a question of strength, and may vary in degree.
inhabitants thereof.' It is reasonable to suppose that the attitude
How far a new sovereign shall insist upon the theoretical relation
thus assumed by the United States with regard to what was
of the subjects to the head in the past, and how far it shall
unquestionably its own is also its attitude in deciding what it will
recognize actual facts, are matters for it to decide."137
claim for its own. The same statute made a bill of rights,
embodying the safeguards of the Constitution, and, like the
Constitution, extends those safeguards to all. It provides that 'no
The U.S. Supreme Court noted that it need not accept Spanish
law shall be enacted in said islands which shall deprive any
doctrines. The choice was with the new colonizer. Ultimately, the
person of life, liberty, or property without due process of law, or
matter had to be decided under U.S. law.
deny to any person therein the equal protection of the laws.' In
the light of the declaration that we have quoted from section 12,
it is hard to believe that the United States was ready to declare in
The Cariño decision largely rested on the North American
the next breath that "any person" did not embrace the inhabitants
constitutionalist's concept of "due process" as well as the
of Benguet, or that it meant by "property" only that which had
pronounced policy "to do justice to the natives."138 It was based
become such by ceremonies of which presumably a large part of
on the strong mandate extended to the Islands via the Philippine
the inhabitants never had heard, and that it proposed to treat as
Bill of 1902 that "No law shall be enacted in said islands which
public land what they, by native custom and by long association,-
shall deprive any person of life, liberty, or property without due
of the profoundest factors in human thought,- regarded as their
process of law, or deny to any person therein the equal protection
own."139
of the laws." The court declared:

The Court went further:

30
 seem to indicate pretty clearly that the natives were recognized as
owning some lands, irrespective of any royal grant. In other
"Every presumption is and ought to be against the government in
words, Spain did not assume to convert all the native inhabitants
a case like the present. It might, perhaps, be proper and sufficient
of the Philippines into trespassers or even into tenants at will. For
to say that when, as far back as testimony or memory goes, the
instance, Book 4, title 12, Law 14 of the the Recopilacion de
land has been held by individuals under a claim of private
Leyes de las Indias, cited for a contrary conclusion in Valenton v.
ownership, it will be presumed to have been held in the same
Murciano, 3 Philippine 537, while it commands viceroys and
way from before the Spanish conquest, and never to have been
others, when it seems proper, to call for the exhibition of grants,
public land. Certainly in a case like this, if there is doubt or
directs them to confirm those who hold by good grants or justa
ambiguity in the Spanish law, we ought to give the applicant the
prescripcion. It is true that it begins by the characteristic assertion
benefit of the doubt."140
of feudal overlordship and the origin of all titles in the King or
his predecessors. That was theory and discourse. The fact was
that titles were admitted to exist that owed nothing to the powers
The court thus laid down the presumption of a certain title held
of Spain beyond this recognition in their books." (Emphasis
(1) as far back as testimony or memory went, and (2) under a
supplied).141
claim of private ownership. Land held by this title is presumed to
"never have been public land."
The court further stated that the Spanish "adjustment"
proceedings never held sway over unconquered territories. The
Against this presumption, the U.S. Supreme Court analyzed the
wording of the Spanish laws were not framed in a manner as to
Spanish decrees upheld in the 1904 decision of Valenton v.
convey to the natives that failure to register what to them has
Murciano. The U.S. Supreme Court found no proof that the
always been their own would mean loss of such land. The
Spanish decrees did not honor native title. On the contrary, the
registration requirement was "not to confer title, but simply to
decrees discussed in Valenton appeared to recognize that the
establish it;" it was "not calculated to convey to the mind of an
natives owned some land, irrespective of any royal grant. The
Igorot chief the notion that ancient family possessions were in
Regalian doctrine declared in the preamble of the Recopilacion
danger, if he had read every word of it."
was all "theory and discourse" and it was observed that titles
were admitted to exist beyond the powers of the Crown, viz:
By recognizing this kind of title, the court clearly repudiated the
doctrine of Valenton. It was frank enough, however, to admit the
"If the applicant's case is to be tried by the law of Spain, we do
possibility that the applicant might have been deprived of his
not discover such clear proof that it was bad by that law as to
land under Spanish law because of the inherent ambiguity of the
satisfy us that he does not own the land. To begin with, the older
decrees and concomitantly, the various interpretations which may
decrees and laws cited by the counsel for the plaintiff in error
31
be given them. But precisely because of the ambiguity and of the
strong "due process mandate" of the Constitution, the court
validated this kind of title.142 This title was sufficient, even
without government administrative action, and entitled the holder
to a Torrens certificate. Justice Holmes explained:
"It will be perceived that the rights of the applicant under the
Spanish law present a problem not without difficulties for courts
of a legal tradition. We have deemed it proper on that account to
notice the possible effect of the change of sovereignty and the act
of Congress establishing the fundamental principles now to be
observed. Upon a consideration of the whole case we are of the
opinion that law and justice require that the applicant should be
granted what he seeks, and should not be deprived of what, by
the practice and belief of those among whom he lived, was his
property, through a refined interpretation of an almost forgotten
law of Spain."143
Thus, the court ruled in favor of Cariño and ordered the
registration of the 148 hectares in Baguio Municipality in his
name.144
Examining Cariño closer, the U.S. Supreme Court did not
categorically refer to the title it upheld as "native title." It simply
said:
"The Province of Benguet was inhabited by a tribe that the
Solicitor-General, in his argument, characterized as a savage tribe
that never was brought under the civil or military government of
the Spanish Crown. It seems probable, if not certain, that the
Spanish officials would not have granted to anyone in that
province the registration to which formerly the plaintiff was
entitled by the Spanish Laws, and which would have made his
title beyond question good. Whatever may have been the
technical position of Spain it does not follow that, in the view of
the United States, he had lost all rights and was a mere trespasser
when the present government seized his land. The argument to
that effect seems to amount to a denial of native titles through an
important part of the Island of Luzon, at least, for the want of
ceremonies which the Spaniards would not have permitted and
had not the power to enforce."145
This is the only instance when Justice Holmes used the term
"native title" in the entire length of the Cariño decision. It is
observed that the widespread use of the term "native title" may
be traced to Professor Owen James Lynch, Jr., a Visiting
Professor at the University of the Philippines College of Law
from the Yale University Law School. In 1982, Prof. Lynch
published an article in the Philippine Law Journal entitled Native
Title, Private Right and Tribal Land Law.146 This article was
made after Professor Lynch visited over thirty tribal communities
throughout the country and studied the origin and development of
Philippine land laws.147 He discussed Cariño extensively and
used the term "native title" to refer to Cariño's title as discussed
and upheld by the U.S. Supreme Court in said case.
(b) Indian Title
32
In a footnote in the same article, Professor Lynch stated that the
concept of "native title" as defined by Justice Holmes in Cariño
"is conceptually similar to "aboriginal title" of the American
Indians.148 This is not surprising, according to Prof. Lynch,
considering that during the American regime, government policy
towards ICCs/IPs was consistently made in reference to native
Americans.149 This was clearly demonstrated in the case of Rubi
v. Provincial Board of Mindoro.150
In Rubi, the Provincial Board of Mindoro adopted a Resolution
authorizing the provincial governor to remove the Mangyans
from their domains and place them in a permanent reservation in
Sitio Tigbao, Lake Naujan. Any Mangyan who refused to comply
was to be imprisoned. Rubi and some Mangyans, including one
who was imprisoned for trying to escape from the reservation,
filed for habeas corpus claiming deprivation of liberty under the
Board Resolution. This Court denied the petition on the ground
of police power. It upheld government policy promoting the idea
that a permanent settlement was the only successful method for
educating the Mangyans, introducing civilized customs,
improving their health and morals, and protecting the public
forests in which they roamed.151 Speaking through Justice
Malcolm, the court said:
"Reference was made in the President's instructions to the
Commission to the policy adopted by the United States for the
Indian Tribes. The methods followed by the Government of the
Philippine Islands in its dealings with the so-called non-Christian
people is said, on argument, to be practically identical with that
followed by the United States Government in its dealings with
the Indian tribes. Valuable lessons, it is insisted, can be derived
by an investigation of the American-Indian policy.
From the beginning of the United States, and even before, the
Indians have been treated as "in a state of pupilage." The
recognized relation between the Government of the United States
and the Indians may be described as that of guardian and ward. It
is for the Congress to determine when and how the guardianship
shall be terminated. The Indians are always subject to the plenary
authority of the United States.152
x x x.
As to the second point, the facts in the Standing Bear case and
the Rubi case are not exactly identical. But even admitting
similarity of facts, yet it is known to all that Indian reservations
do exist in the United States, that Indians have been taken from
different parts of the country and placed on these reservations,
without any previous consultation as to their own wishes, and
that, when once so located, they have been made to remain on the
reservation for their own good and for the general good of the
country. If any lesson can be drawn from the Indian policy of the
United States, it is that the determination of this policy is for the
legislative and executive branches of the government and that
when once so decided upon, the courts should not interfere to
upset a carefully planned governmental system. Perhaps, just as
many forceful reasons exist for the segregation of the
Manguianes in Mindoro as existed for the segregation of the
different Indian tribes in the United States."153
33
Rubi applied the concept of Indian land grants or reservations in
the Philippines. An Indian reservation is a part of the public
domain set apart by proper authority for the use and occupation
of a tribe or tribes of Indians.154 It may be set apart by an act of
Congress, by treaty, or by executive order, but it cannot be
established by custom and prescription.155
Indian title to land, however, is not limited to land grants or
reservations. It also covers the "aboriginal right of possession or
occupancy."156 The aboriginal right of possession depends on
the actual occupancy of the lands in question by the tribe or
nation as their ancestral home, in the sense that such lands
constitute definable territory occupied exclusively by the
particular tribe or nation.157 It is a right which exists apart from
any treaty, statute, or other governmental action, although in
numerous instances treaties have been negotiated with Indian
tribes, recognizing their aboriginal possession and delimiting
their occupancy rights or settling and adjusting their
boundaries.158
American jurisprudence recognizes the Indians' or native
Americans' rights to land they have held and occupied before the
"discovery" of the Americas by the Europeans. The earliest
definitive statement by the U.S. Supreme Court on the nature of
aboriginal title was made in 1823 in Johnson & Graham's Lessee
v. M'Intosh.159
In Johnson, the plaintiffs claimed the land in question under two
(2) grants made by the chiefs of two (2) Indian tribes. The U.S.
Supreme Court refused to recognize this conveyance, the
plaintiffs being private persons. The only conveyance that was
recognized was that made by the Indians to the government of
the European discoverer. Speaking for the court, Chief Justice
Marshall pointed out that the potentates of the old world believed
that they had made ample compensation to the inhabitants of the
new world by bestowing civilization and Christianity upon them;
but in addition, said the court, they found it necessary, in order to
avoid conflicting settlements and consequent war, to establish the
principle that discovery gives title to the government by whose
subjects, or by whose authority, the discovery was made, against
all other European governments, which title might be
consummated by possession.160 The exclusion of all other
Europeans gave to the nation making the discovery the sole right
of acquiring the soil from the natives and establishing settlements
upon it. As regards the natives, the court further stated that:
"Those relations which were to exist between the discoverer and
the natives were to be regulated by themselves. The rights thus
acquired being exclusive, no other power could interpose
between them.
In the establishment of these relations, the rights of the original
inhabitants were, in no instance, entirely disregarded; but were
necessarily, to a considerable extent, impaired. They were
admitted to be the rightful occupants of the soil, with a legal as
well as just claim to retain possession of it, and to use it
according to their own discretion; but their rights to complete
sovereignty, as independent nations, were necessarily
diminished, and their power to dispose of the soil at their own
will, to whomsoever they pleased, was denied by the
34
fundamental principle that discovery gave exclusive title to those
who made it.
"It has never been contended that the Indian title amounted to
nothing. Their right of possession has never been questioned. The
claim of government extends to the complete ultimate title,
While the different nations of Europe respected the right of the
charged with this right of possession, and to the exclusive power
natives as occupants, they asserted the ultimate dominion to be in
of acquiring that right."162
themselves; and claimed and exercised, as a consequence of this
ultimate dominion, a power to grant the soil, while yet in
possession of the natives. These grants have been understood by
It has been said that the history of America, from its discovery to
all to convey a title to the grantees, subject only to the Indian
the present day, proves the universal recognition of this
right of occupancy."161
principle.163

Thus, the discoverer of new territory was deemed to have

The Johnson doctrine was a compromise. It protected Indian
obtained the exclusive right to acquire Indian land and extinguish
rights and their native lands without having to invalidate
Indian titles. Only to the discoverer- whether to England, France,
conveyances made by the government to many U.S. citizens.164
Spain or Holland- did this right belong and not to any other
nation or private person. The mere acquisition of the right
nonetheless did not extinguish Indian claims to land. Rather, until
Johnson was reiterated in the case of Worcester v. Georgia.165 In
the discoverer, by purchase or conquest, exercised its right, the
this case, the State of Georgia enacted a law requiring all white
concerned Indians were recognized as the "rightful occupants of
persons residing within the Cherokee nation to obtain a license or
the soil, with a legal as well as just claim to retain possession of
permit from the Governor of Georgia; and any violation of the
it." Grants made by the discoverer to her subjects of lands
law was deemed a high misdemeanor. The plaintiffs, who were
occupied by the Indians were held to convey a title to the
white missionaries, did not obtain said license and were thus
grantees, subject only to the Indian right of occupancy. Once the
charged with a violation of the Act.
discoverer purchased the land from the Indians or conquered
them, it was only then that the discoverer gained an absolute title
unrestricted by Indian rights.
The U.S. Supreme Court declared the Act as unconstitutional for
interfering with the treaties established between the United States
and the Cherokee nation as well as the Acts of Congress
The court concluded, in essence, that a grant of Indian lands by
regulating intercourse with them. It characterized the relationship
Indians could not convey a title paramount to the title of the
between the United States government and the Indians as:
United States itself to other parties, saying:

35
 authority is exclusive, and having a right to all the lands within
those boundaries, which is not only acknowledged, but
"The Indian nations were, from their situation, necessarily
guaranteed by the United States.
dependent on some foreign potentate for the supply of their
essential wants, and for their protection from lawless and
injurious intrusions into their country. That power was naturally
x x x.
termed their protector. They had been arranged under the
protection of Great Britain; but the extinguishment of the British
power in their neighborhood, and the establishment of that of the
"The Indian nations had always been considered as distinct,
United States in its place, led naturally to the declaration, on the
independent political communities, retaining their original
part of the Cherokees, that they were under the protection of the
natural rights, as the undisputed possessors of the soil from time
United States, and of no other power. They assumed the relation
immemorial, with the single exception of that imposed by
with the United States which had before subsisted with Great
irresistible power, which excluded them from intercourse with
Britain.
any other European potentate than the first discoverer of the coast
of the particular region claimed: and this was a restriction which
those European potentates imposed on themselves, as well as on
This relation was that of a nation claiming and receiving the
the Indians. The very term "nation," so generally applied to them,
protection of one more powerful, not that of individuals
means "a people distinct from others." x x x.167
abandoning their national character, and submitting as subjects to
the laws of a master."166
The Cherokee nation, then, is a distinct community, occupying its
own territory, with boundaries accurately described, in which the
It was the policy of the U.S. government to treat the Indians as
laws of Georgia can have no force, and which the citizens of
nations with distinct territorial boundaries and recognize their
Georgia have no right to enter but with the assent of the
right of occupancy over all the lands within their domains. Thus:
Cherokees themselves or in conformity with treaties and with the
acts of Congress. The whole intercourse between the United
States and this nation is, by our Constitution and laws, vested in
"From the commencement of our government Congress has
the government of the United States."168
passed acts to regulate trade and intercourse with the Indians;
which treat them as nations, respect their rights, and manifest a
firm purpose to afford that protection which treaties stipulate. All
The discovery of the American continent gave title to the
these acts, and especially that of 1802, which is still in force,
government of the discoverer as against all other European
manifestly consider the several Indian nations as distinct political
governments. Designated as the naked fee,169 this title was to be
communities, having territorial boundaries, within which their
36
consummated by possession and was subject to the Indian title of
occupancy. The discoverer acknowledged the Indians' legal and
just claim to retain possession of the land, the Indians being the
original inhabitants of the land. The discoverer nonetheless
asserted the exclusive right to acquire the Indians' land- either by
purchase, "defensive" conquest, or cession- and in so doing,
extinguish the Indian title. Only the discoverer could extinguish
Indian title because it alone asserted ultimate dominion in itself.
Thus, while the different nations of Europe respected the rights
of the natives as occupants, they all asserted the ultimate
dominion and title to be in themselves.170
As early as the 19th century, it became accepted doctrine that
although fee title to the lands occupied by the Indians when the
colonists arrived became vested in the sovereign- first the
discovering European nation and later the original 13 States and
the United States- a right of occupancy in the Indian tribes was
nevertheless recognized. The Federal Government continued the
policy of respecting the Indian right of occupancy, sometimes
called Indian title, which it accorded the protection of complete
ownership.171 But this aboriginal Indian interest simply
constitutes "permission" from the whites to occupy the land, and
means mere possession not specifically recognized as ownership
by Congress.172 It is clear that this right of occupancy based
upon aboriginal possession is not a property right.173 It is
vulnerable to affirmative action by the federal government who,
as sovereign, possessed exclusive power to extinguish the right of
occupancy at will.174 Thus, aboriginal title is not the same as
legal title. Aboriginal title rests on actual, exclusive and
continuous use and occupancy for a long time.175 It entails that
land owned by Indian title must be used within the tribe, subject
to its laws and customs, and cannot be sold to another sovereign
government nor to any citizen.176 Such title as Indians have to
possess and occupy land is in the tribe, and not in the individual
Indian; the right of individual Indians to share in the tribal
property usually depends upon tribal membership, the property of
the tribe generally being held in communal ownership.177
As a rule, Indian lands are not included in the term "public
lands," which is ordinarily used to designate such lands as are
subject to sale or other disposal under general laws.178 Indian
land which has been abandoned is deemed to fall into the public
domain.179 On the other hand, an Indian reservation is a part of
the public domain set apart for the use and occupation of a tribe
of Indians.180 Once set apart by proper authority, the reservation
ceases to be public land, and until the Indian title is extinguished,
no one but Congress can initiate any preferential right on, or
restrict the nation's power to dispose of, them.181
The American judiciary struggled for more than 200 years with
the ancestral land claims of indigenous Americans.182 And two
things are clear. First, aboriginal title is recognized. Second,
indigenous property systems are also recognized. From a legal
point of view, certain benefits can be drawn from a comparison
of Philippine IPs to native Americans.183 Despite the similarities
between native title and aboriginal title, however, there are at
present some misgivings on whether jurisprudence on American
Indians may be cited authoritatively in the Philippines. The U.S.
recognizes the possessory rights of the Indians over their land;
title to the land, however, is deemed to have passed to the U.S. as
successor of the discoverer. The aboriginal title of ownership is
not specifically recognized as ownership by action authorized by
Congress.184 The protection of aboriginal title merely guards
37
against encroachment by persons other than the Federal
Government.185 Although there are criticisms against the refusal
to recognize the native Americans' ownership of these lands,186
the power of the State to extinguish these titles has remained
firmly entrenched.187
Under the IPRA, the Philippine State is not barred form asserting
sovereignty over the ancestral domains and ancestral lands.188
The IPRA, however, is still in its infancy and any similarities
between its application in the Philippines vis-à-vis American
Jurisprudence on aboriginal title will depend on the peculiar facts
of each case.
(c) Why the Cariño doctrine is unique
In the Philippines, the concept of native title first upheld in
Cariño and enshrined in the IPRA grants ownership, albeit in
limited form, of the land to the ICCs/IPs. Native title presumes
that the land is private and was never public. Cariño is the only
case that specifically and categorically recognizes native title.
The long line of cases citing Cariño did not touch on native title
and the private character of ancestral domains and lands. Cariño
was cited by the succeeding cases to support the concept of
acquisitive prescription under the Public Land Act which is a
different matter altogether. Under the Public Land Act, land
sought to be registered must be public agricultural land. When
the conditions specified in Section 48 [b] of the Public Land Act
are complied with, the possessor of the land is deemed to have
acquired, by operation of law, a right to a grant of the land.189
The land ceases to be part of the public domain,190 ipso jure,191
and is converted to private property by the mere lapse or
completion of the prescribed statutory period.
It was only in the case of Oh Cho v. Director of Lands192 that
the court declared that the rule that all lands that were not
acquired from the government, either by purchase or grant,
belong to the public domain has an exception. This exception
would be any land that should have been in the possession of an
occupant and of his predecessors-in-interest since time
immemorial. It is this kind of possession that would justify the
presumption that the land had never been part of the public
domain or that it had been private property even before the
Spanish conquest.193 Oh Cho, however, was decided under the
provisions of the Public Land Act and Cariño was cited to
support the applicant's claim of acquisitive prescription under the
said Act.
All these years, Cariño had been quoted out of context simply to
justify long, continuous, open and adverse possession in the
concept of owner of public agricultural land. It is this long,
continuous, open and adverse possession in the concept of owner
of thirty years both for ordinary citizens194 and members of the
national cultural minorities195 that converts the land from public
into private and entitles the registrant to a torrens certificate of
title.
(3) The Option of Securing a Torrens Title to the Ancestral Land
Indicates that the Land is Private.
38
The private character of ancestral lands and domains as laid
down in the IPRA is further strengthened by the option given to
individual ICCs/IPs over their individually-owned ancestral
lands. For purposes of registration under the Public Land Act and
the Land Registration Act, the IPRA expressly converts ancestral
land into public agricultural land which may be disposed of by
the State. The necessary implication is that ancestral land is
private. It, however, has to be first converted to public
agricultural land simply for registration purposes. To wit:
"Sec. 12. Option to Secure Certificate of Title Under
Commonwealth Act 141, as amended, or the Land Registration
Act 496- Individual members of cultural communities, with
respect to their individually-owned ancestral lands who, by
themselves or through their predecessors-in-interest, have been in
continuous possession and occupation of the same in the concept
of owner since time immemorial or for a period of not less than
thirty (30) years immediately preceding the approval of this Act
and uncontested by the members of the same ICCs/IPs shall have
the option to secure title to their ancestral lands under the
provisions of Commonwealth Act 141, as amended, or the Land
Registration Act 496.
For this purpose, said individually-owned ancestral lands, which
are agricultural in character and actually used for agricultural,
residential, pasture, and tree farming purposes, including those
with a slope of eighteen percent (18%) or more, are hereby
classified as alienable and disposable agricultural lands.
The option granted under this section shall be exercised within
twenty (20) years from the approval of this Act."196
ICCs/IPs are given the option to secure a torrens certificate of
title over their individually-owned ancestral lands. This option is
limited to ancestral lands only, not domains, and such lands must
be individually, not communally, owned.
Ancestral lands that are owned by individual members of
ICCs/IPs who, by themselves or through their predecessors-in-
interest, have been in continuous possession and occupation of
the same in the concept of owner since time immemorial197 or
for a period of not less than 30 years, which claims are
uncontested by the members of the same ICCs/IPs, may be
registered under C.A. 141, otherwise known as the Public Land
Act, or Act 496, the Land Registration Act. For purposes of
registration, the individually-owned ancestral lands are classified
as alienable and disposable agricultural lands of the public
domain, provided, they are agricultural in character and are
actually used for agricultural, residential, pasture and tree
farming purposes. These lands shall be classified as public
agricultural lands regardless of whether they have a slope of 18%
or more.
The classification of ancestral land as public agricultural land is
in compliance with the requirements of the Public Land Act and
the Land Registration Act. C.A. 141, the Public Land Act, deals
specifically with lands of the public domain.198 Its provisions
apply to those lands "declared open to disposition or concession"
x x x "which have not been reserved for public or quasi-public
39
purposes, nor appropriated by the Government, nor in any
manner become private property, nor those on which a private
The 1987 Constitution mandates the State to "protect the rights of
right authorized and recognized by this Act or any other valid
indigenous cultural communities to their ancestral lands" and that
law x x x or which having been reserved or appropriated, have
"Congress provide for the applicability of customary laws x x x
ceased to be so."199 Act 496, the Land Registration Act, allows
in determining the ownership and extent of ancestral
registration only of private lands and public agricultural lands.
domain."202 It is the recognition of the ICCs/IPs distinct rights
Since ancestral domains and lands are private, if the ICC/IP
of ownership over their ancestral domains and lands that breathes
wants to avail of the benefits of C.A. 141 and Act 496, the IPRA
life into this constitutional mandate.
itself converts his ancestral land, regardless of whether the land
has a slope of eighteen per cent (18%) or over,200 from private
to public agricultural land for proper disposition.
B. The right of ownership and possession by the ICCs/IPs of
their ancestral domains is a limited form of ownership and does
not include the right to alienate the same.
The option to register land under the Public Land Act and the
Land Registration Act has nonetheless a limited period. This
option must be exercised within twenty (20) years from October
Registration under the Public Land Act and Land Registration
29, 1997, the date of approval of the IPRA.
Act recognizes the concept of ownership under the civil law. This
ownership is based on adverse possession for a specified period,
and harkens to Section 44 of the Public Land Act on
Thus, ancestral lands and ancestral domains are not part of the
administrative legalization (free patent) of imperfect or
lands of the public domain. They are private and belong to the
incomplete titles and Section 48 (b) and (c) of the same Act on
ICCs/IPs. Section 3 of Article XII on National Economy and
the judicial confirmation of imperfect or incomplete titles. Thus:
Patrimony of the 1987 Constitution classifies lands of the public
domain into four categories: (a) agricultural, (b) forest or timber,
(c) mineral lands, and (d) national parks. Section 5 of the same
"Sec. 44. Any natural-born citizen of the Philippines who is not
Article XII mentions ancestral lands and ancestral domains but it
the owner of more than twenty-four hectares and who since July
does not classify them under any of the said four categories. To
fourth, 1926 or prior thereto, has continuously occupied and
classify them as public lands under any one of the four classes
cultivated, either by himself or through his predecessors-in-
will render the entire IPRA law a nullity. The spirit of the IPRA
interest, a tract or tracts of agricultural public lands subject to
lies in the distinct concept of ancestral domains and ancestral
disposition, or who shall have paid the real estate tax thereon
lands. The IPRA addresses the major problem of the ICCs/IPs
while the same has not been occupied by any person shall be
which is loss of land. Land and space are of vital concern in
entitled, under the provisions of this chapter, to have a free patent
terms of sheer survival of the ICCs/IPs.201

40
issued to him for such tract or tracts of such land not to exceed
twenty-four hectares.
A member of the national cultural minorities who has
continuously occupied and cultivated, either by himself or
through his predecessors-in-interest, a tract or tracts of land,
whether disposable or not since July 4, 1955, shall be entitled to
the right granted in the preceding paragraph of this section:
Provided, That at the time he files his free patent application he is
not the owner of any real property secured or disposable under
the provision of the Public Land Law.203
x x x.
"Sec. 48. The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any
such lands or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of First Instance
of the province where the land is located for confirmation of their
claims and the issuance of a certificate of title therefor, under the
Land Registration Act, to wit:
(a) [perfection of Spanish titles] xxx.
(b) Those who by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition or ownership, for
at least thirty years immediately preceding the filing of the
application for confirmation of title except when prevented by
war or force majeure. These shall be conclusively presumed to
have performed all the conditions essential to a Government
grant and shall be entitled to a certificate of title under the
provisions of this Chapter.
(c) Members of the national cultural minorities who by
themselves or through their predecessors-in-interest have been in
open, continuous, exclusive and notorious possession and
occupation of lands of the public domain suitable to agriculture,
whether disposable or not, under a bona fide claim of ownership
for at least 30 years shall be entitled to the rights granted in sub-
section (b) hereof."204
Registration under the foregoing provisions presumes that the
land was originally public agricultural land but because of
adverse possession since July 4, 1955 (free patent) or at least
thirty years (judicial confirmation), the land has become private.
Open, adverse, public and continuous possession is sufficient,
provided, the possessor makes proper application therefor. The
possession has to be confirmed judicially or administratively
after which a torrens title is issued.
A torrens title recognizes the owner whose name appears in the
certificate as entitled to all the rights of ownership under the civil
law. The Civil Code of the Philippines defines ownership in
Articles 427, 428 and 429. This concept is based on Roman Law
which the Spaniards introduced to the Philippines through the
Civil Code of 1889. Ownership, under Roman Law, may be
41
exercised over things or rights. It primarily includes the right of
the owner to enjoy and dispose of the thing owned. And the right
to enjoy and dispose of the thing includes the right to receive
from the thing what it produces,205 the right to consume the
thing by its use,206 the right to alienate, encumber, transform or
even destroy the thing owned,207 and the right to exclude from
the possession of the thing owned by any other person to whom
the owner has not transmitted such thing.208
1. The Indigenous Concept of Ownership and Customary Law.
Ownership of ancestral domains by native title does not entitle
the ICC/IP to a torrens title but to a Certificate of Ancestral
Domain Title (CADT). The CADT formally recognizes the
indigenous concept of ownership of the ICCs/IPs over their
ancestral domain. Thus:
"Sec. 5. Indigenous concept of ownership.- Indigenous concept
of ownership sustains the view that ancestral domains and all
resources found therein shall serve as the material bases of their
cultural integrity. The indigenous concept of ownership generally
holds that ancestral domains are the ICCs/IPs private but
community property which belongs to all generations and
therefore cannot be sold, disposed or destroyed. It likewise
covers sustainable traditional resource rights."
The right of ownership and possession of the ICCs/IPs to their
ancestral domains is held under the indigenous concept of
ownership. This concept maintains the view that ancestral
domains are the ICCs/IPs private but community property. It is
private simply because it is not part of the public domain. But its
private character ends there. The ancestral domain is owned in
common by the ICCs/IPs and not by one particular person. The
IPRA itself provides that areas within the ancestral domains,
whether delineated or not, are presumed to be communally
held.209 These communal rights, however, are not exactly the
same as co-ownership rights under the Civil Code.210 Co-
ownership gives any co-owner the right to demand partition of
the property held in common. The Civil Code expressly provides
that "no co-owner shall be obliged to remain in the co-
ownership." Each co-owner may demand at any time the partition
of the thing in common, insofar as his share is concerned.211 To
allow such a right over ancestral domains may be destructive not
only of customary law of the community but of the very
community itself.212
Communal rights over land are not the same as corporate rights
over real property, much less corporate condominium rights. A
corporation can exist only for a maximum of fifty (50) years
subject to an extension of another fifty years in any single
instance.213 Every stockholder has the right to disassociate
himself from the corporation.214 Moreover, the corporation itself
may be dissolved voluntarily or involuntarily.215
Communal rights to the land are held not only by the present
possessors of the land but extends to all generations of the
ICCs/IPs, past, present and future, to the domain. This is the
reason why the ancestral domain must be kept within the
ICCs/IPs themselves. The domain cannot be transferred, sold or
42
conveyed to other persons. It belongs to the ICCs/IPs as a
community.
Ancestral lands are also held under the indigenous concept of
ownership. The lands are communal. These lands, however, may
be transferred subject to the following limitations: (a) only to the
members of the same ICCs/IPs; (b) in accord with customary
laws and traditions; and (c) subject to the right of redemption of
the ICCs/IPs for a period of 15 years if the land was transferred
to a non-member of the ICCs/IPs.
Following the constitutional mandate that "customary law govern
property rights or relations in determining the ownership and
extent of ancestral domains,"216 the IPRA, by legislative fiat,
introduces a new concept of ownership. This is a concept that has
long existed under customary law.217
Custom, from which customary law is derived, is also recognized
under the Civil Code as a source of law.218 Some articles of the
Civil Code expressly provide that custom should be applied in
cases where no codal provision is applicable.219 In other words,
in the absence of any applicable provision in the Civil Code,
custom, when duly proven, can define rights and liabilities.220
Customary law is a primary, not secondary, source of rights
under the IPRA and uniquely applies to ICCs/IPs. Its recognition
does not depend on the absence of a specific provision in the civil
law. The indigenous concept of ownership under customary law
is specifically acknowledged and recognized, and coexists with
the civil law concept and the laws on land titling and land
registration.221
To be sure, the indigenous concept of ownership exists even
without a paper title. The CADT is merely a "formal recognition"
of native title. This is clear from Section 11 of the IPRA, to wit:
"Sec. 11. Recognition of Ancestral Domain Rights.- The rights of
ICCs/IPs to their ancestral domains by virtue of Native Title shall
be recognized and respected. Formal recognition, when solicited
by ICCs/IPs concerned shall be embodied in a Certificate of
Ancestral Domain Title, which shall recognize the title of the
concerned ICCs/IPs over the territories identified and
delineated."
The moral import of ancestral domain, native land or being
native is "belongingness" to the land, being people of the land-
by sheer force of having sprung from the land since time beyond
recall, and the faithful nurture of the land by the sweat of one's
brow. This is fidelity of usufructuary relation to the land- the
possession of stewardship through perduring, intimate tillage,
and the mutuality of blessings between man and land; from man,
care for land; from the land, sustenance for man.222
C. Sections 7 (a), 7 (b) and 57 of the IPRA Do Not Violate the
Regalian Doctrine Enshrined in Section 2, Article XII of the
1987 Constitution.
43
1. The Rights of ICCs/IPs Over Their Ancestral Domains and
Lands
The IPRA grants the ICCs/IPs several rights over their ancestral
domains and ancestral lands. Section 7 provides for the rights
over ancestral domains:
"Sec. 7. Rights to Ancestral Domains.- The rights of ownership
and possession of ICCs/IPs to their ancestral domains shall be
recognized and protected. Such rights include:
a) Right of Ownership.- The right to claim ownership over lands,
bodies of water traditionally and actually occupied by ICCs/IPs,
sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains;
b) Right to Develop Lands and Natural Resources.- Subject to
Section 56 hereof, the right to develop, control and use lands and
territories traditionally occupied, owned, or used; to manage and
conserve natural resources within the territories and uphold the
responsibilities for future generations; to benefit and share the
profits from allocation and utilization of the natural resources
found therein; the right to negotiate the terms and conditions for
the exploration of natural resources in the areas for the purpose
of ensuring ecological, environmental protection and the
conservation measures, pursuant to national and customary laws;
the right to an informed and intelligent participation in the
formulation and implementation of any project, government or
private, that will affect or impact upon the ancestral domains and
to receive just and fair compensation for any damages which they
may sustain as a result of the project; and the right to effective
measures by the government to prevent any interference with,
alienation and encroachment upon these rights;"
c) Right to Stay in the Territories.- The right to stay in the
territory and not to be removed therefrom. No ICCs/IPs will be
relocated without their free and prior informed consent, nor
through any means other than eminent domain. x x x;
d) Right in Case of Displacement.- In case displacement occurs
as a result of natural catastrophes, the State shall endeavor to
resettle the displaced ICCs/IPs in suitable areas where they can
have temporary life support systems: x x x;
e) Right to Regulate the Entry of Migrants.- Right to regulate the
entry of migrant settlers and organizations into their domains;
f) Right to Safe and Clean Air and Water.-For this purpose, the
ICCs/IPs shall have access to integrated systems for the
management of their inland waters and air space;
g) Right to Claim Parts of Reservations.- The right to claim parts
of the ancestral domains which have been reserved for various
purposes, except those reserved and intended for common and
public welfare and service;
44
h) Right to Resolve Conflict.- Right to resolve land conflicts in
accordance with customary laws of the area where the land is
located, and only in default thereof shall the complaints be
submitted to amicable settlement and to the Courts of Justice
whenever necessary."
Section 8 provides for the rights over ancestral lands:
"Sec. 8. Rights to Ancestral Lands.- The right of ownership and
possession of the ICCs/IPs to their ancestral lands shall be
recognized and protected.
a) Right to transfer land/property.- Such right shall include the
right to transfer land or property rights to/among members of the
same ICCs/IPs, subject to customary laws and traditions of the
community concerned.
b) Right to Redemption.- In cases where it is shown that the
transfer of land/property rights by virtue of any agreement or
devise, to a non-member of the concerned ICCs/IPs is tainted by
the vitiated consent of the ICCs/IPs, or is transferred for an
unconscionable consideration or price, the transferor ICC/IP shall
have the right to redeem the same within a period not exceeding
fifteen (15) years from the date of transfer."
Section 7 (a) defines the ICCs/IPs the right of ownership over
their ancestral domains which covers (a) lands, (b) bodies of
water traditionally and actually occupied by the ICCs/IPs, (c)
sacred places, (d) traditional hunting and fishing grounds, and (e)
all improvements made by them at any time within the domains.
The right of ownership includes the following rights: (1) the right
to develop lands and natural resources; (b) the right to stay in the
territories; (c) the right to resettlement in case of displacement;
(d) the right to regulate the entry of migrants; (e) the right to safe
and clean air and water; (f) the right to claim parts of the
ancestral domains as reservations; and (g) the right to resolve
conflict in accordance with customary laws.
Section 8 governs their rights to ancestral lands. Unlike
ownership over the ancestral domains, Section 8 gives the
ICCs/IPs also the right to transfer the land or property rights to
members of the same ICCs/IPs or non-members thereof. This is
in keeping with the option given to ICCs/IPs to secure a torrens
title over the ancestral lands, but not to domains.
2. The Right of ICCs/IPs to Develop Lands and Natural
Resources Within the Ancestral Domains Does Not Deprive the
State of Ownership Over the Natural Resources and Control and
Supervision in their Development and Exploitation.
The Regalian doctrine on the ownership, management and
utilization of natural resources is declared in Section 2, Article
XII of the 1987 Constitution, viz:
"Sec. 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
45
natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of
natural resources shall be under the full control and supervision
of the State. The State may directly undertake such activities, or,
it may enter into co-production, joint venture, or production-
sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned
by such citizens. Such agreements may be for a period not
exceeding twenty-five years, renewable for not more than
twenty-five years, and under such terms and conditions as may
be provided by law. In cases of water rights for irrigation, water
supply, fisheries, water supply, fisheries, or industrial uses other
than the development of water power, beneficial use may be the
measure and limit of the grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive economic zone,
and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as cooperative fish
farming, with priority to subsistence fishermen and fishworkers
in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms
and conditions provided by law, based on real contributions to
the economic growth and general welfare of the country. In such
agreements, the state shall promote the development and use of
local scientific and technical resources.
The President shall notify the Congress of every contract entered
into in accordance with this provision, within thirty days from its
execution."223
All lands of the public domain and all natural resources- waters,
minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources- are owned by the State. The
Constitution provides that in the exploration, development and
utilization of these natural resources, the State exercises full
control and supervision, and may undertake the same in four (4)
modes:
1. The State may directly undertake such activities; or
2. The State may enter into co-production, joint venture or
production-sharing agreements with Filipino citizens or qualified
corporations;
3. Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens;
46
4. For the large-scale exploration, development and utilization of
minerals, petroleum and other mineral oils, the President may
enter into agreements with foreign-owned corporations involving
technical or financial assistance.
As owner of the natural resources, the State is accorded primary
power and responsibility in the exploration, development and
utilization of these natural resources. The State may directly
undertake the exploitation and development by itself, or, it may
allow participation by the private sector through co-
production,224 joint venture,225 or production-sharing
agreements.226 These agreements may be for a period of 25
years, renewable for another 25 years. The State, through
Congress, may allow the small-scale utilization of natural
resources by Filipino citizens. For the large-scale exploration of
these resources, specifically minerals, petroleum and other
mineral oils, the State, through the President, may enter into
technical and financial assistance agreements with foreign-owned
corporations.
Under the Philippine Mining Act of 1995, (R.A. 7942) and the
People's Small-Scale Mining Act of 1991 (R.A. 7076) the three
types of agreements, i.e., co-production, joint venture or
production-sharing, may apply to both large-scale227 and small-
scale mining.228 "Small-scale mining" refers to "mining
activities which rely heavily on manual labor using simple
implements and methods and do not use explosives or heavy
mining equipment."229
Examining the IPRA, there is nothing in the law that grants to the
ICCs/IPs ownership over the natural resources within their
ancestral domains. The right of ICCs/IPs in their ancestral
domains includes ownership, but this "ownership" is expressly
defined and limited in Section 7 (a) as:
"Sec. 7. a) Right of ownership- The right to claim ownership over
lands, bodies of water traditionally and actually occupied by
ICCs/IPs, sacred places, traditional hunting and fishing grounds,
and all improvements made by them at any time within the
domains;"
The ICCs/IPs are given the right to claim ownership over "lands,
bodies of water traditionally and actually occupied by ICCs/IPs,
sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains." It
will be noted that this enumeration does not mention bodies of
water not occupied by the ICCs/IPs, minerals, coal, wildlife, flora
and fauna in the traditional hunting grounds, fish in the
traditional fishing grounds, forests or timber in the sacred places,
etc. and all other natural resources found within the ancestral
domains. Indeed, the right of ownership under Section 7 (a) does
not cover "waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna and all other natural resources"
enumerated in Section 2, Article XII of the 1987 Constitution as
belonging to the State.
The non-inclusion of ownership by the ICCs/IPs over the natural
resources in Section 7(a) complies with the Regalian doctrine.
47
 later, do not give the ICCs/IPs the right of ownership over these
resources.
(a) Section 1, Part II, Rule III of the Implementing Rules Goes
Beyond the Parameters of Sec. 7 (a) of the IPRA And is
Unconstitutional.
The constitutionality of Section 1, Part II, Rule III of the
Implementing Rules was not specifically and categorically
challenged by petitioners. Petitioners actually assail the
The Rules Implementing the IPRA230 in Section 1, Part II, Rule
constitutionality of the Implementing Rules in general.232
III reads:
Nevertheless, to avoid any confusion in the implementation of
the law, it is necessary to declare that the inclusion of "natural
resources" in Section 1, Part II, Rule III of the Implementing
"Section 1. Rights of Ownership. ICCs/IPs have rights of
Rules goes beyond the parameters of Section 7 (b) of the law and
ownership over lands, waters, and natural resources and all
is contrary to Section 2, Article XII of the 1987 Constitution.
improvements made by them at any time within the ancestral
domains/ lands. These rights shall include, but not limited to, the
right over the fruits, the right to possess, the right to use, right to
(b) The Small-Scale Utilization of Natural Resources In Sec. 7
consume, right to exclude and right to recover ownership, and the
(b) of the IPRA Is Allowed Under Paragraph 3, Section 2 of
rights or interests over land and natural resources. The right to
Article XII of the Constitution.
recover shall be particularly applied to lands lost through fraud or
any form or vitiated consent or transferred for an unconscionable
price."
Ownership over natural resources remain with the State and the
IPRA in Section 7 (b) merely grants the ICCs/IPs the right to
manage them, viz:
Section 1 of the Implementing Rules gives the ICCs/IPs rights of
ownership over "lands, waters and natural resources." The term
"natural resources" is not one of those expressly mentioned in
"Sec. 7 (b) Right to Develop Lands and Natural Resources.-
Section 7 (a) of the law. Our Constitution and jurisprudence
Subject to Section 56 hereof, right to develop, control and use
clearly declare that the right to claim ownership over land does
lands and territories traditionally occupied, owned, or used; to
not necessarily include the right to claim ownership over the
manage and conserve natural resources within the territories and
natural resources found on or under the land.231 The IPRA itself
uphold the responsibilities for future generations; to benefit and
makes a distinction between land and natural resources. Section 7
share the profits from allocation and utilization of the natural
(a) speaks of the right of ownership only over the land within the
resources found therein; the right to negotiate the terms and
ancestral domain. It is Sections 7 (b) and 57 of the law that speak
conditions for the exploration of natural resources in the areas for
of natural resources, and these provisions, as shall be discussed
48
the purpose of ensuring ecological, environmental protection and
the conservation measures, pursuant to national and customary
laws; the right to an informed and intelligent participation in the
formulation and implementation of any project, government or
private, that will affect or impact upon the ancestral domains and
to receive just and fair compensation for any damages which they
may sustain as a result of the project; and the right to effective
measures by the government to prevent any interference with,
alienation and encroachment upon these rights;"
The right to develop lands and natural resources under Section 7
(b) of the IPRA enumerates the following rights:
a) the right to develop, control and use lands and territories
traditionally occupied;
b) the right to manage and conserve natural resources within the
territories and uphold the responsibilities for future generations;
c) the right to benefit and share the profits from the allocation
and utilization of the natural resources found therein;
d) the right to negotiate the terms and conditions for the
exploration of natural resources for the purpose of ensuring
ecological, environmental protection and the conservation
measures, pursuant to national and customary laws;
e) the right to an informed and intelligent participation in the
formulation and implementation of any project, government or
private, that will affect or impact upon the ancestral domains and
to receive just and fair compensation for any damages which they
may sustain as a result of the project;
f) the right to effective measures by the government to prevent
any interference with, alienation and encroachment upon these
rights.233
Ownership over the natural resources in the ancestral domains
remains with the State and the ICCs/IPs are merely granted the
right to "manage and conserve" them for future generations,
"benefit and share" the profits from their allocation and
utilization, and "negotiate the terms and conditions for their
exploration" for the purpose of "ensuring ecological and
environmental protection and conservation measures." It must be
noted that the right to negotiate the terms and conditions over the
natural resources covers only their exploration which must be for
the purpose of ensuring ecological and environmental protection
of, and conservation measures in the ancestral domain. It does
not extend to the exploitation and development of natural
resources.
Simply stated, the ICCs/IPs' rights over the natural resources take
the form of management or stewardship. For the ICCs/IPs may
use these resources and share in the profits of their utilization or
negotiate the terms for their exploration. At the same time,
however, the ICCs/IPs must ensure that the natural resources
within their ancestral domains are conserved for future
49
generations and that the "utilization" of these resources must not
harm the ecology and environment pursuant to national and
customary laws.234
The limited rights of "management and use" in Section 7 (b)
must be taken to contemplate small-scale utilization of natural
resources as distinguished from large-scale. Small-scale
utilization of natural resources is expressly allowed in the third
paragraph of Section 2, Article XII of the Constitution "in
recognition of the plight of forest dwellers, gold panners,
marginal fishermen and others similarly situated who exploit our
natural resources for their daily sustenance and survival."235
Section 7 (b) also expressly mandates the ICCs/IPs to manage
and conserve these resources and ensure environmental and
ecological protection within the domains, which duties, by their
very nature, necessarily reject utilization in a large-scale.
(c) The Large-Scale Utilization of Natural Resources In Section
57 of the IPRA Is Allowed Under Paragraphs 1 and 4, Section 2,
Article XII of the 1987 Constitution.
Section 57 of the IPRA provides:
"Sec. 57. Natural Resources within Ancestral Domains.- The
ICCs/IPs shall have priority rights in the harvesting, extraction,
development or exploitation of any natural resources within the
ancestral domains. A non-member of the ICCs/IPs concerned
may be allowed to take part in the development and utilization of
the natural resources for a period of not exceeding twenty-five
(25) years renewable for not more than twenty-five (25) years:
Provided, That a formal and written agreement is entered into
with the ICCs/IPs concerned or that the community, pursuant to
its own decision-making process, has agreed to allow such
operation: Provided finally, That the NCIP may exercise
visitorial powers and take appropriate action to safeguard the
rights of the ICCs/IPs under the same contract."
Section 57 speaks of the "harvesting, extraction, development or
exploitation of natural resources within ancestral domains" and
"gives the ICCs/IPs 'priority rights' therein." The terms
"harvesting, extraction, development or exploitation" of any
natural resources within the ancestral domains obviously refer to
large-scale utilization. It is utilization not merely for subsistence
but for commercial or other extensive use that require technology
other than manual labor.236 The law recognizes the probability
of requiring a non-member of the ICCs/IPs to participate in the
development and utilization of the natural resources and thereby
allows such participation for a period of not more than 25 years,
renewable for another 25 years. This may be done on condition
that a formal written agreement be entered into by the non-
member and members of the ICCs/IPs.
Section 57 of the IPRA does not give the ICCs/IPs the right to
"manage and conserve" the natural resources. Instead, the law
only grants the ICCs/IPs "priority rights" in the development or
exploitation thereof. Priority means giving preference. Having
priority rights over the natural resources does not necessarily
mean ownership rights. The grant of priority rights implies that
there is a superior entity that owns these resources and this entity
50
has the power to grant preferential rights over the resources to
whosoever itself chooses.
Section 57 is not a repudiation of the Regalian doctrine. Rather, it
is an affirmation of the said doctrine that all natural resources
found within the ancestral domains belong to the State. It
incorporates by implication the Regalian doctrine, hence,
requires that the provision be read in the light of Section 2,
Article XII of the 1987 Constitution. Interpreting Section 2,
Article XII of the 1987 Constitution237 in relation to Section 57
of IPRA, the State, as owner of these natural resources, may
directly undertake the development and exploitation of the
natural resources by itself, or in the alternative, it may recognize
the priority rights of the ICCs/IPs as owners of the land on which
the natural resources are found by entering into a co-production,
joint venture, or production-sharing agreement with them. The
State may likewise enter into any of said agreements with a non-
member of the ICCs/IPs, whether natural or juridical, or enter
into agreements with foreign-owned corporations involving
either technical or financial assistance for the large-scale
exploration, development and utilization of minerals, petroleum,
and other mineral oils, or allow such non-member to participate
in its agreement with the ICCs/IPs. If the State decides to enter
into an agreement with a non-ICC/IP member, the National
Commission on Indigenous Peoples (NCIP) shall ensure that the
rights of the ICCs/IPs under the agreement shall be protected.
The agreement shall be for a period of 25 years, renewable for
another 25 years.
To reiterate, in the large-scale utilization of natural resources
within the ancestral domains, the State, as owner of these
resources, has four (4) options: (1) it may, of and by itself,
directly undertake the development and exploitation of the
natural resources; or (2) it may recognize the priority rights of the
ICCs/IPs by entering into an agreement with them for such
development and exploitation; or (3) it may enter into an
agreement with a non-member of the ICCs/IPs, whether natural
or juridical, local or foreign; or (4) it may allow such non-
member to participate in the agreement with the ICCs/IPs.
The rights granted by the IPRA to the ICCs/IPs over the natural
resources in their ancestral domains merely gives the ICCs/IPs,
as owners and occupants of the land on which the resources are
found, the right to the small-scale utilization of these resources,
and at the same time, a priority in their large-scale development
and exploitation. Section 57 does not mandate the State to
automatically give priority to the ICCs/IPs. The State has several
options and it is within its discretion to choose which option to
pursue. Moreover, there is nothing in the law that gives the
ICCs/IPs the right to solely undertake the large-scale
development of the natural resources within their domains. The
ICCs/IPs must undertake such endeavour always under State
supervision or control. This indicates that the State does not lose
control and ownership over the resources even in their
exploitation. Sections 7 (b) and 57 of the law simply give due
respect to the ICCs/IPs who, as actual occupants of the land
where the natural resources lie, have traditionally utilized these
resources for their subsistence and survival.
Neither is the State stripped of ownership and control of the
natural resources by the following provision:
51
"Section 59. Certification Precondition.- All departments and
other governmental agencies shall henceforth be strictly enjoined
from issuing, renewing or granting any concession, license or
lease, or entering into any production-sharing agreement. without
prior certification from the NCIP that the area affected does not
overlap with any ancestral domain. Such certification shall only
be issued after a field-based investigation is conducted by the
Ancestral Domains Office of the area concerned: Provided, That
no certification shall be issued by the NCIP without the free and
prior informed and written consent of the ICCs/IPs concerned:
Provided, further, That no department, government agency or
government-owned or -controlled corporation may issue new
concession, license, lease, or production sharing agreement while
there is a pending application for a CADT: Provided, finally,
That the ICCs/IPs shall have the right to stop or suspend, in
accordance with this Act, any project that has not satisfied the
requirement of this consultation process."
Concessions, licenses, lease or production-sharing agreements for
the exploitation of natural resources shall not be issued, renewed
or granted by all departments and government agencies without
prior certification from the NCIP that the area subject of the
agreement does not overlap with any ancestral domain. The
NCIP certification shall be issued only after a field-based
investigation shall have been conducted and the free and prior
informed written consent of the ICCs/IPs obtained. Non-
compliance with the consultation requirement gives the ICCs/IPs
the right to stop or suspend any project granted by any
department or government agency.
As its subtitle suggests, this provision requires as a precondition
for the issuance of any concession, license or agreement over
natural resources, that a certification be issued by the NCIP that
the area subject of the agreement does not lie within any
ancestral domain. The provision does not vest the NCIP with
power over the other agencies of the State as to determine
whether to grant or deny any concession or license or agreement.
It merely gives the NCIP the authority to ensure that the ICCs/IPs
have been informed of the agreement and that their consent
thereto has been obtained. Note that the certification applies to
agreements over natural resources that do not necessarily lie
within the ancestral domains. For those that are found within the
said domains, Sections 7(b) and 57 of the IPRA apply.
V. THE IPRA IS A RECOGNITION OF OUR ACTIVE
PARTICIPATION IN THE INDIGENOUS INTERNATIONAL
MOVEMENT.
The indigenous movement can be seen as the heir to a history of
anti-imperialism stretching back to prehistoric times. The
movement received a massive impetus during the 1960's from
two sources. First, the decolonization of Asia and Africa brought
into the limelight the possibility of peoples controlling their own
destinies. Second, the right of self-determination was enshrined
in the UN Declaration on Human Rights.238 The rise of the civil
rights movement and anti-racism brought to the attention of
North American Indians, Aborigines in Australia, and Maori in
New Zealand the possibility of fighting for fundamental rights
and freedoms.
52
In 1974 and 1975, international indigenous organizations were
founded,239 and during the 1980's, indigenous affairs were on
the international agenda. The people of the Philippine Cordillera
were the first Asians to take part in the international indigenous
movement. It was the Cordillera People's Alliance that carried
out successful campaigns against the building of the Chico River
Dam in 1981-82 and they have since become one of the best-
organized indigenous bodies in the world.240
Presently, there is a growing concern for indigenous rights in the
international scene. This came as a result of the increased
publicity focused on the continuing disrespect for indigenous
human rights and the destruction of the indigenous peoples'
environment, together with the national governments' inability to
deal with the situation.241 Indigenous rights came as a result of
both human rights and environmental protection, and have
become a part of today's priorities for the international
agenda.242
International institutions and bodies have realized the necessity
of applying policies, programs and specific rules concerning IPs
in some nations. The World Bank, for example, first adopted a
policy on IPs as a result of the dismal experience of projects in
Latin America.243 The World Bank now seeks to apply its
current policy on IPs to some of its projects in Asia. This policy
has provided an influential model for the projects of the Asian
Development Bank.244
The 1987 Philippine Constitution formally recognizes the
existence of ICCs/IPs and declares as a State policy the
promotion of their rights within the framework of national unity
and development.245 The IPRA amalgamates the Philippine
category of ICCs with the international category of IPs,246 and is
heavily influenced by both the International Labor Organization
(ILO) Convention 169 and the United Nations (UN) Draft
Declaration on the Rights of Indigenous Peoples.247
ILO Convention No. 169 is entitled the "Convention Concerning
Indigenous and Tribal Peoples in Independent Countries"248 and
was adopted on June 27, 1989. It is based on the Universal
Declaration of Human Rights, the International Covenant on
Economic, Social and Cultural Rights, the International Covenant
on Civil and Political Rights, and many other international
instruments on the prevention of discrimination.249 ILO
Convention No. 169 revised the "Convention Concerning the
Protection and Integration of Indigenous and Other Tribal and
Semi-Tribal Populations in Independent Countries" (ILO No.
107) passed on June 26, 1957. Developments in international law
made it appropriate to adopt new international standards on
indigenous peoples "with a view to removing the assimilationist
orientation of the earlier standards," and recognizing the
aspirations of these peoples to exercise control over their own
institutions, ways of life and economic development."250
CONCLUSION
The struggle of the Filipinos throughout colonial history had
been plagued by ethnic and religious differences. These
differences were carried over and magnified by the Philippine
government through the imposition of a national legal order that
53
is mostly foreign in origin or derivation.251 Largely unpopulist,
the present legal system has resulted in the alienation of a large
sector of society, specifically, the indigenous peoples. The
histories and cultures of the indigenes are relevant to the
evolution of Philippine culture and are vital to the understanding
of contemporary problems.252 It is through the IPRA that an
attempt was made by our legislators to understand Filipino
society not in terms of myths and biases but through common
Cruz vs Secretary of DENR
experiences in the course of history. The Philippines became a
democracy a centennial ago and the decolonization process still Natural Resources and Environmental Law; Constitutional Law;
continues. If the evolution of the Filipino people into a IPRA; Regalian Doctrine
democratic society is to truly proceed democratically, i.e., if the
Filipinos as a whole are to participate fully in the task of
continuing democratization,253 it is this Court's duty to GR. No. 135385, Dec. 6, 2000
acknowledge the presence of indigenous and customary laws in
the country and affirm their co-existence with the land laws in
our national legal system. FACTS:
Petitioners Isagani Cruz and Cesar Europa filed a suit for
prohibition and mandamus as citizens and taxpayers, assailing the
With the foregoing disquisitions, I vote to uphold the
constitutionality of certain provisions of Republic Act No. 8371,
constitutionality of the Indigenous Peoples Rights Act of 1997.
otherwise known as the Indigenous People’s Rights Act of 1997
(IPRA) and its implementing rules and regulations (IRR). The
petitioners assail certain provisions of the IPRA and its IRR on the
ground that these amount to an unlawful deprivation of the State’s
ownership over lands of the public domain as well as minerals and
other natural resources therein, in violation of the regalian doctrine
embodied in section 2, Article XII of the Constitution.

