Francisco I. Chavez vs. Public Estates Authority, Et Al

7/28/2019 Francisco I. Chavez vs. Public Estates Authority, Et Al.

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

R. No. 133250 July 9, 2002

ANCISCO I. CHAVEZ, petitioner,

BLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents.

RPIO, J.:

s is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a temporary restraining order. Ttion seeks to compel the Public Estates Authority ("PEA" for brevity) to disclose all facts on PEA's then on-goingegotiations with Amari Coastal Bay and Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bation further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation.

The Facts

November 20, 1973, the government, through the Commissioner of Public Highways, signed a contract with the Constr

Development Corporation of the Philippines ("CDCP" for brevity) to reclaim certain foreshore and offshore areas of May. The contract also included the construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itsery out all the works in consideration of fifty percent of the total reclaimed land.

February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084 creating PEA. PD No. 1084ked PEA "to reclaim land, including foreshore and submerged areas," and "to develop, improve, acquire, x x x lease and

and all kinds of lands."1 On the same date, then President Marcos issued Presidential Decree No. 1085 transferring to "lands reclaimed in the foreshore and offshore of the Manila Bay"2 under the Manila-Cavite Coastal Road and Reclamaject (MCCRRP).

December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its contract with CDCP, so ll future works in MCCRRP x x x shall be funded and owned by PEA." Accordingly, PEA and CDCP executed a Memora

Agreement dated December 29, 1981, which stated:

"(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP as may be aupon by the parties, to be paid according to progress of works on a unit price/lump sum basis for items of wbe agreed upon, subject to price escalation, retention and other terms and conditions provided for in PresidDecree No. 1594. All the financing required for such works shall be provided by PEA.

x x x


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(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in favor of Pof the rights, title, interest and participation of CDCP in and to all the areas of land reclaimed by CDCP in thMCCRRP as of December 30, 1981 which have not yet been sold, transferred or otherwise disposed of by Cas of said date, which areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three(99,473) square meters in the Financial Center Area covered by land pledge No. 5 and approximately ThreMillion Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of recla

areas at varying elevations above Mean Low Water Level located outside the Financial Center Area and theNeighborhood Unit."3

January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting and transferring to PEA cels of land so reclaimed under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total

one million nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters." Subsequently, on April 98, the Register of Deeds of the Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311, and 73name of PEA, covering the three reclaimed islands known as the "Freedom Islands" located at the southern portion of tnila-Cavite Coastal Road, Paraaque City. The Freedom Islands have a total land area of One Million Five Hundred Sevht Thousand Four Hundred and Forty One (1,578,441) square meters or 157.841 hectares.

April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a private corporation, to deFreedom Islands. The JVA also required the reclamation of an additional 250 hectares of submerged areas surrounding

se islands to complete the configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP AMARI entered into the JVA through negotiation without public bidding.4 On April 28, 1995, the Board of Directors of P

Resolution No. 1245, confirmed the JVA.5 On June 8, 1995, then President Fidel V. Ramos, through then Executive Secben Torres, approved the JVA.6

November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the Senate and denouncedA as the "grandmother of all scams." As a result, the Senate Committee on Government Corporations and Public Enterp the Committee on Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate

mmittees reported the results of their investigation in Senate Committee Report No. 560 dated September 16, 1997.7 Amconclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the p

main which the government has not classified as alienable lands and therefore PEA cannot alienate these lands; (2) theificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.

December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No. 365 creating a Legal Tce to conduct a study on the legality of the JVA in view of Senate Committee Report No. 560. The members of the Legace were the Secretary of Justice,8 the Chief Presidential Legal Counsel,9 and the Government Corporate Counsel.10 Thek Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate Committees.11

April 4 and 5, 1998, the Philippine Daily Inquirerand Todaypublished reports that there were on-going renegotiationsween PEA and AMARI under an order issued by then President Fidel V. Ramos. According to these reports, PEA Directstor Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.

April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for the Issuance of amporary Restraining Order and Preliminary Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The Cou

missed the petition "for unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the case before theper court."12

April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the instant Petition for Mandamusyer for the Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order. Petitioner contends the governds to lose billions of pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly discterms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987 Constitution t of the people to information on matters of public concern. Petitioner assails the sale to AMARI of lands of the public do

a blatant violation of Section 3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public do


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private corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of pesos in properties of the Staof public dominion.

er several motions for extension of time,13 PEA and AMARI filed their Comments on October 19, 1998 and June 25, 199pectively. Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit the termsrenegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining order; and (c) to set the case for hearing

argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the Court denied in asolution dated June 22, 1999.

