MANILA PRINCE HOTEL vs GSIS

267 SCRA 408; G.R. No. 122156; 3 Feb 1997

FACTS:

The controversy arose when respondent Government Service

Insurance System (GSIS), pursuant to the privatization program of the

Philippine Government under Proclamation No. 50 dated 8 December

1986, decided to sell through public bidding 30% to 51% of the issued

and outstanding shares of respondent MHC. The winning bidder, or the

eventual "strategic partner," is to provide management expertise

and/or an international marketing/reservation system, and financial

support to strengthen the profitability and performance of the Manila

Hotel. 2 In a close bidding held on 18 September 1995 only two (2)

bidders participated: petitioner Manila Prince Hotel Corporation, a

Filipino corporation, which offered to buy 51% of the MHC or

15,300,000 shares at P41.58 per share, and Renong Berhad, a

Malaysian firm, with ITT-Sheraton as its hotel operator, which bid for

the same number of shares at P44.00 per share, or P2.42 more than

the bid of petitioner.

Pending the declaration of Renong Berhad as the winning

bidder/strategic partner and the execution of the necessary contracts,

petitioner in a letter to respondent GSIS dated 28 September 1995

matched the bid price of P44.00 per share tendered by Renong

Berhad. 

On 17 October 1995, perhaps apprehensive that respondent

GSIS has disregarded the tender of the matching bid and that the sale

of 51% of the MHC may be hastened by respondent GSIS and

consummated with RenongBerhad, petitioner came to this Court on

prohibition and mandamus. On 18 October 1995 the Court issued a

temporary restraining order enjoining respondents from perfecting and

consummating the sale to the Malaysian firm.

In the main, petitioner invokes Sec. 10, second par., Art. XII, of

the 1987 Constitution and submits that the Manila Hotel has been

“identified with the Filipino nation and has practically become a

historical monument which reflects the vibrancy of Philippine heritage

and culture. It is a proud legacy of an earlier generation of Filipinos

who believed in the nobility and sacredness of independence and its

power and capacity to release the full potential of the Filipino

people. To all intents and purposes, it has become a part of the

national patrimony. “ Petitioner also argues that since 51% of the

shares of the MHC carries with it the ownership of the business of the

hotel which is owned by respondent GSIS, a government-owned and

controlled corporation, the hotel business of respondent GSIS being a

part of the tourism industry is unquestionably a part of the national

economy.

SECTION 10, SECOND PAR., ARTICLE XII which recognizes above all: IN

THE GRANTS OF RIGHTS, PRIVILEGES, AND CONCESSIONS COVERING

THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE

PREFRENCE TO QUALIFIED FILIPINOS.

ISSUE:

1. Whether or not the term “national patrimony” applies to

the Manila Hotel

2. Whether or not the term “qualified Filipinos” applies to the

MPH

3. Whether or not the GSIS, being a chartered GOCC, is

covered by the constitutional prohibition

RULING:

1. Patrimony means heritage, referring not only to natural

resources but to the cultural heritage of Filipinos as well.

Manila Prince Hotel is very much a part of our national

patrimony and has played and important role in our

nation’s history, having been the venue of many a

historical events and serving as it did, and as it does, as

the Philippine Guest House for visiting foreign heads of

state, dignitaries, celebrities and others. A landmark and a

living testament of the Philippine heritage.

2. Qualified according to the Constitution commission refers

to (1) companies whose capital or controlling stock is

wholly owned by citizens of the Phil. (2) the fact that the

company can make viable contributions to the common

good, because of credible competency and efficiency. By

giving preference to Phil. companies or entities it does not

mean that they should be pampered; rather they should

indeed “qualify” first with the requirements that the law

provides before they can even be considered as having the

preferential treatment of the state accorded to them. In

the first place, MPH was selected as on of the qualified

bidders, which meant that they possessed both

requirements. “in the granting of economic rights,

privileges and concession, when a choice is between a

“qualified foreigner” and a “qualified Filipino”, the latter

shall be chosen”

SECTION 10, SECOND PAR., ARTICLE XII which recognizes above all: IN

THE GRANTS OF RIGHTS, PRIVILEGES, AND CONCESSIONS COVERING

THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE

PREFRENCE TO QUALIFIED FILIPINOS.