ISSUE:
Do the provisions of IPRA contravene the Constitution?

54
HELD:
No, the provisions of IPRA do not contravene the Constitution.
Examining the IPRA, there is nothing in the law that grants to the
ICCs/IPs ownership over the natural resources within their
ancestral domain. Ownership over the natural resources in the
ancestral domains remains with the State and the rights granted by
the IPRA to the ICCs/IPs over the natural resources in their
ancestral domains merely gives them, as owners and occupants of
the land on which the resources are found, the right to the small
scale utilization of these resources, and at the same time, a priority
in their large scale development and exploitation.
Additionally, ancestral lands and ancestral domains are not part of
the lands of the public domain. They are private lands and belong
to the ICCs/IPs by native title, which is a concept of private land
title that existed irrespective of any royal grant from the State.
However, the right of ownership and possession by the ICCs/IPs
of their ancestral domains is a limited form of ownership and does
not include the right to alienate the same.
EN BANC
G.R. No. 133250 July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY
DEVELOPMENT CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of
preliminary injunction and a temporary restraining order. The
petition seeks to compel the Public Estates Authority ("PEA" for
brevity) to disclose all facts on PEA's then on-going renegotiations
with Amari Coastal Bay and Development Corporation
("AMARI" for brevity) to reclaim portions of Manila Bay. The
petition further seeks to enjoin PEA from signing a new agreement
with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the
Commissioner of Public Highways, signed a contract with the
Construction and Development Corporation of the Philippines
("CDCP" for brevity) to reclaim certain foreshore and offshore
areas of Manila Bay. The contract also included the construction
of Phases I and II of the Manila-Cavite Coastal Road. CDCP
obligated itself to carry out all the works in consideration of fifty
percent of the total reclaimed land.
55
 (iii) x x x CDCP shall give up all its development rights and hereby
agrees to cede and transfer in favor of PEA, all of the rights, title,
On February 4, 1977, then President Ferdinand E. Marcos issued
interest and participation of CDCP in and to all the areas of land
Presidential Decree No. 1084 creating PEA. PD No. 1084 tasked
reclaimed by CDCP in the MCCRRP as of December 30, 1981
PEA "to reclaim land, including foreshore and submerged areas,"
which have not yet been sold, transferred or otherwise disposed of
and "to develop, improve, acquire, x x x lease and sell any and all
by CDCP as of said date, which areas consist of approximately
kinds of lands."1 On the same date, then President Marcos issued
Ninety-Nine Thousand Four Hundred Seventy Three (99,473)
Presidential Decree No. 1085 transferring to PEA the "lands
square meters in the Financial Center Area covered by land pledge
reclaimed in the foreshore and offshore of the Manila Bay"2 under
No. 5 and approximately Three Million Three Hundred Eighty
the Manila-Cavite Coastal Road and Reclamation Project
Two Thousand Eight Hundred Eighty Eight (3,382,888) square
(MCCRRP).
meters of reclaimed areas at varying elevations above Mean Low
Water Level located outside the Financial Center Area and the
First Neighborhood Unit."3
On December 29, 1981, then President Marcos issued a
memorandum directing PEA to amend its contract with CDCP, so
that "[A]ll future works in MCCRRP x x x shall be funded and
On January 19, 1988, then President Corazon C. Aquino issued
owned by PEA." Accordingly, PEA and CDCP executed a
Special Patent No. 3517, granting and transferring to PEA "the
Memorandum of Agreement dated December 29, 1981, which
parcels of land so reclaimed under the Manila-Cavite Coastal Road
stated:
and Reclamation Project (MCCRRP) containing a total area of one
million nine hundred fifteen thousand eight hundred ninety four
(1,915,894) square meters." Subsequently, on April 9, 1988, the
"(i) CDCP shall undertake all reclamation, construction, and such
Register of Deeds of the Municipality of Parañaque issued
other works in the MCCRRP as may be agreed upon by the parties,
Transfer Certificates of Title Nos. 7309, 7311, and 7312, in the
to be paid according to progress of works on a unit price/lump sum
name of PEA, covering the three reclaimed islands known as the
basis for items of work to be agreed upon, subject to price
"Freedom Islands" located at the southern portion of the Manila-
escalation, retention and other terms and conditions provided for
Cavite Coastal Road, Parañaque City. The Freedom Islands have
in Presidential Decree No. 1594. All the financing required for
a total land area of One Million Five Hundred Seventy Eight
such works shall be provided by PEA.
Thousand Four Hundred and Forty One (1,578,441) square meters
or 157.841 hectares.
xxx
On April 25, 1995, PEA entered into a Joint Venture Agreement
("JVA" for brevity) with AMARI, a private corporation, to

56
develop the Freedom Islands. The JVA also required the
reclamation of an additional 250 hectares of submerged areas
surrounding these islands to complete the configuration in the
Master Development Plan of the Southern Reclamation Project-
MCCRRP. PEA and AMARI entered into the JVA through
negotiation without public bidding.4 On April 28, 1995, the Board
of Directors of PEA, in its Resolution No. 1245, confirmed the
JVA.5 On June 8, 1995, then President Fidel V. Ramos, through
then Executive Secretary Ruben Torres, approved the JVA.6
On November 29, 1996, then Senate President Ernesto Maceda
delivered a privilege speech in the Senate and denounced the JVA
as the "grandmother of all scams." As a result, the Senate
Committee on Government Corporations and Public Enterprises,
and the Committee on Accountability of Public Officers and
Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate
Committee Report No. 560 dated September 16, 1997.7 Among
the conclusions of their report are: (1) the reclaimed lands PEA
seeks to transfer to AMARI under the JVA are lands of the public
domain which the government has not classified as alienable lands
and therefore PEA cannot alienate these lands; (2) the certificates
of title covering the Freedom Islands are thus void, and (3) the
JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued
Presidential Administrative Order No. 365 creating a Legal Task
Force to conduct a study on the legality of the JVA in view of
Senate Committee Report No. 560. The members of the Legal
Task Force were the Secretary of Justice,8 the Chief Presidential
Legal Counsel,9 and the Government Corporate Counsel.10 The
Legal Task Force upheld the legality of the JVA, contrary to the
conclusions reached by the Senate Committees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today
published reports that there were on-going renegotiations between
PEA and AMARI under an order issued by then President Fidel V.
Ramos. According to these reports, PEA Director Nestor Kalaw,
PEA Chairman Arsenio Yulo and retired Navy Officer Sergio
Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a
Petition for Prohibition with Application for the Issuance of a
Temporary Restraining Order and Preliminary Injunction
docketed as G.R. No. 132994 seeking to nullify the JVA. The
Court dismissed the petition "for unwarranted disregard of judicial
hierarchy, without prejudice to the refiling of the case before the
proper court."12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for
brevity) as a taxpayer, filed the instant Petition for Mandamus with
Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government
stands to lose billions of pesos in the sale by PEA of the reclaimed
lands to AMARI. Petitioner prays that PEA publicly disclose the
terms of any renegotiation of the JVA, invoking Section 28,
Article II, and Section 7, Article III, of the 1987 Constitution on
the right of the people to information on matters of public concern.
Petitioner assails the sale to AMARI of lands of the public domain
as a blatant violation of Section 3, Article XII of the 1987
Constitution prohibiting the sale of alienable lands of the public
57
domain to private corporations. Finally, petitioner asserts that he
seeks to enjoin the loss of billions of pesos in properties of the
State that are of public dominion.
After several motions for extension of time,13 PEA and AMARI
filed their Comments on October 19, 1998 and June 25, 1998,
respectively. Meanwhile, on December 28, 1998, petitioner filed
an Omnibus Motion: (a) to require PEA to submit the terms of the
renegotiated PEA-AMARI contract; (b) for issuance of a
temporary restraining order; and (c) to set the case for hearing on
oral argument. Petitioner filed a Reiterative Motion for Issuance
of a TRO dated May 26, 1999, which the Court denied in a
Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course
to the petition and required the parties to file their respective
memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint
Venture Agreement ("Amended JVA," for brevity). On May 28,
1999, the Office of the President under the administration of then
President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the
President, petitioner now prays that on "constitutional and
statutory grounds the renegotiated contract be declared null and
void."14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are as
follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN
THE PETITION ARE MOOT AND ACADEMIC BECAUSE OF
SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR
FAILING TO OBSERVE THE PRINCIPLE GOVERNING THE
HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR
NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO
BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO
INFORMATION INCLUDES OFFICIAL INFORMATION ON
ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED
JOINT VENTURE AGREEMENT FOR THE TRANSFER TO
58
AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO
BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION;
AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR
RAISING THE ISSUE OF WHETHER THE AMENDED JOINT
VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in the petition
are moot and academic because of subsequent events.
The petition prays that PEA publicly disclose the "terms and
conditions of the on-going negotiations for a new agreement." The
petition also prays that the Court enjoin PEA from "privately
entering into, perfecting and/or executing any new agreement with
AMARI."
PEA and AMARI claim the petition is now moot and academic
because AMARI furnished petitioner on June 21, 1999 a copy of
the signed Amended JVA containing the terms and conditions
agreed upon in the renegotiations. Thus, PEA has satisfied
petitioner's prayer for a public disclosure of the renegotiations.
Likewise, petitioner's prayer to enjoin the signing of the Amended
JVA is now moot because PEA and AMARI have already signed
the Amended JVA on March 30, 1999. Moreover, the Office of the
President has approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the
constitutional issue by simply fast-tracking the signing and
approval of the Amended JVA before the Court could act on the
issue. Presidential approval does not resolve the constitutional
issue or remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI
and its approval by the President cannot operate to moot the
petition and divest the Court of its jurisdiction. PEA and AMARI
have still to implement the Amended JVA. The prayer to enjoin
the signing of the Amended JVA on constitutional grounds
necessarily includes preventing its implementation if in the
meantime PEA and AMARI have signed one in violation of the
Constitution. Petitioner's principal basis in assailing the
renegotiation of the JVA is its violation of Section 3, Article XII
of the Constitution, which prohibits the government from
alienating lands of the public domain to private corporations. If the
Amended JVA indeed violates the Constitution, it is the duty of
the Court to enjoin its implementation, and if already
implemented, to annul the effects of such unconstitutional
contract.
The Amended JVA is not an ordinary commercial contract but one
which seeks to transfer title and ownership to 367.5 hectares of
reclaimed lands and submerged areas of Manila Bay to a single
private corporation. It now becomes more compelling for the
Court to resolve the issue to insure the government itself does not
59
violate a provision of the Constitution intended to safeguard the
national patrimony. Supervening events, whether intended or
accidental, cannot prevent the Court from rendering a decision if
there is a grave violation of the Constitution. In the instant case, if
the Amended JVA runs counter to the Constitution, the Court can
still prevent the transfer of title and ownership of alienable lands
of the public domain in the name of AMARI. Even in cases where
supervening events had made the cases moot, the Court did not
hesitate to resolve the legal or constitutional issues raised to
formulate controlling principles to guide the bench, bar, and the
public.17
Also, the instant petition is a case of first impression. All previous
decisions of the Court involving Section 3, Article XII of the 1987
Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural lands sold to private
corporations which acquired the lands from private parties. The
transferors of the private corporations claimed or could claim the
right to judicial confirmation of their imperfect titles19 under Title
II of Commonwealth Act. 141 ("CA No. 141" for brevity). In the
instant case, AMARI seeks to acquire from PEA, a public
corporation, reclaimed lands and submerged areas for non-
agricultural purposes by purchase under PD No. 1084 (charter of
PEA) and Title III of CA No. 141. Certain undertakings by
AMARI under the Amended JVA constitute the consideration for
the purchase. Neither AMARI nor PEA can claim judicial
confirmation of their titles because the lands covered by the
Amended JVA are newly reclaimed or still to be reclaimed.
Judicial confirmation of imperfect title requires open, continuous,
exclusive and notorious occupation of agricultural lands of the
public domain for at least thirty years since June 12, 1945 or
earlier. Besides, the deadline for filing applications for judicial
confirmation of imperfect title expired on December 31, 1987.20
Lastly, there is a need to resolve immediately the constitutional
issue raised in this petition because of the possible transfer at any
time by PEA to AMARI of title and ownership to portions of the
reclaimed lands. Under the Amended JVA, PEA is obligated to
transfer to AMARI the latter's seventy percent proportionate share
in the reclaimed areas as the reclamation progresses. The
Amended JVA even allows AMARI to mortgage at any time the
entire reclaimed area to raise financing for the reclamation
project.21
Second issue: whether the petition merits dismissal for failing to
observe the principle governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy
by seeking relief directly from the Court. The principle of
hierarchy of courts applies generally to cases involving factual
questions. As it is not a trier of facts, the Court cannot entertain
cases involving factual issues. The instant case, however, raises
constitutional issues of transcendental importance to the public.22
The Court can resolve this case without determining any factual
issue related to the case. Also, the instant case is a petition for
mandamus which falls under the original jurisdiction of the Court
under Section 5, Article VIII of the Constitution. We resolve to
exercise primary jurisdiction over the instant case.
60
Third issue: whether the petition merits dismissal for non-
exhaustion of administrative remedies.
PEA faults petitioner for seeking judicial intervention in
compelling PEA to disclose publicly certain information without
first asking PEA the needed information. PEA claims petitioner's
direct resort to the Court violates the principle of exhaustion of
administrative remedies. It also violates the rule that mandamus
may issue only if there is no other plain, speedy and adequate
remedy in the ordinary course of law.
PEA distinguishes the instant case from Tañada v. Tuvera23 where
the Court granted the petition for mandamus even if the petitioners
there did not initially demand from the Office of the President the
publication of the presidential decrees. PEA points out that in
Tañada, the Executive Department had an affirmative statutory
duty under Article 2 of the Civil Code24 and Section 1 of
Commonwealth Act No. 63825 to publish the presidential decrees.
There was, therefore, no need for the petitioners in Tañada to make
an initial demand from the Office of the President. In the instant
case, PEA claims it has no affirmative statutory duty to disclose
publicly information about its renegotiation of the JVA. Thus,
PEA asserts that the Court must apply the principle of exhaustion
of administrative remedies to the instant case in view of the failure
of petitioner here to demand initially from PEA the needed
information.
The original JVA sought to dispose to AMARI public lands held
by PEA, a government corporation. Under Section 79 of the
Government Auditing Code,26 the disposition of government
lands to private parties requires public bidding. PEA was under a
positive legal duty to disclose to the public the terms and
conditions for the sale of its lands. The law obligated PEA to make
this public disclosure even without demand from petitioner or
from anyone. PEA failed to make this public disclosure because
the original JVA, like the Amended JVA, was the result of a
negotiated contract, not of a public bidding. Considering that PEA
had an affirmative statutory duty to make the public disclosure,
and was even in breach of this legal duty, petitioner had the right
to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the
principle of exhaustion of administrative remedies does not apply
when the issue involved is a purely legal or constitutional
question.27 The principal issue in the instant case is the capacity
of AMARI to acquire lands held by PEA in view of the
constitutional ban prohibiting the alienation of lands of the public
domain to private corporations. We rule that the principle of
exhaustion of administrative remedies does not apply in the instant
case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus
proceedings to enforce his constitutional right to information
without a showing that PEA refused to perform an affirmative duty
imposed on PEA by the Constitution. PEA also claims that
petitioner has not shown that he will suffer any concrete injury
because of the signing or implementation of the Amended JVA.
61
Thus, there is no actual controversy requiring the exercise of the
power of judicial review.
The petitioner has standing to bring this taxpayer's suit because the
petition seeks to compel PEA to comply with its constitutional
duties. There are two constitutional issues involved here. First is
the right of citizens to information on matters of public concern.
Second is the application of a constitutional provision intended to
insure the equitable distribution of alienable lands of the public
domain among Filipino citizens. The thrust of the first issue is to
compel PEA to disclose publicly information on the sale of
government lands worth billions of pesos, information which the
Constitution and statutory law mandate PEA to disclose. The
thrust of the second issue is to prevent PEA from alienating
hundreds of hectares of alienable lands of the public domain in
violation of the Constitution, compelling PEA to comply with a
constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance
to the public. In Chavez v. PCGG,28 the Court upheld the right of
a citizen to bring a taxpayer's suit on matters of transcendental
importance to the public, thus -
"Besides, petitioner emphasizes, the matter of recovering the ill-
gotten wealth of the Marcoses is an issue of 'transcendental
importance to the public.' He asserts that ordinary taxpayers have
a right to initiate and prosecute actions questioning the validity of
acts or orders of government agencies or instrumentalities, if the
issues raised are of 'paramount public interest,' and if they
'immediately affect the social, economic and moral well being of
the people.'
Moreover, the mere fact that he is a citizen satisfies the
requirement of personal interest, when the proceeding involves the
assertion of a public right, such as in this case. He invokes several
decisions of this Court which have set aside the procedural matter
of locus standi, when the subject of the case involved public
interest.
xxx
In Tañada v. Tuvera, the Court asserted that when the issue
concerns a public right and the object of mandamus is to obtain the
enforcement of a public duty, the people are regarded as the real
parties in interest; and because it is sufficient that petitioner is a
citizen and as such is interested in the execution of the laws, he
need not show that he has any legal or special interest in the result
of the action. In the aforesaid case, the petitioners sought to
enforce their right to be informed on matters of public concern, a
right then recognized in Section 6, Article IV of the 1973
Constitution, in connection with the rule that laws in order to be
valid and enforceable must be published in the Official Gazette or
otherwise effectively promulgated. In ruling for the petitioners'
legal standing, the Court declared that the right they sought to be
enforced 'is a public right recognized by no less than the
fundamental law of the land.'
62
Legaspi v. Civil Service Commission, while reiterating Tañada,
further declared that 'when a mandamus proceeding involves the
assertion of a public right, the requirement of personal interest is
satisfied by the mere fact that petitioner is a citizen and, therefore,
part of the general 'public' which possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure of
public funds may not have been involved under the questioned
contract for the development, management and operation of the
Manila International Container Terminal, 'public interest [was]
definitely involved considering the important role [of the subject
contract] . . . in the economic development of the country and the
magnitude of the financial consideration involved.' We concluded
that, as a consequence, the disclosure provision in the Constitution
would constitute sufficient authority for upholding the petitioner's
standing.
Similarly, the instant petition is anchored on the right of the people
to information and access to official records, documents and
papers — a right guaranteed under Section 7, Article III of the
1987 Constitution. Petitioner, a former solicitor general, is a
Filipino citizen. Because of the satisfaction of the two basic
requisites laid down by decisional law to sustain petitioner's legal
standing, i.e. (1) the enforcement of a public right (2) espoused by
a Filipino citizen, we rule that the petition at bar should be
allowed."
We rule that since the instant petition, brought by a citizen,
involves the enforcement of constitutional rights - to information
and to the equitable diffusion of natural resources - matters of
transcendental public importance, the petitioner has the requisite
locus standi.
Fifth issue: whether the constitutional right to information includes
official information on on-going negotiations before a final
agreement.
Section 7, Article III of the Constitution explains the people's right
to information on matters of public concern in this manner:
"Sec. 7. The right of the people to information on matters of public
concern shall be recognized. Access to official records, and to
documents, and papers pertaining to official acts, transactions, or
decisions, as well as to government research data used as basis for
policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law." (Emphasis supplied)
The State policy of full transparency in all transactions involving
public interest reinforces the people's right to information on
matters of public concern. This State policy is expressed in Section
28, Article II of the Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law, the
State adopts and implements a policy of full public disclosure of
all its transactions involving public interest." (Emphasis supplied)
63
These twin provisions of the Constitution seek to promote
transparency in policy-making and in the operations of the
government, as well as provide the people sufficient information
to exercise effectively other constitutional rights. These twin
provisions are essential to the exercise of freedom of expression.
If the government does not disclose its official acts, transactions
and decisions to citizens, whatever citizens say, even if expressed
without any restraint, will be speculative and amount to nothing.
These twin provisions are also essential to hold public officials "at
all times x x x accountable to the people,"29 for unless citizens
have the proper information, they cannot hold public officials
accountable for anything. Armed with the right information,
citizens can participate in public discussions leading to the
formulation of government policies and their effective
implementation. An informed citizenry is essential to the existence
and proper functioning of any democracy. As explained by the
Court in Valmonte v. Belmonte, Jr.30 –
"An essential element of these freedoms is to keep open a
continuing dialogue or process of communication between the
government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that
the government may perceive and be responsive to the people's
will. Yet, this open dialogue can be effective only to the extent that
the citizenry is informed and thus able to formulate its will
intelligently. Only when the participants in the discussion are
aware of the issues and have access to information relating thereto
can such bear fruit."
PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going
negotiations the right to information is limited to "definite
propositions of the government." PEA maintains the right does not
include access to "intra-agency or inter-agency recommendations
or communications during the stage when common assertions are
still in the process of being formulated or are in the 'exploratory
stage'."
Also, AMARI contends that petitioner cannot invoke the right at
the pre-decisional stage or before the closing of the transaction. To
support its contention, AMARI cites the following discussion in
the 1986 Constitutional Commission:
"Mr. Suarez. And when we say 'transactions' which should be
distinguished from contracts, agreements, or treaties or whatever,
does the Gentleman refer to the steps leading to the consummation
of the contract, or does he refer to the contract itself?
Mr. Ople: The 'transactions' used here, I suppose is generic and
therefore, it can cover both steps leading to a contract and already
a consummated contract, Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to
the consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the
national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
64
 once the committee makes its official recommendation, there
arises a "definite proposition" on the part of the government. From
AMARI argues there must first be a consummated contract before
this moment, the public's right to information attaches, and any
petitioner can invoke the right. Requiring government officials to
citizen can access all the non-proprietary information leading to
reveal their deliberations at the pre-decisional stage will degrade
such definite proposition. In Chavez v. PCGG,33 the Court ruled
the quality of decision-making in government agencies.
as follows:
Government officials will hesitate to express their real sentiments
during deliberations if there is immediate public dissemination of
their discussions, putting them under all kinds of pressure before
"Considering the intent of the framers of the Constitution, we
they decide.
believe that it is incumbent upon the PCGG and its officers, as well
as other government representatives, to disclose sufficient public
information on any proposed settlement they have decided to take
We must first distinguish between information the law on public
up with the ostensible owners and holders of ill-gotten wealth.
bidding requires PEA to disclose publicly, and information the
Such information, though, must pertain to definite propositions of
constitutional right to information requires PEA to release to the
the government, not necessarily to intra-agency or inter-agency
public. Before the consummation of the contract, PEA must, on its
recommendations or communications during the stage when
own and without demand from anyone, disclose to the public
common assertions are still in the process of being formulated or
matters relating to the disposition of its property. These include the
are in the "exploratory" stage. There is need, of course, to observe
size, location, technical description and nature of the property
the same restrictions on disclosure of information in general, as
being disposed of, the terms and conditions of the disposition, the
discussed earlier – such as on matters involving national security,
parties qualified to bid, the minimum price and similar
diplomatic or foreign relations, intelligence and other classified
information. PEA must prepare all these data and disclose them to
information." (Emphasis supplied)
the public at the start of the disposition process, long before the
consummation of the contract, because the Government Auditing
Code requires public bidding. If PEA fails to make this disclosure,
Contrary to AMARI's contention, the commissioners of the 1986
any citizen can demand from PEA this information at any time
Constitutional Commission understood that the right to
during the bidding process.
information "contemplates inclusion of negotiations leading to the
consummation of the transaction." Certainly, a consummated
contract is not a requirement for the exercise of the right to
Information, however, on on-going evaluation or review of bids or
information. Otherwise, the people can never exercise the right if
proposals being undertaken by the bidding or review committee is
no contract is consummated, and if one is consummated, it may be
not immediately accessible under the right to information. While
too late for the public to expose its defects.1âwphi1.nêt
the evaluation or review is still on-going, there are no "official
acts, transactions, or decisions" on the bids or proposals. However,
65
Requiring a consummated contract will keep the public in the dark
until the contract, which may be grossly disadvantageous to the
government or even illegal, becomes a fait accompli. This negates
the State policy of full transparency on matters of public concern,
a situation which the framers of the Constitution could not have
intended. Such a requirement will prevent the citizenry from
participating in the public discussion of any proposed contract,
effectively truncating a basic right enshrined in the Bill of Rights.
We can allow neither an emasculation of a constitutional right, nor
a retreat by the State of its avowed "policy of full disclosure of all
its transactions involving public interest."
The right covers three categories of information which are
"matters of public concern," namely: (1) official records; (2)
documents and papers pertaining to official acts, transactions and
decisions; and (3) government research data used in formulating
policies. The first category refers to any document that is part of
the public records in the custody of government agencies or
officials. The second category refers to documents and papers
recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of
government agencies or officials. The third category refers to
research data, whether raw, collated or processed, owned by the
government and used in formulating government policies.
The information that petitioner may access on the renegotiation of
the JVA includes evaluation reports, recommendations, legal and
expert opinions, minutes of meetings, terms of reference and other
documents attached to such reports or minutes, all relating to the
JVA. However, the right to information does not compel PEA to
prepare lists, abstracts, summaries and the like relating to the
renegotiation of the JVA.34 The right only affords access to
records, documents and papers, which means the opportunity to
inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the
right is also subject to reasonable regulations to protect the
integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to
conduct the inspection and copying.35
The right to information, however, does not extend to matters
recognized as privileged information under the separation of
powers.36 The right does not also apply to information on military
and diplomatic secrets, information affecting national security,
and information on investigations of crimes by law enforcement
agencies before the prosecution of the accused, which courts have
long recognized as confidential.37 The right may also be subject
to other limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by
petitioner is privileged information rooted in the separation of
powers. The information does not cover Presidential
conversations, correspondences, or discussions during closed-door
Cabinet meetings which, like internal deliberations of the Supreme
Court and other collegiate courts, or executive sessions of either
house of Congress,38 are recognized as confidential. This kind of
information cannot be pried open by a co-equal branch of
government. A frank exchange of exploratory ideas and
assessments, free from the glare of publicity and pressure by
interested parties, is essential to protect the independence of
decision-making of those tasked to exercise Presidential,
66
Legislative and Judicial power.39 This is not the situation in the
instant case.
We rule, therefore, that the constitutional right to information
includes official information on on-going negotiations before a
final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized
exceptions like privileged information, military and diplomatic
secrets and similar matters affecting national security and public
order.40 Congress has also prescribed other limitations on the right
to information in several legislations.41
Sixth issue: whether stipulations in the Amended JVA for the
transfer to AMARI of lands, reclaimed or to be reclaimed, violate
the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged
areas is rooted in the Regalian doctrine which holds that the State
owns all lands and waters of the public domain. Upon the Spanish
conquest of the Philippines, ownership of all "lands, territories and
possessions" in the Philippines passed to the Spanish Crown.42
The King, as the sovereign ruler and representative of the people,
acquired and owned all lands and territories in the Philippines
except those he disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian
doctrine substituting, however, the State, in lieu of the King, as the
owner of all lands and waters of the public domain. The Regalian
doctrine is the foundation of the time-honored principle of land
ownership that "all lands that were not acquired from the
Government, either by purchase or by grant, belong to the public
domain."43 Article 339 of the Civil Code of 1889, which is now
Article 420 of the Civil Code of 1950, incorporated the Regalian
doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law
governing the ownership and disposition of reclaimed lands in the
Philippines. On May 18, 1907, the Philippine Commission enacted
Act No. 1654 which provided for the lease, but not the sale, of
reclaimed lands of the government to corporations and individuals.
Later, on November 29, 1919, the Philippine Legislature approved
Act No. 2874, the Public Land Act, which authorized the lease, but
not the sale, of reclaimed lands of the government to corporations
and individuals. On November 7, 1936, the National Assembly
passed Commonwealth Act No. 141, also known as the Public
Land Act, which authorized the lease, but not the sale, of reclaimed
lands of the government to corporations and individuals. CA No.
141 continues to this day as the general law governing the
classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
67
Under the Spanish Law of Waters of 1866, the shores, bays, coves,
inlets and all waters within the maritime zone of the Spanish
territory belonged to the public domain for public use.44 The
Spanish Law of Waters of 1866 allowed the reclamation of the sea
under Article 5, which provided as follows:
"Article 5. Lands reclaimed from the sea in consequence of works
constructed by the State, or by the provinces, pueblos or private
persons, with proper permission, shall become the property of the
party constructing such works, unless otherwise provided by the
terms of the grant of authority."
Under the Spanish Law of Waters, land reclaimed from the sea
belonged to the party undertaking the reclamation, provided the
government issued the necessary permit and did not reserve
ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public
dominion as follows:
"Art. 339. Property of public dominion is –
1. That devoted to public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, riverbanks,
shores, roadsteads, and that of a similar character;
2. That belonging exclusively to the State which, without being of
general public use, is employed in some public service, or in the
development of the national wealth, such as walls, fortresses, and
other works for the defense of the territory, and mines, until
granted to private individuals."
Property devoted to public use referred to property open for use by
the public. In contrast, property devoted to public service referred
to property used for some specific public service and open only to
those authorized to use the property.
Property of public dominion referred not only to property devoted
to public use, but also to property not so used but employed to
develop the national wealth. This class of property constituted
property of public dominion although employed for some
economic or commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-
classification of property of public dominion into private property,
to wit:
"Art. 341. Property of public dominion, when no longer devoted
to public use or to the defense of the territory, shall become a part
of the private property of the State."
This provision, however, was not self-executing. The legislature,
or the executive department pursuant to law, must declare the
property no longer needed for public use or territorial defense
68
before the government could lease or alienate the property to
private parties.45
xxx

Act No. 1654 of the Philippine Commission

(e) The leases above provided for shall be disposed of to the
highest and best bidder therefore, subject to such regulations and
safeguards as the Governor-General may by executive order
On May 8, 1907, the Philippine Commission enacted Act No. 1654
prescribe." (Emphasis supplied)
which regulated the lease of reclaimed and foreshore lands. The
salient provisions of this law were as follows:
Act No. 1654 mandated that the government should retain title to
all lands reclaimed by the government. The Act also vested in the
"Section 1. The control and disposition of the foreshore as defined
government control and disposition of foreshore lands. Private
in existing law, and the title to all Government or public lands
parties could lease lands reclaimed by the government only if these
made or reclaimed by the Government by dredging or filling or
lands were no longer needed for public purpose. Act No. 1654
otherwise throughout the Philippine Islands, shall be retained by
mandated public bidding in the lease of government reclaimed
the Government without prejudice to vested rights and without
lands. Act No. 1654 made government reclaimed lands sui generis
prejudice to rights conceded to the City of Manila in the Luneta
in that unlike other public lands which the government could sell
Extension.
to private parties, these reclaimed lands were available only for
lease to private parties.
Section 2. (a) The Secretary of the Interior shall cause all
Government or public lands made or reclaimed by the Government
Act No. 1654, however, did not repeal Section 5 of the Spanish
by dredging or filling or otherwise to be divided into lots or blocks,
Law of Waters of 1866. Act No. 1654 did not prohibit private
with the necessary streets and alleyways located thereon, and shall
parties from reclaiming parts of the sea under Section 5 of the
cause plats and plans of such surveys to be prepared and filed with
Spanish Law of Waters. Lands reclaimed from the sea by private
the Bureau of Lands.
parties with government permission remained private lands.