Resolution dated March 23, 1999, the Court gave due course to the petition and required the parties to file their respecmoranda.

March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended JVA," for brevity). On May9, the Office of the President under the administration of then President Joseph E. Estrada approved the Amended JVA

e to the approval of the Amended JVA by the Office of the President, petitioner now prays that on "constitutional and staunds the renegotiated contract be declared null and void."14

The Issues

e issues raised by petitioner, PEA15 and AMARI16 are as follows:

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND ACADEMICBECAUSE OF SUBSEQUENT EVENTS;

II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLEGOVERNING THE HIERARCHY OF COURTS;

III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF ADMINISTRATIVEREMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDITO BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL INFORMATIONON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;

VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THETRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE TH1987 CONSTITUTION; AND

VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER THEAMENDED JOINT VENTURE AGREEMENT IS GROSSLY DISADVANTAGEOUS TO THE GOVERNMEN

The Court's Ruling

First issue: whether the princ ipal rel iefs prayed for in the peti t ion are moot and academic because of sub sequ

events.

e petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations for a new agreement." tion also prays that the Court enjoin PEA from "privately entering into, perfecting and/or executing any new agreement wARI."


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A and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on June 21, 1999 a copsigned Amended JVA containing the terms and conditions agreed upon in the renegotiations. Thus, PEA has satisfiedtioner's prayer for a public disclosure of the renegotiations. Likewise, petitioner's prayer to enjoin the signing of the Ame

A is now moot because PEA and AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the OfficPresident has approved the Amended JVA on May 28, 1999.

itioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking the signing and approAmended JVA before the Court could act on the issue. Presidential approval does not resolve the constitutional issue o

move it from the ambit of judicial review.

rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President cannot operate to mootion and divest the Court of its jurisdiction. PEA and AMARI have still to implement the Amended JVA. The prayer to ensigning of the Amended JVA on constitutional grounds necessarily includes preventing its implementation if in the mean

A and AMARI have signed one in violation of the Constitution. Petitioner's principal basis in assailing the renegotiation oA is its violation of Section 3, Article XII of the Constitution, which prohibits the government from alienating lands of the pmain to private corporations. If the Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin itslementation, and if already implemented, to annul the effects of such unconstitutional contract.

e Amended JVA is not an ordinary commercial contract but one which seeks to transfer ti t le and own ership to 367.5ctares o f reclaimed lands and subm erged areas of Mani la Bay to a single private corpor at ion. It now becomes mompelling for the Court to resolve the issue to insure the government itself does not violate a provision of the Constitutionnded to safeguard the national patrimony. Supervening events, whether intended or accidental, cannot prevent the Cou

m rendering a decision if there is a grave violation of the Constitution. In the instant case, if the Amended JVA runs counConstitution, the Court can still prevent the transfer of title and ownership of alienable lands of the public domain in the

AMARI. Even in cases where supervening events had made the cases moot, the Court did not hesitate to resolve the legstitutional issues raised to formulate controlling principles to guide the bench, bar, and the public.17

o, the instant petition is a case of first impression. All previous decisions of the Court involving Section 3, Article XII of th7 Constitution, or its counterpart provision in the 1973 Constitution,18 covered agricul tural landssold to private corporach acquired the lands from private parties. The transferors of the private corporations claimed or could claim the rightud ic ia l confir mat io n of thei r imper fec t t it les

19 underTitle IIof Commonwealth Act. 141 ("CA No. 141" for brevity). In t

ant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and submerged areas fornon-icul turalpurposes by purchaseunder PD No. 1084 (charter of PEA) andTitle IIIof CA No. 141. Certain undertakings ARI under the Amended JVA constitute the consideration for the purchase. Neither AMARI nor PEA can claim judicialfirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or still to be reclaimed. Judfirmation of imperfect title requires open, continuous, exclusive and notorious occupation of agricultural lands of the pub

main for at least thirty years since June 12, 1945 or earlier. Besides, the deadline for filing applications for judicial confirmmperfect title expired on December 31, 1987.20

tly, there is a need to resolve immediately the constitutional issue raised in this petition because of the possible transfertime by PEA to AMARI of title and ownership to portions of the reclaimed lands. Under the Amended JVA, PEA is oblig

ransfer to AMARI the latter's seventy percent proportionate share in the reclaimed areas as the reclamation progresses.ended JVA even allows AMARI to mortgage at any time the entirereclaimed area to raise financing for the reclamation

ect.

