DIGEST - Manila Prince Hotel Corporation v. GSIS (G.R. No. one two two one five six)
DIGEST - Manila Prince Hotel Corporation v. GSIS (G.R. No. one two two one five six)
Doctrine
The Filipino First Policy in Section ten, Article twelve of the nineteen eighty-seven Constitution is self-executing and judicially enforceable. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State must prefer qualified Filipinos over foreign bidders when the Filipino bidder matches the foreign bid.
Facts
Facts
Manila Prince Hotel Corporation sought to acquire fifty-one percent of the shares of Manila Hotel Corporation, which owned the historic Manila Hotel. The controversy arose from the government's privatization program, under which the Government Service Insurance System decided to sell through public bidding between thirty percent and fifty-one percent of the issued and outstanding shares of Manila Hotel Corporation. The winning bidder, described as the strategic partner, was expected to provide management expertise, an international marketing and reservation system, and financial support to improve the hotel's profitability and performance.
The bidding was held on September eighteen, nineteen ninety-five. Only two bidders participated: Manila Prince Hotel Corporation, a Filipino corporation, and Renong Berhad, a Malaysian firm with ITT-Sheraton as hotel operator. Manila Prince Hotel offered to buy the fifty-one percent block at forty-one point five eight pesos per share, while Renong Berhad offered forty-four pesos per share for the same shares. The bidding rules stated that if the highest bidder could not be awarded the block of shares, GSIS could offer the same to other qualified bidders willing to match the highest bid in price per share.
Manila Prince Hotel claimed that it was entitled to preference under the Constitution because the Manila Hotel had become a symbol of Philippine heritage and therefore part of the national patrimony. It stressed that the hotel was a historic landmark, having hosted significant events in Philippine history and having become deeply associated with Filipino identity and culture. It further argued that because the sale involved fifty-one percent of the shares of Manila Hotel Corporation, the buyer would effectively control the hotel business itself, which was part of the national economy. For that reason, it insisted that once it matched the foreign bidder's price, it should be awarded the shares.
The government respondents maintained that the constitutional Filipino First Policy was not self-executing and needed implementing legislation. They also argued that Manila Hotel did not fall within the constitutional concept of national patrimony, which they claimed referred only to the more specific natural resources enumerated in the Constitution. In addition, they asserted that the sale involved only shares of stock, not the hotel building or the land on which it stood, and that the petitioner's right to match the foreign bid had not yet arisen because the foreign bidder had not yet been finally disqualified.