(b) Upon completion of such plats and plans the Governor-General

Act No. 2874 of the Philippine Legislature
shall give notice to the public that such parts of the lands so made
or reclaimed as are not needed for public purposes will be leased
for commercial and business purposes, x x x.

69
On November 29, 1919, the Philippine Legislature enacted Act
No. 2874, the Public Land Act.46 The salient provisions of Act
No. 2874, on reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the recommendation of the
Secretary of Agriculture and Natural Resources, shall from time to
time classify the lands of the public domain into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of
alienable or disposable public lands, the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural
Resources, shall from time to time declare what lands are open to
disposition or concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited or classified x x
x.
xxx
Sec. 55. Any tract of land of the public domain which, being
neither timber nor mineral land, shall be classified as suitable for
residential purposes or for commercial, industrial, or other
productive purposes other than agricultural purposes, and shall be
open to disposition or concession, shall be disposed of under the
provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section
fifty-six shall be disposed of to private parties by lease only and
not otherwise, as soon as the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural
70
Resources, shall declare that the same are not necessary for the
public service and are open to disposition under this chapter. The
lands included in class (d) may be disposed of by sale or lease
under the provisions of this Act." (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to
"classify lands of the public domain into x x x alienable or
disposable"47 lands. Section 7 of the Act empowered the
Governor-General to "declare what lands are open to disposition
or concession." Section 8 of the Act limited alienable or disposable
lands only to those lands which have been "officially delimited and
classified."
Section 56 of Act No. 2874 stated that lands "disposable under this
title48 shall be classified" as government reclaimed, foreshore and
marshy lands, as well as other lands. All these lands, however,
must be suitable for residential, commercial, industrial or other
productive non-agricultural purposes. These provisions vested
upon the Governor-General the power to classify inalienable lands
of the public domain into disposable lands of the public domain.
These provisions also empowered the Governor-General to
classify further such disposable lands of the public domain into
government reclaimed, foreshore or marshy lands of the public
domain, as well as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable
lands of the public domain classified as government reclaimed,
foreshore and marshy lands "shall be disposed of to private parties
by lease only and not otherwise." The Governor-General, before
allowing the lease of these lands to private parties, must formally
declare that the lands were "not necessary for the public service."
Act No. 2874 reiterated the State policy to lease and not to sell
government reclaimed, foreshore and marshy lands of the public
domain, a policy first enunciated in 1907 in Act No. 1654.
Government reclaimed, foreshore and marshy lands remained sui
generis, as the only alienable or disposable lands of the public
domain that the government could not sell to private parties.
The rationale behind this State policy is obvious. Government
reclaimed, foreshore and marshy public lands for non-agricultural
purposes retain their inherent potential as areas for public service.
This is the reason the government prohibited the sale, and only
allowed the lease, of these lands to private parties. The State
always reserved these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government
reclaimed, foreshore and marshy lands into other non-agricultural
lands under Section 56 (d). Lands falling under Section 56 (d) were
the only lands for non-agricultural purposes the government could
sell to private parties. Thus, under Act No. 2874, the government
could not sell government reclaimed, foreshore and marshy lands
to private parties, unless the legislature passed a law allowing their
sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts
of the sea pursuant to Section 5 of the Spanish Law of Waters of
1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.
71
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its
ratification by the Filipino people. The 1935 Constitution, in
adopting the Regalian doctrine, declared in Section 1, Article XIII,
that –
"Section 1. All agricultural, timber, and mineral lands of the public
domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy and other natural resources of the
Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the
Philippines or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject
to any existing right, grant, lease, or concession at the time of the
inauguration of the Government established under this
Constitution. Natural resources, with the exception of public
agricultural land, shall not be alienated, and no license,
concession, or lease for the exploitation, development, or
utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for another twenty-
five years, except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water
power, in which cases beneficial use may be the measure and limit
of the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources
except public agricultural lands, which were the only natural
resources the State could alienate. Thus, foreshore lands,
considered part of the State's natural resources, became inalienable
by constitutional fiat, available only for lease for 25 years,
renewable for another 25 years. The government could alienate
foreshore lands only after these lands were reclaimed and
classified as alienable agricultural lands of the public domain.
Government reclaimed and marshy lands of the public domain,
being neither timber nor mineral lands, fell under the classification
of public agricultural lands.50 However, government reclaimed
and marshy lands, although subject to classification as disposable
public agricultural lands, could only be leased and not sold to
private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of
government reclaimed and marshy lands of the public domain was
only a statutory prohibition and the legislature could therefore
remove such prohibition. The 1935 Constitution did not prohibit
individuals and corporations from acquiring government
reclaimed and marshy lands of the public domain that were
classified as agricultural lands under existing public land laws.
Section 2, Article XIII of the 1935 Constitution provided as
follows:
"Section 2. No private corporation or association may acquire,
lease, or hold public agricultural lands in excess of one thousand
and twenty four hectares, nor may any individual acquire such
lands by purchase in excess of one hundred and forty hectares, or
by lease in excess of one thousand and twenty-four hectares, or by
homestead in excess of twenty-four hectares. Lands adapted to
grazing, not exceeding two thousand hectares, may be leased to an
individual, private corporation, or association." (Emphasis
supplied)
72
Still, after the effectivity of the 1935 Constitution, the legislature
did not repeal Section 58 of Act No. 2874 to open for sale to
private parties government reclaimed and marshy lands of the
public domain. On the contrary, the legislature continued the long
established State policy of retaining for the government title and
ownership of government reclaimed and marshy lands of the
public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved
Commonwealth Act No. 141, also known as the Public Land Act,
which compiled the then existing laws on lands of the public
domain. CA No. 141, as amended, remains to this day the existing
general law governing the classification and disposition of lands
of the public domain other than timber and mineral lands.51
Section 6 of CA No. 141 empowers the President to classify lands
of the public domain into "alienable or disposable"52 lands of the
public domain, which prior to such classification are inalienable
and outside the commerce of man. Section 7 of CA No. 141
authorizes the President to "declare what lands are open to
disposition or concession." Section 8 of CA No. 141 states that the
government can declare open for disposition or concession only
lands that are "officially delimited and classified." Sections 6, 7
and 8 of CA No. 141 read as follows:
"Sec. 6. The President, upon the recommendation of the Secretary
of Agriculture and Commerce, shall from time to time classify the
lands of the public domain into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from
one class to another,53 for the purpose of their administration and
disposition.
Sec. 7. For the purposes of the administration and disposition of
alienable or disposable public lands, the President, upon
recommendation by the Secretary of Agriculture and Commerce,
shall from time to time declare what lands are open to disposition
or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited and classified
and, when practicable, surveyed, and which have not been
reserved for public or quasi-public uses, nor appropriated by the
Government, nor in any manner become private property, nor
those on which a private right authorized and recognized by this
73
Act or any other valid law may be claimed, or which, having been
reserved or appropriated, have ceased to be so. x x x."
Thus, before the government could alienate or dispose of lands of
the public domain, the President must first officially classify these
lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these
lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed,
foreshore and marshy lands of the public domain, are as follows:
"Sec. 58. Any tract of land of the public domain which, being
neither timber nor mineral land, is intended to be used for
residential purposes or for commercial, industrial, or other
productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the
provisions of this chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased
or sold, as the case may be, to any person, corporation, or
association authorized to purchase or lease public lands for
agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section
fifty-nine shall be disposed of to private parties by lease only and
not otherwise, as soon as the President, upon recommendation by
the Secretary of Agriculture, shall declare that the same are not
necessary for the public service and are open to disposition under
this chapter. The lands included in class (d) may be disposed of by
sale or lease under the provisions of this Act." (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the
1935 Constitution, Section 58 of Act No. 2874 prohibiting the sale
of government reclaimed, foreshore and marshy disposable lands
of the public domain. All these lands are intended for residential,
commercial, industrial or other non-agricultural purposes. As
before, Section 61 allowed only the lease of such lands to private
parties. The government could sell to private parties only lands
falling under Section 59 (d) of CA No. 141, or those lands for non-
agricultural purposes not classified as government reclaimed,
foreshore and marshy disposable lands of the public domain.
Foreshore lands, however, became inalienable under the 1935
74
Constitution which only allowed the lease of these lands to
qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of
the public domain intended for residential, commercial, industrial
or other productive purposes other than agricultural "shall be
disposed of under the provisions of this chapter and not
otherwise." Under Section 10 of CA No. 141, the term
"disposition" includes lease of the land. Any disposition of
government reclaimed, foreshore and marshy disposable lands for
non-agricultural purposes must comply with Chapter IX, Title III
of CA No. 141,54 unless a subsequent law amended or repealed
these provisions.
In his concurring opinion in the landmark case of Republic Real
Estate Corporation v. Court of Appeals,55 Justice Reynato S. Puno
summarized succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for public
use. So too are lands reclaimed by the government by dredging,
filling, or other means. Act 1654 mandated that the control and
disposition of the foreshore and lands under water remained in the
national government. Said law allowed only the 'leasing' of
reclaimed land. The Public Land Acts of 1919 and 1936 also
declared that the foreshore and lands reclaimed by the government
were to be "disposed of to private parties by lease only and not
otherwise." Before leasing, however, the Governor-General, upon
recommendation of the Secretary of Agriculture and Natural
Resources, had first to determine that the land reclaimed was not
necessary for the public service. This requisite must have been met
before the land could be disposed of. But even then, the foreshore
and lands under water were not to be alienated and sold to private
parties. The disposition of the reclaimed land was only by lease.
The land remained property of the State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion,
"Commonwealth Act No. 141 has remained in effect at present."
The State policy prohibiting the sale to private parties of
government reclaimed, foreshore and marshy alienable lands of
the public domain, first implemented in 1907 was thus reaffirmed
in CA No. 141 after the 1935 Constitution took effect. The
prohibition on the sale of foreshore lands, however, became a
constitutional edict under the 1935 Constitution. Foreshore lands
became inalienable as natural resources of the State, unless
reclaimed by the government and classified as agricultural lands
of the public domain, in which case they would fall under the
classification of government reclaimed lands.
After the effectivity of the 1935 Constitution, government
reclaimed and marshy disposable lands of the public domain
continued to be only leased and not sold to private parties.56 These
lands remained sui generis, as the only alienable or disposable
lands of the public domain the government could not sell to private
parties.
Since then and until now, the only way the government can sell to
private parties government reclaimed and marshy disposable lands
of the public domain is for the legislature to pass a law authorizing
75
such sale. CA No. 141 does not authorize the President to
reclassify government reclaimed and marshy lands into other non-
One reason for the congressional authority is that Section 60 of CA
agricultural lands under Section 59 (d). Lands classified under
No. 141 exempted government units and entities from the
Section 59 (d) are the only alienable or disposable lands for non-
maximum area of public lands that could be acquired from the
agricultural purposes that the government could sell to private
State. These government units and entities should not just turn
parties.
around and sell these lands to private parties in violation of
constitutional or statutory limitations. Otherwise, the transfer of
lands for non-agricultural purposes to government units and
Moreover, Section 60 of CA No. 141 expressly requires
entities could be used to circumvent constitutional limitations on
congressional authority before lands under Section 59 that the
ownership of alienable or disposable lands of the public domain.
government previously transferred to government units or entities
In the same manner, such transfers could also be used to evade the
could be sold to private parties. Section 60 of CA No. 141 declares
statutory prohibition in CA No. 141 on the sale of government
that –
reclaimed and marshy lands of the public domain to private
parties. Section 60 of CA No. 141 constitutes by operation of law
a lien on these lands.57
"Sec. 60. x x x The area so leased or sold shall be such as shall, in
the judgment of the Secretary of Agriculture and Natural
Resources, be reasonably necessary for the purposes for which
In case of sale or lease of disposable lands of the public domain
such sale or lease is requested, and shall not exceed one hundred
falling under Section 59 of CA No. 141, Sections 63 and 67 require
and forty-four hectares: Provided, however, That this limitation
a public bidding. Sections 63 and 67 of CA No. 141 provide as
shall not apply to grants, donations, or transfers made to a
follows:
province, municipality or branch or subdivision of the
Government for the purposes deemed by said entities conducive to
the public interest; but the land so granted, donated, or transferred
"Sec. 63. Whenever it is decided that lands covered by this chapter
to a province, municipality or branch or subdivision of the
are not needed for public purposes, the Director of Lands shall ask
Government shall not be alienated, encumbered, or otherwise
the Secretary of Agriculture and Commerce (now the Secretary of
disposed of in a manner affecting its title, except when authorized
Natural Resources) for authority to dispose of the same. Upon
by Congress: x x x." (Emphasis supplied)
receipt of such authority, the Director of Lands shall give notice
by public advertisement in the same manner as in the case of leases
or sales of agricultural public land, x x x.
The congressional authority required in Section 60 of CA No. 141
mirrors the legislative authority required in Section 56 of Act No.
2874.

76
Sec. 67. The lease or sale shall be made by oral bidding; and
adjudication shall be made to the highest bidder. x x x." (Emphasis
supplied)
Thus, CA No. 141 mandates the Government to put to public
auction all leases or sales of alienable or disposable lands of the
public domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did
not repeal Section 5 of the Spanish Law of Waters of 1866. Private
parties could still reclaim portions of the sea with government
permission. However, the reclaimed land could become private
land only if classified as alienable agricultural land of the public
domain open to disposition under CA No. 141. The 1935
Constitution prohibited the alienation of all natural resources
except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of
property of public dominion found in the Civil Code of 1889.
Articles 420 and 422 of the Civil Code of 1950 state that –
"Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use,
and are intended for some public service or for the development of
the national wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended
for public use or for public service, shall form part of the
patrimonial property of the State."
Again, the government must formally declare that the property of
public dominion is no longer needed for public use or public
service, before the same could be classified as patrimonial
property of the State.59 In the case of government reclaimed and
marshy lands of the public domain, the declaration of their being
disposable, as well as the manner of their disposition, is governed
by the applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as
property of public dominion those properties of the State which,
without being for public use, are intended for public service or the
"development of the national wealth." Thus, government
reclaimed and marshy lands of the State, even if not employed for
77
public use or public service, if developed to enhance the national
wealth, are classified as property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973,
likewise adopted the Regalian doctrine. Section 8, Article XIV of
the 1973 Constitution stated that –
"Sec. 8. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, wildlife, and other natural resources of the Philippines
belong to the State. With the exception of agricultural, industrial
or commercial, residential, and resettlement lands of the public
domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development,
exploitation, or utilization of any of the natural resources shall be
granted for a period exceeding twenty-five years, renewable for
not more than twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases, beneficial use may
be the measure and the limit of the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural
resources with the exception of "agricultural, industrial or
commercial, residential, and resettlement lands of the public
domain." In contrast, the 1935 Constitution barred the alienation
of all natural resources except "public agricultural lands."
However, the term "public agricultural lands" in the 1935
Constitution encompassed industrial, commercial, residential and
resettlement lands of the public domain.60 If the land of public
domain were neither timber nor mineral land, it would fall under
the classification of agricultural land of the public domain. Both
the 1935 and 1973 Constitutions, therefore, prohibited the
alienation of all natural resources except agricultural lands of the
public domain.
The 1973 Constitution, however, limited the alienation of lands of
the public domain to individuals who were citizens of the
Philippines. Private corporations, even if wholly owned by
Philippine citizens, were no longer allowed to acquire alienable
lands of the public domain unlike in the 1935 Constitution. Section
11, Article XIV of the 1973 Constitution declared that –
"Sec. 11. The Batasang Pambansa, taking into account
conservation, ecological, and development requirements of the
natural resources, shall determine by law the size of land of the
public domain which may be developed, held or acquired by, or
leased to, any qualified individual, corporation, or association, and
the conditions therefor. No private corporation or association may
hold alienable lands of the public domain except by lease not to
exceed one thousand hectares in area nor may any citizen hold
such lands by lease in excess of five hundred hectares or acquire
by purchase, homestead or grant, in excess of twenty-four
hectares. No private corporation or association may hold by lease,
concession, license or permit, timber or forest lands and other
timber or forest resources in excess of one hundred thousand
hectares. However, such area may be increased by the Batasang
Pambansa upon recommendation of the National Economic and
Development Authority." (Emphasis supplied)
78
 and other forms of real property, owned, managed, controlled
and/or operated by the government;
Thus, under the 1973 Constitution, private corporations could hold
alienable lands of the public domain only through lease. Only
individuals could now acquire alienable lands of the public
(c) To provide for, operate or administer such service as may be
domain, and private corporations became absolutely barred from
necessary for the efficient, economical and beneficial utilization
acquiring any kind of alienable land of the public domain. The
of the above properties.
constitutional ban extended to all kinds of alienable lands of the
public domain, while the statutory ban under CA No. 141 applied
only to government reclaimed, foreshore and marshy alienable
Sec. 5. Powers and functions of the Authority. The Authority shall,
lands of the public domain.
in carrying out the purposes for which it is created, have the
following powers and functions:
PD No. 1084 Creating the Public Estates Authority
(a)To prescribe its by-laws.
On February 4, 1977, then President Ferdinand Marcos issued
Presidential Decree No. 1084 creating PEA, a wholly government
xxx
owned and controlled corporation with a special charter. Sections
4 and 8 of PD No. 1084, vests PEA with the following purposes
and powers:
(i) To hold lands of the public domain in excess of the area
permitted to private corporations by statute.
"Sec. 4. Purpose. The Authority is hereby created for the following
purposes:
(j) To reclaim lands and to construct work across, or otherwise,
any stream, watercourse, canal, ditch, flume x x x.
(a) To reclaim land, including foreshore and submerged areas, by
dredging, filling or other means, or to acquire reclaimed land;
xxx

(b) To develop, improve, acquire, administer, deal in, subdivide,

dispose, lease and sell any and all kinds of lands, buildings, estates

79
(o) To perform such acts and exercise such functions as may be
necessary for the attainment of the purposes and objectives herein
specified." (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and
submerged areas of the public domain. Foreshore areas are those
covered and uncovered by the ebb and flow of the tide.61
Submerged areas are those permanently under water regardless of
the ebb and flow of the tide.62 Foreshore and submerged areas
indisputably belong to the public domain63 and are inalienable
unless reclaimed, classified as alienable lands open to disposition,
and further declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from
acquiring alienable lands of the public domain did not apply to
PEA since it was then, and until today, a fully owned government
corporation. The constitutional ban applied then, as it still applies
now, only to "private corporations and associations." PD No. 1084
expressly empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private corporations by
statute." Thus, PEA can hold title to private lands, as well as title
to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged
alienable lands of the public domain, there must be legislative
authority empowering PEA to sell these lands. This legislative
authority is necessary in view of Section 60 of CA No.141, which
states –
"Sec. 60. x x x; but the land so granted, donated or transferred to a
province, municipality, or branch or subdivision of the
Government shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized
by Congress; x x x." (Emphasis supplied)
Without such legislative authority, PEA could not sell but only
lease its reclaimed foreshore and submerged alienable lands of the
public domain. Nevertheless, any legislative authority granted to
PEA to sell its reclaimed alienable lands of the public domain
would be subject to the constitutional ban on private corporations
from acquiring alienable lands of the public domain. Hence, such
legislative authority could only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions
before it, has adopted the Regalian doctrine. The 1987
Constitution declares that all natural resources are "owned by the
State," and except for alienable agricultural lands of the public
domain, natural resources cannot be alienated. Sections 2 and 3,
Article XII of the 1987 Constitution state that –
"Section 2. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated.
80
The exploration, development, and utilization of natural resources
shall be under the full control and supervision of the State. x x x.
The Rationale behind the Constitutional Ban

Section 3. Lands of the public domain are classified into

The rationale behind the constitutional ban on corporations from
agricultural, forest or timber, mineral lands, and national parks.
acquiring, except through lease, alienable lands of the public
Agricultural lands of the public domain may be further classified
domain is not well understood. During the deliberations of the
by law according to the uses which they may be devoted. Alienable
1986 Constitutional Commission, the commissioners probed the
lands of the public domain shall be limited to agricultural lands.
rationale behind this ban, thus:
Private corporations or associations may not hold such alienable
lands of the public domain except by lease, for a period not
exceeding twenty-five years, renewable for not more than twenty-
"FR. BERNAS: Mr. Vice-President, my questions have reference
five years, and not to exceed one thousand hectares in area.
to page 3, line 5 which says:
Citizens of the Philippines may lease not more than five hundred
hectares, or acquire not more than twelve hectares thereof by
purchase, homestead, or grant.
`No private corporation or association may hold alienable lands of
the public domain except by lease, not to exceed one thousand
hectares in area.'
Taking into account the requirements of conservation, ecology,
and development, and subject to the requirements of agrarian
reform, the Congress shall determine, by law, the size of lands of
If we recall, this provision did not exist under the 1935
the public domain which may be acquired, developed, held, or
Constitution, but this was introduced in the 1973 Constitution. In
leased and the conditions therefor." (Emphasis supplied)
effect, it prohibits private corporations from acquiring alienable
public lands. But it has not been very clear in jurisprudence what
the reason for this is. In some of the cases decided in 1982 and
The 1987 Constitution continues the State policy in the 1973
1983, it was indicated that the purpose of this is to prevent large
Constitution banning private corporations from acquiring any kind
landholdings. Is that the intent of this provision?
of alienable land of the public domain. Like the 1973 Constitution,
the 1987 Constitution allows private corporations to hold alienable
lands of the public domain only through lease. As in the 1935 and
MR. VILLEGAS: I think that is the spirit of the provision.
1973 Constitutions, the general law governing the lease to private
corporations of reclaimed, foreshore and marshy alienable lands
of the public domain is still CA No. 141.

81
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo,
there were instances where the Iglesia ni Cristo was not allowed to
acquire a mere 313-square meter land where a chapel stood
because the Supreme Court said it would be in violation of this."
(Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this
constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against
purchases of public agricultural lands by private corporations is to
equitably diffuse land ownership or to encourage 'owner-
cultivatorship and the economic family-size farm' and to prevent a
recurrence of cases like the instant case. Huge landholdings by
corporations or private persons had spawned social unrest."
However, if the constitutional intent is to prevent huge
landholdings, the Constitution could have simply limited the size
of alienable lands of the public domain that corporations could
acquire. The Constitution could have followed the limitations on
individuals, who could acquire not more than 24 hectares of
alienable lands of the public domain under the 1973 Constitution,
and not more than 12 hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size
farms, placing the land in the name of a corporation would be more
effective in preventing the break-up of farmlands. If the farmland
is registered in the name of a corporation, upon the death of the
owner, his heirs would inherit shares in the corporation instead of
subdivided parcels of the farmland. This would prevent the
continuing break-up of farmlands into smaller and smaller plots
from one generation to the next.
In actual practice, the constitutional ban strengthens the
constitutional limitation on individuals from acquiring more than
the allowed area of alienable lands of the public domain. Without
the constitutional ban, individuals who already acquired the
maximum area of alienable lands of the public domain could easily
set up corporations to acquire more alienable public lands. An
individual could own as many corporations as his means would
allow him. An individual could even hide his ownership of a
corporation by putting his nominees as stockholders of the
corporation. The corporation is a convenient vehicle to circumvent
the constitutional limitation on acquisition by individuals of
alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions,
is to transfer ownership of only a limited area of alienable land of
the public domain to a qualified individual. This constitutional
intent is safeguarded by the provision prohibiting corporations
from acquiring alienable lands of the public domain, since the
vehicle to circumvent the constitutional intent is removed. The
available alienable public lands are gradually decreasing in the
face of an ever-growing population. The most effective way to
insure faithful adherence to this constitutional intent is to grant or
sell alienable lands of the public domain only to individuals. This,
it would seem, is the practical benefit arising from the
constitutional ban.
82
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second
Whereas clause, consists of three properties, namely:
1. "[T]hree partially reclaimed and substantially eroded islands
along Emilio Aguinaldo Boulevard in Paranaque and Las Pinas,
Metro Manila, with a combined titled area of 1,578,441 square
meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to the
three islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional 350
hectares more or less to regularize the configuration of the
reclaimed area."65
PEA confirms that the Amended JVA involves "the development
of the Freedom Islands and further reclamation of about 250
hectares x x x," plus an option "granted to AMARI to subsequently
reclaim another 350 hectares x x x."66
In short, the Amended JVA covers a reclamation area of 750
hectares. Only 157.84 hectares of the 750-hectare reclamation
project have been reclaimed, and the rest of the 592.15 hectares
are still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of
P1,894,129,200.00 for PEA's "actual cost" in partially reclaiming
the Freedom Islands. AMARI will also complete, at its own
expense, the reclamation of the Freedom Islands. AMARI will
further shoulder all the reclamation costs of all the other areas,
totaling 592.15 hectares, still to be reclaimed. AMARI and PEA
will share, in the proportion of 70 percent and 30 percent,
respectively, the total net usable area which is defined in the
Amended JVA as the total reclaimed area less 30 percent
earmarked for common areas. Title to AMARI's share in the net
usable area, totaling 367.5 hectares, will be issued in the name of
AMARI. Section 5.2 (c) of the Amended JVA provides that –
"x x x, PEA shall have the duty to execute without delay the
necessary deed of transfer or conveyance of the title pertaining to
AMARI's Land share based on the Land Allocation Plan. PEA,
when requested in writing by AMARI, shall then cause the
issuance and delivery of the proper certificates of title covering
AMARI's Land Share in the name of AMARI, x x x; provided, that
if more than seventy percent (70%) of the titled area at any given
time pertains to AMARI, PEA shall deliver to AMARI only
seventy percent (70%) of the titles pertaining to AMARI, until
such time when a corresponding proportionate area of additional
land pertaining to PEA has been titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and
own a maximum of 367.5 hectares of reclaimed land which will
be titled in its name.
83
To implement the Amended JVA, PEA delegated to the
unincorporated PEA-AMARI joint venture PEA's statutory
authority, rights and privileges to reclaim foreshore and
submerged areas in Manila Bay. Section 3.2.a of the Amended
JVA states that –
"PEA hereby contributes to the joint venture its rights and
privileges to perform Rawland Reclamation and Horizontal
Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right, authority
and privilege to undertake the Project in accordance with the
Master Development Plan."
The Amended JVA is the product of a renegotiation of the original
JVA dated April 25, 1995 and its supplemental agreement dated
August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can
acquire and own under the Amended JVA 367.5 hectares of
reclaimed foreshore and submerged areas in Manila Bay in view
of Sections 2 and 3, Article XII of the 1987 Constitution which
state that:
"Section 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated.
x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be
limited to agricultural lands. Private corporations or associations
may not hold such alienable lands of the public domain except by
lease, x x x."(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or
submerged areas of Manila Bay are alienable or disposable lands
of the public domain. In its Memorandum,67 PEA admits that –
"Under the Public Land Act (CA 141, as amended), reclaimed
lands are classified as alienable and disposable lands of the public
domain:
'Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the government by dredging, filling, or
other means;
84
 mere reclamation of these areas by PEA does not convert these
inalienable natural resources of the State into alienable or
x x x.'" (Emphasis supplied)
disposable lands of the public domain. There must be a law or
presidential proclamation officially classifying these reclaimed
lands as alienable or disposable and open to disposition or
Likewise, the Legal Task Force68 constituted under Presidential
concession. Moreover, these reclaimed lands cannot be classified
Administrative Order No. 365 admitted in its Report and
as alienable or disposable if the law has reserved them for some
Recommendation to then President Fidel V. Ramos, "[R]eclaimed
public or quasi-public use.71
lands are classified as alienable and disposable lands of the public
domain."69 The Legal Task Force concluded that –
Section 8 of CA No. 141 provides that "only those lands shall be
declared open to disposition or concession which have been
"D. Conclusion
officially delimited and classified."72 The President has the
authority to classify inalienable lands of the public domain into
alienable or disposable lands of the public domain, pursuant to
Reclaimed lands are lands of the public domain. However, by
Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive
statutory authority, the rights of ownership and disposition over
Department attempted to sell the Roppongi property in Tokyo,
reclaimed lands have been transferred to PEA, by virtue of which
Japan, which was acquired by the Philippine Government for use
PEA, as owner, may validly convey the same to any qualified
as the Chancery of the Philippine Embassy. Although the
person without violating the Constitution or any statute.
Chancery had transferred to another location thirteen years earlier,
the Court still ruled that, under Article 42274 of the Civil Code, a
property of public dominion retains such character until formally
The constitutional provision prohibiting private corporations from
declared otherwise. The Court ruled that –
holding public land, except by lease (Sec. 3, Art. XVII,70 1987
Constitution), does not apply to reclaimed lands whose ownership
has passed on to PEA by statutory grant."
"The fact that the Roppongi site has not been used for a long time
for actual Embassy service does not automatically convert it to
patrimonial property. Any such conversion happens only if the
Under Section 2, Article XII of the 1987 Constitution, the
property is withdrawn from public use (Cebu Oxygen and
foreshore and submerged areas of Manila Bay are part of the
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A property
"lands of the public domain, waters x x x and other natural
continues to be part of the public domain, not available for private
resources" and consequently "owned by the State." As such,
appropriation or ownership 'until there is a formal declaration on
foreshore and submerged areas "shall not be alienated," unless
they are classified as "agricultural lands" of the public domain. The
85
the part of the government to withdraw it from being such' (Ignacio
v. Director of Lands, 108 Phil. 335 [1960]." (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance
of special land patents for lands reclaimed by PEA from the
foreshore or submerged areas of Manila Bay. On January 19, 1988
then President Corazon C. Aquino issued Special Patent No. 3517
in the name of PEA for the 157.84 hectares comprising the
partially reclaimed Freedom Islands. Subsequently, on April 9,
1999 the Register of Deeds of the Municipality of Paranaque
issued TCT Nos. 7309, 7311 and 7312 in the name of PEA
pursuant to Section 103 of PD No. 1529 authorizing the issuance
of certificates of title corresponding to land patents. To this day,
these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of
a special patent covering the Freedom Islands, is equivalent to an
official proclamation classifying the Freedom Islands as alienable
or disposable lands of the public domain. PD No. 1085 and
President Aquino's issuance of a land patent also constitute a
declaration that the Freedom Islands are no longer needed for
public service. The Freedom Islands are thus alienable or
disposable lands of the public domain, open to disposition or
concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517,
PEA had already reclaimed the Freedom Islands although
subsequently there were partial erosions on some areas. The
government had also completed the necessary surveys on these
islands. Thus, the Freedom Islands were no longer part of Manila
Bay but part of the land mass. Section 3, Article XII of the 1987
Constitution classifies lands of the public domain into
"agricultural, forest or timber, mineral lands, and national parks."
Being neither timber, mineral, nor national park lands, the
reclaimed Freedom Islands necessarily fall under the classification
of agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the only
natural resources that the State may alienate to qualified private
parties. All other natural resources, such as the seas or bays, are
"waters x x x owned by the State" forming part of the public
domain, and are inalienable pursuant to Section 2, Article XII of
the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because
CDCP, then a private corporation, reclaimed the islands under a
contract dated November 20, 1973 with the Commissioner of
Public Highways. AMARI, citing Article 5 of the Spanish Law of
Waters of 1866, argues that "if the ownership of reclaimed lands
may be given to the party constructing the works, then it cannot be
said that reclaimed lands are lands of the public domain which the
State may not alienate."75 Article 5 of the Spanish Law of Waters
reads as follows:
"Article 5. Lands reclaimed from the sea in consequence of works
constructed by the State, or by the provinces, pueblos or private
persons, with proper permission, shall become the property of the
party constructing such works, unless otherwise provided by the
terms of the grant of authority." (Emphasis supplied)
86
Under Article 5 of the Spanish Law of Waters of 1866, private
parties could reclaim from the sea only with "proper permission"
from the State. Private parties could own the reclaimed land only
if not "otherwise provided by the terms of the grant of authority."
This clearly meant that no one could reclaim from the sea without
permission from the State because the sea is property of public
dominion. It also meant that the State could grant or withhold
ownership of the reclaimed land because any reclaimed land, like
the sea from which it emerged, belonged to the State. Thus, a
private person reclaiming from the sea without permission from
the State could not acquire ownership of the reclaimed land which
would remain property of public dominion like the sea it
replaced.76 Article 5 of the Spanish Law of Waters of 1866
adopted the time-honored principle of land ownership that "all
lands that were not acquired from the government, either by
purchase or by grant, belong to the public domain."77
Article 5 of the Spanish Law of Waters must be read together with
laws subsequently enacted on the disposition of public lands. In
particular, CA No. 141 requires that lands of the public domain
must first be classified as alienable or disposable before the
government can alienate them. These lands must not be reserved
for public or quasi-public purposes.78 Moreover, the contract
between CDCP and the government was executed after the
effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the
public domain. This contract could not have converted the
Freedom Islands into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked
all laws authorizing the reclamation of areas under water and
revested solely in the National Government the power to reclaim
lands. Section 1 of PD No. 3-A declared that –
"The provisions of any law to the contrary notwithstanding, the
reclamation of areas under water, whether foreshore or inland,
shall be limited to the National Government or any person
authorized by it under a proper contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of
1866 because reclamation of areas under water could now be
undertaken only by the National Government or by a person
contracted by the National Government. Private parties may
reclaim from the sea only under a contract with the National
Government, and no longer by grant or permission as provided in
Section 5 of the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated
PEA as the National Government's implementing arm to undertake
"all reclamation projects of the government," which "shall be
undertaken by the PEA or through a proper contract executed by
it with any person or entity." Under such contract, a private party
receives compensation for reclamation services rendered to PEA.
Payment to the contractor may be in cash, or in kind consisting of
portions of the reclaimed land, subject to the constitutional ban on
private corporations from acquiring alienable lands of the public
domain. The reclaimed land can be used as payment in kind only
if the reclaimed land is first classified as alienable or disposable
87
land open to disposition, and then declared no longer needed for
public service.
The Amended JVA covers not only the Freedom Islands, but also
an additional 592.15 hectares which are still submerged and
forming part of Manila Bay. There is no legislative or Presidential
act classifying these submerged areas as alienable or disposable
lands of the public domain open to disposition. These submerged
areas are not covered by any patent or certificate of title. There can
be no dispute that these submerged areas form part of the public
domain, and in their present state are inalienable and outside the
commerce of man. Until reclaimed from the sea, these submerged
areas are, under the Constitution, "waters x x x owned by the
State," forming part of the public domain and consequently
inalienable. Only when actually reclaimed from the sea can these
submerged areas be classified as public agricultural lands, which
under the Constitution are the only natural resources that the State
may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially classify
these lands as alienable or disposable lands open to disposition.
Thereafter, the government may declare these lands no longer
needed for public service. Only then can these reclaimed lands be
considered alienable or disposable lands of the public domain and
within the commerce of man.
The classification of PEA's reclaimed foreshore and submerged
lands into alienable or disposable lands open to disposition is
necessary because PEA is tasked under its charter to undertake
public services that require the use of lands of the public domain.
Under Section 5 of PD No. 1084, the functions of PEA include the
following: "[T]o own or operate railroads, tramways and other
kinds of land transportation, x x x; [T]o construct, maintain and
operate such systems of sanitary sewers as may be necessary; [T]o
construct, maintain and operate such storm drains as may be
necessary." PEA is empowered to issue "rules and regulations as
may be necessary for the proper use by private parties of any or all
of the highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus,
part of the reclaimed foreshore and submerged lands held by the
PEA would actually be needed for public use or service since
many of the functions imposed on PEA by its charter constitute
essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that
PEA "shall be primarily responsible for integrating, directing, and
coordinating all reclamation projects for and on behalf of the
National Government." The same section also states that "[A]ll
reclamation projects shall be approved by the President upon
recommendation of the PEA, and shall be undertaken by the PEA
or through a proper contract executed by it with any person or
entity; x x x." Thus, under EO No. 525, in relation to PD No. 3-A
and PD No.1084, PEA became the primary implementing agency
of the National Government to reclaim foreshore and submerged
lands of the public domain. EO No. 525 recognized PEA as the
government entity "to undertake the reclamation of lands and
ensure their maximum utilization in promoting public welfare and
interests."79 Since large portions of these reclaimed lands would
obviously be needed for public service, there must be a formal
declaration segregating reclaimed lands no longer needed for
public service from those still needed for public
service.1âwphi1.nêt
88
Section 3 of EO No. 525, by declaring that all lands reclaimed by
PEA "shall belong to or be owned by the PEA," could not
(14) Promulgate rules, regulations and guidelines on the issuance
automatically operate to classify inalienable lands into alienable or
of licenses, permits, concessions, lease agreements and such other
disposable lands of the public domain. Otherwise, reclaimed
privileges concerning the development, exploration and utilization
foreshore and submerged lands of the public domain would
of the country's marine, freshwater, and brackish water and over
automatically become alienable once reclaimed by PEA, whether
all aquatic resources of the country and shall continue to oversee,
or not classified as alienable or disposable.
supervise and police our natural resources; cancel or cause to
cancel such privileges upon failure, non-compliance or violations
of any regulation, order, and for all other causes which are in
The Revised Administrative Code of 1987, a later law than either
furtherance of the conservation of natural resources and supportive
PD No. 1084 or EO No. 525, vests in the Department of
of the national interest;
Environment and Natural Resources ("DENR" for brevity) the
following powers and functions:
(15) Exercise exclusive jurisdiction on the management and
disposition of all lands of the public domain and serve as the sole
"Sec. 4. Powers and Functions. The Department shall:
agency responsible for classification, sub-classification, surveying
and titling of lands in consultation with appropriate agencies."80
(Emphasis supplied)
(1) x x x

As manager, conservator and overseer of the natural resources of

xxx
the State, DENR exercises "supervision and control over alienable
and disposable public lands." DENR also exercises "exclusive
jurisdiction on the management and disposition of all lands of the
(4) Exercise supervision and control over forest lands, alienable
public domain." Thus, DENR decides whether areas under water,
and disposable public lands, mineral resources and, in the process
like foreshore or submerged areas of Manila Bay, should be
of exercising such control, impose appropriate taxes, fees, charges,
reclaimed or not. This means that PEA needs authorization from
rentals and any such form of levy and collect such revenues for the
DENR before PEA can undertake reclamation projects in Manila
exploration, development, utilization or gathering of such
Bay, or in any part of the country.
resources;