21

Second issue: whether the peti t ion meri ts dismissal for fai l ing to ob serve the principle governing the hierarchy

cour ts.

A and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court. The principle of hierourts applies generally to cases involving factual questions. As it is not a trier of facts, the Court cannot entertain cases

olving factual issues. The instant case, however, raises constitutional issues of transcendental importance to the public.urt can resolve this case without determining any factual issue related to the case. Also, the instant case is a petition for


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ndamus which falls under the original jurisdiction of the Court under Section 5, Article VIII of the Constitution. We resolvercise primary jurisdiction over the instant case.

Third issue: wh ether the petit ion m eri ts dismissal for no n-exhaustion o f administrat ive remedies.

A faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain information without first

A the needed information. PEA claims petitioner's direct resort to the Court violates the principle of exhaustion ofministrative remedies. It also violates the rule that mandamus may issue only if there is no other plain, speedy and adeqmedy in the ordinary course of law.

A distinguishes the instant case from Taada v. Tuvera23 where the Court granted the petition for mandamus even if thetioners there did not initially demand from the Office of the President the publication of the presidential decrees. PEA pothat in Taada, the Executive Department had an aff i rmative statutoryduty under Article 2 of the Civil Code24 and Se

Commonwealth Act No. 63825 to publish the presidential decrees. There was, therefore, no need for the petitioners in Tamake an initial demand from the Office of the President. In the instant case, PEA claims it has no affirmative statutory duclose publicly information about its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle oaustion of administrative remedies to the instant case in view of the failure of petitioner here to demand initially from PEded information.

e original JVA sought to dispose to AMARI public lands held by PEA, a government corporation. Under Section 79 of thevernment Auditing Code,26 the disposition of government lands to private parties requires public bidding. PEA was undesi t ive legal duty to disclose to the pu bl ic the terms and co ndi t ions fo r the sale of i ts lands. The law obligated PEAke this public disclosure even without demand from petitioner or from anyone. PEA failed to make this public disclosureause the original JVA, like the Amended JVA, was the result of a negotiated c ontract, not of a public bidding. Considet PEA had an affirmative statutory duty to make the public disclosure, and was even in breach of this legal duty, petitionright to seek direct judicial intervention.

reover, and this alone is determinative of this issue, the principle of exhaustion of administrative remedies does not applen the issue involved is a purely legal or constitutional question.27 The principal issue in the instant case is the capacity oARI to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of lands of the public domaiate corporations. We rule that the principle of exhaustion of administrative remedies does not apply in the instant case.

Fourth issue: whether peti t ioner has locus s tandi to bring this su i t

A argues that petitioner has no standing to institute mandamus proceedings to enforce his constitutional right to informahout a showing that PEA refused to perform an affirmative duty imposed on PEA by the Constitution. PEA also claims thtioner has not shown that he will suffer any concrete injury because of the signing or implementation of the Amended JV

us, there is no actual controversy requiring the exercise of the power of judicial review.

e petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to comply with itsstitutional duties. There are two constitutional issues involved here. First is the right of citizens to information on matterslic concern. Second is the application of a constitutional provision intended to insure the equitable distribution of alienab

ds of the public domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly informa

the sale of government lands worth billions of pesos, information which the Constitution and statutory law mandate PEAclose. The thrust of the second issue is to prevent PEA from alienating hundreds of hectares of alienable lands of the pumain in violation of the Constitution, compelling PEA to comply with a constitutional duty to the nation.

reover, the petition raises matters of transcendental importance to the public. In Chavez v. PCGG,28 the Court upheld th 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 o'transcendental importance to the public.' He asserts that ordinary taxpayers have a right to initiate and pros