DENR also exercises exclusive jurisdiction over the disposition of

xxx
all lands of the public domain. Hence, DENR decides whether
89
reclaimed lands of PEA should be classified as alienable under
Sections 681 and 782 of CA No. 141. Once DENR decides that the
reclaimed lands should be so classified, it then recommends to the
President the issuance of a proclamation classifying the lands as
alienable or disposable lands of the public domain open to
disposition. We note that then DENR Secretary Fulgencio S.
Factoran, Jr. countersigned Special Patent No. 3517 in compliance
with the Revised Administrative Code and Sections 6 and 7 of CA
No. 141.
In short, DENR is vested with the power to authorize the
reclamation of areas under water, while PEA is vested with the
power to undertake the physical reclamation of areas under water,
whether directly or through private contractors. DENR is also
empowered to classify lands of the public domain into alienable or
disposable lands subject to the approval of the President. On the
other hand, PEA is tasked to develop, sell or lease the reclaimed
alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore
or submerged areas does not make the reclaimed lands alienable
or disposable lands of the public domain, much less patrimonial
lands of PEA. Likewise, the mere transfer by the National
Government of lands of the public domain to PEA does not make
the lands alienable or disposable lands of the public domain, much
less patrimonial lands of PEA.
Absent two official acts – a classification that these lands are
alienable or disposable and open to disposition and a declaration
that these lands are not needed for public service, lands reclaimed
by PEA remain inalienable lands of the public domain. Only such
an official classification and formal declaration can convert
reclaimed lands into alienable or disposable lands of the public
domain, open to disposition under the Constitution, Title I and
Title III83 of CA No. 141 and other applicable laws.84
PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or
disposable lands of the public domain, the reclaimed lands shall be
disposed of in accordance with CA No. 141, the Public Land Act.
PEA, citing Section 60 of CA No. 141, admits that reclaimed lands
transferred to a branch or subdivision of the government "shall not
be alienated, encumbered, or otherwise disposed of in a manner
affecting its title, except when authorized by Congress: x x x."85
(Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised
Administrative Code of 1987, which states that –
"Sec. 48. Official Authorized to Convey Real Property. Whenever
real property of the Government is authorized by law to be
conveyed, the deed of conveyance shall be executed in behalf of
the government by the following: x x x."
Thus, the Court concluded that a law is needed to convey any real
property belonging to the Government. The Court declared that -
90
"It is not for the President to convey real property of the
government on his or her own sole will. Any such conveyance
must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence."
(Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the
legislative authority allowing PEA to sell its reclaimed lands. PD
No. 1085, issued on February 4, 1977, provides that –
"The land reclaimed in the foreshore and offshore area of Manila
Bay pursuant to the contract for the reclamation and construction
of the Manila-Cavite Coastal Road Project between the Republic
of the Philippines and the Construction and Development
Corporation of the Philippines dated November 20, 1973 and/or
any other contract or reclamation covering the same area is hereby
transferred, conveyed and assigned to the ownership and
administration of the Public Estates Authority established pursuant
to PD No. 1084; Provided, however, That the rights and interests
of the Construction and Development Corporation of the
Philippines pursuant to the aforesaid contract shall be recognized
and respected.
Henceforth, the Public Estates Authority shall exercise the rights
and assume the obligations of the Republic of the Philippines
(Department of Public Highways) arising from, or incident to, the
aforesaid contract between the Republic of the Philippines and the
Construction and Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the
Public Estates Authority shall issue in favor of the Republic of the
Philippines the corresponding shares of stock in said entity with
an issued value of said shares of stock (which) shall be deemed
fully paid and non-assessable.
The Secretary of Public Highways and the General Manager of the
Public Estates Authority shall execute such contracts or
agreements, including appropriate agreements with the
Construction and Development Corporation of the Philippines, as
may be necessary to implement the above.
Special land patent/patents shall be issued by the Secretary of
Natural Resources in favor of the Public Estates Authority without
prejudice to the subsequent transfer to the contractor or his
assignees of such portion or portions of the land reclaimed or to be
reclaimed as provided for in the above-mentioned contract. On the
basis of such patents, the Land Registration Commission shall
issue the corresponding certificate of title." (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February
14, 1979, provides that -
"Sec. 3. All lands reclaimed by PEA shall belong to or be owned
by the PEA which shall be responsible for its administration,
development, utilization or disposition in accordance with the
provisions of Presidential Decree No. 1084. Any and all income
that the PEA may derive from the sale, lease or use of reclaimed
91
lands shall be used in accordance with the provisions of
Presidential Decree No. 1084."
There is no express authority under either PD No. 1085 or EO No.
525 for PEA to sell its reclaimed lands. PD No. 1085 merely
transferred "ownership and administration" of lands reclaimed
from Manila Bay to PEA, while EO No. 525 declared that lands
reclaimed by PEA "shall belong to or be owned by PEA." EO No.
525 expressly states that PEA should dispose of its reclaimed lands
"in accordance with the provisions of Presidential Decree No.
1084," the charter of PEA.
PEA's charter, however, expressly tasks PEA "to develop,
improve, acquire, administer, deal in, subdivide, dispose, lease and
sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government."87 (Emphasis supplied) There
is, therefore, legislative authority granted to PEA to sell its lands,
whether patrimonial or alienable lands of the public domain. PEA
may sell to private parties its patrimonial properties in accordance
with the PEA charter free from constitutional limitations. The
constitutional ban on private corporations from acquiring alienable
lands of the public domain does not apply to the sale of PEA's
patrimonial lands.
PEA may also sell its alienable or disposable lands of the public
domain to private individuals since, with the legislative authority,
there is no longer any statutory prohibition against such sales and
the constitutional ban does not apply to individuals. PEA,
however, cannot sell any of its alienable or disposable lands of the
public domain to private corporations since Section 3, Article XII
of the 1987 Constitution expressly prohibits such sales. The
legislative authority benefits only individuals. Private corporations
remain barred from acquiring any kind of alienable land of the
public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the
reclaimed lands could be transferred by PEA to the "contractor or
his assignees" (Emphasis supplied) would not apply to private
corporations but only to individuals because of the constitutional
ban. Otherwise, the provisions of PD No. 1085 would violate both
the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable
or disposable lands open to disposition, and further declared no
longer needed for public service, PEA would have to conduct a
public bidding in selling or leasing these lands. PEA must observe
the provisions of Sections 63 and 67 of CA No. 141 requiring
public auction, in the absence of a law exempting PEA from
holding a public auction.88 Special Patent No. 3517 expressly
states that the patent is issued by authority of the Constitution and
PD No. 1084, "supplemented by Commonwealth Act No. 141, as
amended." This is an acknowledgment that the provisions of CA
No. 141 apply to the disposition of reclaimed alienable lands of
the public domain unless otherwise provided by law. Executive
Order No. 654,89 which authorizes PEA "to determine the kind
and manner of payment for the transfer" of its assets and
properties, does not exempt PEA from the requirement of public
auction. EO No. 654 merely authorizes PEA to decide the mode of
92
payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as
the Government Auditing Code, the government is required to sell
valuable government property through public bidding. Section 79
of PD No. 1445 mandates that –
"Section 79. When government property has become
unserviceable for any cause, or is no longer needed, it shall, upon
application of the officer accountable therefor, be inspected by the
head of the agency or his duly authorized representative in the
presence of the auditor concerned and, if found to be valueless or
unsaleable, it may be destroyed in their presence. If found to be
valuable, it may be sold at public auction to the highest bidder
under the supervision of the proper committee on award or similar
body in the presence of the auditor concerned or other authorized
representative of the Commission, after advertising by printed
notice in the Official Gazette, or for not less than three consecutive
days in any newspaper of general circulation, or where the value
of the property does not warrant the expense of publication, by
notices posted for a like period in at least three public places in the
locality where the property is to be sold. In the event that the public
auction fails, the property may be sold at a private sale at such
price as may be fixed by the same committee or body concerned
and approved by the Commission."
It is only when the public auction fails that a negotiated sale is
allowed, in which case the Commission on Audit must approve the
selling price.90 The Commission on Audit implements Section 79
of the Government Auditing Code through Circular No. 89-29691
dated January 27, 1989. This circular emphasizes that government
assets must be disposed of only through public auction, and a
negotiated sale can be resorted to only in case of "failure of public
auction."
At the public auction sale, only Philippine citizens are qualified to
bid for PEA's reclaimed foreshore and submerged alienable lands
of the public domain. Private corporations are barred from bidding
at the auction sale of any kind of alienable land of the public
domain.
PEA originally scheduled a public bidding for the Freedom Islands
on December 10, 1991. PEA imposed a condition that the winning
bidder should reclaim another 250 hectares of submerged areas to
regularize the shape of the Freedom Islands, under a 60-40 sharing
of the additional reclaimed areas in favor of the winning bidder.92
No one, however, submitted a bid. On December 23, 1994, the
Government Corporate Counsel advised PEA it could sell the
Freedom Islands through negotiation, without need of another
public bidding, because of the failure of the public bidding on
December 10, 1991.93
However, the original JVA dated April 25, 1995 covered not only
the Freedom Islands and the additional 250 hectares still to be
reclaimed, it also granted an option to AMARI to reclaim another
350 hectares. The original JVA, a negotiated contract, enlarged the
reclamation area to 750 hectares.94 The failure of public bidding
on December 10, 1991, involving only 407.84 hectares,95 is not a
valid justification for a negotiated sale of 750 hectares, almost
93
double the area publicly auctioned. Besides, the failure of public
bidding happened on December 10, 1991, more than three years
before the signing of the original JVA on April 25, 1995. The
economic situation in the country had greatly improved during the
intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987
Constitution is absolute and clear: "Private corporations or
associations may not hold such alienable lands of the public
domain except by lease, x x x." Even Republic Act No. 6957
("BOT Law," for brevity), cited by PEA and AMARI as legislative
authority to sell reclaimed lands to private parties, recognizes the
constitutional ban. Section 6 of RA No. 6957 states –
"Sec. 6. Repayment Scheme. - For the financing, construction,
operation and maintenance of any infrastructure projects
undertaken through the build-operate-and-transfer arrangement or
any of its variations pursuant to the provisions of this Act, the
project proponent x x x may likewise be repaid in the form of a
share in the revenue of the project or other non-monetary
payments, such as, but not limited to, the grant of a portion or
percentage of the reclaimed land, subject to the constitutional
requirements with respect to the ownership of the land: x x x."
(Emphasis supplied)
A private corporation, even one that undertakes the physical
reclamation of a government BOT project, cannot acquire
reclaimed alienable lands of the public domain in view of the
constitutional ban.
Section 302 of the Local Government Code, also mentioned by
PEA and AMARI, authorizes local governments in land
reclamation projects to pay the contractor or developer in kind
consisting of a percentage of the reclaimed land, to wit:
"Section 302. Financing, Construction, Maintenance, Operation,
and Management of Infrastructure Projects by the Private Sector.
xxx
xxx
In case of land reclamation or construction of industrial estates, the
repayment plan may consist of the grant of a portion or percentage
of the reclaimed land or the industrial estate constructed."
Although Section 302 of the Local Government Code does not
contain a proviso similar to that of the BOT Law, the constitutional
restrictions on land ownership automatically apply even though
not expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code,
the contractor or developer, if a corporate entity, can only be paid
with leaseholds on portions of the reclaimed land. If the contractor
or developer is an individual, portions of the reclaimed land, not
94
exceeding 12 hectares96 of non-agricultural lands, may be
conveyed to him in ownership in view of the legislative authority
allowing such conveyance. This is the only way these provisions
of the BOT Law and the Local Government Code can avoid a
direct collision with Section 3, Article XII of the 1987
Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of
the reclaimed lands to public respondent PEA transformed such
lands of the public domain to private lands." This theory is echoed
by AMARI which maintains that the "issuance of the special
patent leading to the eventual issuance of title takes the subject
land away from the land of public domain and converts the
property into patrimonial or private property." In short, PEA and
AMARI contend that with the issuance of Special Patent No. 3517
and the corresponding certificates of titles, the 157.84 hectares
comprising the Freedom Islands have become private lands of
PEA. In support of their theory, PEA and AMARI cite the
following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –
"Once the patent was granted and the corresponding certificate of
title was issued, the land ceased to be part of the public domain
and became private property over which the Director of Lands has
neither control nor jurisdiction."
2. Lee Hong Hok v. David,98 where the Court declared -
"After the registration and issuance of the certificate and duplicate
certificate of title based on a public land patent, the land covered
thereby automatically comes under the operation of Republic Act
496 subject to all the safeguards provided therein."3. Heirs of
Gregorio Tengco v. Heirs of Jose Aliwalas,99 where the Court
ruled -
"While the Director of Lands has the power to review homestead
patents, he may do so only so long as the land remains part of the
public domain and continues to be under his exclusive control; but
once the patent is registered and a certificate of title is issued, the
land ceases to be part of the public domain and becomes private
property over which the Director of Lands has neither control nor
jurisdiction."
4. Manalo v. Intermediate Appellate Court,100 where the Court
held –
"When the lots in dispute were certified as disposable on May 19,
1971, and free patents were issued covering the same in favor of
the private respondents, the said lots ceased to be part of the public
domain and, therefore, the Director of Lands lost jurisdiction over
the same."
5.Republic v. Court of Appeals,101 where the Court stated –
95
"Proclamation No. 350, dated October 9, 1956, of President
Magsaysay legally effected a land grant to the Mindanao Medical
In the instant case, the only patent and certificates of title issued
Center, Bureau of Medical Services, Department of Health, of the
are those in the name of PEA, a wholly government owned
whole lot, validly sufficient for initial registration under the Land
corporation performing public as well as proprietary functions. No
Registration Act. Such land grant is constitutive of a 'fee simple'
patent or certificate of title has been issued to any private party.
title or absolute title in favor of petitioner Mindanao Medical
No one is asking the Director of Lands to cancel PEA's patent or
Center. Thus, Section 122 of the Act, which governs the
certificates of title. In fact, the thrust of the instant petition is that
registration of grants or patents involving public lands, provides
PEA's certificates of title should remain with PEA, and the land
that 'Whenever public lands in the Philippine Islands belonging to
covered by these certificates, being alienable lands of the public
the Government of the United States or to the Government of the
domain, should not be sold to a private corporation.
Philippines are alienated, granted or conveyed to persons or to
public or private corporations, the same shall be brought forthwith
under the operation of this Act (Land Registration Act, Act 496)
Registration of land under Act No. 496 or PD No. 1529 does not
and shall become registered lands.'"
vest in the registrant private or public ownership of the land.
Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the
The first four cases cited involve petitions to cancel the land
recognized modes of acquiring ownership. Registration does not
patents and the corresponding certificates of titles issued to private
give the registrant a better right than what the registrant had prior
parties. These four cases uniformly hold that the Director of Lands
to the registration.102 The registration of lands of the public
has no jurisdiction over private lands or that upon issuance of the
domain under the Torrens system, by itself, cannot convert public
certificate of title the land automatically comes under the Torrens
lands into private lands.103
System. The fifth case cited involves the registration under the
Torrens System of a 12.8-hectare public land granted by the
National Government to Mindanao Medical Center, a government
Jurisprudence holding that upon the grant of the patent or issuance
unit under the Department of Health. The National Government
of the certificate of title the alienable land of the public domain
transferred the 12.8-hectare public land to serve as the site for the
automatically becomes private land cannot apply to government
hospital buildings and other facilities of Mindanao Medical
units and entities like PEA. The transfer of the Freedom Islands to
Center, which performed a public service. The Court affirmed the
PEA was made subject to the provisions of CA No. 141 as
registration of the 12.8-hectare public land in the name of
expressly stated in Special Patent No. 3517 issued by then
Mindanao Medical Center under Section 122 of Act No. 496. This
President Aquino, to wit:
fifth case is an example of a public land being registered under Act
No. 496 without the land losing its character as a property of public
dominion.

96
"NOW, THEREFORE, KNOW YE, that by authority of the
Constitution of the Philippines and in conformity with the
provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby
granted and conveyed unto the Public Estates Authority the
aforesaid tracts of land containing a total area of one million nine
hundred fifteen thousand eight hundred ninety four (1,915,894)
square meters; the technical description of which are hereto
attached and made an integral part hereof." (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands
on matters not covered by PD No. 1084. Section 60 of CA No. 141
prohibits, "except when authorized by Congress," the sale of
alienable lands of the public domain that are transferred to
government units or entities. Section 60 of CA No. 141 constitutes,
under Section 44 of PD No. 1529, a "statutory lien affecting title"
of the registered land even if not annotated on the certificate of
title.104 Alienable lands of the public domain held by government
entities under Section 60 of CA No. 141 remain public lands
because they cannot be alienated or encumbered unless Congress
passes a law authorizing their disposition. Congress, however,
cannot authorize the sale to private corporations of reclaimed
alienable lands of the public domain because of the constitutional
ban. Only individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance
with Section 60 of CA No. 141 does not automatically convert
alienable lands of the public domain into private or patrimonial
lands. The alienable lands of the public domain must be transferred
to qualified private parties, or to government entities not tasked to
dispose of public lands, before these lands can become private or
patrimonial lands. Otherwise, the constitutional ban will become
illusory if Congress can declare lands of the public domain as
private or patrimonial lands in the hands of a government agency
tasked to dispose of public lands. This will allow private
corporations to acquire directly from government agencies
limitless areas of lands which, prior to such law, are concededly
public lands.
Under EO No. 525, PEA became the central implementing agency
of the National Government to reclaim foreshore and submerged
areas of the public domain. Thus, EO No. 525 declares that –
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily
Responsible for all Reclamation Projects
Whereas, there are several reclamation projects which are ongoing
or being proposed to be undertaken in various parts of the country
which need to be evaluated for consistency with national
programs;
Whereas, there is a need to give further institutional support to the
Government's declared policy to provide for a coordinated,
economical and efficient reclamation of lands;
97
Whereas, Presidential Decree No. 3-A requires that all reclamation
of areas shall be limited to the National Government or any person
authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the
National Government which shall ensure a coordinated and
integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates
Authority as a government corporation to undertake reclamation
of lands and ensure their maximum utilization in promoting public
welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President
with continuing authority to reorganize the national government
including the transfer, abolition, or merger of functions and
offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers vested in me by the
Constitution and pursuant to Presidential Decree No. 1416, do
hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily
responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National
Government. All reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be
undertaken by the PEA or through a proper contract executed by
it with any person or entity; Provided, that, reclamation projects of
any national government agency or entity authorized under its
charter shall be undertaken in consultation with the PEA upon
approval of the President.
x x x ."
As the central implementing agency tasked to undertake
reclamation projects nationwide, with authority to sell reclaimed
lands, PEA took the place of DENR as the government agency
charged with leasing or selling reclaimed lands of the public
domain. The reclaimed lands being leased or sold by PEA are not
private lands, in the same manner that DENR, when it disposes of
other alienable lands, does not dispose of private lands but
alienable lands of the public domain. Only when qualified private
parties acquire these lands will the lands become private lands. In
the hands of the government agency tasked and authorized to
dispose of alienable of disposable lands of the public domain,
these lands are still public, not private lands.
Furthermore, PEA's charter expressly states that PEA "shall hold
lands of the public domain" as well as "any and all kinds of lands."
PEA can hold both lands of the public domain and private lands.
Thus, the mere fact that alienable lands of the public domain like
the Freedom Islands are transferred to PEA and issued land patents
or certificates of title in PEA's name does not automatically make
such lands private.
98
To allow vast areas of reclaimed lands of the public domain to be
transferred to PEA as private lands will sanction a gross violation
of the constitutional ban on private corporations from acquiring
any kind of alienable land of the public domain. PEA will simply
turn around, as PEA has now done under the Amended JVA, and
transfer several hundreds of hectares of these reclaimed and still
to be reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the constitutional
ban in Section 3, Article XII of the 1987 Constitution which was
intended to diffuse equitably the ownership of alienable lands of
the public domain among Filipinos, now numbering over 80
million strong.
This scheme, if allowed, can even be applied to alienable
agricultural lands of the public domain since PEA can "acquire x
x x any and all kinds of lands." This will open the floodgates to
corporations and even individuals acquiring hundreds of hectares
of alienable lands of the public domain under the guise that in the
hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this
country - creating the very evil that the constitutional ban was
designed to prevent. This will completely reverse the clear
direction of constitutional development in this country. The 1935
Constitution allowed private corporations to acquire not more than
1,024 hectares of public lands.105 The 1973 Constitution
prohibited private corporations from acquiring any kind of public
land, and the 1987 Constitution has unequivocally reiterated this
prohibition.
The contention of PEA and AMARI that public lands, once
registered under Act No. 496 or PD No. 1529, automatically
become private lands is contrary to existing laws. Several laws
authorize lands of the public domain to be registered under the
Torrens System or Act No. 496, now PD No. 1529, without losing
their character as public lands. Section 122 of Act No. 496, and
Section 103 of PD No. 1529, respectively, provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands
belonging to the x x x Government of the Philippine Islands are
alienated, granted, or conveyed to persons or the public or private
corporations, the same shall be brought forthwith under the
operation of this Act and shall become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public land is
by the Government alienated, granted or conveyed to any person,
the same shall be brought forthwith under the operation of this
Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any
person" in Section 103 of PD No. 1529 includes conveyances of
public lands to public corporations.
Alienable lands of the public domain "granted, donated, or
transferred to a province, municipality, or branch or subdivision of
99
the Government," as provided in Section 60 of CA No. 141, may
be registered under the Torrens System pursuant to Section 103 of
PD No. 1529. Such registration, however, is expressly subject to
the condition in Section 60 of CA No. 141 that the land "shall not
be alienated, encumbered or otherwise disposed of in a manner
affecting its title, except when authorized by Congress." This
provision refers to government reclaimed, foreshore and marshy
lands of the public domain that have been titled but still cannot be
alienated or encumbered unless expressly authorized by Congress.
The need for legislative authority prevents the registered land of
the public domain from becoming private land that can be disposed
of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that
lands of the public domain may be registered under the Torrens
System. Section 48, Chapter 12, Book I of the Code states –
"Sec. 48. Official Authorized to Convey Real Property. Whenever
real property of the Government is authorized by law to be
conveyed, the deed of conveyance shall be executed in behalf of
the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency or
instrumentality." (Emphasis supplied)
Thus, private property purchased by the National Government for
expansion of a public wharf may be titled in the name of a
government corporation regulating port operations in the country.
Private property purchased by the National Government for
expansion of an airport may also be titled in the name of the
government agency tasked to administer the airport. Private
property donated to a municipality for use as a town plaza or public
school site may likewise be titled in the name of the
municipality.106 All these properties become properties of the
public domain, and if already registered under Act No. 496 or PD
No. 1529, remain registered land. There is no requirement or
provision in any existing law for the de-registration of land from
the Torrens System.
Private lands taken by the Government for public use under its
power of eminent domain become unquestionably part of the
public domain. Nevertheless, Section 85 of PD No. 1529
authorizes the Register of Deeds to issue in the name of the
National Government new certificates of title covering such
expropriated lands. Section 85 of PD No. 1529 states –
"Sec. 85. Land taken by eminent domain. Whenever any registered
land, or interest therein, is expropriated or taken by eminent
domain, the National Government, province, city or municipality,
or any other agency or instrumentality exercising such right shall
file for registration in the proper Registry a certified copy of the
judgment which shall state definitely by an adequate description,
the particular property or interest expropriated, the number of the
certificate of title, and the nature of the public use. A memorandum
of the right or interest taken shall be made on each certificate of
title by the Register of Deeds, and where the fee simple is taken, a
100
new certificate shall be issued in favor of the National
Government, province, city, municipality, or any other agency or
instrumentality exercising such right for the land so taken. The
legal expenses incident to the memorandum of registration or
issuance of a new certificate of title shall be for the account of the
authority taking the land or interest therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529
are not exclusively private or patrimonial lands. Lands of the
public domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale
to AMARI of the Freedom Islands or of the lands to be reclaimed
from submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA "is not a sale but a joint venture with a stipulation
for reimbursement of the original cost incurred by PEA for the
earlier reclamation and construction works performed by the
CDCP under its 1973 contract with the Republic." Whether the
Amended JVA is a sale or a joint venture, the fact remains that the
Amended JVA requires PEA to "cause the issuance and delivery
of the certificates of title conveying AMARI's Land Share in the
name of AMARI."107
This stipulation still contravenes Section 3, Article XII of the 1987
Constitution which provides that private corporations "shall not
hold such alienable lands of the public domain except by lease."
The transfer of title and ownership to AMARI clearly means that
AMARI will "hold" the reclaimed lands other than by lease. The
transfer of title and ownership is a "disposition" of the reclaimed
lands, a transaction considered a sale or alienation under CA No.
141,108 the Government Auditing Code,109 and Section 3,
Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system.
Foreshore and submerged areas form part of the public domain and
are inalienable. Lands reclaimed from foreshore and submerged
areas also form part of the public domain and are also inalienable,
unless converted pursuant to law into alienable or disposable lands
of the public domain. Historically, lands reclaimed by the
government are sui generis, not available for sale to private parties
unlike other alienable public lands. Reclaimed lands retain their
inherent potential as areas for public use or public service.
Alienable lands of the public domain, increasingly becoming
scarce natural resources, are to be distributed equitably among our
ever-growing population. To insure such equitable distribution,
the 1973 and 1987 Constitutions have barred private corporations
from acquiring any kind of alienable land of the public domain.
Those who attempt to dispose of inalienable natural resources of
the State, or seek to circumvent the constitutional ban on alienation
of lands of the public domain to private corporations, do so at their
own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom
Islands, now covered by certificates of title in the name of PEA,
are alienable lands of the public domain. PEA may lease these
lands to private corporations but may not sell or transfer ownership
of these lands to private corporations. PEA may only sell these
101
lands to Philippine citizens, subject to the ownership limitations in
the 1987 Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain
inalienable natural resources of the public domain until classified
as alienable or disposable lands open to disposition and declared
no longer needed for public service. The government can make
such classification and declaration only after PEA has reclaimed
these submerged areas. Only then can these lands qualify as
agricultural lands of the public domain, which are the only natural
resources the government can alienate. In their present state, the
592.15 hectares of submerged areas are inalienable and outside the
commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private
corporation, ownership of 77.34 hectares110 of the Freedom
Islands, such transfer is void for being contrary to Section 3,
Article XII of the 1987 Constitution which prohibits private
corporations from acquiring any kind of alienable land of the
public domain.
4. Since the Amended JVA also seeks to transfer to AMARI
ownership of 290.156 hectares111 of still submerged areas of
Manila Bay, such transfer is void for being contrary to Section 2,
Article XII of the 1987 Constitution which prohibits the alienation
of natural resources other than agricultural lands of the public
domain. PEA may reclaim these submerged areas. Thereafter, the
government can classify the reclaimed lands as alienable or
disposable, and further declare them no longer needed for public
service. Still, the transfer of such reclaimed alienable lands of the
public domain to AMARI will be void in view of Section 3, Article
XII of the 1987 Constitution which prohibits private corporations
from acquiring any kind of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3,
Article XII of the 1987 Constitution. Under Article 1409112 of the
Civil Code, contracts whose "object or purpose is contrary to law,"
or whose "object is outside the commerce of men," are "inexistent
and void from the beginning." The Court must perform its duty to
defend and uphold the Constitution, and therefore declares the
Amended JVA null and void ab initio.
Seventh issue: whether the Court is the proper forum to raise the
issue of whether the Amended JVA is grossly disadvantageous to
the government.
Considering that the Amended JVA is null and void ab initio, there
is no necessity to rule on this last issue. Besides, the Court is not a
trier of facts, and this last issue involves a determination of factual
matters.
WHEREFORE, the petition is GRANTED. The Public Estates
Authority and Amari Coastal Bay Development Corporation are
PERMANENTLY ENJOINED from implementing the Amended
Joint Venture Agreement which is hereby declared NULL and
VOID ab initio.
SO ORDERED.
102
 WHETHER THE STIPULATIONS IN THE AMENDED JOINT
VENTURE AGREEMENT FOR THE TRANSFER TO AMARI
FRANCISCO I. CHAVEZ v. PUBLIC ESTATES AUTHORITY,
OF CERTAIN LANDS, RECLAIMED AND STILL TO BE
GR No. 133250, 2002-07-09
RECLAIMED, VIOLATE THE 1987 CONSTITUTION

Facts:
The threshold issue is whether AMARI, a private corporation, can
acquire and own under the Amended JVA 367.5 hectares of
reclaimed foreshore and submerged areas in Manila Bay in view
On November 20, 1973, the government, through the
of Sections 2 and 3, Article XII of the 1987 Constitution which
Commissioner of Public Highways, signed a contract with the
state that:
Construction and Development Corporation of the Philippines
("CDCP" for brevity) to reclaim certain foreshore and offshore
areas of Manila Ba... y
"Section 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
On February 4, 1977, then President Ferdinand E. Marcos issued
natural resources are owned by the State. With the... exception of
Presidential Decree No. 1084 creating PEA.
agricultural lands, all other natural resources shall not be alienated.

On the same date, then President Marcos issued Presidential

Section 3. x x x Alienable lands of the public domain shall be
Decree No. 1085 transferring to PEA the "lands reclaimed in the
limited to agricultural lands. Private corporations or associations
foreshore and offshore of the Manila Bay"[2] under the Manila-
may not hold such alienable lands of the public domain except by
Cavite Coastal Road and Reclamation Project (MCCRRP).
lease, x x x."(Emphasis... supplied)

April 25, 1995, PEA entered into a Joint Venture Agreement

Ruling:
("JVA" for brevity) with AMARI, a private corporation, to
develop the Freedom Islands.
In the instant case, AMARI seeks to acquire from PEA, a public
corporation, reclaimed lands and submerged areas for... non-
Issues:
agricultural purposes by purchase under PD No. 1084 (charter of
103
PEA) and Title III of CA No. 141. Certain undertakings by
AMARI under the Amended JVA constitute the consideration for
the purchase.
Neither AMARI nor PEA can claim... judicial confirmation of
their titles because the lands covered by the Amended JVA are
newly reclaimed or still to be reclaimed.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
"Article 5. Lands reclaimed from the sea in consequence of works
constructed by the State, or by the provinces, pueblos or private
persons, with proper permission, shall become the property of the
party constructing such works, unless otherwise provided by the...
terms of the grant of authority."
Article 339 of the Civil Code of 1889 defined property of public
dominion as follows:
"Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, riverbanks,
shores, roadsteads, and that of a similar character;
2. That belonging exclusively to the State which, without being of
general public use, is employed in some public service, or in the
development of the national wealth, such as walls, fortresses, and
other works for the defense of the territory, and... mines, until
granted to private individuals."
This provision, however, was not self-executing. The legislature,
or the executive department pursuant to law, must declare the
property no longer needed for public use or territorial defense
before the government could lease or alienate the property to
private... parties
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654
which regulated the lease of reclaimed and foreshore lands. The
salient provisions of this law were as follows:
"Section 1. The control and disposition of the foreshore as defined
in existing law, and the title to all Government or public lands
made or reclaimed by the Government by dredging or filling or
otherwise throughout the
Philippine Islands, shall be retained by the Government without
prejudice to vested rights and without prejudice to rights conceded
to the City of Manila in the Luneta Extension.
104
Act No. 1654 mandated that the government should retain title to
all lands reclaimed by the government.
Act No. 1654, however, did not repeal Section 5 of the Spanish
Law of Waters of 1866.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act
No. 2874, the Public Land Act.[46] The salient provisions of Act
No. 2874, on reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the recommendation of the
Secretary of Agriculture and Natural Resources, shall from time to
time classify the lands of the public domain into
(a)Alienable or disposable
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of
alienable or disposable public lands, the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural
Resources, shall from time to time... declare what lands are open
to disposition or concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited or classified
Sec. 55. Any tract of land of the public domain which, being
neither timber nor mineral land, shall be classified as suitable for
residential purposes or for commercial, industrial, or other
productive purposes other than agricultural purposes,... and shall
be open to disposition or concession, shall be disposed of under
the provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
105
Sec. 58. The lands comprised in classes (a), (b), and (c) of section
fifty-six shall be disposed of to private parties by lease only and
not otherwise, as soon as the Governor-General, upon
recommendation by the Secretary of Agriculture and
Natural Resources, shall declare that the same are not necessary
for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale
or lease under the provisions of this Act."
(Emphasis supplied)
These provisions vested upon the Governor-General the power to
classify inalienable lands of the public domain into disposable
lands of the public domain
Section 58 of Act No. 2874 categorically mandated that disposable
lands of the public domain classified as government reclaimed,
foreshore and marshy lands "shall be disposed of to private parties
by lease only and not otherwise."
The rationale behind this State policy is obvious. Government
reclaimed, foreshore and marshy public lands for non-agricultural
purposes retain their inherent potential as areas for public service.
Dispositions under the 1935 Constitution
The 1935 Constitution barred the alienation of all natural resources
except public agricultural lands, which were the only natural
resources the State could alienate.
Thus, foreshore lands, considered part of the State's natural
resources, became inalienable by... constitutional fiat, available
only for lease for 25 years, renewable for another 25 years.
The prohibition on private parties from acquiring ownership of
government reclaimed and marshy lands of the public domain was
only a statutory prohibition and the legislature could therefore
remove such prohibition. The 1935 Constitution did not prohibit
individuals and... corporations from acquiring government
reclaimed and marshy lands of the public domain that were
classified as agricultural lands under existing public land laws.
Still, after the effectivity of the 1935 Constitution, the legislature
did not repeal Section 58 of Act No. 2874 to open for sale to
private parties government reclaimed and marshy lands of the
public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
CA No. 141, as amended, remains to this day the existing general
law... governing the classification and disposition of lands of the
public domain other than timber and mineral lands
106
Section 6 of CA No. 141 empowers the President to classify lands
of the public domain into "alienable or disposable
Again, the government must formally declare that the property of
public dominion is no longer needed for public use or public
service, before the same could be classified as patrimonial
Thus, before the government could alienate or dispose of lands of
property of the State
the public domain, the President must first officially classify these
lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these
The 1973 Constitution prohibited the alienation of all natural
lands... for public or quasi-public uses.
resources with the exception of "agricultural, industrial or
commercial, residential, and resettlement lands of the public
domain."
Section 61 of CA No. 141 readopted, after the effectivity of the
1935 Constitution, Section 58 of Act No. 2874 prohibiting the sale
of government reclaimed, foreshore and marshy disposable lands
The 1973 Constitution, however, limited the alienation of lands of
of the public domain.
the public domain to individuals who were citizens of the
Philippines. Private corporations, even if wholly owned by
Philippine citizens, were no longer allowed to acquire alienable
Foreshore lands are lands of public dominion intended for public
lands of the public... domain unlike in the 1935 Constitution.
use. So too are lands reclaimed by the government by dredging,
filling, or other means. Act 1654 mandated that the control and
disposition of the foreshore and lands under water remained in
Thus, under the 1973 Constitution, private corporations could hold
the... national government.
alienable lands of the public domain only through lease

Since then and until now, the only way the government can sell to
PD No. 1084 authorizes PEA to reclaim both foreshore and
private parties government reclaimed and marshy disposable lands
submerged areas of the public domain. Foreshore areas are those
of the public domain is for the legislature to pass a law authorizing
covered and uncovered by the ebb and flow of the tide
such sale.

Submerged areas are those... permanently under water regardless

The congressional authority required in Section 60 of CA No. 141
of the ebb and flow of the tide.
mirrors the legislative authority required in Section 56 of Act No.
2874.

107
Thus, PEA can hold title to private lands, as well as... title to lands
of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged
alienable lands of the public domain, there must be legislative
authority empowering PEA to sell these lands.
Without such legislative authority, PEA could not sell but only
lease its reclaimed foreshore and submerged alienable lands of the
public domain.
Nevertheless, any legislative authority granted to PEA to sell its
reclaimed alienable lands of the public domain would be... subject
to the constitutional ban on private corporations from acquiring
alienable lands of the public domain.
Dispositions under the 1987 Constitution... he 1987 Constitution,
like the 1935 and 1973 Constitutions before it, has adopted the
Regalian doctrine.
The Rationale behind the Constitutional Ban
Indeed, one purpose of the constitutional prohibition against
purchases of public agricultural lands by private corporations is to
equitably diffuse land ownership or to encourage 'owner-
cultivatorship and the economic family-size farm' and to prevent
a... recurrence of cases like the instant case. Huge landholdings by
corporations or private persons had spawned social unrest.
The constitutional intent, under the 1973 and 1987 Constitutions,
is to transfer ownership of only a limited area of alienable land of
the public domain to a qualified individual. This constitutional
intent is safeguarded by the provision prohibiting corporations
from... acquiring alienable lands of the public domain, since the
vehicle to circumvent the constitutional intent is removed.
The Amended Joint Venture Agreement
In short, the Amended JVA covers a reclamation area of 750
hectares. Only 157.84 hectares of the 750-hectare reclamation
project have been reclaimed, and the rest of the 592.15 hectares
are still submerged areas forming part of Manila Bay.
Indisputably, under the Amended JVA AMARI will acquire and
own a maximum of 367.5 hectares of reclaimed land which will
be titled in its name.
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or
submerged areas of Manila Bay are alienable or disposable lands
of the public domain.
108
Under Section 2, Article XII of the 1987 Constitution, the
foreshore and submerged areas of Manila Bay are part of the
"lands of the public domain, waters x x x and other natural
resources" and consequently "owned by the State."
As such, foreshore and submerged areas
"shall not be alienated," unless they are classified as "agricultural
lands" of the public domain. The mere reclamation of these areas
by PEA does not convert these inalienable natural resources of the
State into alienable or disposable lands of the public domain
Section 8 of CA No. 141 provides that "only those lands shall be
declared open to disposition or concession which have been
officially delimited and classified."[72] The President has the...
authority to classify inalienable lands of the public domain into
alienable or disposable lands of the public domain, pursuant to
Section 6 of CA No. 141.
PD No. 1085, coupled with President Aquino's actual issuance of
a special patent covering the Freedom Islands, is equivalent to an
official proclamation classifying the Freedom Islands as alienable
or disposable lands of the public domain.
The Freedom Islands are thus alienable or disposable lands of the
public domain, open to disposition or concession to qualified...
parties.
Article 5 of the Spanish Law of Waters must be read together with
laws subsequently enacted on the disposition of public lands. In
particular, CA No. 141 requires that lands of the public domain
must first be classified as alienable or disposable before the
government... can alienate them.
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of
1866 because reclamation of areas under water could now be
undertaken only by the National Government or by a person
contracted by the National Government.
The Amended JVA covers not only the Freedom Islands, but also
an additional 592.15 hectares which are still submerged and
forming part of Manila Bay. There is no legislative or Presidential
act classifying these submerged areas as alienable or disposable
lands of... the public domain open to disposition.
Section 3 of EO No. 525, by declaring that all lands reclaimed by
PEA "shall belong to or be owned by the PEA," could not
automatically operate to classify inalienable lands into alienable or
disposable lands of the public domain.
As manager, conservator and overseer of the natural resources of
the State, DENR exercises "supervision and control over alienable
and disposable public lands." DENR also exercises "exclusive
jurisdiction on the management and disposition of all lands of the
public... domain."
109
DENR also exercises exclusive jurisdiction over the disposition of
all lands of the public domain.
In short, DENR is vested with the power to authorize the
reclamation of areas under water, while PEA is vested with the
power to undertake the physical reclamation of areas under water,
whether directly or through private contractors.
Clearly, the mere physical act of reclamation by PEA of foreshore
or submerged areas does not make the reclaimed lands alienable
or disposable lands of the public domain, much less patrimonial
lands of PEA.
Absent two official acts a classification that these lands are
alienable or disposable and open to disposition and a declaration
that these lands are not needed for public service, lands reclaimed
by PEA remain inalienable lands of the public domain.
PEA contends that PD No. 1085 and EO No. 525 constitute the
legislative authority allowing PEA to sell its reclaimed lands. PD
No. 1085, issued on February 4, 1977,... There is no express
authority under either PD No. 1085 or EO No. 525 for PEA to sell
its reclaimed lands. PD No. 1085 merely transferred "ownership
and administration" of lands reclaimed from Manila Bay to PEA,
while EO No. 525 declared that lands reclaimed by PEA
"shall belong to or be owned by PEA."
PEA's charter, however, expressly tasks PEA "to develop,
improve, acquire, administer, deal in, subdivide, dispose, lease and
sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government."
There is, therefore, legislative authority granted to PEA to sell its
lands, whether patrimonial or alienable lands of the public domain.
PEA may sell to private parties its patrimonial... properties in
accordance with the PEA charter free from constitutional
limitations.
The constitutional ban on private corporations from acquiring
alienable lands of the public domain does not apply to the sale of
PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the public
domain to private individuals since, with the legislative authority,
there is no longer any statutory prohibition against such sales and
the constitutional ban does not apply to individuals.
PEA, however, cannot sell any of its alienable or disposable lands
of the public domain to private corporations since Section 3,
Article XII of the 1987 Constitution expressly prohibits such sales.
Registration of lands of the public domain
110
Finally, PEA theorizes that the "act of conveying the ownership of
the reclaimed lands to public respondent PEA transformed such
lands of the public domain to private lands."
In the instant case, the only patent and certificates of title issued
are those in the name of PEA, a wholly government owned
corporation performing public as well as proprietary functions.
Registration of land under Act No. 496 or PD No. 1529 does not
vest in the registrant private or public ownership of the land.
Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the
recognized modes of... acquiring ownership.
We can now summarize our conclusions as follows:
The 157.84 hectares of reclaimed lands comprising the Freedom
Islands, now covered by certificates of title in the name of PEA,
are alienable lands of the public domain.
PEA may lease these lands to private corporations but may not...
sell or transfer ownership of these lands to private corporations.
The 592.15 hectares of submerged areas of Manila Bay remain
inalienable natural resources of the public domain until classified
as alienable or disposable lands open to disposition and declared
no longer needed for public service.
In their present state, the 592.15... hectares of submerged areas are
inalienable and outside the commerce of man.
Since the Amended JVA seeks to transfer to AMARI, a private
corporation, ownership of 77.34 hectares[110] of the Freedom
Islands, such transfer is void for being contrary to Section 3,...
Article XII of the 1987 Constitution which prohibits private
corporations from acquiring any kind of alienable land of the
public domain.
Since the Amended JVA also seeks to transfer to AMARI
ownership of 290.156 hectares[111] of still submerged areas of
Manila Bay, such transfer is void for being contrary to Section 2,...
Article XII of the 1987 Constitution which prohibits the alienation
of natural resources other than agricultural lands of the public
domain.
WHEREFORE, the petition is GRANTED. The Public Estates
Authority and Amari Coastal Bay Development Corporation are
PERMANENTLY ENJOINED from implementing the Amended
Joint Venture Agreement which is hereby declared NULL and
VOID ab... initio.
Principles:
111
The Regalian doctrine is the foundation of the time-honored
principle of land ownership... that "all lands that were not acquired
from the Government, either by purchase or by grant, belong to the
public domain."
Article 339 of the Civil Code of 1889, which is now Article 420
of the Civil Code of 1950,... incorporated the Regalian doctrine.
Sections 6, 7 and 8 of CA No. 141 read as follows
"Sec. 6. The President, upon the recommendation of the Secretary
of Agriculture and Commerce, shall from time to time classify the
lands of the public domain into
(a) Alienable or disposable,... (b) Timber, and
(c) Mineral lands,... and may at any time and in like manner
transfer such lands from one class to another,[53] for the purpose
of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of
alienable or disposable public lands, the President, upon
recommendation by the Secretary of Agriculture and Commerce,
shall from time to time declare what lands are open to... disposition
or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited and classified
and, when practicable, surveyed, and which have not been
reserved for public or quasi-public... uses, nor appropriated by the
Government, nor in any manner become private property, nor
those on which a private right authorized and recognized by this
Act or any other valid law may be claimed, or which, having been
reserved or appropriated, have ceased to be so. x x... x."
The salient provisions of CA No. 141, on government reclaimed,
foreshore and marshy lands of the public domain, are as follows:
"Sec. 58. Any tract of land of the public domain which, being
neither timber nor mineral land, is intended to be used for
residential purposes or for commercial, industrial, or other
productive purposes other than agricultural, and is open... to
disposition or concession, shall be disposed of under the
provisions of this chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
112

Sec. 60. Any tract of land comprised under this title may be leased
or sold, as the case may be, to any person, corporation, or
association authorized to purchase or lease public lands for
agricultural purposes. x x x
Sec. 61. The lands comprised in classes (a), (b), and (c) of section
fifty-nine shall be disposed of to private parties by lease only and
not otherwise, as soon as the President, upon recommendation by
the Secretary of Agriculture,... shall declare that the same are not
necessary for the public service and are open to disposition under
this chapter. The lands included in class (d) may be disposed of by
sale or lease under the provisions of this Act."
Sections 2 and 3, Article XII of the 1987 Constitution state that
"Section 2. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State.
Agricultural lands of the public domain may be further classified
by law according to the uses which they may be devoted.
Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not
hold such alienable lands of the public domain except by lease, for
a period not exceeding twenty-five years, renewable for not more
than twenty-five... years, and not to exceed one thousand hectares
in area. Citizens of the Philippines may lease not more than five
hundred hectares, or acquire not more than twelve hectares thereof
by purchase, homestead, or grant.
aking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform,
the Congress shall determine, by law, the size of lands of the public
domain which may be acquired, developed, held, or leased... and
the conditions therefor."
Like the 1973 Constitution, the 1987 Constitution allows private
corporations to hold... alienable lands of the public domain only
through lease.

With the exception of agricultural lands, all other natural resources

FIRST DIVISION
shall not be alienated. The exploration, development, and
utilization of natural resources shall be under the full control and
supervision of the State. x x x.
G. R. No. 107764 October 4, 2002
Section 3. Lands of the public domain are classified into
agricultural, forest or timber, mineral lands, and national parks.

113
EDNA COLLADO, BERNARDINA TAWAS, JORETO C.
TORRES,
The Case
JOSE AMO, SERGIO L. MONTEALEGRE, VICENTE C.
TORRES,
This Petition1 seeks to set aside the Decision of the Court of
JOSEPH L. NUÑEZ, GLORIA SERRANO, DANILO
Appeals,2 dated June 22, 1992, in CA-G.R. SP No. 25597, which
FABREGAS, FERNANDO T. TORRES,
declared null and void the Decision3 dated January 30, 1991 of the
LUZ G. TUBUNGBANUA, CARIDAD T. TUTANA, JOSE C. Regional Trial Court of Antipolo, Rizal, Branch 71, in LRC No.
TORRES, JR., 269-A, LRC Rec. No. N-59179, confirming the imperfect title of
petitioners over a parcel of land.
IMELDA CAYLALUAD, ROSALIE TUTANA, NORMA
ASTORIAS, MYRNA M. LANCION,
NORBERTO CAMILOTE, CECILIA MACARANAS, PEDRO The Facts
BRIONES,
REMEDIOS BANTIGUE, DANTE L. MONTEALEGRE, AIDA
On April 25, 1985, petitioner Edna T. Collado filed with the land
T. GADON, ARMANDO T. TORRES and FIDELITO ECO,
registration court an application for registration of a parcel of land
petitioners,
with an approximate area of 1,200,766 square meters or 120.0766
vs. hectares ("Lot" for brevity). The Lot is situated in Barangay San
Isidro (formerly known as Boso-boso), Antipolo, Rizal, and
COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES,
covered by Survey Plan Psu-162620. Attached to the application
thru the Director of Lands, respondents,
was the technical description of the Lot as Lot Psu-162620 signed
BOCKASANJO ISF AWARDEES ASSOCIATION, INC., by Robert C. Pangyarihan, Officer-in-Charge of the Survey
Division, Bureau of Lands, which stated, "[t]his survey is inside
LITA MENDOZA, MORADO PREFIDIGNO, TERESITA
IN-12 Mariquina Watershed." On March 24, 1986, petitioner Edna
CRUZ
T. Collado filed an Amended Application to include additional co-
and CALOMA MOISES, respondents/intervernors. applicants.4 Subsequently, more applicants joined (collectively
referred to as "petitioners" for brevity).5

DECISION
The Republic of the Philippines, through the Solicitor General, and
the Municipality of Antipolo, through its Municipal Attorney and
CARPIO, J.: the Provincial Fiscal of Rizal, filed oppositions to petitioners’
114
application. In due course, the land registration court issued an
order of general default against the whole world with the exception
of the oppositors.
Petitioners alleged that they have occupied the Lot since time
immemorial. Their possession has been open, public, notorious
and in the concept of owners. The Lot was surveyed in the name
of Sesinando Leyva, one of their predecessors-in-interest, as early
as March 22, 1902. Petitioners declared the Lot for taxation
purposes and paid all the corresponding real estate taxes.
According to them, there are now twenty-five co-owners in pro-
indiviso shares of five hectares each. During the hearings,
petitioners submitted evidence to prove that there have been nine
transfers of rights among them and their predecessors-in-interest,
as follows:
"1. SESINANDO LEYVA was the earliest known predecessor-in-
interest of the Applicants who was in actual, open, notorious and
continuous possession of the property in the concept of owner. He
had the property surveyed in his name on 22 March 1902 (Exhibit
"W" and "W-1" testimonies of J. Torres on 16 December 1987 and
Mariano Leyva on 29 December 1987).
2. DIOSDADO LEYVA, is the son of Sesinando Leyva, who
inherited the property. He had the property resurveyed in his name
on May 21-28, 1928 (Exhibit "X" and "X-1"; testimony of
Mariano Leyva, a son of Diosdado Leyva).
3. GREGORIO CAMANTIQUE bought the property from
Diosdado Leyva before the Japanese Occupation of the Philippines
during World War II. He owned and possessed the property until
1958. He declared the property for tax purposes, the latest of which
was under Tax Declaration No. 7182 issued on 3 February 1957
(Exhibit "I" and testimony of Mariano Leyva, supra).
4. ANGELINA REYNOSO, bought the property from Gregorio
Camantique by virtue of a Deed of Sale on 3 February 1958
(Exhibit "H"). During the ownership of the property by Angelina
Reynoso, Mariano Leyva the grandson of Sesinando Leyva, the
previous owner, attended to the farm. (Testimony of Mariano
Leyva, supra). Angelina Reynoso declared the property in her
name under Tax Declaration No. 7189 in 4 February 1958, under
Tax Declaration No. 8775 on 3 August 1965, under Tax
Declaration No. 16945 on 15 December 1975, and under Tax
Declaration No. 03-06145 on 25 June 1978.
5. MYRNA TORRES bought the property from Angelina Reynoso
on 16 October 1982 through a Deed of Sale (Exhibit "G").
6. EDNA COLLADO bought the property from Myrna Torres in
a Deed of Sale dated 28 April 1984 (Exhibit "P-1" to "P-3").
7. Additional owners BERNARDINA TAWAS, JORETO
TORRES, JOSE AMO, VICENTE TORRES and SERGIO
MONTEALEGRE who bought portions of the property from Edna
Collado through a Deed of Sale on 6 November 1985 (Exhibit "Q"
to "Q-3").
115
 The Trial Court’s Ruling
8. And more additional Owners JOSEPH NUNEZ, DIOSDADO
ARENOS, DANILO FABREGAS, FERNANDO TORRES, LUZ
After appraisal of the evidence submitted by petitioners, the land
TUBUNGBANUA, CARIDAD TUTANA, JOSE TORRES JR.,
registration court held that petitioners had adduced sufficient
RODRIGO TUTANA, ROSALIE TUTANA, NORMA
evidence to establish their registrable rights over the Lot.
ASTORIAS, MYRNA LANCION, CHONA MARCIANO,
Accordingly, the court rendered a decision confirming the
CECILIA MACARANAS, PEDRO BRIONES, REMEDIOS
imperfect title of petitioners. We quote the pertinent portions of
BANTIQUE, DANTE MONTEALEGRE, ARMANDO
the court’s decision, as follows:
TORRES, AIDA GADON and AMELIA M. MALAPAD bought
portions of the property in a Deed of Sale on 12 May 1986 (Exhibit
"S" to "S-3").
"From the evidence presented, the Court finds that from the
testimony of the witnesses presented by the Applicants, the
property applied for is in actual, open, public and notorious
9. Co-owners DIOSDADO ARENOS, RODRIGO TUTANA,
possession by the applicants and their predecessor-in-interest since
CHONA MARCIANO and AMELIA MALAPAD jointly sold
time immemorial and said possession had been testified to by
their shares to new OWNERS GLORIA R. SERRANO, IMELDA
witnesses Jimmy Torres, Mariano Leyva, Sergio Montealegre,
CAYLALUAD, NORBERTO CAMILOTE and FIDELITO ECO
Jose Amo and one Chona who were all cross-examined by Counsel
through a Deed of Sale dated 18 January 1987 (Exhibit "T" to "T-
for Oppositor Republic of the Philippines.
9")."6

Evidence was likewise presented that said property was declared

During the hearing on January 9, 1991, only the assistant
for taxation purposes in the names of the previous owners and the
provincial prosecutor appeared without the Solicitor General. For
corresponding taxes were paid by the Applicants and the previous
failure of the oppositors to present their evidence, the land
owners and said property was planted to fruit bearing trees;
registration court issued an order considering the case submitted
portions to palay and portions used for grazing purposes.
for decision based on the evidence of the petitioners. The court
later set aside the order and reset the hearing to January 14, 1991
for the presentation of the evidence of the oppositors. On this date,
To the mind of the Court, Applicants have presented sufficient
counsel for oppositors failed to appear again despite due notice.
evidence to establish registrable title over said property applied for
Hence, the court again issued an order submitting the case for
by them.
decision based on the evidence of the petitioners.

116
On the claim that the property applied for is within the Marikina
Watershed, the Court can only add that all Presidential
Proclamations like the Proclamation setting aside the Marikina
Watershed are subject to "private rights."
In the case of Municipality of Santiago vs. Court of Appeals, 120
SCRA 734, 1983 "private rights" is proof of acquisition through
(sic) among means of acquisition of public lands.
In the case of Director of Lands vs. Reyes, 68 SCRA 193-195, by
"private rights" means that applicant should show clear and
convincing evidence that the property in question was acquired by
applicants or their ancestors either by composition title from the
Spanish government or by Possessory Information title, or any
other means for the acquisition of public lands xxx" (underscoring
supplied).
The Court believes that from the evidence presented as above
stated, Applicants have acquired private rights to which the
Presidential Proclamation setting aside the Marikina Watershed
should be subject to such private rights.
At any rate, the Court notes that evidence was presented by the
applicants that as per Certification issued by the Bureau of Forest
Development dated March 18, 1980, the area applied for was
verified to be within the area excluded from the operation of the
Marikina Watershed Lands Executive Order No. 33 dated July 26,
1904 per Proclamation No. 1283 promulgated on June 21, 1974
which established the Boso-boso Town Site Reservation, amended
by Proclamation No. 1637 dated April 18, 1977 known as the
Lungsod Silangan Townsite Reservation. (Exhibit "K")."7
In a motion dated April 5, 1991, received by the Solicitor General
on April 6, 1991, petitioners alleged that the decision dated
January 30, 1991 confirming their title had become final after the
Solicitor General received a copy of the decision on February 18,
1991. Petitioners prayed that the land registration court order the
Land Registration Authority to issue the necessary decree in their
favor over the Lot.
On April 11, 1991, the Solicitor General inquired from the
Provincial Prosecutor of Rizal whether the land registration court
had already rendered a decision and if so, whether the Provincial
Prosecutor would recommend an appeal. However, the Provincial
Prosecutor failed to answer the query.
According to the Solicitor General, he received on April 23, 1991
a copy of the land registration court’s decision dated January 30,
1991, and not on February 18, 1991 as alleged by petitioners in
their motion.
In the meantime, on May 7, 1991, the land registration court issued
an order directing the Land Regulation Authority to issue the
corresponding decree of registration in favor of the petitioners.
On August 6, 1991, the Solicitor General filed with the Court of
Appeals a Petition for Annulment of Judgment pursuant to Section
117
9(2) of BP Blg. 129 on the ground that there had been no clear
showing that the Lot had been previously classified as alienable
and disposable making it subject to private appropriation.
On November 29, 1991, Bockasanjo ISF Awardees Association,
Inc., an association of holders of certificates of stewardship issued
by the Department of Environment and Natural Resources
("DENR" for brevity) under its Integrated Social Forestry Program
("ISF" for brevity), filed with the Court of Appeals a Motion for
Leave to Intervene and to Admit Petition-In-Intervention. They
likewise opposed the registration and asserted that the Lot, which
is situated inside the Marikina Watershed Reservation, is
inalienable. They claimed that they are the actual occupants of the
Lot pursuant to the certificates of stewardship issued by the DENR
under the ISF for tree planting purposes.
The Court of Appeals granted the motion to intervene verbally
during the preliminary conference held on April 6, 1992. During
the preliminary conference, all the parties as represented by their
respective counsels agreed that the only issue for resolution was
whether the Lot in question is part of the public domain.8
The Court of Appeals’ Ruling
In a decision dated June 22, 1992, the Court of Appeals granted
the petition and declared null and void the decision dated January
30, 1991 of the land registration court. The Court of Appeals
explained thus:
"Under the Regalian Doctrine, which is enshrined in the 1935 (Art.
XIII, Sec. 1), 1973 (Art. XIV, Sec. 8), and 1987 Constitution (Art.
XII, Sec. 2), all lands of the public domain belong to the State. An
applicant, like the private respondents herein, for registration of a
parcel of land bears the burden of overcoming the presumption that
the land sought to be registered forms part of the public domain
(Director of Lands vs. Aquino, 192 SCRA 296).
A positive Act of government is needed to declassify a public land
and to convert it into alienable or disposable land for agricultural
or other purposes (Republic vs. Bacas, 176 SCRA 376).
In the case at bar, the private respondents failed to present any
evidence whatsoever that the land applied for as described in Psu-
162620 has been segregated from the bulk of the public domain
and declared by competent authority to be alienable and
disposable. Worse, the technical description of Psu-162620 signed
by Robert C. Pangyarihan, Officer-in-Charge, Survey Division,
Bureau of Lands, which was attached to the application of private
respondents, categorically stated that "This survey is inside IN-12
Mariquina Watershed.""
That the land in question is within the Marikina Watershed
Reservation is confirmed by the Administrator of the National
Land Titles and Deeds in a Report, dated March 2, 1988, submitted
to the respondent Court in LR Case No. 269-A. These documents
readily and effectively negate the allegation in private respondent
Collado’s application that "said parcel of land known as Psu-
162620 is not covered by any form of title, nor any public land
application and are not within any government reservation (Par. 8,
118
Application; Emphasis supplied). The respondent court could not The Issues
have missed the import of these vital documents which are binding
upon the courts inasmuch as it is the exclusive prerogative of the
Executive Department to classify public lands. They should have The issues raised by petitioners are restated as follows:
forewarned the respondent judge from assuming jurisdiction over
the case.
I

"x x x inasmuch as the said properties applied for by petitioners

are part of the public domain, it is the Director of Lands who has WHETHER THE COURT OF APPEALS ERRED OR
jurisdiction in the disposition of the same (subject to the approval GRAVELY ABUSED ITS DISCRETION IN REVERSING THE
of the Secretary of Natural Resources and Environment), and not DECISION OF THE TRIAL COURT GRANTING THE
the courts. x x x Even assuming that petitioners did have the said APPLICATION OF THE PETITIONERS FOR
properties surveyed even before the same was declared to be part CONFIRMATION OF TITLE;
of the Busol Forest Reservation, the fact remains that it was so
converted into a forest reservation, thus it is with more reason that
this action must fail. Forest lands are inalienable and possession II
thereof, no matter how long, cannot convert the same into private
property. And courts are without jurisdiction to adjudicate lands
within the forest zone. (Heirs of Gumangan vs. Court of Appeals. WHETHER THE COURT OF APPEALS ERRED OR
172 SCRA 563; Emphasis supplied). GRAVELY ABUSED ITS DISCRETION IN GIVING DUE
COURSE TO THE PETITION FOR ANNULMENT OF
JUDGMENT FILED BY THE REPUBLIC LONG AFTER THE
Needless to say, a final judgment may be annulled on the ground DECISION OF THE TRIAL COURT HAD BECOME FINAL;
of lack of jurisdiction, fraud or that it is contrary to law (Panlilio
vs. Garcia, 119 SCRA 387, 391) and a decision rendered without
jurisdiction is a total nullity and may be struck down at any time III
(Suarez vs. Court of Appeals, 186 SCRA 339)."9

WHETHER THE COURT OF APPEALS ERRED OR

Hence, the instant petition. GRAVELY ABUSED ITS DISCRETION IN GIVING DUE
COURSE TO THE INTERVENORS’ PETITION FOR
INTERVENTION WHICH WAS FILED OUT OF TIME OR

119
LONG AFTER THE DECISION OF THE TRIAL COURT HAD
BECOME FINAL.
Petitioners’ arguments find no basis in law.

The Court’s Ruling

The Regalian Doctrine: An Overview

The petition is bereft of merit.

Under the Regalian Doctrine, all lands not otherwise appearing to
be clearly within private ownership are presumed to belong to the
State.11 The Spaniards first introduced the doctrine to the
First Issue: whether petitioners have registrable title over the Lot.
Philippines through the Laws of the Indies and the Royal Cedulas,
specifically, Law 14, Title 12, Book 4 of the Novisima
Recopilacion de Leyes de las Indias12 which laid the foundation
There is no dispute that Executive Order No. 33 ("EO 33" for
that "all lands that were not acquired from the Government, either
brevity) dated July 26, 190410 established the Marikina
by purchase or by grant, belong to the public domain."13 Upon the
Watershed Reservation ("MWR" for brevity) situated in the
Spanish conquest of the Philippines, ownership of all "lands,
Municipality of Antipolo, Rizal. Petitioners even concede that the
territories and possessions" in the Philippines passed to the
Lot, described as Lot Psu-162620, is inside the technical, literal
Spanish Crown.14
description of the MWR. However, the main thrust of petitioners’
claim over the Lot is that "all Presidential proclamations like the
proclamation setting aside the Marikina Watershed Reservation
The Laws of the Indies were followed by the Ley Hipotecaria or
are subject to private rights." They point out that EO 33 contains a
the Mortgage Law of 1893. The Spanish Mortgage Law provided
saving clause that the reservations are "subject to existing private
for the systematic registration of titles and deeds as well as
rights, if any there be." Petitioners contend that their claim of
possessory claims. The Royal Decree of 1894 or the "Maura Law"
ownership goes all the way back to 1902, when their known
partly amended the Mortgage Law as well as the Law of the Indies.
predecessor-in-interest, Sesinando Leyva, laid claim and
The Maura Law was the last Spanish land law promulgated in the
ownership over the Lot. They claim that the presumption of law
Philippines. It required the "adjustment" or registration of all
then prevailing under the Philippine Bill of 1902 and Public Land
agricultural lands, otherwise the lands would revert to the state.15
Act No. 926 was that the land possessed and claimed by
individuals as their own are agricultural lands and therefore
alienable and disposable. They conclude that private rights were
Four years later, Spain ceded to the government of the United
vested on Sesinando Leyva before the issuance of EO 33, thus
States all rights, interests and claims over the national territory of
excluding the Lot from the Marikina Watershed Reservation.
the Philippine Islands through the Treaty of Paris of December 10,
120
1898. In 1903, the United States colonial government, through the
Philippine Commission, passed Act No. 926, the first Public Land
Act, which was described as follows:
"Act No. 926, the first Public Land Act, was passed in pursuance
of the provisions of the Philippine Bill of 1902. The law governed
the disposition of lands of the public domain. It prescribed rules
and regulations for the homesteading, selling and leasing of
portions of the public domain of the Philippine Islands, and
prescribed the terms and conditions to enable persons to perfect
their titles to public lands in the Islands. It also provided for the
"issuance of patents to certain native settlers upon public lands,"
for the establishment of town sites and sale of lots therein, for the
completion of imperfect titles, and for the cancellation or
confirmation of Spanish concessions and grants in the Islands." In
short, the Public Land Act operated on the assumption that title to
public lands in the Philippine Islands remained in the government;
and that the government’s title to public land sprung from the
Treaty of Paris and other subsequent treaties between Spain and
the United States. The term "public land" referred to all lands of
the public domain whose title still remained in the government and
are thrown open to private appropriation and settlement, and
excluded the patrimonial property of the government and the friar
lands."16
Thus, it is plain error for petitioners to argue that under the
Philippine Bill of 1902 and Public Land Act No. 926, mere
possession by private individuals of lands creates the legal
presumption that the lands are alienable and disposable.
Act 2874, the second Public Land Act, superseded Act No. 926 in
1919. After the passage of the 1935 Constitution, Commonwealth
Act No. 141 ("CA 141" for brevity) amended Act 2874 in 1936.
CA 141, as amended, remains to this day as the existing general
law governing the classification and disposition of lands of the
public domain other than timber and mineral lands.17
In the meantime, in order to establish a system of registration by
which recorded title becomes absolute, indefeasible and
imprescriptible, the legislature passed Act 496, otherwise known
as the Land Registration Act, which took effect on February 1,
1903. Act 496 placed all registered lands in the Philippines under
the Torrens system.18 The Torrens system requires the
government to issue a certificate of title stating that the person
named in the title is the owner of the property described therein,
subject to liens and encumbrances annotated on the title or
reserved by law. The certificate of title is indefeasible and
imprescriptible and all claims to the parcel of land are quieted upon
issuance of the certificate.19 PD 1529, known as the Property
Registration Decree enacted on June 11, 1978,20 amended and
updated Act 496.
The 1935, 1973, 1987 Philippine Constitutions
The 1935, 1973 and 1987 Constitutions adopted the Regalian
doctrine substituting, however, the state, in lieu of the King, as the
owner of all lands and waters of the public domain.21 Justice
Reynato S. Puno, in his separate opinion in Cruz vs. Secretary of
Environment and Natural Resources,22 explained thus:
121
"One of the fixed and dominating objectives of the 1935
Constitutional Convention was the nationalization and
Watershed Reservation is a Natural Resource
conservation of the natural resources of the country. There was an
overwhelming sentiment in the Convention in favor of the
principle of state ownership of natural resources and the adoption
The term "natural resource" includes "not only timber, gas, oil
of the Regalian doctrine. State ownership of natural resources was
coal, minerals, lakes, and submerged lands, but also, features
seen as a necessary starting point to secure recognition of the
which supply a human need and contribute to the health, welfare,
state’s power to control their disposition, exploitation,
and benefit of a community, and are essential to the well-being
development, or utilization. The delegates to the Constitutional
thereof and proper enjoyment of property devoted to park and
Convention very well knew that the concept of State ownership of
recreational purposes."26
land and natural resources was introduced by the Spaniards,
however, they were not certain whether it was continued and
applied by the Americans. To remove all doubts, the Convention
In Sta. Rosa Realty Development Corp. vs. Court of Appeals, et
approved the provision in the Constitution affirming the Regalian
al.,27 the Court had occasion to discourse on watershed areas. The
doctrine."
Court resolved the issue of whether the parcel of land which the
Department of Environment and Natural Resources had assessed
to be a watershed area is exempt from the coverage of RA No.
Thus, Section 1, Article XIII23 of the 1935 Constitution, on
6657 or the Comprehensive Agrarian Reform Law ("CARL" for
"Conservation and Utilization of Natural Resources" barred the
brevity).28 The Court defined watershed as "an area drained by a
alienation of all natural resources except public agricultural lands,
river and its tributaries and enclosed by a boundary or divide
which were the only natural resources the State could alienate. The
which separates it from adjacent watersheds." However, the Court
1973 Constitution reiterated the Regalian doctrine in Section 8,
also recognized that:
Article XIV24 on the "National Economy and the Patrimony of the
Nation". The 1987 Constitution reaffirmed the Regalian doctrine
in Section 2 of Article XII25 on "National Economy and
"The definition does not exactly depict the complexities of a
Patrimony".
watershed. The most important product of a watershed is water
which is one of the most important human necessit(ies). The
protection of watershed ensures an adequate supply of water for
Both the 1935 and 1973 Constitutions prohibited the alienation of
future generations and the control of flashfloods that not only
all natural resources except agricultural lands of the public
damage property but also cause loss of lives. Protection of
domain. The 1987 Constitution readopted this policy. Indeed, all
watersheds is an "intergenerational" responsibility that needs to be
lands of the public domain as well as all natural resources
answered now."
enumerated in the Philippine Constitution belong to the State.

122
 mean destruction of forest covers which acts as recharged areas of
the Matangtubig springs. Considering that the people have little if
Article 67 of the Water Code of the Philippines (PD 1067)
no direct interest in the protection of the Matangtubig structures
provides:
they couldn’t care less even if it would be destroyed.

"Art. 67. Any watershed or any area of land adjacent to any surface
The Casile and Kabanga-an watersheds can be considered a most
water or overlying any ground water may be declared by the
vital life support system to thousands of inhabitants directly and
Department of Natural Resources as a protected area. Rules and
indirectly affected by it. From these watersheds come the natural
Regulations may be promulgated by such Department to prohibit
God-given precious resource – water. x x x
or control such activities by the owners or occupants thereof within
the protected area which may damage or cause the deterioration of
the surface water or ground water or interfere with the
Clearing and tilling of the lands are totally inconsistent with sound
investigation, use, control, protection, management or
watershed management. More so, the introduction of earth
administration of such waters."
disturbing activities like road building and erection of permanent
infrastructures. Unless the pernicious agricultural activities of the
Casile farmers are immediately stopped, it would not be long
The Court in Sta. Rosa Realty also recognized the need to protect
before these watersheds would cease to be of value. The impact of
watershed areas and took note of the report of the Ecosystems
watershed degradation threatens the livelihood of thousands of
Research and Development Bureau (ERDB), a research arm of the
people dependent upon it. Toward this, we hope that an acceptable
DENR, regarding the environmental assessment of the Casile and
comprehensive watershed development policy and program be
Kabanga-an river watersheds involved in that case. That report
immediately formulated and implemented before the irreversible
concluded as follows:
damage finally happens."

"The Casile barangay covered by CLOA in question is situated in

The Court remanded the case to the Department of Agriculture and
the heartland of both watersheds. Considering the barangays
Adjudication Board or DARAB to re-evaluate and determine the
proximity to the Matangtubig waterworks, the activities of the
nature of the parcels of land involved in order to resolve the issue
farmers which are in conflict with proper soil and water
of its coverage by the CARL.
conservation practices jeopardize and endanger the vital
waterworks. Degradation of the land would have double edge
detrimental effects. On the Casile side this would mean direct
Sta. Rosa Realty gives us a glimpse of the dangers posed by the
siltation of the Mangumit river which drains to the water
misuse of natural resources such as watershed reservations which
impounding reservoir below. On the Kabanga-an side, this would
123
are akin to forest zones. Population growth and industrialization
have taken a heavy toll on the environment. Environmental
degradation from unchecked human activities could wreak havoc
on the lives of present and future generations. Hence, by
constitutional fiat, natural resources remain to this day inalienable
properties of the State.
Viewed under this legal and factual backdrop, did petitioners
acquire, as they vigorously argue, private rights over the parcel of
land prior to the issuance of EO 33 segregating the same as a
watershed reservation?
The answer is in the negative.
First. An applicant for confirmation of imperfect title bears the
burden of proving that he meets the requirements of Section 48 of
CA 141, as amended. He must overcome the presumption that the
land he is applying for is part of the public domain and that he has
an interest therein sufficient to warrant registration in his name
arising from an imperfect title. An imperfect title may have been
derived from old Spanish grants such as a titulo real or royal grant,
a concession especial or special grant, a composicion con el estado
or adjustment title, or a titulo de compra or title through
purchase.29 Or, that he has had continuous, open and notorious
possession and occupation of agricultural lands of the public
domain under a bona fide claim of ownership for at least thirty
years preceding the filing of his application as provided by Section
48 (b) CA 141.
Originally, Section 48(b) of CA 141 provided for possession and
occupation of lands of the public domain since July 26, 1894. This
was superseded by RA 1942 which provided for a simple thirty-
year prescriptive period of occupation by an applicant for judicial
confirmation of an imperfect title. The same, however, has already
been amended by Presidential Decree No. 1073, approved on
January 25, 1977, the law prevailing at the time petitioners’
application for registration was filed on April 25, 1985.30 As
amended, Section 48 (b) now reads:
"(b) Those who by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive and notorious
possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition or ownership, for
at least thirty years immediately preceding the filing of the
application for confirmation of title, except when prevented by
wars or force majeure. Those shall be conclusively presumed to
have performed all the conditions essential to a Government grant
and shall be entitled to a certificate of title under the provisions of
this chapter."
Interpreting Section 48 (b) of CA 141, the Court stated that the
Public Land Act requires that the applicant must prove the
following:
"(a) that the land is alienable public land and (b) that his open,
continuous, exclusive and notorious possession and occupation of
the same must either be since time immemorial or for the period
prescribed in the Public Land Act. When the conditions set by law
are complied with, the possessor of the land, by operation of law,
124
acquires a right to a grant, a government grant, without the
necessity of a certificate of title being issued."31
Petitioners do not claim to have documentary title over the Lot.
Their right to register the Lot is predicated mainly upon continuous
possession since 1902.
Clearly, petitioners were unable to acquire a valid and enforceable
right or title because of the failure to complete the required period
of possession, whether under the original Section 48 (b) of CA 141
prior to the issuance of EO 33, or under the amendment by RA
1942 and PD 1073.
There is no proof that prior to the issuance of EO 33 in 1904,
petitioners had acquired ownership or title to the Lot either by deed
or by any other mode of acquisition from the State, as for instance
by acquisitive prescription. As of 1904, Sesinando Leyva had only
been in possession for two years. Verily, petitioners have not
possessed the parcel of land in the manner and for the number of
years required by law for the confirmation of imperfect title.
Second, assuming that the Lot was alienable and disposable land
prior to the issuance of EO 33 in 1904, EO 33 reserved the Lot as
a watershed. Since then, the Lot became non-disposable and
inalienable public land. At the time petitioners filed their
application on April 25, 1985, the Lot has been reserved as a
watershed under EO 33 for 81 years prior to the filing of
petitioners’ application.
The period of occupancy after the issuance of EO 33 in 1904 could
no longer be counted because as a watershed reservation, the Lot
was no longer susceptible of occupancy, disposition, conveyance
or alienation. Section 48 (b) of CA 141, as amended, applies
exclusively to alienable and disposable public agricultural land.
Forest lands, including watershed reservations, are excluded. It is
axiomatic that the possession of forest lands or other inalienable
public lands cannot ripen into private ownership. In Municipality
of Santiago, Isabela vs. Court of Appeals,32 the Court declared
that inalienable public lands -
"x x x cannot be acquired by acquisitive prescription. Prescription,
both acquisitive and extinctive, does not run against the State.
‘The possession of public land, however long the period may have
extended, never confers title thereto upon the possessor because
the statute of limitations with regard to public land does not
operate against the State, unless the occupant can prove possession
and occupation of the same under claim of ownership for the
required number of years to constitute a grant from the State.’ "
Third, Gordula vs. Court of Appeals33 is in point. In Gordula,
petitioners did not contest the nature of the land. They admitted
that the land lies in the heart of the Caliraya-Lumot River Forest
Reserve, which Proclamation No. 573 classified as inalienable.
The petitioners in Gordula contended, however, that Proclamation
No. 573 itself recognizes private rights of landowners prior to the
reservation. They claim to have established their private rights to
the subject land. The Court ruled:
125
"We do not agree. No public land can be acquired by private
persons without any grant, express or implied from the
government; it is indispensable that there be a showing of a title
from the state. The facts show that petitioner Gordula did not
acquire title to the subject land prior to its reservation under
Proclamation No. 573. He filed his application for free patent only
in January, 1973, more than three (3) years after the issuance of
Proclamation No. 573 in June, 1969. At that time, the land, as part
of the Caliraya-Lumot River Forest Reserve, was no longer open
to private ownership as it has been classified as public forest
reserve for the public good.
Nonetheless, petitioners insist that the term, "private rights," in
Proclamation No. 573, should not be interpreted as requiring a
title. They opine that it suffices if the claimant "had occupied and
cultivated the property for so many number of years, declared the
land for taxation purposes, [paid] the corresponding real estate
taxes [which are] accepted by the government, and [his]
occupancy and possession [is] continuous, open and unmolested
and recognized by the government. Prescinding from this premise,
petitioners urge that the 25-year possession by petitioner Gordula
from 1944 to 1969, albeit five (5) years short of the 30-year
possession required under Commonwealth Act (C.A.) No. 141, as
amended, is enough to vest upon petitioner Gordula the "private
rights" recognized and respected in Proclamation No. 573.
The case law does not support this submission. In Director of
Lands vs. Reyes, we held that a settler claiming the protection of
"private rights" to exclude his land from a military or forest
reservation must show "x x x by clear and convincing evidence
that the property in question was acquired by [any] x x x means
for the acquisition of public lands."
In fine, one claiming "private rights" must prove that he has
complied with C.A. No. 141, as amended, otherwise known as the
Public Land Act, which prescribes the substantive as well as the
procedural requirements for acquisition of public lands. This law
requires at least thirty (30) years of open, continuous, exclusive
and notorious possession and possession of agricultural lands of
the public domain, under a bona fide claim of acquisition,
immediately preceding the filing of the application for free patent.
The rationale for the 30-year period lies in the presumption that
the land applied for pertains to the State, and that the occupants
and/or possessors claim an interest therein only by virtue of their
imperfect title or continuous, open and notorious possession."
Next, petitioners argue that assuming no private rights had
attached to the Lot prior to EO 33 in 1904, the President of the
Philippines had subsequently segregated the Lot from the public
domain and made the Lot alienable and disposable when he issued
Proclamation No. 1283 on June 21, 1974. Petitioners contend that
Proclamation No. 1283 expressly excluded an area of 3,780
hectares from the MWR and made the area part of the Boso-boso
Townsite Reservation. Petitioners assert that Lot Psu-162620 is a
small part of this excluded town site area. Petitioners further
contend that town sites are considered alienable and disposable
under CA 141.
Proclamation No. 1283 reads thus:
126
"PROCLAMATION NO. 1283
EXCLUDING FROM THE OPERATION EXECUTIVE ORDER
NO. 33, DATED JULY 26, 1904, AS AMENDED BY
EXECUTIVE ORDERS NOS. 14 AND 16, BOTH SERIES OF
1915, WHICH ESTABLISHED THE WATERSHED
RESERVATION SITUATED IN THE MUNICIPALITY OF
ANTIPOLO, PROVINCE OF RIZAL, ISLAND OF LUZON, A
CERTAIN PORTION OF THE LAND EMBRACED THEREIN
AND RESERVING THE SAME, TOGETHER WITH THE
ADJACENT PARCEL OF LAND OF THE PUBLIC DOMAIN,
FOR TOWNSITE PURPOSES UNDER THE PROVISIONS OF
CHAPTER XI OF THE PUBLIC LAND ACT.
Upon recommendation of the Secretary of Agriculture and Natural
Resources and pursuant to the authority vested in me by law, I,
FERDINAND E. MARCOS, President of the Philippines, do
hereby, exclude from the operation of Executive Order No. 33
dated July 26, 1904, as amended by Executive Orders Nos. 14 and
16, both series of 1915, which established the Watershed
Reservation situated in the Municipality of Antipolo, Province of
Rizal, Island of Luzon, certain portions of land embraced therein
and reserve the same, together with the adjacent parcel of land of
the public domain, for townsite purposes under the provisions of
Chapter XI of the Public Land Act, subject to private rights, if any
there be, and to future subdivision survey in accordance with the
development plan to be prepared and approved by the Department
of Local Government and Community Development, which
parcels are more particularly described as follows:
Lot A (Part of Watershed Reservation)
A parcel of land (Lot A of Proposed Poor Man’s Baguio, being a
portion of the Marikina Watershed, IN-2), situated in the
municipality of Antipolo, Province of Rizal, Island of Luzon,
beginning at a point marked "1" on sketch plan, being N-74’-30 E,
8480.00 meters more or less, from BLLM 1, Antipolo, Rizal;
thence N 33’ 28 W 1575.00 m. to point 2; thence N 40’ 26 W
1538.50 m. to point 3; thence N 30’ 50W 503.17 m. to point 4;
thence N 75’ 02 W 704.33 m. to point 5; thence N 14’ 18 W
1399.39 m. to point 6; thence N 43’ 25 W 477.04 m. to point 7;
thence N 71’ 38 W 458.36 m. to point 8; thence N 31’ 05 W
1025.00 m. to point 9; thence Due North 490.38 m. to point 10;
thence Due North 1075.00 m. to point 11; thence Due East 1000.00
m. to point 12; thence Due East 1000.00 m. to point 13; thence
Due East 1000.00 m. to point 14; thence Due East 1000.00 m. to
point 15; thence Due East 1000.00 m. to point 16; thence Due East
1000.00 m. to point 17; thence Due East 1075.00 m. to point 18;
thence Due South 1000.00 m. to point 19; thence Due South
1000.00 m. to point 20; thence Due South 1000.00 m. to point 21;
thence Due South 1000.00 m. to point 22; thence Due South
1000.00 m. to point 23; thence Due South 1000.00 m. to point 24;
thence Due South 1075.00 m. to point 25; thence Due West
1000.00 m. to point 26; thence Due West 1000.00 m. to point 27;
thence Due West 636.56 m. to point of beginning. Containing an
area of three thousand seven hundred eighty (3,780) Hectares,
more or less.
Lot B (Alienable and Disposable Land)
127
A parcel of land (Lot B of Proposed Poor Man’s Baguio, being a
portion of alienable and disposable portion of public domain)
situated in the municipality of Antipolo, Province of Rizal, Island
of Luzon. Beginning at a point marked "1" on sketch plan being N
74’ 30 E., 8430.00 m., more or less, from BLLM 1. Antipolo,
Rizal; thence Due West 363.44 m. to point 2; thence Due West
1000.00 m. to point 3; thence Due West 100.00 m. to point 4;
thence Due West 1000.00 m. to point 5; thence Due West 1075.00
m. to point 6; thence Due North 1000.00 m. to point 7; thence Due
North 1000.00 m. to point 8; thence Due North 1000.00 m. to point
9; thence Due North 1000.00 m. to point 10; thence Due North
1000.00 m. to point 11; thence Due North 509.62 m. to point 12;
thence S. 31’ 05 E 1025.00 m. to point 13; thence S 71’ 38 E
458.36 m. to point 14; thence S 43’ 25 E 477.04 m. to point 15;
thence S 14’ 18 E 1399.39 m. to point 16; thence S 75’ 02 E 704.33
m. to point 17; thence S. 30’ 50 E 503.17 m. to point 18; thence S
40’ 26 E 1538.50 m. to point 19; thence s 33’ 23 e 1575.00 m to
point of beginning. Containing an area of one thousand two
hundred twenty five (1,225) Hectares, more or less.
Note: All data are approximate and subject to change based on
future survey.
IN WITNESS WHEREOF, I Have hereunto set my hand and
caused the seal of the Republic of the Philippines to be affixed.
Done in the City of Manila, this 21st day of June, in the year of
Our Lord, nineteen hundred and seventy-four.
(Sgd.) FERDINAND E. MARCOS
President
Republic of the Philippines"
Proclamation No. 1283 has since been amended by Proclamation
No. 1637 issued on April 18, 1977. Proclamation No. 1637 revised
the area and location of the proposed townsite. According to then
DENR Secretary Victor O. Ramos, Proclamation No. 1637
excluded Lot A (of which the Lot claimed by petitioners is part)
for townsite purposes and reverted it to MWR coverage.34
Proclamation No. 1637 reads:
"PROCLAMATION NO. 1637
AMENDING PROCLAMATION NO. 1283, DATED JUNE 21,
1974, WHICH ESTABLISHED THE TOWNSITE
RESERVATION IN THE MUNICIPALITIES OF ANTIPOLO
AND SAN MATEO, PROVINCE OF RIZAL, ISLAND OF
LUZON BY INCREASING THE AREA AND REVISING THE
TECHNICAL DESCRIPTION OF THE LAND EMBRACED
THEREIN, AND REVOKING PROCLAMATION NO. 765
DATED OCTOBER 26, 1970 THAT RESERVED PORTIONS
OF THE AREA AS RESETTLEMENT SITE.
Upon recommendation of the Secretary of Natural Resources and
pursuant to the authority vested in me by law, I, FERDINAND E.
MARCOS, President of the Philippines, do hereby amend
Proclamation No. 1283, dated June 21, 1974 which established the
128
townsite reservation in the municipalities of Antipolo and San
Mateo, Province of Rizal, Island of Luzon, by increasing the area
and revising the technical descriptions of the land embraced
therein, subject to private rights, if any there be, which parcel of
land is more particularly described as follows:
(Proposed Lungsod Silangan Townsite)
Proclamation No. 765 dated October 26, 1970, which covered
areas entirely within the herein Lungsod Silangan Townsite, is
hereby revoked accordingly.
IN WITNESS WHEREOF, I have hereunto set my hand and
caused the seal of the Republic of the Philippines to be affixed.

Done in the City of Manila, this 18th day of April, in the year of
A PARCEL OF LAND (Proposed Lungsod Silangan Townsite Our Lord, nineteen hundred and seventy-seven.
Reservation amending the area under SWO-41762 establishing the
Bagong Silangan Townsite Reservation) situated in the
Municipalities of Antipolo, San Mateo, and Montalban, Province (Sgd.) FERDINAND E. MARCOS
of Rizal, Island of Luzon. Bounded on the E., along lines 1-2-3-4-
President of the Philippines"
5-6-7-8-9-10-11-12-13-14-15-16-17-18-19-20-21-22-23 by the
Marikina Watershed Reservation (IN-12); on the S., along lines
23-24-25 by the portion of Antipolo; on the W., along lines 25-26-
A positive act (e.g., an official proclamation) of the Executive
27-28-29-30 by the Municipalities of Montalban, San Mateo; and
Department is needed to declassify land which had been earlier
on the N., along lines 30-31-32-33-34-35-36-37-38-39-40-41-42-
classified as a watershed reservation and to convert it into
43-44 by the Angat Watershed Reservation. Beginning at a point
alienable or disposable land for agricultural or other purposes.35
marked "1" on the Topographic Maps with the Scale of 1:50,000
Unless and until the land classified as such is released in an official
which is the identical corner 38 IN-12, Marikina Watershed
proclamation so that it may form part of the disposable agricultural
Reservation.
lands of the public domain, the rules on confirmation of imperfect
title do not apply.36
xxx xxx xxx
The principal document presented by petitioners to prove the
private character of the Lot is the Certification of the Bureau of
NOTE: All data are approximate and subject to change based on
Forest Development dated March 18, 1986 that the Lot is excluded
future survey.
from the Marikina Watershed (Exh. R). The Certification reads:

129
"Republic of the Philippines Subject area also falls within the bounds of Bagong Lipunan Site
under P.D. 1396 dated June 2, 1978 under the sole jurisdiction of
Ministry of Natural Resources
the Ministry of Human Settlements, to the exclusion of any other
government agencies.
BUREAU OF FOREST DEVELOPMENT
REGION IV This verification is made upon the request of the Chief, Legal
Staff, R-4 as contained in his internal memorandum dated March
EL – AL Building
18, 1986.
100 Quezon Avenue, Quezon City

Verified by:
MAR 18 1986

(Sgd) ROMEO C. PASCUBILLO

VERIFICATION ON THE STATUS OF LAND:
Cartographer II

TO WHOM IT MAY CONCERN:

Checked by:

This is to certify that the tract of land situated in Barangay San

(Sgd) ARMENDO R. CRUZ
Isidro, Antipolo, Rizal, containing an area of 1,269,766 square
meters, as shown and described on the reverse side hereof, Supervising Cartographer
surveyed by Geodetic Engineer Telesforo Cabading for Angelina
C. Reynoso, is verified to be within the area excluded from the
operation of Marikina Watershed Reservation established under ATTESTED:
Executive Order No. 33 dated July 26, 1904 per Proclamation No.
1283, promulgated on June 21, 1974, which established the Boso-
Boso Townsite Reservation, amended by proclamation No. 1637 (Sgd) LUIS G. DACANAY
dated April 18, 1977 known as Lungsod Silangan Townsite
Chief, Forest Engineering & Infrastructure Section"
Reservation.

130
The above certification on which petitioners rely that a
reclassification had occurred, and that the Lot is covered by the
"WHEREFORE, this matter is respectfully submitted to the
reclassification, is contradicted by several documents submitted
Honorable Court for its information and guidance with the
by the Solicitor General before the land registration court.
recommendation that the application in the instant proceedings be
dismissed, after due hearing (Underlining supplied)."
The Solicitor General submitted to the land registration court a
Report37 dated March 2, 1988, signed by Administrator Teodoro
Likewise, in a letter38 dated November 11, 1991, the Deputy Land
G. Bonifacio of the then National Land Titles and Deeds
Inspector, DENR, Region IV, Community Environment and
Registration Administration, confirming that the Lot described in
Natural Resources Office, Antipolo, Rizal, similarly confirmed
Psu-162620 forms part of the MWR. He thus recommended the
that the Lot is within the MWR. The letter states:
dismissal of the application for registration. The Report states:

"That the land sought to be registered is situated at San Isidro

"COMES NOW the Administrator of the National Land Titles and
(Boso-boso), Antipolo, Rizal, with an area of ONE HUNDRED
Deeds Registration Commission and to this Honorable Court
TWENTY SIX POINT ZERO SEVEN SIXTY SIX (126.0766)
respectfully reports that:
hectares, more particularly described in Psu-162620, which is
within the Marikina Watershed Reservation under Executive
Order No. 33 dated July 2, 1904 which established the Marikina
1. A parcel of land described in plan Psu-162620 situated in the
Watershed Reservation (IN-12) x x x.
Barrio of San Isidro, Municipality of Antipolo, Province of Rizal,
is applied for registration of title in the case at bar.
"x x x
2. After plotting plan Psu-162620 in our Municipal Index Map it
was found that a portion of the SW, described as Lot 3 in plan Psu-
"That the land sought to be registered is not a private property of
173790 was previously the subject of registration in Land Reg.
the Registration Applicant but part of the public domain, not
Case No. N-9578, LRC Record No. N-55948 and was issued
subjected to disposition and is covered by Proclamation No. 585
Decree No. N-191242 on April 4, 1986 in the name of Apolonia
for Integrated Social Forestry Program hence, L.R.C. No. 269-A
Garcia, et al., pursuant to the Decision and Order for Issuance of
is recommended for rejection (Underlining supplied)." Copy of the
the Decree dated February 8, 1984 and March 6, 1984,
letter is attached herewith as Annex "3" and made an integral part
respectively, and the remaining portion of plan Psu-162620 is
hereof."
inside IN-12, Marikina Watershed. x x x

131
 Proclamation No. 1637 on April 18, 1977. According to then
DENR Secretary Victor Ramos, Proclamation No. 1637 reverted
Lastly, the Solicitor General pointed out that attached to petitioner
Lot A or the townsite reservation, where petitioners' Lot is
Edna T. Collado’s [as original applicant] application is the
supposedly situated, back to the MWR.
technical description39 of the Lot signed by Robert C.
Pangyarihan, Officer-in-Charge of the Survey Division of the
Bureau of Lands. This technical description categorically stated
Finally, it is of no moment if the areas of the MWR are now fairly
that the Lot "is inside IN-12 Mariquina Watershed."
populated and vibrant communities as claimed by petitioners. The
following ruling may be applied to this case by analogy:
The evidence of record thus appears unsatisfactory and insufficient
to show clearly and positively that the Lot had been officially
"A forested area classified as forest land of the public domain does
released from the Marikina Watershed Reservation to form part of
not lose such classification simply because loggers or settlers may
the alienable and disposable lands of the public domain. We hold
have stripped it of its forest cover. Parcels of land classified as
that once a parcel of land is included within a watershed
forest land may actually be covered with grass or planted to crops
reservation duly established by Executive Proclamation, as in the
by kaingin cultivators or other farmers. "Forest lands" do not have
instant case, a presumption arises that the land continues to be part
to be on mountains or in out of the way places. Swampy areas
of such Reservation until clear and convincing evidence of
covered by mangrove trees, nipa palms and other trees growing in
subsequent declassification is shown.
brackish or sea water may also be classified as forest land. The
classification is descriptive of its legal nature or status and does
not have to be descriptive of what the land actually looks like.
It is obvious, based on the facts on record that neither petitioners
Unless and until the land classified as "forest" is released in an
nor their predecessors-in-interest have been in open, continuous,
official proclamation to that effect so that it may form part of the
exclusive and notorious possession and occupation of the Lot for
disposable agricultural lands of the public domain, the rules on
at least thirty years immediately preceding the filing of the
confirmation of imperfect title do not apply."40
application for confirmation of title. Even if they submitted
sufficient proof that the Lot had been excluded from the MWR
upon the issuance of Proclamation No. 1283 on June 21, 1974,
Second Issue: Whether the petition for annulment of judgment
petitioners’ possession as of the filing of their application on April
25, 1985 would have been only eleven years counted from the
issuance of the proclamation in 1974. The result will not change
should have been given due course.
even if we tack in the two years Sesinando Leyva allegedly
possessed the Lot from 1902 until the issuance of EO 33 in 1904.
Petitioners’ case falters even more because of the issuance of
132
Petitioners fault the Court of Appeals for giving due course to the
Republic’s petition for annulment of judgment which was filed
long after the decision of the land registration court had allegedly
become final and executory. The land registration court rendered
its decision on January 30, 1991 and the Solicitor General received
a copy of the decision on April 23, 1991.41 Petitioners point out
that the Solicitor General filed with the Court of Appeals the
petition for annulment of judgment invoking Section 9(2) of BP
Blg. 12942 only on August 6, 1991, after the decision had
supposedly become final and executory. Moreover, petitioners
further point out that the Solicitor General filed the petition for
annulment after the land registration court issued its order of May
6, 1991 directing the Land Registration Authority to issue the
corresponding decree of registration.
The Solicitor General sought the annulment of the decision on the
ground that the land registration court had no jurisdiction over the
case, specifically, over the Lot which was not alienable and
disposable. The Solicitor General maintained that the decision was
null and void.
Petitioners argue that the remedy of annulment of judgment is no
longer available because it is barred by the principle of res
judicata. They insist that the land registration court had jurisdiction
over the case which involves private land. They also argue that the
Republic is estopped from questioning the land registration court’s
jurisdiction considering that the Republic participated in the
proceedings before the court.
It is now established that the Lot, being a watershed reservation, is
not alienable and disposable public land. The evidence of the
petitioners do not clearly and convincingly show that the Lot,
described as Lot Psu-162620, ceased to be a portion of the area
classified as a watershed reservation of the public domain. Any
title to the Lot is void ab initio. In view of this, the alleged
procedural infirmities attending the filing of the petition for
annulment of judgment are immaterial since the land registration
court never acquired jurisdiction over the Lot. All proceedings of
the land registration court involving the Lot are therefore null and
void.
We apply our ruling in Martinez vs. Court of Appeals,43 as
follows:
"The Land Registration Court has no jurisdiction over non-
registrable properties, such as public navigable rivers which are
parts of the public domain, and cannot validly adjudge the
registration of title in favor of private applicant. Hence, the
judgment of the Court of First Instance of Pampanga as regards
the Lot No. 2 of certificate of Title No. 15856 in the name of
petitioners may be attacked at any time, either directly or
collaterally, by the State which is not bound by any prescriptive
period provided for by the Statute of Limitations."
We also hold that environmental consequences in this case
override concerns over technicalities and rules of procedure.
133
In Republic vs. De los Angeles,44 which involved the registration
of public lands, specifically parts of the sea, the Court rejected the
principle of res judicata and estoppel to silence the Republic’s
claim over public lands. The Court said:
"It should be noted further that the doctrine of estoppel or laches
does not apply when the Government sues as a sovereign or asserts
governmental rights, nor does estoppel or laches validate an act
that contravenes law or public policy, and that res judicata is to be
disregarded if its application would involve the sacrifice of justice
to technicality."
The Court further held that "the right of reversion or reconveyance
to the State of the public properties registered and which are not
capable of private appropriation or private acquisition does not
prescribe."
Third issue: Whether the petition-in-intervention is proper.
The Bockasanjo ISF Awardees Association, Inc., an association of
holders of certificates of stewardship issued by the DENR under
its Integrated Social Forestry Program, filed with the Court of
Appeals on November 29, 1991 a Motion for Leave to Intervene
and to Admit Petition-In-Intervention.
According to intervenors, they are the actual occupants of the Lot
which petitioners sought to register. Aware that the parcels of land
which their forefathers had occupied, developed and tilled belong
to the Government, they filed a petition with then President
Corazon C. Aquino and then DENR Secretary Fulgencio S.
Factoran, to award the parcels of land to them.
Secretary Factoran directed the Director of Forest Management
Bureau to take steps for the segregation of the aforementioned area
from the MWR for development under the DENR’s ISF Programs.
Subsequently, then President Aquino issued Proclamation No. 585
dated June 5, 1990 excluding 1,430 hectares from the operation of
EO 33 and placed the same under the DENR’s Integrated Social
Forestry Program. Proclamation No. 585 reads:
PROCLAMATION NO. 585
AMENDING FURTHER EXECUTIVE ORDER NO. 33,
DATED JULY 26, 1904 WHICH ESTABLISHED THE
MARIKINA WATERSHED RESERVATION (IN-12) AS
AMENDED, BY EXCLUDING CERTAIN PORTIONS OF
LANDS EMBRACED THEREIN SITUATED AT SITIOS
BOSOBOSO, KILINGAN, VETERANS, BARANGAYS SAN
JOSEPH AND PAENAAN, MUNICIPALITY OF ANTIPOLO,
PROVINCE OF RIZAL, ISLAND OF LUZON.
Upon recommendation of the Secretary of Environment and
Natural Resources and pursuant to the authority vested in me by
law, I, CORAZON C. AQUINO, President of the Philippines, do
hereby exclude from the operation of Executive Order No. 33,
which established the Marikina Watershed Reservation, certain
parcel of land of the public domain embraced therein situated in
134
Sitios Bosoboso, Veterans, Kilingan and Barangay San Joseph and (Sgd.) CORAZON C. AQUINO
Paenaan, Municipality of Antipolo, Province of Rizal and place
President of the Philippines"
the same under the Integrated Social Forestry Program of the
Department of Environment and Natural Resources in accordance
with existing laws, rules and regulations, which parcel of land is
Pursuant to Proclamation No. 585, the chief of the ISF Unit, acting
more particularly described as follows:
through the Regional Executive Director of the DENR (Region
IV), issued sometime between the years 1989 to 1991 certificates
of stewardship contracts to bona fide residents of the barangays
"A PARCEL OF LAND, within the Marikina Watershed
mentioned in the proclamation as qualified recipients of the ISF
Reservation situated in the Municipality of Antipolo, Province of
programs. Among those awarded were intervenors. The
Rizal, beginning at point "1" on plan, being identical to corner 1
certificates of stewardship are actually contracts of lease granted
of Marikina Watershed Reservation; thence
by the DENR to actual occupants of parcels of land under its ISF
programs for a period of twenty-five (25) years, renewable for
another twenty-five (25) years.45 The DENR awarded contracts
xxx xxx xxx
of stewardship to ISF participants in Barangay San Isidro (or
Boso-boso) and the other barangays based on the Inventory of
Forest Occupants the DENR had conducted.46
Containing an area of One Thousand Four Hundred Thirty (1,430)
Hectares.
According to intervenors, they learned only on July 31, 1991 about
the pendency of LRC Case No. 269-A before the Regional Trial
All other lands covered and embraced under Executive Order No.
Court of Antipolo, Rizal. On August 8, 1991, they filed a Motion
33 as amended, not otherwise affected by this Proclamation, shall
for Leave to Intervene and to Admit Opposition in Intervention
remain in force and effect.
before the land registration court to assert their rights and to
protect their interests.
IN WITNESS WHEREOF, I have hereunto set my hand and
caused the seal of the Republic of the Philippines to be affixed.
However, shortly after the filing of their opposition, intervenors
learned that the land registration court had already rendered a
decision on January 30, 1991 confirming petitioners’ imperfect
Done in the City of Manila, this 5th day of June, in the year of Our
title. Intervenors’ counsel received a copy of the decision on
Lord, nineteen hundred and ninety.
August 9, 1991.

135
On August 14, 1991, intervenors filed a motion to vacate judgment
and for new trial before the land registration court. According to
intervenors, the land registration court could not act on its motions
due to the restraining order issued by the Court of Appeals on
August 8, 1991, enjoining the land registration court from
executing its decision, as prayed for by the Solicitor General in its
petition for annulment of judgment. The intervenors were thus
constrained to file a petition for intervention before the Court of
Appeals which allowed the same.
Rule 19 of the 1997 Rules of Civil Procedure47 provides in
pertinent parts:
Section 1. Who may intervene. – A person who has a legal interest
in the matter in litigation, or in the success of either of the parties,
or an interest against both, or is so situated as to be adversely
affected by a distribution or other disposition of property in the
custody of the court, or an officer thereof may, with leave of court,
be allowed to intervene in the action. The Court shall consider
whether or not the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties, and whether or
not the inertvenor’s rights may be fully protected in a separate
proceeding.
Sec. 2. Time to intervene. – The motion to intervene may be filed
at any time before rendition of judgment by the trial court. A copy
of the pleading-in-intervention shall be attached to the motion and
served on the original parties.
As a rule, intervention is allowed "before rendition of judgment by
the trial court," as Section 2, Rule 19 expressly provides. However,
the Court has recognized exceptions to this rule in the interest of
substantial justice. Mago vs. Court of Appeals48 reiterated the
ruling in Director of Lands vs. Court of Appeals, where the Court
allowed the motions for intervention even when the case had
already reached this Court. Thus, in Mago the Court held that:
"It is quite clear and patent that the motions for intervention filed
by the movants at this stage of the proceedings where trial had
already been concluded x x x and on appeal x x x the same
affirmed by the Court of Appeals and the instant petition for
certiorari to review said judgment is already submitted for decision
by the Supreme Court, are obviously and, manifestly late, beyond
the period prescribed under x x x Section 2, Rule 12 of the rules of
Court.
But Rule 12 of the Rules of Court, like all other Rules therein
promulgated, is simply a rule of procedure, the whole purpose and
object of which is to make the powers of the Court fully and
completely available for justice. The purpose of procedure is not
to thwart justice. Its proper aim is to facilitate the application of
justice to the rival claims of contending parties. It was created not
to hinder and delay but to facilitate and promote the administration
of justice. It does not constitute the thing itself which courts are
always striving to secure to litigants. It is designed as the means
best adopted to obtain that thing. In other words, it is a means to
an end."
136
To be sure, the Court of Appeals did not pass upon the actual status
of intervenors in relation to the Lot as this was not in issue. Neither
was the validity of the certificates of stewardship contracts which
intervenors allegedly possessed inquired into considering this too
was not in issue. In fact, intervenors did not specifically seek any
relief apart from a declaration that the Lot in question remains
inalienable land of the public domain. We cannot fault the Court
of Appeals for allowing the intervention, if only to provide the
rival groups a peaceful venue for ventilating their sides. This case
has already claimed at least five lives due to the raging dispute
between the rival camps of the petitioners on one side and those of
the DENR awardees on the other. It also spawned a number of
criminal cases between the two rival groups including malicious
mischief, robbery and arson. A strict application of the rules would
blur this bigger, far more important picture.

WHEREFORE, the Petition is DENIED. The Decision of the

Court of Appeals dated June 22, 1992 declaring null and void the
Decision dated January 30, 1991 of Branch 71, Regional Trial
Court of Antipolo, Rizal, in LRC No. 269-A, LRC Rec. No. N-
59179 is AFFIRMED.

SO ORDERED.

137
 his mother EDITHA T. MIGUEL, ALDEMAR L. SAL,
represented by his father DANNY M. SAL, DAISY RECARSE,
represented by her mother LYDIA S. SANTOS, EDWARD M.
EMUY, ALAN P. MAMPARAIR, MARIO L. MANGCAL,
ALDEN S. TUSAN, AMPARO S. YAP, VIRGILIO CULAR,
MARVIC M.V.F. LEONEN, JULIA REGINA CULAR, GIAN
CARLO CULAR, VIRGILIO CULAR, JR., represented by their
father VIRGILIO CULAR, PAUL ANTONIO P. VILLAMOR,
represented by his parents JOSE VILLAMOR and ELIZABETH
PUA-VILLAMOR, ANA GININA R. TALJA, represented by her
father MARIO JOSE B. TALJA, SHARMAINE R. CUNANAN,
represented by her father ALFREDO M. CUNANAN, ANTONIO
JOSE A. VITUG III, represented by his mother ANNALIZA A.
VITUG, LEAN D. NARVADEZ, represented by his father
EN BANC
MANUEL E. NARVADEZ, JR., ROSERIO MARALAG
LINGATING, represented by her father RIO OLIMPIO A.
LINGATING, MARIO JOSE B. TALJA, DAVID E. DE VERA,
G.R. No. 127882 January 27, 2004
MARIA MILAGROS L. SAN JOSE, SR., SUSAN O. BOLANIO,
OND, LOLITA G. DEMONTEVERDE, BENJIE L.
NEQUINTO,1 ROSE LILIA S. ROMANO, ROBERTO S.
LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC.,
VERZOLA, EDUARDO AURELIO C. REYES, LEAN LOUEL
represented by its Chairman F'LONG MIGUEL M.
A. PERIA, represented by his father ELPIDIO V. PERIA,2
LUMAYONG, WIGBERTO E. TAÑADA, PONCIANO
GREEN FORUM PHILIPPINES, GREEN FORUM WESTERN
BENNAGEN, JAIME TADEO, RENATO R. CONSTANTINO,
VISAYAS, (GF-WV), ENVIRONMETAL LEGAL
JR., F'LONG AGUSTIN M. DABIE, ROBERTO P. AMLOY,
ASSISTANCE CENTER (ELAC), PHILIPPINE KAISAHAN
RAQIM L. DABIE, SIMEON H. DOLOJO, IMELDA M.
TUNGO SA KAUNLARAN NG KANAYUNAN AT
GANDON, LENY B. GUSANAN, MARCELO L. GUSANAN,
REPORMANG PANSAKAHAN (KAISAHAN),3 KAISAHAN
QUINTOL A. LABUAYAN, LOMINGGES D. LAWAY,
TUNGO SA KAUNLARAN NG KANAYUNAN AT
BENITA P. TACUAYAN, minors JOLY L. BUGOY, represented
REPORMANG PANSAKAHAN (KAISAHAN),
by his father UNDERO D. BUGOY, ROGER M. DADING,
PARTNERSHIP FOR AGRARIAN REFORM and RURAL
represented by his father ANTONIO L. DADING, ROMY M.
DEVELOPMENT SERVICES, INC. (PARRDS), PHILIPPINE
LAGARO, represented by his father TOTING A. LAGARO,
PART`NERSHIP FOR THE DEVELOPMENT OF HUMAN
MIKENY JONG B. LUMAYONG, represented by his father
RESOURCES IN THE RURAL AREAS, INC. (PHILDHRRA),
MIGUEL M. LUMAYONG, RENE T. MIGUEL, represented by
138
WOMEN'S LEGAL BUREAU (WLB), CENTER FOR
ALTERNATIVE DEVELOPMENT INITIATIVES, INC.
(CADI), UPLAND DEVELOPMENT INSTITUTE (UDI),
KINAIYAHAN FOUNDATION, INC., SENTRO NG
ALTERNATIBONG LINGAP PANLIGAL (SALIGAN),
LEGAL RIGHTS AND NATURAL RESOURCES CENTER,
INC. (LRC), petitioners,
vs.
VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES (DENR),
HORACIO RAMOS, DIRECTOR, MINES AND
GEOSCIENCES BUREAU (MGB-DENR), RUBEN TORRES,
EXECUTIVE SECRETARY, and WMC (PHILIPPINES), INC.4
respondents.
DECISION
CARPIO-MORALES, J.:
The present petition for mandamus and prohibition assails the
constitutionality of Republic Act No. 7942,5 otherwise known as
the PHILIPPINE MINING ACT OF 1995, along with the
Implementing Rules and Regulations issued pursuant thereto,
Department of Environment and Natural Resources (DENR)
Administrative Order 96-40, and of the Financial and Technical
Assistance Agreement (FTAA) entered into on March 30, 1995 by
the Republic of the Philippines and WMC (Philippines), Inc.
(WMCP), a corporation organized under Philippine laws.
On July 25, 1987, then President Corazon C. Aquino issued
Executive Order (E.O.) No. 2796 authorizing the DENR Secretary
to accept, consider and evaluate proposals from foreign-owned
corporations or foreign investors for contracts or agreements
involving either technical or financial assistance for large-scale
exploration, development, and utilization of minerals, which, upon
appropriate recommendation of the Secretary, the President may
execute with the foreign proponent. In entering into such
proposals, the President shall consider the real contributions to the
economic growth and general welfare of the country that will be
realized, as well as the development and use of local scientific and
technical resources that will be promoted by the proposed contract
or agreement. Until Congress shall determine otherwise, large-
scale mining, for purpose of this Section, shall mean those
proposals for contracts or agreements for mineral resources
exploration, development, and utilization involving a committed
capital investment in a single mining unit project of at least Fifty
Million Dollars in United States Currency (US $50,000,000.00).7
On March 3, 1995, then President Fidel V. Ramos approved R.A.
No. 7942 to "govern the exploration, development, utilization and
processing of all mineral resources."8 R.A. No. 7942 defines the
modes of mineral agreements for mining operations,9 outlines the
procedure for their filing and approval,10 assignment/transfer11
and withdrawal,12 and fixes their terms.13 Similar provisions
govern financial or technical assistance agreements.14
The law prescribes the qualifications of contractors15 and grants
them certain rights, including timber,16 water17 and easement18
rights, and the right to possess explosives.19 Surface owners,
occupants, or concessionaires are forbidden from preventing
139
holders of mining rights from entering private lands and
concession areas.20 A procedure for the settlement of conflicts is
On January 10, 1997, counsels for petitioners sent a letter to the
likewise provided for.21
DENR Secretary demanding that the DENR stop the
implementation of R.A. No. 7942 and DAO No. 96-40,35 giving
the DENR fifteen days from receipt36 to act thereon. The DENR,
The Act restricts the conditions for exploration,22 quarry23 and
however, has yet to respond or act on petitioners' letter.37
other24 permits. It regulates the transport, sale and processing of
minerals,25 and promotes the development of mining
communities, science and mining technology,26 and safety and
Petitioners thus filed the present petition for prohibition and
environmental protection.27
mandamus, with a prayer for a temporary restraining order. They
allege that at the time of the filing of the petition, 100 FTAA
applications had already been filed, covering an area of 8.4 million
The government's share in the agreements is spelled out and
hectares,38 64 of which applications are by fully foreign-owned
allocated,28 taxes and fees are imposed,29 incentives granted.30
corporations covering a total of 5.8 million hectares, and at least
Aside from penalizing certain acts,31 the law likewise specifies
one by a fully foreign-owned mining company over offshore
grounds for the cancellation, revocation and termination of
areas.39
agreements and permits.32

Petitioners claim that the DENR Secretary acted without or in

On April 9, 1995, 30 days following its publication on March 10,
excess of jurisdiction:
1995 in Malaya and Manila Times, two newspapers of general
circulation, R.A. No. 7942 took effect.33 Shortly before the
effectivity of R.A. No. 7942, however, or on March 30, 1995, the
I
President entered into an FTAA with WMCP covering 99,387
hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur
and North Cotabato.34
x x x in signing and promulgating DENR Administrative Order
No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows fully foreign owned corporations
On August 15, 1995, then DENR Secretary Victor O. Ramos
to explore, develop, utilize and exploit mineral resources in a
issued DENR Administrative Order (DAO) No. 95-23, s. 1995,
manner contrary to Section 2, paragraph 4, Article XII of the
otherwise known as the Implementing Rules and Regulations of
Constitution;
R.A. No. 7942. This was later repealed by DAO No. 96-40, s. 1996
which was adopted on December 20, 1996.

140
II
x x x in signing and promulgating DENR Administrative Order
No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows the taking of private property
without the determination of public use and for just compensation;
III
x x x in signing and promulgating DENR Administrative Order
No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it violates Sec. 1, Art. III of the
Constitution;
IV
x x x in signing and promulgating DENR Administrative Order
No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows enjoyment by foreign citizens as
well as fully foreign owned corporations of the nation's marine
wealth contrary to Section 2, paragraph 2 of Article XII of the
Constitution;
V
x x x in signing and promulgating DENR Administrative Order
No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows priority to foreign and fully
foreign owned corporations in the exploration, development and
utilization of mineral resources contrary to Article XII of the
Constitution;
VI
x x x in signing and promulgating DENR Administrative Order
No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows the inequitable sharing of wealth
contrary to Sections [sic] 1, paragraph 1, and Section 2, paragraph
4[,] [Article XII] of the Constitution;
VII
x x x in recommending approval of and implementing the
Financial and Technical Assistance Agreement between the
President of the Republic of the Philippines and Western Mining
Corporation Philippines Inc. because the same is illegal and
unconstitutional.40
They pray that the Court issue an order:
(a) Permanently enjoining respondents from acting on any
application for Financial or Technical Assistance Agreements;
141
(b) Declaring the Philippine Mining Act of 1995 or Republic Act
No. 7942 as unconstitutional and null and void;
(c) Declaring the Implementing Rules and Regulations of the
Philippine Mining Act contained in DENR Administrative Order
No. 96-40 and all other similar administrative issuances as
unconstitutional and null and void; and
(d) Cancelling the Financial and Technical Assistance Agreement
issued to Western Mining Philippines, Inc. as unconstitutional,
illegal and null and void.41
Impleaded as public respondents are Ruben Torres, the then
Executive Secretary, Victor O. Ramos, the then DENR Secretary,
and Horacio Ramos, Director of the Mines and Geosciences
Bureau of the DENR. Also impleaded is private respondent
WMCP, which entered into the assailed FTAA with the Philippine
Government. WMCP is owned by WMC Resources International
Pty., Ltd. (WMC), "a wholly owned subsidiary of Western Mining
Corporation Holdings Limited, a publicly listed major Australian
mining and exploration company."42 By WMCP's information, "it
is a 100% owned subsidiary of WMC LIMITED."43
Respondents, aside from meeting petitioners' contentions, argue
that the requisites for judicial inquiry have not been met and that
the petition does not comply with the criteria for prohibition and
mandamus. Additionally, respondent WMCP argues that there has
been a violation of the rule on hierarchy of courts.
After petitioners filed their reply, this Court granted due course to
the petition. The parties have since filed their respective
memoranda.
WMCP subsequently filed a Manifestation dated September 25,
2002 alleging that on January 23, 2001, WMC sold all its shares
in WMCP to Sagittarius Mines, Inc. (Sagittarius), a corporation
organized under Philippine laws.44 WMCP was subsequently
renamed "Tampakan Mineral Resources Corporation."45 WMCP
claims that at least 60% of the equity of Sagittarius is owned by
Filipinos and/or Filipino-owned corporations while about 40% is
owned by Indophil Resources NL, an Australian company.46 It
further claims that by such sale and transfer of shares, "WMCP has
ceased to be connected in any way with WMC."47
By virtue of such sale and transfer, the DENR Secretary, by Order
of December 18, 2001,48 approved the transfer and registration of
the subject FTAA from WMCP to Sagittarius. Said Order,
however, was appealed by Lepanto Consolidated Mining Co.
(Lepanto) to the Office of the President which upheld it by
Decision of July 23, 2002.49 Its motion for reconsideration having
been denied by the Office of the President by Resolution of
November 12, 2002,50 Lepanto filed a petition for review51
before the Court of Appeals. Incidentally, two other petitions for
review related to the approval of the transfer and registration of the
FTAA to Sagittarius were recently resolved by this Court.52
It bears stressing that this case has not been rendered moot either
by the transfer and registration of the FTAA to a Filipino-owned
142
corporation or by the non-issuance of a temporary restraining
order or a preliminary injunction to stay the above-said July 23,
I
2002 decision of the Office of the President.53 The validity of the
transfer remains in dispute and awaits final judicial determination.
This assumes, of course, that such transfer cures the FTAA's
Before going into the substantive issues, the procedural questions
alleged unconstitutionality, on which question judgment is
posed by respondents shall first be tackled.
reserved.

REQUISITES FOR JUDICIAL REVIEW

WMCP also points out that the original claimowners of the major
mineralized areas included in the WMCP FTAA, namely,
Sagittarius, Tampakan Mining Corporation, and Southcot Mining
When an issue of constitutionality is raised, this Court can exercise
Corporation, are all Filipino-owned corporations,54 each of which
its power of judicial review only if the following requisites are
was a holder of an approved Mineral Production Sharing
present:
Agreement awarded in 1994, albeit their respective mineral claims
were subsumed in the WMCP FTAA;55 and that these three
companies are the same companies that consolidated their interests
(1) The existence of an actual and appropriate case;
in Sagittarius to whom WMC sold its 100% equity in WMCP.56
WMCP concludes that in the event that the FTAA is invalidated,
the MPSAs of the three corporations would be revived and the
(2) A personal and substantial interest of the party raising the
mineral claims would revert to their original claimants.57
constitutional question;

These circumstances, while informative, are hardly significant in

(3) The exercise of judicial review is pleaded at the earliest
the resolution of this case, it involving the validity of the FTAA,
opportunity; and
not the possible consequences of its invalidation.

(4) The constitutional question is the lis mota of the case. 58

Of the above-enumerated seven grounds cited by petitioners, as
will be shown later, only the first and the last need be delved into;
in the latter, the discussion shall dwell only insofar as it questions
Respondents claim that the first three requisites are not present.
the effectivity of E. O. No. 279 by virtue of which order the
questioned FTAA was forged.

143
Section 1, Article VIII of the Constitution states that "(j)udicial
power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable." The power of judicial review, therefore, is limited to
the determination of actual cases and controversies.59
An actual case or controversy means an existing case or
controversy that is appropriate or ripe for determination, not
conjectural or anticipatory,60 lest the decision of the court would
amount to an advisory opinion.61 The power does not extend to
hypothetical questions62 since any attempt at abstraction could
only lead to dialectics and barren legal questions and to sterile
conclusions unrelated to actualities.63
"Legal standing" or locus standi has been defined as a personal and
substantial interest in the case such that the party has sustained or
will sustain direct injury as a result of the governmental act that is
being challenged,64 alleging more than a generalized grievance.65
The gist of the question of standing is whether a party alleges "such
personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues
upon which the court depends for illumination of difficult
constitutional questions."66 Unless a person is injuriously affected
in any of his constitutional rights by the operation of statute or
ordinance, he has no standing.67
Petitioners traverse a wide range of sectors. Among them are La
Bugal B'laan Tribal Association, Inc., a farmers and indigenous
people's cooperative organized under Philippine laws representing
a community actually affected by the mining activities of WMCP,
members of said cooperative,68 as well as other residents of areas
also affected by the mining activities of WMCP.69 These
petitioners have standing to raise the constitutionality of the
questioned FTAA as they allege a personal and substantial injury.
They claim that they would suffer "irremediable displacement"70
as a result of the implementation of the FTAA allowing WMCP to
conduct mining activities in their area of residence. They thus meet
the appropriate case requirement as they assert an interest adverse
to that of respondents who, on the other hand, insist on the FTAA's
validity.
In view of the alleged impending injury, petitioners also have
standing to assail the validity of E.O. No. 279, by authority of
which the FTAA was executed.
Public respondents maintain that petitioners, being strangers to the
FTAA, cannot sue either or both contracting parties to annul it.71
In other words, they contend that petitioners are not real parties in
interest in an action for the annulment of contract.
Public respondents' contention fails. The present action is not
merely one for annulment of contract but for prohibition and
mandamus. Petitioners allege that public respondents acted
without or in excess of jurisdiction in implementing the FTAA,
which they submit is unconstitutional. As the case involves
constitutional questions, this Court is not concerned with whether
petitioners are real parties in interest, but with whether they have
legal standing. As held in Kilosbayan v. Morato:72
144
x x x. "It is important to note . . . that standing because of its
constitutional and public policy underpinnings, is very different
from questions relating to whether a particular plaintiff is the real
party in interest or has capacity to sue. Although all three
requirements are directed towards ensuring that only certain
parties can maintain an action, standing restrictions require a
partial consideration of the merits, as well as broader policy
concerns relating to the proper role of the judiciary in certain
areas.["] (FRIEDENTHAL, KANE AND MILLER, CIVIL
PROCEDURE 328 [1985])
Standing is a special concern in constitutional law because in some
cases suits are brought not by parties who have been personally
injured by the operation of a law or by official action taken, but by
concerned citizens, taxpayers or voters who actually sue in the
public interest. Hence, the question in standing is whether such
parties have "alleged such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens
the presentation of issues upon which the court so largely depends
for illumination of difficult constitutional questions." (Baker v.
Carr, 369 U.S. 186, 7 L.Ed.2d 633 [1962].)
As earlier stated, petitioners meet this requirement.
The challenge against the constitutionality of R.A. No. 7942 and
DAO No. 96-40 likewise fulfills the requisites of justiciability.
Although these laws were not in force when the subject FTAA was
entered into, the question as to their validity is ripe for
adjudication.
The WMCP FTAA provides:
14.3 Future Legislation
Any term and condition more favourable to Financial &Technical
Assistance Agreement contractors resulting from repeal or
amendment of any existing law or regulation or from the
enactment of a law, regulation or administrative order shall be
considered a part of this Agreement.
It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain
provisions that are more favorable to WMCP, hence, these laws,
to the extent that they are favorable to WMCP, govern the FTAA.
In addition, R.A. No. 7942 explicitly makes certain provisions
apply to pre-existing agreements.
SEC. 112. Non-impairment of Existing Mining/Quarrying Rights.
– x x x That the provisions of Chapter XIV on government share
in mineral production-sharing agreement and of Chapter XVI on
incentives of this Act shall immediately govern and apply to a
mining lessee or contractor unless the mining lessee or contractor
indicates his intention to the secretary, in writing, not to avail of
said provisions x x x Provided, finally, That such leases,
production-sharing agreements, financial or technical assistance
agreements shall comply with the applicable provisions of this Act
and its implementing rules and regulations.
145
As there is no suggestion that WMCP has indicated its intention
not to avail of the provisions of Chapter XVI of R.A. No. 7942, it
can safely be presumed that they apply to the WMCP FTAA.
Misconstruing the application of the third requisite for judicial
review – that the exercise of the review is pleaded at the earliest
opportunity – WMCP points out that the petition was filed only
almost two years after the execution of the FTAA, hence, not
raised at the earliest opportunity.
The third requisite should not be taken to mean that the question
of constitutionality must be raised immediately after the execution
of the state action complained of. That the question of
constitutionality has not been raised before is not a valid reason
for refusing to allow it to be raised later.73 A contrary rule would
mean that a law, otherwise unconstitutional, would lapse into
constitutionality by the mere failure of the proper party to
promptly file a case to challenge the same.
PROPRIETY OF PROHIBITION AND MANDAMUS
Before the effectivity in July 1997 of the Revised Rules of Civil
Procedure, Section 2 of Rule 65 read:
SEC. 2. Petition for prohibition. – When the proceedings of any
tribunal, corporation, board, or person, whether exercising
functions judicial or ministerial, are without or in excess of its or
his jurisdiction, or with grave abuse of discretion, and there is no
appeal or any other plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a
verified petition in the proper court alleging the facts with certainty
and praying that judgment be rendered commanding the defendant
to desist from further proceeding in the action or matter specified
therein.
Prohibition is a preventive remedy.74 It seeks a judgment ordering
the defendant to desist from continuing with the commission of an
act perceived to be illegal.75
The petition for prohibition at bar is thus an appropriate remedy.
While the execution of the contract itself may be fait accompli, its
implementation is not. Public respondents, in behalf of the
Government, have obligations to fulfill under said contract.
Petitioners seek to prevent them from fulfilling such obligations
on the theory that the contract is unconstitutional and, therefore,
void.
The propriety of a petition for prohibition being upheld, discussion
of the propriety of the mandamus aspect of the petition is rendered
unnecessary.
HIERARCHY OF COURTS
The contention that the filing of this petition violated the rule on
hierarchy of courts does not likewise lie. The rule has been
explained thus:
146
 jurisdiction, and to prevent further over-crowding of the Court's
docket x x x.76 [Emphasis supplied.]
Between two courts of concurrent original jurisdiction, it is the
lower court that should initially pass upon the issues of a case. That
way, as a particular case goes through the hierarchy of courts, it is
The repercussions of the issues in this case on the Philippine
shorn of all but the important legal issues or those of first
mining industry, if not the national economy, as well as the novelty
impression, which are the proper subject of attention of the
thereof, constitute exceptional and compelling circumstances to
appellate court. This is a procedural rule borne of experience and
justify resort to this Court in the first instance.
adopted to improve the administration of justice.

In all events, this Court has the discretion to take cognizance of a

This Court has consistently enjoined litigants to respect the
suit which does not satisfy the requirements of an actual case or
hierarchy of courts. Although this Court has concurrent
legal standing when paramount public interest is involved.77
jurisdiction with the Regional Trial Courts and the Court of
When the issues raised are of paramount importance to the public,
Appeals to issue writs of certiorari, prohibition, mandamus, quo
this Court may brush aside technicalities of procedure.78
warranto, habeas corpus and injunction, such concurrence does not
give a party unrestricted freedom of choice of court forum. The
resort to this Court's primary jurisdiction to issue said writs shall
II
be allowed only where the redress desired cannot be obtained in
the appropriate courts or where exceptional and compelling
circumstances justify such invocation. We held in People v.
Petitioners contend that E.O. No. 279 did not take effect because
Cuaresma that:
its supposed date of effectivity came after President Aquino had
already lost her legislative powers under the Provisional
Constitution.
A becoming regard for judicial hierarchy most certainly indicates
that petitions for the issuance of extraordinary writs against first
level ("inferior") courts should be filed with the Regional Trial
And they likewise claim that the WMC FTAA, which was entered
Court, and those against the latter, with the Court of Appeals. A
into pursuant to E.O. No. 279, violates Section 2, Article XII of
direct invocation of the Supreme Court's original jurisdiction to
the Constitution because, among other reasons:
issue these writs should be allowed only where there are special
and important reasons therefor, clearly and specifically set out in
the petition. This is established policy. It is a policy necessary to
(1) It allows foreign-owned companies to extend more than mere
prevent inordinate demands upon the Court's time and attention
financial or technical assistance to the State in the exploitation,
which are better devoted to those matters within its exclusive
147
development, and utilization of minerals, petroleum, and other
mineral oils, and even permits foreign owned companies to
"operate and manage mining activities."
(2) It allows foreign-owned companies to extend both technical
and financial assistance, instead of "either technical or financial
assistance."
To appreciate the import of these issues, a visit to the history of
the pertinent constitutional provision, the concepts contained
therein, and the laws enacted pursuant thereto, is in order.
Section 2, Article XII reads in full:
Sec. 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated.
The exploration, development, and utilization of natural resources
shall be under the full control and supervision of the State. The
State may directly undertake such activities or it may enter into co-
production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least sixty per
centum of whose capital is owned by such citizens. Such
agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such
terms and conditions as may be provided by law. In cases of water
rights for irrigation, water supply, fisheries, or industrial uses other
than the development of water power, beneficial use may be the
measure and limit of the grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive economic zone,
and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fish-workers in rivers,
lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms
and conditions provided by law, based on real contributions to the
economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of
local scientific and technical resources.
The President shall notify the Congress of every contract entered
into in accordance with this provision, within thirty days from its
execution.
THE SPANISH REGIME AND THE REGALIAN DOCTRINE
148
The first sentence of Section 2 embodies the Regalian doctrine or
jura regalia. Introduced by Spain into these Islands, this feudal
concept is based on the State's power of dominium, which is the
capacity of the State to own or acquire property.79
In its broad sense, the term "jura regalia" refers to royal rights, or
those rights which the King has by virtue of his prerogatives. In
Spanish law, it refers to a right which the sovereign has over
anything in which a subject has a right of property or propriedad.
These were rights enjoyed during feudal times by the king as the
sovereign.
The theory of the feudal system was that title to all lands was
originally held by the King, and while the use of lands was granted
out to others who were permitted to hold them under certain
conditions, the King theoretically retained the title. By fiction of
law, the King was regarded as the original proprietor of all lands,
and the true and only source of title, and from him all lands were
held. The theory of jura regalia was therefore nothing more than a
natural fruit of conquest.80
The Philippines having passed to Spain by virtue of discovery and
conquest,81 earlier Spanish decrees declared that "all lands were
held from the Crown."82
The Regalian doctrine extends not only to land but also to "all
natural wealth that may be found in the bowels of the earth."83
Spain, in particular, recognized the unique value of natural
resources, viewing them, especially minerals, as an abundant
source of revenue to finance its wars against other nations.84
Mining laws during the Spanish regime reflected this
perspective.85
THE AMERICAN OCCUPATION AND THE CONCESSION
REGIME
By the Treaty of Paris of December 10, 1898, Spain ceded "the
archipelago known as the Philippine Islands" to the United States.
The Philippines was hence governed by means of organic acts that
were in the nature of charters serving as a Constitution of the
occupied territory from 1900 to 1935.86 Among the principal
organic acts of the Philippines was the Act of Congress of July 1,
1902, more commonly known as the Philippine Bill of 1902,
through which the United States Congress assumed the
administration of the Philippine Islands.87 Section 20 of said Bill
reserved the disposition of mineral lands of the public domain
from sale. Section 21 thereof allowed the free and open
exploration, occupation and purchase of mineral deposits not only
to citizens of the Philippine Islands but to those of the United
States as well:
Sec. 21. That all valuable mineral deposits in public lands in the
Philippine Islands, both surveyed and unsurveyed, are hereby
declared to be free and open to exploration, occupation and
purchase, and the land in which they are found, to occupation and
purchase, by citizens of the United States or of said Islands:
Provided, That when on any lands in said Islands entered and
occupied as agricultural lands under the provisions of this Act, but
not patented, mineral deposits have been found, the working of
149
such mineral deposits is forbidden until the person, association, or
corporation who or which has entered and is occupying such lands
shall have paid to the Government of said Islands such additional
sum or sums as will make the total amount paid for the mineral
claim or claims in which said deposits are located equal to the
amount charged by the Government for the same as mineral
claims.
Unlike Spain, the United States considered natural resources as a
source of wealth for its nationals and saw fit to allow both Filipino
and American citizens to explore and exploit minerals in public
lands, and to grant patents to private mineral lands.88 A person
who acquired ownership over a parcel of private mineral land
pursuant to the laws then prevailing could exclude other persons,
even the State, from exploiting minerals within his property.89
Thus, earlier jurisprudence90 held that:
A valid and subsisting location of mineral land, made and kept up
in accordance with the provisions of the statutes of the United
States, has the effect of a grant by the United States of the present
and exclusive possession of the lands located, and this exclusive
right of possession and enjoyment continues during the entire life
of the location. x x x.
x x x.
The discovery of minerals in the ground by one who has a valid
mineral location perfects his claim and his location not only
against third persons, but also against the Government. x x x.
[Italics in the original.]
The Regalian doctrine and the American system, therefore, differ
in one essential respect. Under the Regalian theory, mineral rights
are not included in a grant of land by the state; under the American
doctrine, mineral rights are included in a grant of land by the
government.91
Section 21 also made possible the concession (frequently styled
"permit", license" or "lease")92 system.93 This was the traditional
regime imposed by the colonial administrators for the exploitation
of natural resources in the extractive sector (petroleum, hard
minerals, timber, etc.).94
Under the concession system, the concessionaire makes a direct
equity investment for the purpose of exploiting a particular natural
resource within a given area.95 Thus, the concession amounts to
complete control by the concessionaire over the country's natural
resource, for it is given exclusive and plenary rights to exploit a
particular resource at the point of extraction.96 In consideration
for the right to exploit a natural resource, the concessionaire either
pays rent or royalty, which is a fixed percentage of the gross
proceeds.97
Later statutory enactments by the legislative bodies set up in the
Philippines adopted the contractual framework of the
concession.98 For instance, Act No. 2932,99 approved on August
31, 1920, which provided for the exploration, location, and lease
150
of lands containing petroleum and other mineral oils and gas in the
Philippines, and Act No. 2719,100 approved on May 14, 1917,
which provided for the leasing and development of coal lands in
the Philippines, both utilized the concession system.101
THE 1935 CONSTITUTION AND THE NATIONALIZATION
OF NATURAL RESOURCES
By the Act of United States Congress of March 24, 1934,
popularly known as the Tydings-McDuffie Law, the People of the
Philippine Islands were authorized to adopt a constitution.102 On
July 30, 1934, the Constitutional Convention met for the purpose
of drafting a constitution, and the Constitution subsequently
drafted was approved by the Convention on February 8, 1935.103
The Constitution was submitted to the President of the United
States on March 18, 1935.104 On March 23, 1935, the President
of the United States certified that the Constitution conformed
substantially with the provisions of the Act of Congress approved
on March 24, 1934.105 On May 14, 1935, the Constitution was
ratified by the Filipino people.106
The 1935 Constitution adopted the Regalian doctrine, declaring all
natural resources of the Philippines, including mineral lands and
minerals, to be property belonging to the State.107 As adopted in
a republican system, the medieval concept of jura regalia is
stripped of royal overtones and ownership of the land is vested in
the State.108
Section 1, Article XIII, on Conservation and Utilization of Natural
Resources, of the 1935 Constitution provided:
SECTION 1. All agricultural, timber, and mineral lands of the
public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, and other natural
resources of the Philippines belong to the State, and their
disposition, exploitation, development, or utilization shall be
limited to citizens of the Philippines, or to corporations or
associations at least sixty per centum of the capital of which is
owned by such citizens, subject to any existing right, grant, lease,
or concession at the time of the inauguration of the Government
established under this Constitution. Natural resources, with the
exception of public agricultural land, shall not be alienated, and no
license, concession, or lease for the exploitation, development, or
utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be
the measure and the limit of the grant.
The nationalization and conservation of the natural resources of
the country was one of the fixed and dominating objectives of the
1935 Constitutional Convention.109 One delegate relates:
There was an overwhelming sentiment in the Convention in favor
of the principle of state ownership of natural resources and the
adoption of the Regalian doctrine. State ownership of natural
resources was seen as a necessary starting point to secure
recognition of the state's power to control their disposition,
151
exploitation, development, or utilization. The delegates of the
Constitutional Convention very well knew that the concept of
State ownership of land and natural resources was introduced by
the Spaniards, however, they were not certain whether it was
continued and applied by the Americans. To remove all doubts,
the Convention approved the provision in the Constitution
affirming the Regalian doctrine.
The adoption of the principle of state ownership of the natural
resources and of the Regalian doctrine was considered to be a
necessary starting point for the plan of nationalizing and
conserving the natural resources of the country. For with the
establishment of the principle of state ownership of the natural
resources, it would not be hard to secure the recognition of the
power of the State to control their disposition, exploitation,
development or utilization.110
The nationalization of the natural resources was intended (1) to
insure their conservation for Filipino posterity; (2) to serve as an
instrument of national defense, helping prevent the extension to
the country of foreign control through peaceful economic
penetration; and (3) to avoid making the Philippines a source of
international conflicts with the consequent danger to its internal
security and independence.111
The same Section 1, Article XIII also adopted the concession
system, expressly permitting the State to grant licenses,
concessions, or leases for the exploitation, development, or
utilization of any of the natural resources. Grants, however, were
limited to Filipinos or entities at least 60% of the capital of which
is owned by Filipinos.lawph!l.ne+
The swell of nationalism that suffused the 1935 Constitution was
radically diluted when on November 1946, the Parity Amendment,
which came in the form of an "Ordinance Appended to the
Constitution," was ratified in a plebiscite.112 The Amendment
extended, from July 4, 1946 to July 3, 1974, the right to utilize and
exploit our natural resources to citizens of the United States and
business enterprises owned or controlled, directly or indirectly, by
citizens of the United States:113
Notwithstanding the provision of section one, Article Thirteen,
and section eight, Article Fourteen, of the foregoing Constitution,
during the effectivity of the Executive Agreement entered into by
the President of the Philippines with the President of the United
States on the fourth of July, nineteen hundred and forty-six,
pursuant to the provisions of Commonwealth Act Numbered
Seven hundred and thirty-three, but in no case to extend beyond
the third of July, nineteen hundred and seventy-four, the
disposition, exploitation, development, and utilization of all
agricultural, timber, and mineral lands of the public domain,
waters, minerals, coals, petroleum, and other mineral oils, all
forces and sources of potential energy, and other natural resources
of the Philippines, and the operation of public utilities, shall, if
open to any person, be open to citizens of the United States and to
all forms of business enterprise owned or controlled, directly or
indirectly, by citizens of the United States in the same manner as
to, and under the same conditions imposed upon, citizens of the
Philippines or corporations or associations owned or controlled by
citizens of the Philippines.
152
 concessionaire ownership over the petroleum lands and petroleum
deposits.122 However, they did grant concessionaires the right to
The Parity Amendment was subsequently modified by the 1954
explore, develop, exploit, and utilize them for the period and under
Revised Trade Agreement, also known as the Laurel-Langley
the conditions determined by the law.123
Agreement, embodied in Republic Act No. 1355.114

Concessions were granted at the complete risk of the

THE PETROLEUM ACT OF 1949 AND THE CONCESSION
concessionaire; the Government did not guarantee the existence of
SYSTEM
petroleum or undertake, in any case, title warranty.124

In the meantime, Republic Act No. 387,115 also known as the

Concessionaires were required to submit information as maybe
Petroleum Act of 1949, was approved on June 18, 1949.
required by the Secretary of Agriculture and Natural Resources,
including reports of geological and geophysical examinations, as
well as production reports.125 Exploration126 and
The Petroleum Act of 1949 employed the concession system for
exploitation127 concessionaires were also required to submit work
the exploitation of the nation's petroleum resources. Among the
programs.lavvphi1.net
kinds of concessions it sanctioned were exploration and
exploitation concessions, which respectively granted to the
concessionaire the exclusive right to explore for116 or develop117
Exploitation concessionaires, in particular, were obliged to pay an
petroleum within specified areas.
annual exploitation tax,128 the object of which is to induce the
concessionaire to actually produce petroleum, and not simply to
sit on the concession without developing or exploiting it.129 These
Concessions may be granted only to duly qualified persons118
concessionaires were also bound to pay the Government royalty,
who have sufficient finances, organization, resources, technical
which was not less than 12½% of the petroleum produced and
competence, and skills necessary to conduct the operations to be
saved, less that consumed in the operations of the
undertaken.119
concessionaire.130 Under Article 66, R.A. No. 387, the
exploitation tax may be credited against the royalties so that if the
concessionaire shall be actually producing enough oil, it would not
Nevertheless, the Government reserved the right to undertake such
actually be paying the exploitation tax.131
work itself.120 This proceeded from the theory that all natural
deposits or occurrences of petroleum or natural gas in public
and/or private lands in the Philippines belong to the State.121
Exploration and exploitation concessions did not confer upon the
153
Failure to pay the annual exploitation tax for two consecutive
years,132 or the royalty due to the Government within one year
from the date it becomes due,133 constituted grounds for the
cancellation of the concession. In case of delay in the payment of
the taxes or royalty imposed by the law or by the concession, a
surcharge of 1% per month is exacted until the same are paid.134
As a rule, title rights to all equipment and structures that the
concessionaire placed on the land belong to the exploration or
exploitation concessionaire.135 Upon termination of such
concession, the concessionaire had a right to remove the same.136
The Secretary of Agriculture and Natural Resources was tasked
with carrying out the provisions of the law, through the Director
of Mines, who acted under the Secretary's immediate supervision
and control.137 The Act granted the Secretary the authority to
inspect any operation of the concessionaire and to examine all the
books and accounts pertaining to operations or conditions related
to payment of taxes and royalties.138
The same law authorized the Secretary to create an Administration
Unit and a Technical Board.139 The Administration Unit was
charged, inter alia, with the enforcement of the provisions of the
law.140 The Technical Board had, among other functions, the duty
to check on the performance of concessionaires and to determine
whether the obligations imposed by the Act and its implementing
regulations were being complied with.141
Victorio Mario A. Dimagiba, Chief Legal Officer of the Bureau of
Energy Development, analyzed the benefits and drawbacks of the
concession system insofar as it applied to the petroleum industry:
Advantages of Concession. Whether it emphasizes income tax or
royalty, the most positive aspect of the concession system is that
the State's financial involvement is virtually risk free and
administration is simple and comparatively low in cost.
Furthermore, if there is a competitive allocation of the resource
leading to substantial bonuses and/or greater royalty coupled with
a relatively high level of taxation, revenue accruing to the State
under the concession system may compare favorably with other
financial arrangements.
Disadvantages of Concession. There are, however, major negative
aspects to this system. Because the Government's role in the
traditional concession is passive, it is at a distinct disadvantage in
managing and developing policy for the nation's petroleum
resource. This is true for several reasons. First, even though most
concession agreements contain covenants requiring diligence in
operations and production, this establishes only an indirect and
passive control of the host country in resource development.
Second, and more importantly, the fact that the host country does
not directly participate in resource management decisions inhibits
its ability to train and employ its nationals in petroleum
development. This factor could delay or prevent the country from
effectively engaging in the development of its resources. Lastly, a
direct role in management is usually necessary in order to obtain a
knowledge of the international petroleum industry which is
important to an appreciation of the host country's resources in
relation to those of other countries.142
154
 concessionaires' funds were easily exhausted. Moreover, since the
concession system practically closed its doors to interested foreign
Other liabilities of the system have also been noted:
investors, local capital was stretched to the limits. The old system
also failed to consider the highly sophisticated technology and
expertise required, which would be available only to multinational
x x x there are functional implications which give the
companies.144
concessionaire great economic power arising from its exclusive
equity holding. This includes, first, appropriation of the returns of
the undertaking, subject to a modest royalty; second, exclusive
A shift to a new regime for the development of natural resources
management of the project; third, control of production of the
thus seemed imminent.
natural resource, such as volume of production, expansion,
research and development; and fourth, exclusive responsibility for
downstream operations, like processing, marketing, and
PRESIDENTIAL DECREE NO. 87, THE 1973 CONSTITUTION
distribution. In short, even if nominally, the state is the sovereign
AND THE SERVICE CONTRACT SYSTEM
and owner of the natural resource being exploited, it has been
shorn of all elements of control over such natural resource because
of the exclusive nature of the contractual regime of the concession.
The promulgation on December 31, 1972 of Presidential Decree
The concession system, investing as it does ownership of natural
No. 87,145 otherwise known as The Oil Exploration and
resources, constitutes a consistent inconsistency with the principle
Development Act of 1972 signaled such a transformation. P.D.
embodied in our Constitution that natural resources belong to the
No. 87 permitted the government to explore for and produce
state and shall not be alienated, not to mention the fact that the
indigenous petroleum through "service contracts."146
concession was the bedrock of the colonial system in the
exploitation of natural resources.143
"Service contracts" is a term that assumes varying meanings to
different people, and it has carried many names in different
Eventually, the concession system failed for reasons explained by
countries, like "work contracts" in Indonesia, "concession
Dimagiba:
agreements" in Africa, "production-sharing agreements" in the
Middle East, and "participation agreements" in Latin America.147
A functional definition of "service contracts" in the Philippines is
Notwithstanding the good intentions of the Petroleum Act of 1949,
provided as follows:
the concession system could not have properly spurred sustained
oil exploration activities in the country, since it assumed that such
a capital-intensive, high risk venture could be successfully
undertaken by a single individual or a small company. In effect,
155
A service contract is a contractual arrangement for engaging in the
exploitation and development of petroleum, mineral, energy, land
and other natural resources by which a government or its agency,
or a private person granted a right or privilege by the government
authorizes the other party (service contractor) to engage or
participate in the exercise of such right or the enjoyment of the
privilege, in that the latter provides financial or technical
resources, undertakes the exploitation or production of a given
resource, or directly manages the productive enterprise, operations
of the exploration and exploitation of the resources or the
disposition of marketing or resources.148
In a service contract under P.D. No. 87, service and technology are
furnished by the service contractor for which it shall be entitled to
the stipulated service fee.149 The contractor must be technically
competent and financially capable to undertake the operations
required in the contract.150
Financing is supposed to be provided by the Government to which
all petroleum produced belongs.151 In case the Government is
unable to finance petroleum exploration operations, the contractor
may furnish services, technology and financing, and the proceeds
of sale of the petroleum produced under the contract shall be the
source of funds for payment of the service fee and the operating
expenses due the contractor.152 The contractor shall undertake,
manage and execute petroleum operations, subject to the
government overseeing the management of the operations.153 The
contractor provides all necessary services and technology and the
requisite financing, performs the exploration work obligations,
and assumes all exploration risks such that if no petroleum is
produced, it will not be entitled to reimbursement.154 Once
petroleum in commercial quantity is discovered, the contractor
shall operate the field on behalf of the government.155
P.D. No. 87 prescribed minimum terms and conditions for every
service contract.156 It also granted the contractor certain
privileges, including exemption from taxes and payment of tariff
duties,157 and permitted the repatriation of capital and retention
of profits abroad.158
Ostensibly, the service contract system had certain advantages
over the concession regime.159 It has been opined, though, that,
in the Philippines, our concept of a service contract, at least in the
petroleum industry, was basically a concession regime with a
production-sharing element.160
On January 17, 1973, then President Ferdinand E. Marcos
proclaimed the ratification of a new Constitution.161 Article XIV
on the National Economy and Patrimony contained provisions
similar to the 1935 Constitution with regard to Filipino
participation in the nation's natural resources. Section 8, Article
XIV thereof provides:
Sec. 8. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, wildlife, and other natural resources of the Philippines
belong to the State. With the exception of agricultural, industrial
or commercial, residential and resettlement lands of the public
domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development,
156
exploitation, or utilization of any of the natural resources shall be
granted for a period exceeding twenty-five years, renewable for
not more than twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be
the measure and the limit of the grant.
While Section 9 of the same Article maintained the Filipino-only
policy in the enjoyment of natural resources, it also allowed
Filipinos, upon authority of the Batasang Pambansa, to enter into
service contracts with any person or entity for the exploration or
utilization of natural resources.
Sec. 9. The disposition, exploration, development, exploitation, or
utilization of any of the natural resources of the Philippines shall
be limited to citizens, or to corporations or associations at least
sixty per centum of which is owned by such citizens. The Batasang
Pambansa, in the national interest, may allow such citizens,
corporations or associations to enter into service contracts for
financial, technical, management, or other forms of assistance with
any person or entity for the exploration, or utilization of any of the
natural resources. Existing valid and binding service contracts for
financial, technical, management, or other forms of assistance are
hereby recognized as such. [Emphasis supplied.]
The concept of service contracts, according to one delegate, was
borrowed from the methods followed by India, Pakistan and
especially Indonesia in the exploration of petroleum and mineral
oils.162 The provision allowing such contracts, according to
another, was intended to "enhance the proper development of our
natural resources since Filipino citizens lack the needed capital
and technical know-how which are essential in the proper
exploration, development and exploitation of the natural resources
of the country."163
The original idea was to authorize the government, not private
entities, to enter into service contracts with foreign entities.164 As
finally approved, however, a citizen or private entity could be
allowed by the National Assembly to enter into such service
contract.165 The prior approval of the National Assembly was
deemed sufficient to protect the national interest.166 Notably,
none of the laws allowing service contracts were passed by the
Batasang Pambansa. Indeed, all of them were enacted by
presidential decree.
On March 13, 1973, shortly after the ratification of the new
Constitution, the President promulgated Presidential Decree No.
151.167 The law allowed Filipino citizens or entities which have
acquired lands of the public domain or which own, hold or control
such lands to enter into service contracts for financial, technical,
management or other forms of assistance with any foreign persons
or entity for the exploration, development, exploitation or
utilization of said lands.168
Presidential Decree No. 463,169 also known as The Mineral
Resources Development Decree of 1974, was enacted on May 17,
1974. Section 44 of the decree, as amended, provided that a lessee
of a mining claim may enter into a service contract with a qualified
domestic or foreign contractor for the exploration, development
157
and exploitation of his claims and the processing and marketing of
the product thereof.
Presidential Decree No. 704170 (The Fisheries Decree of 1975),
approved on May 16, 1975, allowed Filipinos engaged in
commercial fishing to enter into contracts for financial, technical
or other forms of assistance with any foreign person, corporation
or entity for the production, storage, marketing and processing of
fish and fishery/aquatic products.171
Presidential Decree No. 705172 (The Revised Forestry Code of
the Philippines), approved on May 19, 1975, allowed "forest
products licensees, lessees, or permitees to enter into service
contracts for financial, technical, management, or other forms of
assistance . . . with any foreign person or entity for the exploration,
development, exploitation or utilization of the forest
resources."173
Yet another law allowing service contracts, this time for
geothermal resources, was Presidential Decree No. 1442,174
which was signed into law on June 11, 1978. Section 1 thereof
authorized the Government to enter into service contracts for the
exploration, exploitation and development of geothermal
resources with a foreign contractor who must be technically and
financially capable of undertaking the operations required in the
service contract.
Thus, virtually the entire range of the country's natural resources –
from petroleum and minerals to geothermal energy, from public
lands and forest resources to fishery products – was well covered
by apparent legal authority to engage in the direct participation or
involvement of foreign persons or corporations (otherwise
disqualified) in the exploration and utilization of natural resources
through service contracts.175
THE 1987 CONSTITUTION AND TECHNICAL OR
FINANCIAL ASSISTANCE AGREEMENTS
After the February 1986 Edsa Revolution, Corazon C. Aquino
took the reins of power under a revolutionary government. On
March 25, 1986, President Aquino issued Proclamation No. 3,176
promulgating the Provisional Constitution, more popularly
referred to as the Freedom Constitution. By authority of the same
Proclamation, the President created a Constitutional Commission
(CONCOM) to draft a new constitution, which took effect on the
date of its ratification on February 2, 1987.177
The 1987 Constitution retained the Regalian doctrine. The first
sentence of Section 2, Article XII states: "All lands of the public
domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, fisheries, forests or timber, wildlife,
flora and fauna, and other natural resources are owned by the
State."
Like the 1935 and 1973 Constitutions before it, the 1987
Constitution, in the second sentence of the same provision,
prohibits the alienation of natural resources, except agricultural
lands.
158
 Consonant with the State's "full supervision and control" over
natural resources, Section 2 offers the State two "options."182
The third sentence of the same paragraph is new: "The exploration,
One, the State may directly undertake these activities itself; or two,
development and utilization of natural resources shall be under the
it may enter into co-production, joint venture, or production-
full control and supervision of the State." The constitutional policy
sharing agreements with Filipino citizens, or entities at least 60%
of the State's "full control and supervision" over natural resources
of whose capital is owned by such citizens.
proceeds from the concept of jura regalia, as well as the
recognition of the importance of the country's natural resources,
not only for national economic development, but also for its
A third option is found in the third paragraph of the same section:
security and national defense.178 Under this provision, the State
assumes "a more dynamic role" in the exploration, development
and utilization of natural resources.179
The Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fish-workers in rivers,
Conspicuously absent in Section 2 is the provision in the 1935 and
lakes, bays, and lagoons.
1973 Constitutions authorizing the State to grant licenses,
concessions, or leases for the exploration, exploitation,
development, or utilization of natural resources. By such omission,
While the second and third options are limited only to Filipino
the utilization of inalienable lands of public domain through
citizens or, in the case of the former, to corporations or
"license, concession or lease" is no longer allowed under the 1987
associations at least 60% of the capital of which is owned by
Constitution.180
Filipinos, a fourth allows the participation of foreign-owned
corporations. The fourth and fifth paragraphs of Section 2 provide:
Having omitted the provision on the concession system, Section 2
proceeded to introduce "unfamiliar language":181
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals,
The State may directly undertake such activities or it may enter
petroleum, and other mineral oils according to the general terms
into co-production, joint venture, or production-sharing
and conditions provided by law, based on real contributions to the
agreements with Filipino citizens, or corporations or associations
economic growth and general welfare of the country. In such
at least sixty per centum of whose capital is owned by such
agreements, the State shall promote the development and use of
citizens.
local scientific and technical resources.

159
The President shall notify the Congress of every contract entered
into in accordance with this provision, within thirty days from its
execution.
Although Section 2 sanctions the participation of foreign-owned
corporations in the exploration, development, and utilization of
natural resources, it imposes certain limitations or conditions to
agreements with such corporations.
First, the parties to FTAAs. Only the President, in behalf of the
State, may enter into these agreements, and only with corporations.
By contrast, under the 1973 Constitution, a Filipino citizen,
corporation or association may enter into a service contract with a
"foreign person or entity."
Second, the size of the activities: only large-scale exploration,
development, and utilization is allowed. The term "large-scale
usually refers to very capital-intensive activities."183
Third, the natural resources subject of the activities is restricted to
minerals, petroleum and other mineral oils, the intent being to limit
service contracts to those areas where Filipino capital may not be
sufficient.184
Fourth, consistency with the provisions of statute. The agreements
must be in accordance with the terms and conditions provided by
law.
Fifth, Section 2 prescribes certain standards for entering into such
agreements. The agreements must be based on real contributions
to economic growth and general welfare of the country.
Sixth, the agreements must contain rudimentary stipulations for
the promotion of the development and use of local scientific and
technical resources.
Seventh, the notification requirement. The President shall notify
Congress of every financial or technical assistance agreement
entered into within thirty days from its execution.
Finally, the scope of the agreements. While the 1973 Constitution
referred to "service contracts for financial, technical, management,
or other forms of assistance" the 1987 Constitution provides for
"agreements. . . involving either financial or technical assistance."
It bears noting that the phrases "service contracts" and
"management or other forms of assistance" in the earlier
constitution have been omitted.
By virtue of her legislative powers under the Provisional
Constitution,185 President Aquino, on July 10, 1987, signed into
law E.O. No. 211 prescribing the interim procedures in the
processing and approval of applications for the exploration,
development and utilization of minerals. The omission in the 1987
Constitution of the term "service contracts" notwithstanding, the
said E.O. still referred to them in Section 2 thereof:
160
Sec. 2. Applications for the exploration, development and
utilization of mineral resources, including renewal applications
and applications for approval of operating agreements and mining
service contracts, shall be accepted and processed and may be
approved x x x. [Emphasis supplied.]
The same law provided in its Section 3 that the "processing,
evaluation and approval of all mining applications . . . operating
agreements and service contracts . . . shall be governed by
Presidential Decree No. 463, as amended, other existing mining
laws, and their implementing rules and regulations. . . ."
As earlier stated, on the 25th also of July 1987, the President issued
E.O. No. 279 by authority of which the subject WMCP FTAA was
executed on March 30, 1995.
On March 3, 1995, President Ramos signed into law R.A. No.
7942. Section 15 thereof declares that the Act "shall govern the
exploration, development, utilization, and processing of all
mineral resources." Such declaration notwithstanding, R.A. No.
7942 does not actually cover all the modes through which the State
may undertake the exploration, development, and utilization of
natural resources.
The State, being the owner of the natural resources, is accorded the
primary power and responsibility in the exploration, development
and utilization thereof. As such, it may undertake these activities
through four modes:
The State may directly undertake such activities.
(2) The State may enter into co-production, joint venture or
production-sharing agreements with Filipino citizens or qualified
corporations.
(3) Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens.
(4) For the large-scale exploration, development and utilization of
minerals, petroleum and other mineral oils, the President may
enter into agreements with foreign-owned corporations involving
technical or financial assistance.186
Except to charge the Mines and Geosciences Bureau of the DENR
with performing researches and surveys,187 and a passing
mention of government-owned or controlled corporations,188
R.A. No. 7942 does not specify how the State should go about the
first mode. The third mode, on the other hand, is governed by
Republic Act No. 7076189 (the People's Small-Scale Mining Act
of 1991) and other pertinent laws.190 R.A. No. 7942 primarily
concerns itself with the second and fourth modes.
Mineral production sharing, co-production and joint venture
agreements are collectively classified by R.A. No. 7942 as
"mineral agreements."191 The Government participates the least
in a mineral production sharing agreement (MPSA). In an MPSA,
the Government grants the contractor192 the exclusive right to
161
conduct mining operations within a contract area193 and shares in
the gross output.194 The MPSA contractor provides the financing,
technology, management and personnel necessary for the
agreement's implementation.195 The total government share in an
MPSA is the excise tax on mineral products under Republic Act
No. 7729,196 amending Section 151(a) of the National Internal
Revenue Code, as amended.197
In a co-production agreement (CA),198 the Government provides
inputs to the mining operations other than the mineral resource,199
while in a joint venture agreement (JVA), where the Government
enjoys the greatest participation, the Government and the JVA
contractor organize a company with both parties having equity
shares.200 Aside from earnings in equity, the Government in a
JVA is also entitled to a share in the gross output.201 The
Government may enter into a CA202 or JVA203 with one or more
contractors. The Government's share in a CA or JVA is set out in
Section 81 of the law:
The share of the Government in co-production and joint venture
agreements shall be negotiated by the Government and the
contractor taking into consideration the: (a) capital investment of
the project, (b) the risks involved, (c) contribution of the project to
the economy, and (d) other factors that will provide for a fair and
equitable sharing between the Government and the contractor. The
Government shall also be entitled to compensations for its other
contributions which shall be agreed upon by the parties, and shall
consist, among other things, the contractor's income tax, excise
tax, special allowance, withholding tax due from the contractor's
foreign stockholders arising from dividend or interest payments to
the said foreign stockholders, in case of a foreign national and all
such other taxes, duties and fees as provided for under existing
laws.
All mineral agreements grant the respective contractors the
exclusive right to conduct mining operations and to extract all
mineral resources found in the contract area.204 A "qualified
person" may enter into any of the mineral agreements with the
Government.205 A "qualified person" is
any citizen of the Philippines with capacity to contract, or a
corporation, partnership, association, or cooperative organized or
authorized for the purpose of engaging in mining, with technical
and financial capability to undertake mineral resources
development and duly registered in accordance with law at least
sixty per centum (60%) of the capital of which is owned by citizens
of the Philippines x x x.206
The fourth mode involves "financial or technical assistance
agreements." An FTAA is defined as "a contract involving
financial or technical assistance for large-scale exploration,
development, and utilization of natural resources."207 Any
qualified person with technical and financial capability to
undertake large-scale exploration, development, and utilization of
natural resources in the Philippines may enter into such agreement
directly with the Government through the DENR.208 For the
purpose of granting an FTAA, a legally organized foreign-owned
corporation (any corporation, partnership, association, or
cooperative duly registered in accordance with law in which less
than 50% of the capital is owned by Filipino citizens)209 is
deemed a "qualified person."210
162
Other than the difference in contractors' qualifications, the
principal distinction between mineral agreements and FTAAs is
the maximum contract area to which a qualified person may hold
or be granted.211 "Large-scale" under R.A. No. 7942 is
determined by the size of the contract area, as opposed to the
amount invested (US $50,000,000.00), which was the standard
under E.O. 279.
Like a CA or a JVA, an FTAA is subject to negotiation.212 The
Government's contributions, in the form of taxes, in an FTAA is
identical to its contributions in the two mineral agreements, save
that in an FTAA:
The collection of Government share in financial or technical
assistance agreement shall commence after the financial or
technical assistance agreement contractor has fully recovered its
pre-operating expenses, exploration, and development
expenditures, inclusive.213
III
Having examined the history of the constitutional provision and
statutes enacted pursuant thereto, a consideration of the
substantive issues presented by the petition is now in order.
THE EFFECTIVITY OF EXECUTIVE ORDER NO. 279
Petitioners argue that E.O. No. 279, the law in force when the
WMC FTAA was executed, did not come into effect.
E.O. No. 279 was signed into law by then President Aquino on
July 25, 1987, two days before the opening of Congress on July
27, 1987.214 Section 8 of the E.O. states that the same "shall take
effect immediately." This provision, according to petitioners, runs
counter to Section 1 of E.O. No. 200,215 which provides:
SECTION 1. Laws shall take effect after fifteen days following the
completion of their publication either in the Official Gazette or in
a newspaper of general circulation in the Philippines, unless it is
otherwise provided.216 [Emphasis supplied.]
On that premise, petitioners contend that E.O. No. 279 could have
only taken effect fifteen days after its publication at which time
Congress had already convened and the President's power to
legislate had ceased.
Respondents, on the other hand, counter that the validity of E.O.
No. 279 was settled in Miners Association of the Philippines v.
Factoran, supra. This is of course incorrect for the issue in Miners
Association was not the validity of E.O. No. 279 but that of DAO
Nos. 57 and 82 which were issued pursuant thereto.
Nevertheless, petitioners' contentions have no merit.
163
It bears noting that there is nothing in E.O. No. 200 that prevents
a law from taking effect on a date other than – even before – the
15-day period after its publication. Where a law provides for its
own date of effectivity, such date prevails over that prescribed by
E.O. No. 200. Indeed, this is the very essence of the phrase "unless
it is otherwise provided" in Section 1 thereof. Section 1, E.O. No.
200, therefore, applies only when a statute does not provide for its
own date of effectivity.
What is mandatory under E.O. No. 200, and what due process
requires, as this Court held in Tañada v. Tuvera,217 is the
publication of the law for without such notice and publication,
there would be no basis for the application of the maxim
"ignorantia legis n[eminem] excusat." It would be the height of
injustice to punish or otherwise burden a citizen for the
transgression of a law of which he had no notice whatsoever, not
even a constructive one.
While the effectivity clause of E.O. No. 279 does not require its
publication, it is not a ground for its invalidation since the
Constitution, being "the fundamental, paramount and supreme law
of the nation," is deemed written in the law.218 Hence, the due
process clause,219 which, so Tañada held, mandates the
publication of statutes, is read into Section 8 of E.O. No. 279.
Additionally, Section 1 of E.O. No. 200 which provides for
publication "either in the Official Gazette or in a newspaper of
general circulation in the Philippines," finds suppletory
application. It is significant to note that E.O. No. 279 was actually
published in the Official Gazette220 on August 3, 1987.
From a reading then of Section 8 of E.O. No. 279, Section 1 of
E.O. No. 200, and Tañada v. Tuvera, this Court holds that E.O.
No. 279 became effective immediately upon its publication in the
Official Gazette on August 3, 1987.
That such effectivity took place after the convening of the first
Congress is irrelevant. At the time President Aquino issued E.O.
No. 279 on July 25, 1987, she was still validly exercising
legislative powers under the Provisional Constitution.221 Article
XVIII (Transitory Provisions) of the 1987 Constitution explicitly
states:
Sec. 6. The incumbent President shall continue to exercise
legislative powers until the first Congress is convened.
The convening of the first Congress merely precluded the exercise
of legislative powers by President Aquino; it did not prevent the
effectivity of laws she had previously enacted.
There can be no question, therefore, that E.O. No. 279 is an
effective, and a validly enacted, statute.
THE CONSTITUTIONALITY OF THE WMCP FTAA
Petitioners submit that, in accordance with the text of Section 2,
Article XII of the Constitution, FTAAs should be limited to
164
"technical or financial assistance" only. They observe, however,
that, contrary to the language of the Constitution, the WMCP
This Court is not persuaded. As priorly pointed out, the phrase
FTAA allows WMCP, a fully foreign-owned mining corporation,
"management or other forms of assistance" in the 1973
to extend more than mere financial or technical assistance to the
Constitution was deleted in the 1987 Constitution, which allows
State, for it permits WMCP to manage and operate every aspect of
only "technical or financial assistance." Casus omisus pro omisso
the mining activity. 222
habendus est. A person, object or thing omitted from an
enumeration must be held to have been omitted intentionally.228
As will be shown later, the management or operation of mining
Petitioners' submission is well-taken. It is a cardinal rule in the
activities by foreign contractors, which is the primary feature of
interpretation of constitutions that the instrument must be so
service contracts, was precisely the evil that the drafters of the
construed as to give effect to the intention of the people who
1987 Constitution sought to eradicate.
adopted it.223 This intention is to be sought in the constitution
itself, and the apparent meaning of the words is to be taken as
expressing it, except in cases where that assumption would lead to
Respondents insist that "agreements involving technical or
absurdity, ambiguity, or contradiction.224 What the Constitution
financial assistance" is just another term for service contracts.
says according to the text of the provision, therefore, compels
They contend that the proceedings of the CONCOM indicate "that
acceptance and negates the power of the courts to alter it, based on
although the terminology 'service contract' was avoided [by the
the postulate that the framers and the people mean what they
Constitution], the concept it represented was not." They add that
say.225 Accordingly, following the literal text of the Constitution,
"[t]he concept is embodied in the phrase 'agreements involving
assistance accorded by foreign-owned corporations in the large-
financial or technical assistance.'"229 And point out how members
scale exploration, development, and utilization of petroleum,
of the CONCOM referred to these agreements as "service
minerals and mineral oils should be limited to "technical" or
contracts." For instance:
"financial" assistance only.

SR. TAN. Am I correct in thinking that the only difference

WMCP nevertheless submits that the word "technical" in the
between these future service contracts and the past service
fourth paragraph of Section 2 of E.O. No. 279 encompasses a
contracts under Mr. Marcos is the general law to be enacted by the
"broad number of possible services," perhaps, "scientific and/or
legislature and the notification of Congress by the President? That
technological in basis."226 It thus posits that it may also well
is the only difference, is it not?
include "the area of management or operations . . . so long as such
assistance requires specialized knowledge or skills, and are related
to the exploration, development and utilization of mineral
MR. VILLEGAS. That is right.
resources."227

165
SR. TAN. So those are the safeguards[?]
MR. VILLEGAS. Yes. There was no law at all governing service
contracts before.
SR. TAN. Thank you, Madam President.230 [Emphasis supplied.]
WMCP also cites the following statements of Commissioners
Gascon, Garcia, Nolledo and Tadeo who alluded to service
contracts as they explained their respective votes in the approval
of the draft Article:
MR. GASCON. Mr. Presiding Officer, I vote no primarily because
of two reasons: One, the provision on service contracts. I felt that
if we would constitutionalize any provision on service contracts,
this should always be with the concurrence of Congress and not
guided only by a general law to be promulgated by Congress. x x
x.231 [Emphasis supplied.]
x x x.
MR. GARCIA. Thank you.
I vote no. x x x.
Service contracts are given constitutional legitimization in Section
3, even when they have been proven to be inimical to the interests
of the nation, providing as they do the legal loophole for the
exploitation of our natural resources for the benefit of foreign
interests. They constitute a serious negation of Filipino control on
the use and disposition of the nation's natural resources, especially
with regard to those which are nonrenewable.232 [Emphasis
supplied.]
xxx
MR. NOLLEDO. While there are objectionable provisions in the
Article on National Economy and Patrimony, going over said
provisions meticulously, setting aside prejudice and personalities
will reveal that the article contains a balanced set of provisions. I
hope the forthcoming Congress will implement such provisions
taking into account that Filipinos should have real control over our
economy and patrimony, and if foreign equity is permitted, the
same must be subordinated to the imperative demands of the
national interest.
x x x.
It is also my understanding that service contracts involving foreign
corporations or entities are resorted to only when no Filipino
enterprise or Filipino-controlled enterprise could possibly
undertake the exploration or exploitation of our natural resources
and that compensation under such contracts cannot and should not
166
equal what should pertain to ownership of capital. In other words,
the service contract should not be an instrument to circumvent the
basic provision, that the exploration and exploitation of natural
resources should be truly for the benefit of Filipinos.
Thank you, and I vote yes.233 [Emphasis supplied.]
x x x.
MR. TADEO. Nais ko lamang ipaliwanag ang aking boto.
Matapos suriin ang kalagayan ng Pilipinas, ang saligang suliranin,
pangunahin ang salitang "imperyalismo." Ang ibig sabihin nito ay
ang sistema ng lipunang pinaghaharian ng iilang monopolyong
kapitalista at ang salitang "imperyalismo" ay buhay na buhay sa
National Economy and Patrimony na nating ginawa. Sa
pamamagitan ng salitang "based on," naroroon na ang free trade
sapagkat tayo ay mananatiling tagapagluwas ng hilaw na sangkap
at tagaangkat ng yaring produkto. Pangalawa, naroroon pa rin ang
parity rights, ang service contract, ang 60-40 equity sa natural
resources. Habang naghihirap ang sambayanang Pilipino,
ginagalugad naman ng mga dayuhan ang ating likas na yaman.
Kailan man ang Article on National Economy and Patrimony ay
hindi nagpaalis sa pagkaalipin ng ating ekonomiya sa kamay ng
mga dayuhan. Ang solusyon sa suliranin ng bansa ay dalawa
lamang: ang pagpapatupad ng tunay na reporma sa lupa at ang
national industrialization. Ito ang tinatawag naming pagsikat ng
araw sa Silangan. Ngunit ang mga landlords and big businessmen
at ang mga komprador ay nagsasabi na ang free trade na ito, ang
kahulugan para sa amin, ay ipinipilit sa ating sambayanan na ang
araw ay sisikat sa Kanluran. Kailan man hindi puwedeng sumikat
ang araw sa Kanluran. I vote no.234 [Emphasis supplied.]
This Court is likewise not persuaded.
As earlier noted, the phrase "service contracts" has been deleted in
the 1987 Constitution's Article on National Economy and
Patrimony. If the CONCOM intended to retain the concept of
service contracts under the 1973 Constitution, it could have simply
adopted the old terminology ("service contracts") instead of
employing new and unfamiliar terms ("agreements . . . involving
either technical or financial assistance"). Such a difference
between the language of a provision in a revised constitution and
that of a similar provision in the preceding constitution is viewed
as indicative of a difference in purpose.235 If, as respondents
suggest, the concept of "technical or financial assistance"
agreements is identical to that of "service contracts," the
CONCOM would not have bothered to fit the same dog with a new
collar. To uphold respondents' theory would reduce the first to a
mere euphemism for the second and render the change in
phraseology meaningless.
An examination of the reason behind the change confirms that
technical or financial assistance agreements are not synonymous
to service contracts.
[T]he Court in construing a Constitution should bear in mind the
object sought to be accomplished by its adoption, and the evils, if
167
any, sought to be prevented or remedied. A doubtful provision will
be examined in light of the history of the times, and the condition
and circumstances under which the Constitution was framed. The
object is to ascertain the reason which induced the framers of the
Constitution to enact the particular provision and the purpose
sought to be accomplished thereby, in order to construe the whole
as to make the words consonant to that reason and calculated to
effect that purpose.236
As the following question of Commissioner Quesada and
Commissioner Villegas' answer shows the drafters intended to do
away with service contracts which were used to circumvent the
capitalization (60%-40%) requirement:
MS. QUESADA. The 1973 Constitution used the words "service
contracts." In this particular Section 3, is there a safeguard against
the possible control of foreign interests if the Filipinos go into
coproduction with them?
MR. VILLEGAS. Yes. In fact, the deletion of the phrase "service
contracts" was our first attempt to avoid some of the abuses in the
past regime in the use of service contracts to go around the 60-40
arrangement. The safeguard that has been introduced – and this, of
course can be refined – is found in Section 3, lines 25 to 30, where
Congress will have to concur with the President on any agreement
entered into between a foreign-owned corporation and the
government involving technical or financial assistance for large-
scale exploration, development and utilization of natural
resources.237 [Emphasis supplied.]
In a subsequent discussion, Commissioner Villegas allayed the
fears of Commissioner Quesada regarding the participation of
foreign interests in Philippine natural resources, which was
supposed to be restricted to Filipinos.
MS. QUESADA. Another point of clarification is the phrase "and
utilization of natural resources shall be under the full control and
supervision of the State." In the 1973 Constitution, this was limited
to citizens of the Philippines; but it was removed and substituted
by "shall be under the full control and supervision of the State."
Was the concept changed so that these particular resources would
be limited to citizens of the Philippines? Or would these resources
only be under the full control and supervision of the State;
meaning, noncitizens would have access to these natural
resources? Is that the understanding?
MR. VILLEGAS. No, Mr. Vice-President, if the Commissioner
reads the next sentence, it states:
Such activities may be directly undertaken by the State, or it may
enter into co-production, joint venture, production-sharing
agreements with Filipino citizens.
So we are still limiting it only to Filipino citizens.
x x x.
168
MS. QUESADA. Going back to Section 3, the section suggests
that:
The exploration, development, and utilization of natural
resources… may be directly undertaken by the State, or it may
enter into co-production, joint venture or production-sharing
agreement with . . . corporations or associations at least sixty per
cent of whose voting stock or controlling interest is owned by such
citizens.
Lines 25 to 30, on the other hand, suggest that in the large-scale
exploration, development and utilization of natural resources, the
President with the concurrence of Congress may enter into
agreements with foreign-owned corporations even for technical or
financial assistance.
I wonder if this part of Section 3 contradicts the second part. I am
raising this point for fear that foreign investors will use their
enormous capital resources to facilitate the actual exploitation or
exploration, development and effective disposition of our natural
resources to the detriment of Filipino investors. I am not saying
that we should not consider borrowing money from foreign
sources. What I refer to is that foreign interest should be allowed
to participate only to the extent that they lend us money and give
us technical assistance with the appropriate government permit. In
this way, we can insure the enjoyment of our natural resources by
our own people.
MR. VILLEGAS. Actually, the second provision about the
President does not permit foreign investors to participate. It is only
technical or financial assistance – they do not own anything – but
on conditions that have to be determined by law with the
concurrence of Congress. So, it is very restrictive.
If the Commissioner will remember, this removes the possibility
for service contracts which we said yesterday were avenues used
in the previous regime to go around the 60-40 requirement.238
[Emphasis supplied.]
The present Chief Justice, then a member of the CONCOM, also
referred to this limitation in scope in proposing an amendment to
the 60-40 requirement:
MR. DAVIDE. May I be allowed to explain the proposal?
MR. MAAMBONG. Subject to the three-minute rule, Madam
President.
MR. DAVIDE. It will not take three minutes.
The Commission had just approved the Preamble. In the Preamble
we clearly stated that the Filipino people are sovereign and that
one of the objectives for the creation or establishment of a
government is to conserve and develop the national patrimony.
The implication is that the national patrimony or our natural
169
resources are exclusively reserved for the Filipino people. No alien
must be allowed to enjoy, exploit and develop our natural
The opinion of another member of the CONCOM is persuasive240
resources. As a matter of fact, that principle proceeds from the fact
and leaves no doubt as to the intention of the framers to eliminate
that our natural resources are gifts from God to the Filipino people
service contracts altogether. He writes:
and it would be a breach of that special blessing from God if we
will allow aliens to exploit our natural resources.
Paragraph 4 of Section 2 specifies large-scale, capital-intensive,
highly technological undertakings for which the President may
I voted in favor of the Jamir proposal because it is not really
enter into contracts with foreign-owned corporations, and
exploitation that we granted to the alien corporations but only for
enunciates strict conditions that should govern such contracts. x x
them to render financial or technical assistance. It is not for them
x.
to enjoy our natural resources. Madam President, our natural
resources are depleting; our population is increasing by leaps and
bounds. Fifty years from now, if we will allow these aliens to
This provision balances the need for foreign capital and
exploit our natural resources, there will be no more natural
technology with the need to maintain the national sovereignty. It
resources for the next generations of Filipinos. It may last long if
recognizes the fact that as long as Filipinos can formulate their
we will begin now. Since 1935 the aliens have been allowed to
own terms in their own territory, there is no danger of
enjoy to a certain extent the exploitation of our natural resources,
relinquishing sovereignty to foreign interests.
and we became victims of foreign dominance and control. The
aliens are interested in coming to the Philippines because they
would like to enjoy the bounty of nature exclusively intended for
Are service contracts allowed under the new Constitution? No.
Filipinos by God.
Under the new Constitution, foreign investors (fully alien-owned)
can NOT participate in Filipino enterprises except to provide: (1)
Technical Assistance for highly technical enterprises; and (2)
And so I appeal to all, for the sake of the future generations, that
Financial Assistance for large-scale enterprises.
if we have to pray in the Preamble "to preserve and develop the
national patrimony for the sovereign Filipino people and for the
generations to come," we must at this time decide once and for all
The intent of this provision, as well as other provisions on foreign
that our natural resources must be reserved only to Filipino
investments, is to prevent the practice (prevalent in the Marcos
citizens.
government) of skirting the 60/40 equation using the cover of
service contracts.241 [Emphasis supplied.]
Thank you.239 [Emphasis supplied.]

170
Furthermore, it appears that Proposed Resolution No. 496,242 The National Assembly may by law allow small scale utilization
which was the draft Article on National Economy and Patrimony, of natural resources by Filipino citizens.
adopted the concept of "agreements . . . involving either technical
or financial assistance" contained in the "Draft of the 1986 U.P.
Law Constitution Project" (U.P. Law draft) which was taken into The National Assembly, may, by two-thirds vote of all its
consideration during the deliberation of the CONCOM.243 The members by special law provide the terms and conditions under
former, as well as Article XII, as adopted, employed the same which a foreign-owned corporation may enter into agreements
terminology, as the comparative table below shows: with the government involving either technical or financial
assistance for large-scale exploration, development, or utilization
of natural resources. [Emphasis supplied.]
DRAFT OF THE UP LAW CONSTITUTION PROJECT
PROPOSED RESOLUTION NO. 496 OF THE
CONSTITUTIONAL COMMISSION ARTICLE XII OF THE Sec. 3. All lands of the public domain, waters, minerals, coal,
1987 CONSTITUTION petroleum and other mineral oils, all forces of potential energy,
fisheries, forests, flora and fauna, and other natural resources are
Sec. 1. All lands of the public domain, waters, minerals, coal,
owned by the State. With the exception of agricultural lands, all
petroleum and other mineral oils, all forces of potential energy,
other natural resources shall not be alienated. The exploration,
fisheries, flora and fauna and other natural resources of the
development, and utilization of natural resources shall be under
Philippines are owned by the State. With the exception of
the full control and supervision of the State. Such activities may
agricultural lands, all other natural resources shall not be alienated.
be directly undertaken by the State, or it may enter into co-
The exploration, development and utilization of natural resources
production, joint venture, production-sharing agreements with
shall be under the full control and supervision of the State. Such
Filipino citizens or corporations or associations at least sixty per
activities may be directly undertaken by the state, or it may enter
cent of whose voting stock or controlling interest is owned by such
into co-production, joint venture, production sharing agreements
citizens. Such agreements shall be for a period of twenty-five
with Filipino citizens or corporations or associations sixty per cent
years, renewable for not more than twenty-five years, and under
of whose voting stock or controlling interest is owned by such
such term and conditions as may be provided by law. In cases of
citizens for a period of not more than twenty-five years, renewable
water rights for irrigation, water supply, fisheries or industrial uses
for not more than twenty-five years and under such terms and
other than the development for water power, beneficial use may be
conditions as may be provided by law. In case as to water rights
the measure and limit of the grant.
for irrigation, water supply, fisheries, or industrial uses other than
the development of water power, beneficial use may be the
measure and limit of the grant.

171
The Congress may by law allow small-scale utilization of natural
resources by Filipino citizens, as well as cooperative fish farming
in rivers, lakes, bays, and lagoons.
The President with the concurrence of Congress, by special law,
shall provide the terms and conditions under which a foreign-
owned corporation may enter into agreements with the
government involving either technical or financial assistance for
large-scale exploration, development, and utilization of natural
resources. [Emphasis supplied.]
Sec. 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated.
The exploration, development, and utilization of natural resources
shall be under the full control and supervision of the State. The
State may directly undertake such activities or it may enter into co-
production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least sixty per
centum of whose capital is owned by such citizens. Such
agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such
terms and conditions as may be provided by law. In case of water
rights for irrigation, water supply, fisheries, or industrial uses other
than the development of water power, beneficial use may be the
measure and limit of the grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive economic zone,
and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fish-workers in rivers,
lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms
and conditions provided by law, based on real contributions to the
economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of
local scientific and technical resources. [Emphasis supplied.]
The President shall notify the Congress of every contract entered
into in accordance with this provision, within thirty days from its
execution.
The insights of the proponents of the U.P. Law draft are, therefore,
instructive in interpreting the phrase "technical or financial
assistance."
In his position paper entitled Service Contracts: Old Wine in New
Bottles?, Professor Pacifico A. Agabin, who was a member of the
172
working group that prepared the U.P. Law draft, criticized service
contracts for they "lodge exclusive management and control of the
6. Repatriation of capital and retention of profits abroad
enterprise to the service contractor, which is reminiscent of the old
guaranteed to the contractor (Sec. 13, P.D. 87); and
concession regime. Thus, notwithstanding the provision of the
Constitution that natural resources belong to the State, and that
these shall not be alienated, the service contract system renders
7. While title to the petroleum discovered may nominally be in the
nugatory the constitutional provisions cited."244 He elaborates:
name of the government, the contractor has almost unfettered
control over its disposition and sale, and even the domestic
requirements of the country is relegated to a pro rata basis (Sec.
Looking at the Philippine model, we can discern the following
8).
vestiges of the concession regime, thus:

In short, our version of the service contract is just a rehash of the

1. Bidding of a selected area, or leasing the choice of the area to
old concession regime x x x. Some people have pulled an old rabbit
the interested party and then negotiating the terms and conditions
out of a magician's hat, and foisted it upon us as a new and different
of the contract; (Sec. 5, P.D. 87)
animal.

2. Management of the enterprise vested on the contractor,

The service contract as we know it here is antithetical to the
including operation of the field if petroleum is discovered; (Sec. 8,
principle of sovereignty over our natural resources restated in the
P.D. 87)
same article of the [1973] Constitution containing the provision
for service contracts. If the service contractor happens to be a
foreign corporation, the contract would also run counter to the
3. Control of production and other matters such as expansion and
constitutional provision on nationalization or Filipinization, of the
development; (Sec. 8)
exploitation of our natural resources.245 [Emphasis supplied.
Underscoring in the original.]
4. Responsibility for downstream operations – marketing,
distribution, and processing may be with the contractor (Sec. 8);
Professor Merlin M. Magallona, also a member of the working
group, was harsher in his reproach of the system:
5. Ownership of equipment, machinery, fixed assets, and other
properties remain with contractor (Sec. 12, P.D. 87);

173
x x x the nationalistic phraseology of the 1935 [Constitution] was
retained by the [1973] Charter, but the essence of nationalism was
reduced to hollow rhetoric. The 1973 Charter still provided that
the exploitation or development of the country's natural resources
be limited to Filipino citizens or corporations owned or controlled
by them. However, the martial-law Constitution allowed them,
once these resources are in their name, to enter into service
contracts with foreign investors for financial, technical,
management, or other forms of assistance. Since foreign investors
have the capital resources, the actual exploitation and
development, as well as the effective disposition, of the country's
natural resources, would be under their direction, and control,
relegating the Filipino investors to the role of second-rate partners
in joint ventures.
Through the instrumentality of the service contract, the 1973
Constitution had legitimized at the highest level of state policy that
which was prohibited under the 1973 Constitution, namely: the
exploitation of the country's natural resources by foreign nationals.
The drastic impact of [this] constitutional change becomes more
pronounced when it is considered that the active party to any
service contract may be a corporation wholly owned by foreign
interests. In such a case, the citizenship requirement is completely
set aside, permitting foreign corporations to obtain actual
possession, control, and [enjoyment] of the country's natural
resources.246 [Emphasis supplied.]
Accordingly, Professor Agabin recommends that:
Recognizing the service contract for what it is, we have to expunge
it from the Constitution and reaffirm ownership over our natural
resources. That is the only way we can exercise effective control
over our natural resources.
This should not mean complete isolation of the country's natural
resources from foreign investment. Other contract forms which are
less derogatory to our sovereignty and control over natural
resources – like technical assistance agreements, financial
assistance [agreements], co-production agreements, joint ventures,
production-sharing – could still be utilized and adopted without
violating constitutional provisions. In other words, we can adopt
contract forms which recognize and assert our sovereignty and
ownership over natural resources, and where the foreign entity is
just a pure contractor instead of the beneficial owner of our
economic resources.247 [Emphasis supplied.]
Still another member of the working group, Professor Eduardo
Labitag, proposed that:
2. Service contracts as practiced under the 1973 Constitution
should be discouraged, instead the government may be allowed,
subject to authorization by special law passed by an extraordinary
majority to enter into either technical or financial assistance. This
is justified by the fact that as presently worded in the 1973
Constitution, a service contract gives full control over the contract
area to the service contractor, for him to work, manage and dispose
of the proceeds or production. It was a subterfuge to get around
the nationality requirement of the constitution.248 [Emphasis
supplied.]
174
 since the foreign entity is just a pure contractor and not a beneficial
owner of our economic resources. The proposal recognizes the
In the annotations on the proposed Article on National Economy
need for capital and technology to develop our natural resources
and Patrimony, the U.P. Law draft summarized the rationale
without sacrificing our sovereignty and control over such
therefor, thus:
resources by the safeguard of a special law which requires two-
thirds vote of all the members of the Legislature. This will ensure
that such agreements will be debated upon exhaustively and
5. The last paragraph is a modification of the service contract
thoroughly in the National Assembly to avert prejudice to the
provision found in Section 9, Article XIV of the 1973 Constitution
nation.249 [Emphasis supplied.]
as amended. This 1973 provision shattered the framework of
nationalism in our fundamental law (see Magallona, "Nationalism
and its Subversion in the Constitution"). Through the service
The U.P. Law draft proponents viewed service contracts under the
contract, the 1973 Constitution had legitimized that which was
1973 Constitution as grants of beneficial ownership of the
prohibited under the 1935 constitution—the exploitation of the
country's natural resources to foreign owned corporations. While,
country's natural resources by foreign nationals. Through the
in theory, the State owns these natural resources – and Filipino
service contract, acts prohibited by the Anti-Dummy Law were
citizens, their beneficiaries – service contracts actually vested
recognized as legitimate arrangements. Service contracts lodge
foreigners with the right to dispose, explore for, develop, exploit,
exclusive management and control of the enterprise to the service
and utilize the same. Foreigners, not Filipinos, became the
contractor, not unlike the old concession regime where the
beneficiaries of Philippine natural resources. This arrangement is
concessionaire had complete control over the country's natural
clearly incompatible with the constitutional ideal of
resources, having been given exclusive and plenary rights to
nationalization of natural resources, with the Regalian doctrine,
exploit a particular resource and, in effect, having been assured of
and on a broader perspective, with Philippine sovereignty.
ownership of that resource at the point of extraction (see Agabin,
"Service Contracts: Old Wine in New Bottles"). Service contracts,
hence, are antithetical to the principle of sovereignty over our
The proponents nevertheless acknowledged the need for capital
natural resources, as well as the constitutional provision on
and technical know-how in the large-scale exploitation,
nationalization or Filipinization of the exploitation of our natural
development and utilization of natural resources – the second
resources.
paragraph of the proposed draft itself being an admission of such
scarcity. Hence, they recommended a compromise to reconcile the
nationalistic provisions dating back to the 1935 Constitution,
Under the proposed provision, only technical assistance or
which reserved all natural resources exclusively to Filipinos, and
financial assistance agreements may be entered into, and only for
the more liberal 1973 Constitution, which allowed foreigners to
large-scale activities. These are contract forms which recognize
participate in these resources through service contracts. Such a
and assert our sovereignty and ownership over natural resources
175
compromise called for the adoption of a new system in the
exploration, development, and utilization of natural resources in
the form of technical agreements or financial agreements which,
necessarily, are distinct concepts from service contracts.
The replacement of "service contracts" with "agreements…
involving either technical or financial assistance," as well as the
deletion of the phrase "management or other forms of assistance,"
assumes greater significance when note is taken that the U.P. Law
draft proposed other equally crucial changes that were obviously
heeded by the CONCOM. These include the abrogation of the
concession system and the adoption of new "options" for the State
in the exploration, development, and utilization of natural
resources. The proponents deemed these changes to be more
consistent with the State's ownership of, and its "full control and
supervision" (a phrase also employed by the framers) over, such
resources. The Project explained:
3. In line with the State ownership of natural resources, the State
should take a more active role in the exploration, development, and
utilization of natural resources, than the present practice of
granting licenses, concessions, or leases – hence the provision that
said activities shall be under the full control and supervision of the
State. There are three major schemes by which the State could
undertake these activities: first, directly by itself; second, by virtue
of co-production, joint venture, production sharing agreements
with Filipino citizens or corporations or associations sixty per cent
(60%) of the voting stock or controlling interests of which are
owned by such citizens; or third, with a foreign-owned
corporation, in cases of large-scale exploration, development, or
utilization of natural resources through agreements involving
either technical or financial assistance only. x x x.
At present, under the licensing concession or lease schemes, the
government benefits from such benefits only through fees,
charges, ad valorem taxes and income taxes of the exploiters of
our natural resources. Such benefits are very minimal compared
with the enormous profits reaped by theses licensees, grantees,
concessionaires. Moreover, some of them disregard the
conservation of natural resources and do not protect the
environment from degradation. The proposed role of the State will
enable it to a greater share in the profits – it can also actively
husband its natural resources and engage in developmental
programs that will be beneficial to them.
4. Aside from the three major schemes for the exploration,
development, and utilization of our natural resources, the State
may, by law, allow Filipino citizens to explore, develop, utilize
natural resources in small-scale. This is in recognition of the plight
of marginal fishermen, forest dwellers, gold panners, and others
similarly situated who exploit our natural resources for their daily
sustenance and survival.250
Professor Agabin, in particular, after taking pains to illustrate the
similarities between the two systems, concluded that the service
contract regime was but a "rehash" of the concession system. "Old
wine in new bottles," as he put it. The rejection of the service
contract regime, therefore, is in consonance with the abolition of
the concession system.
176
In light of the deliberations of the CONCOM, the text of the
Constitution, and the adoption of other proposed changes, there is
no doubt that the framers considered and shared the intent of the
U.P. Law proponents in employing the phrase "agreements . . .
involving either technical or financial assistance."
While certain commissioners may have mentioned the term
"service contracts" during the CONCOM deliberations, they may
not have been necessarily referring to the concept of service
contracts under the 1973 Constitution. As noted earlier, "service
contracts" is a term that assumes different meanings to different
people.251 The commissioners may have been using the term
loosely, and not in its technical and legal sense, to refer, in general,
to agreements concerning natural resources entered into by the
Government with foreign corporations. These loose statements do
not necessarily translate to the adoption of the 1973 Constitution
provision allowing service contracts.
It is true that, as shown in the earlier quoted portions of the
proceedings in CONCOM, in response to Sr. Tan's question,
Commissioner Villegas commented that, other than congressional
notification, the only difference between "future" and "past"
"service contracts" is the requirement of a general law as there
were no laws previously authorizing the same.252 However, such
remark is far outweighed by his more categorical statement in his
exchange with Commissioner Quesada that the draft article "does
not permit foreign investors to participate" in the nation's natural
resources – which was exactly what service contracts did – except
to provide "technical or financial assistance."253
In the case of the other commissioners, Commissioner Nolledo
himself clarified in his work that the present charter prohibits
service contracts.254 Commissioner Gascon was not totally averse
to foreign participation, but favored stricter restrictions in the form
of majority congressional concurrence.255 On the other hand,
Commissioners Garcia and Tadeo may have veered to the extreme
side of the spectrum and their objections may be interpreted as
votes against any foreign participation in our natural resources
whatsoever.
WMCP cites Opinion No. 75, s. 1987,256 and Opinion No. 175, s.
1990257 of the Secretary of Justice, expressing the view that a
financial or technical assistance agreement "is no different in
concept" from the service contract allowed under the 1973
Constitution. This Court is not, however, bound by this
interpretation. When an administrative or executive agency
renders an opinion or issues a statement of policy, it merely
interprets a pre-existing law; and the administrative interpretation
of the law is at best advisory, for it is the courts that finally
determine what the law means.258
In any case, the constitutional provision allowing the President to
enter into FTAAs with foreign-owned corporations is an exception
to the rule that participation in the nation's natural resources is
reserved exclusively to Filipinos. Accordingly, such provision
must be construed strictly against their enjoyment by non-
Filipinos. As Commissioner Villegas emphasized, the provision is
"very restrictive."259 Commissioner Nolledo also remarked that
"entering into service contracts is an exception to the rule on
protection of natural resources for the interest of the nation and,
therefore, being an exception, it should be subject, whenever
177
possible, to stringent rules."260 Indeed, exceptions should be
strictly but reasonably construed; they extend only so far as their
language fairly warrants and all doubts should be resolved in favor
of the general provision rather than the exception.261
With the foregoing discussion in mind, this Court finds that R.A.
No. 7942 is invalid insofar as said Act authorizes service contracts.
Although the statute employs the phrase "financial and technical
agreements" in accordance with the 1987 Constitution, it actually
treats these agreements as service contracts that grant beneficial
ownership to foreign contractors contrary to the fundamental law.
Section 33, which is found under Chapter VI (Financial or
Technical Assistance Agreement) of R.A. No. 7942 states:
SEC. 33. Eligibility.—Any qualified person with technical and
financial capability to undertake large-scale exploration,
development, and utilization of mineral resources in the
Philippines may enter into a financial or technical assistance
agreement directly with the Government through the Department.
[Emphasis supplied.]
"Exploration," as defined by R.A. No. 7942,
means the searching or prospecting for mineral resources by
geological, geochemical or geophysical surveys, remote sensing,
test pitting, trending, drilling, shaft sinking, tunneling or any other
means for the purpose of determining the existence, extent,
quantity and quality thereof and the feasibility of mining them for
profit.262
A legally organized foreign-owned corporation may be granted an
exploration permit,263 which vests it with the right to conduct
exploration for all minerals in specified areas,264 i.e., to enter,
occupy and explore the same.265 Eventually, the foreign-owned
corporation, as such permittee, may apply for a financial and
technical assistance agreement.266
"Development" is the work undertaken to explore and prepare an
ore body or a mineral deposit for mining, including the
construction of necessary infrastructure and related facilities.267
"Utilization" "means the extraction or disposition of minerals."268
A stipulation that the proponent shall dispose of the minerals and
byproducts produced at the highest price and more advantageous
terms and conditions as provided for under the implementing rules
and regulations is required to be incorporated in every FTAA.269
A foreign-owned/-controlled corporation may likewise be granted
a mineral processing permit.270 "Mineral processing" is the
milling, beneficiation or upgrading of ores or minerals and rocks
or by similar means to convert the same into marketable
products.271
An FTAA contractor makes a warranty that the mining operations
shall be conducted in accordance with the provisions of R.A. No.
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7942 and its implementing rules272 and for work programs and
minimum expenditures and commitments.273 And it obliges itself
to furnish the Government records of geologic, accounting, and
other relevant data for its mining operation.274
"Mining operation," as the law defines it, means mining activities
involving exploration, feasibility, development, utilization, and
processing.275
The underlying assumption in all these provisions is that the
foreign contractor manages the mineral resources, just like the
foreign contractor in a service contract.
Furthermore, Chapter XII of the Act grants foreign contractors in
FTAAs the same auxiliary mining rights that it grants contractors
in mineral agreements (MPSA, CA and JV).276 Parenthetically,
Sections 72 to 75 use the term "contractor," without distinguishing
between FTAA and mineral agreement contractors. And so does
"holders of mining rights" in Section 76. A foreign contractor may
even convert its FTAA into a mineral agreement if the economic
viability of the contract area is found to be inadequate to justify
large-scale mining operations,277 provided that it reduces its
equity in the corporation, partnership, association or cooperative
to forty percent (40%).278
Finally, under the Act, an FTAA contractor warrants that it "has or
has access to all the financing, managerial, and technical expertise.
. . ."279 This suggests that an FTAA contractor is bound to provide
some management assistance – a form of assistance that has been
eliminated and, therefore, proscribed by the present Charter.
By allowing foreign contractors to manage or operate all the
aspects of the mining operation, the above-cited provisions of R.A.
No. 7942 have in effect conveyed beneficial ownership over the
nation's mineral resources to these contractors, leaving the State
with nothing but bare title thereto.
Moreover, the same provisions, whether by design or
inadvertence, permit a circumvention of the constitutionally
ordained 60%-40% capitalization requirement for corporations or
associations engaged in the exploitation, development and
utilization of Philippine natural resources.
In sum, the Court finds the following provisions of R.A. No. 7942
to be violative of Section 2, Article XII of the Constitution:
(1) The proviso in Section 3 (aq), which defines "qualified
person," to wit:
Provided, That a legally organized foreign-owned corporation
shall be deemed a qualified person for purposes of granting an
exploration permit, financial or technical assistance agreement or
mineral processing permit.
179
(2) Section 23,280 which specifies the rights and obligations of an Section 34,285 which prescribes the maximum contract area in a
exploration permittee, insofar as said section applies to a financial financial or technical assistance agreements;
or technical assistance agreement,

Section 36,286 which allows negotiations for financial or technical

(3) Section 33, which prescribes the eligibility of a contractor in a assistance agreements;
financial or technical assistance agreement;

Section 37,287 which prescribes the procedure for filing and

(4) Section 35,281 which enumerates the terms and conditions for evaluation of financial or technical assistance agreement
every financial or technical assistance agreement; proposals;

(5) Section 39,282 which allows the contractor in a financial and Section 38,288 which limits the term of financial or technical
technical assistance agreement to convert the same into a mineral assistance agreements;
production-sharing agreement;

Section 40,289 which allows the assignment or transfer of

(6) Section 56,283 which authorizes the issuance of a mineral financial or technical assistance agreements;
processing permit to a contractor in a financial and technical
assistance agreement;
Section 41,290 which allows the withdrawal of the contractor in
an FTAA;
The following provisions of the same Act are likewise void as they
are dependent on the foregoing provisions and cannot stand on
their own: The second and third paragraphs of Section 81,291 which provide
for the Government's share in a financial and technical assistance
agreement; and
(1) Section 3 (g),284 which defines the term "contractor," insofar
as it applies to a financial or technical assistance agreement.
Section 90,292 which provides for incentives to contractors in
FTAAs insofar as it applies to said contractors;

180
When the parts of the statute are so mutually dependent and
connected as conditions, considerations, inducements, or
compensations for each other, as to warrant a belief that the
legislature intended them as a whole, and that if all could not be
carried into effect, the legislature would not pass the residue
independently, then, if some parts are unconstitutional, all the
provisions which are thus dependent, conditional, or connected,
must fall with them.293
There can be little doubt that the WMCP FTAA itself is a service
contract.
Section 1.3 of the WMCP FTAA grants WMCP "the exclusive
right to explore, exploit, utilise[,] process and dispose of all
Minerals products and by-products thereof that may be produced
from the Contract Area."294 The FTAA also imbues WMCP with
the following rights:
(b) to extract and carry away any Mineral samples from the
Contract area for the purpose of conducting tests and studies in
respect thereof;
(c) to determine the mining and treatment processes to be utilised
during the Development/Operating Period and the project facilities
to be constructed during the Development and Construction
Period;
(d) have the right of possession of the Contract Area, with full right
of ingress and egress and the right to occupy the same, subject to
the provisions of Presidential Decree No. 512 (if applicable) and
not be prevented from entry into private ands by surface owners
and/or occupants thereof when prospecting, exploring and
exploiting for minerals therein;
xxx
(f) to construct roadways, mining, drainage, power generation and
transmission facilities and all other types of works on the Contract
Area;
(g) to erect, install or place any type of improvements, supplies,
machinery and other equipment relating to the Mining Operations
and to use, sell or otherwise dispose of, modify, remove or
diminish any and all parts thereof;
(h) enjoy, subject to pertinent laws, rules and regulations and the
rights of third Parties, easement rights and the use of timber, sand,
clay, stone, water and other natural resources in the Contract Area
without cost for the purposes of the Mining Operations;
xxx
(i) have the right to mortgage, charge or encumber all or part of its
interest and obligations under this Agreement, the plant,
181
equipment and infrastructure and the Minerals produced from the
Mining Operations;
x x x. 295
All materials, equipment, plant and other installations erected or
placed on the Contract Area remain the property of WMCP, which
has the right to deal with and remove such items within twelve
months from the termination of the FTAA.296
Pursuant to Section 1.2 of the FTAA, WMCP shall provide "[all]
financing, technology, management and personnel necessary for
the Mining Operations." The mining company binds itself to
"perform all Mining Operations . . . providing all necessary
services, technology and financing in connection therewith,"297
and to "furnish all materials, labour, equipment and other
installations that may be required for carrying on all Mining
Operations."298> WMCP may make expansions, improvements
and replacements of the mining facilities and may add such new
facilities as it considers necessary for the mining operations.299
These contractual stipulations, taken together, grant WMCP
beneficial ownership over natural resources that properly belong
to the State and are intended for the benefit of its citizens. These
stipulations are abhorrent to the 1987 Constitution. They are
precisely the vices that the fundamental law seeks to avoid, the
evils that it aims to suppress. Consequently, the contract from
which they spring must be struck down.
In arguing against the annulment of the FTAA, WMCP invokes
the Agreement on the Promotion and Protection of Investments
between the Philippine and Australian Governments, which was
signed in Manila on January 25, 1995 and which entered into force
on December 8, 1995.
x x x. Article 2 (1) of said treaty states that it applies to investments
whenever made and thus the fact that [WMCP's] FTAA was
entered into prior to the entry into force of the treaty does not
preclude the Philippine Government from protecting [WMCP's]
investment in [that] FTAA. Likewise, Article 3 (1) of the treaty
provides that "Each Party shall encourage and promote
investments in its area by investors of the other Party and shall
[admit] such investments in accordance with its Constitution,
Laws, regulations and investment policies" and in Article 3 (2), it
states that "Each Party shall ensure that investments are accorded
fair and equitable treatment." The latter stipulation indicates that
it was intended to impose an obligation upon a Party to afford fair
and equitable treatment to the investments of the other Party and
that a failure to provide such treatment by or under the laws of the
Party may constitute a breach of the treaty. Simply stated, the
Philippines could not, under said treaty, rely upon the inadequacies
of its own laws to deprive an Australian investor (like [WMCP])
of fair and equitable treatment by invalidating [WMCP's] FTAA
without likewise nullifying the service contracts entered into
before the enactment of RA 7942 such as those mentioned in PD
87 or EO 279.
This becomes more significant in the light of the fact that
[WMCP's] FTAA was executed not by a mere Filipino citizen, but
by the Philippine Government itself, through its President no less,
182
which, in entering into said treaty is assumed to be aware of the
existing Philippine laws on service contracts over the exploration,
development and utilization of natural resources. The execution of
the FTAA by the Philippine Government assures the Australian
Government that the FTAA is in accordance with existing
Philippine laws.300 [Emphasis and italics by private respondents.]
The invalidation of the subject FTAA, it is argued, would
constitute a breach of said treaty which, in turn, would amount to
a violation of Section 3, Article II of the Constitution adopting the
generally accepted principles of international law as part of the law
of the land. One of these generally accepted principles is pacta sunt
servanda, which requires the performance in good faith of treaty
obligations.
Even assuming arguendo that WMCP is correct in its
interpretation of the treaty and its assertion that "the Philippines
could not . . . deprive an Australian investor (like [WMCP]) of fair
and equitable treatment by invalidating [WMCP's] FTAA without
likewise nullifying the service contracts entered into before the
enactment of RA 7942 . . .," the annulment of the FTAA would
not constitute a breach of the treaty invoked. For this decision
herein invalidating the subject FTAA forms part of the legal
system of the Philippines.301 The equal protection clause302
guarantees that such decision shall apply to all contracts belonging
to the same class, hence, upholding rather than violating, the "fair
and equitable treatment" stipulation in said treaty.
One other matter requires clarification. Petitioners contend that,
consistent with the provisions of Section 2, Article XII of the
Constitution, the President may enter into agreements involving
"either technical or financial assistance" only. The agreement in
question, however, is a technical and financial assistance
agreement.
Petitioners' contention does not lie. To adhere to the literal
language of the Constitution would lead to absurd
consequences.303 As WMCP correctly put it:
x x x such a theory of petitioners would compel the government
(through the President) to enter into contract with two (2) foreign-
owned corporations, one for financial assistance agreement and
with the other, for technical assistance over one and the same
mining area or land; or to execute two (2) contracts with only one
foreign-owned corporation which has the capability to provide
both financial and technical assistance, one for financial assistance
and another for technical assistance, over the same mining area.
Such an absurd result is definitely not sanctioned under the canons
of constitutional construction.304 [Underscoring in the original.]
Surely, the framers of the 1987 Charter did not contemplate such
an absurd result from their use of "either/or." A constitution is not
to be interpreted as demanding the impossible or the
impracticable; and unreasonable or absurd consequences, if
possible, should be avoided.305 Courts are not to give words a
meaning that would lead to absurd or unreasonable consequences
and a literal interpretation is to be rejected if it would be unjust or
lead to absurd results.306 That is a strong argument against its
adoption.307 Accordingly, petitioners' interpretation must be
rejected.
183
 In January 2001, WMC – a publicly listed Australian mining and
exploration company – sold its whole stake in WMCP to
The foregoing discussion has rendered unnecessary the resolution
Sagittarius Mines, 60% of which is owned by Filipinos while 40%
of the other issues raised by the petition. LA BUGAL B’LAAN
of which is owned by Indophil Resources, an Australian company.
TRIBAL ASSOCIATION INC., et. al. v. V. O. RAMOS,
DENR approved the transfer and registration of the FTAA in
Secretary Department of Environment and Natural Resources; H.
Sagittarius‘ name but Lepanto Consolidated assailed the same.
RAMOS, Director, Mines and Geosciences Bureau (MGB-
The latter case is still pending before the Court of Appeals.
DENR); R. TORRES, Executive Secretary; and WMC
(PHILIPPINES) INC. EO 279, issued by former President Aquino on July 25, 1987,
authorizes the DENR to accept, consider and evaluate proposals
from foreign owned corporations or foreign investors for contracts
The constitutional provision allowing the President to enter into or agreements involving wither technical or financial assistance
FTAA is a exception to the rule that participation in the nation’s for large scale exploration, development and utilization of
natural resources is reserved exclusively to Filipinos. Provision minerals which upon appropriate recommendation of the (DENR)
must be construed strictly against their enjoyment by non- Secretary, the President may execute with the foreign proponent.
Filipinos. WMCP likewise contended that the annulment of the FTAA would
violate a treaty between the Philippines and Australia which
RA 7942 (The Philippine Mining Act) took effect on April 9,
provides for the protection of Australian investments.
1995. Before the effectivity of RA 7942, or on March 30, 1995,
the President signed a Financial and Technical Assistance
Agreement (FTAA) with WMCP, a corporation organized under
ISSUES:
Philippine laws, covering close to 100,000 hectares of land in
South Cotabato, Sultan Kudarat, Davao del Sur and North
Cotabato. On August 15, 1995, the Environment Secretary Victor
1. Whether or not the Philippine Mining Act is unconstitutional for
Ramos issued DENR Administrative Order 95-23, which was later
allowing fully foreign-owned corporations to exploit the
repealed by DENR Administrative Order 96-40, adopted on
Philippine mineral resources. 2. Whether or not the FTAA
December 20, 1996.
between the government and WMCP is a ―service contract that
Petitioners prayed that RA 7942, its implementing rules, and the permits fully foreign owned companies to exploit the Philippine
FTAA between the government and WMCP be declared mineral resources.
unconstitutional on ground that they allow fully foreign owned
corporations like WMCP to exploit, explore and develop
Philippine mineral resources in contravention of Article XII HELD:
Section 2 paragraphs 2 and 4 of the Charter.

184
First Issue: RA 7942 is Unconstitutional service contracts was precisely the evil the drafters of the 1987
Constitution sought to avoid.
RA 7942 or the Philippine Mining Act of 1995 is unconstitutional
for permitting fully foreign owned corporations to exploit the The constitutional provision allowing the President to enter into
Philippine natural resources. FTAAs is an exception to the rule that participation in the nation‘s
natural resources is reserved exclusively to Filipinos. Accordingly,
Article XII Section 2 of the 1987 Constitution retained the
such provision must be construed strictly against their enjoyment
Regalian Doctrine which states that ―All lands of the public
by non-Filipinos. Therefore, RA 7942 is invalid insofar as the said
domain, waters, minerals, coal, petroleum, and other minerals,
act authorizes service contracts. Although the statute employs the
coal, petroleum, and other mineral oils, all forces of potential
phrase ―financial and technical agreements in accordance with
energy, fisheries, forests or timber, wildlife, flora and fauna, and
the 1987 Constitution, its pertinent provisions actually treat these
other natural resources are owned by the State. The same section
agreements as service contracts that grant beneficial ownership to
also states that, ―the exploration and development and utilization
foreign contractors contrary to the fundamental law.
of natural resources shall be under the full control and supervision
of the State. The underlying assumption in the provisions of the law is that the
foreign contractor manages the mineral resources just like the
Conspicuously absent in Section 2 is the provision in the 1935 and
foreign contractor in a service contract. By allowing foreign
1973 Constitution authorizing the State to grant licenses,
contractors to manage or operate all the aspects of the mining
concessions, or leases for the exploration, exploitation,
operation, RA 7942 has, in effect, conveyed beneficial ownership
development, or utilization of natural resources. By such omission,
over the nation‘s mineral resources to these contractors, leaving
the utilization of inalienable lands of the public domain through
the State with nothing but bare title thereto.
license, concession or lease is no longer allowed under the 1987
Constitution. The same provisions, whether by design or inadvertence, permit a
circumvention of the constitutionally ordained 60-40%
Under the concession system, the concessionaire makes a direct
capitalization requirement for corporations or associations
equity investment for the purpose of exploiting a particular natural
engaged in the exploitation, development and utilization of
resource within a given area. The concession amounts to complete
Philippine natural resources.
control by the concessionaire over the country‘s natural resource,
for it is given exclusive and plenary rights to exploit a particular When parts of a statute are so mutually dependent and connected
resource at the point of extraction. as conditions, considerations, inducements or compensations for
each other as to warrant a belief that the legislature intended them
The 1987 Constitution, moreover, has deleted the phrase
as a whole, then if some parts are unconstitutional, all provisions
―management or other forms of assistance in the 1973 Charter.
that are thus dependent, conditional or connected, must fail with
The present Constitution now allows only ―technical and
them.
financial assistance. The management and the operation of the
mining activities by foreign contractors, the primary feature of the
185
Under Article XII Section 2 of the 1987 Charter, foreign owned (a) The proviso in Section 3 (aq),
corporations are limited only to merely technical or financial
assistance to the State for large scale exploration, development and
utilization of minerals, petroleum and other mineral oils. (b) Section 23,
Second Issue: RP Government-WMCP FTAA is a Service
Contract
(c) Section 33 to 41,
The FTAA between he WMCP and the Philippine government is
likewise unconstitutional since the agreement itself is a service
contract. (d) Section 56,
Section 1.3 of the FTAA grants WMCP a fully foreign owned
corporation, the exclusive right to explore, exploit, utilize and
(e) The second and third paragraphs of Section 81, and
dispose of all minerals and by-products that may be produced from
the contract area. Section 1.2 of the same agreement provides that
EMCP shall provide all financing, technology, management, and
(f) Section 90.
personnel necessary for the Mining Operations.
These contractual stipulations and related provisions in the FTAA
taken together, grant WMCP beneficial ownership over natural (2) All provisions of Department of Environment and Natural
resources that properly belong to the State and are intended for the Resources Administrative Order 96-40, s. 1996 which are not in
benefit of its citizens. These stipulations are abhorrent to the 1987 conformity with this Decision, and
Constitution. They are precisely the vices that the fundamental law
seeks to avoid, the evils that it aims to suppress. Consequently, the
contract from which they spring must be struck down. (3) The Financial and Technical Assistance Agreement between
the Government of the Republic of the Philippines and WMC
Philippines, Inc.
WHEREFORE, the petition is GRANTED. The Court hereby
declares unconstitutional and void:
SO ORDERED.

(1) The following provisions of Republic Act No. 7942:

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187