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e State policy of full transparency in all transactions involving public interest reinforces the people's right to information otters 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 pol icy ofpubl ic disc losure of al l i ts transact ions involv ing pu bl ic interest." (Emphasis supplied)

ese twin provisions of the Constitution seek to promote transparency in policy-making and in the operations of the goverwell as provide the people sufficient information to exercise effectively other constitutional rights. These twin provisions ential to the exercise of freedom of expression. If the government does not disclose its official acts, transactions andisions to citizens, whatever citizens say, even if expressed without any restraint, will be speculative and amount to noth

ese twin provisions are also essential to hold public officials "at all times x x x accountable to the people,"29 for unless cite the proper information, they cannot hold public officials accountable for anything. Armed with the right information, citiparticipate in public discussions leading to the formulation of government policies and their effective implementation. A

rmed citizenry is essential to the existence and proper functioning of any democracy. As explained by the Court in ValmBelmont e, Jr.

30

"An essential element of these freedoms is to keep open a continuing dialogue or process of communicatiobetween 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 wYet, this open dialogue can be effective only to the extent that the citizenry is informed and thus able to formits will intelligently. Only when the participants in the discussion are aware of the issues and have access toinformation relating thereto can such bear fruit."

A asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information is limited to "definitepositions of the government." PEA maintains the right does not include access to "intra-agency or inter-agencyommendations or communications during the stage when common assertions are still in the process of being formulatedin the 'exploratory stage'."

o, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the closing of the transacsupport 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, ortreaties or whatever, does the Gentleman refer to the steps leading to the consummation of the contract, orhe refer to the contract itself?

Mr. Ople: The 'transact ions' us ed here, I suppose is g eneric and therefore, i t can co ver both steps leto a co ntract and already a co nsummated contract, Mr. Presiding Off icer.

Mr. Suarez: This contemplates inclusion of negotiat ions leading to the consummation of the transac

Mr. Ople: Yes, sub ject only to reason able safeguard s on the nation al interest.

Mr. Suarez:Thank you."32 (Emphasis supplied)

ARI argues there must first be a consummated contract before petitioner can invoke the right. Requiring government ofeveal their deliberations at the pre-decisional stage will degrade the quality of decision-making in government agenciesvernment officials will hesitate to express their real sentiments during deliberations if there is immediate public disseminheir discussions, putting them under all kinds of pressure before they decide.

must first distinguish between information the law on public bidding requires PEA to disclose publicly, and information tstitutional right to information requires PEA to release to the public. Before the consummation of the contract, PEA mus


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own and without demand from anyone, disclose to the public matters relating to the disposition of its property. These incsize, location, technical description and nature of the property being disposed of, the terms and conditions of the disposparties qualified to bid, the minimum price and similar information. PEA must prepare all these data and disclose them lic at the start of the disposition process, long before the consummation of the contract, because the Government Audit

de requires publ ic b idd ing. If PEA fails to make this disclosure, any citizen can demand from PEA this information at anng the bidding process.

rmation, however, on on-going evaluat ion or reviewof bids or proposals being undertaken by the bidding or reviewmmittee is not immediately accessible under the right to information. While the evaluation or review is still on-going, there"official acts, transactions, or decisions" on the bids or proposals. However, once the committee makes its off ic ia lommendation, there arises a "def in i te proposi t ion"on the part of the government. From this moment, the public's rigrmation attaches, and any citizen can access all the non-proprietary information leading to such definite proposition.Chavez v. PCGG,33 the Court ruled as follows:

"Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the PCGG anofficers, as well as other government representatives, to disclose sufficient public information on any proposettlement they have decided to take up with the ostensible owners and holders of ill-gotten wealth. Suchinformation, though, must pertain to defin i te proposi t ions of the government, not necessarily to intra-ageinter-agency recommendations or communications during the stage when common assertions are still in theprocess of being formulated or are in the "exploratory" stage. There is need, of course, to observe the samerestrictions on disclosure of information in general, as discussed earlier such as on matters involving natiosecurity, diplomatic or foreign relations, intelligence and other classified information." (Emphasis supplied)

ntrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission understood that the right tormation "co ntemplates inclusion of negotiat ions leading to the con summ ation of the transact ion."Certainly, asummated contract is not a requirement for the exercise of the right to information. Otherwise, the people can never exeright if no contract is consummated, and if one is consummated, it may be too late for the public to expose its defects.1wphi1.n

quiring a consummated contract will keep the public in the dark until the contract, which may be grossly disadvantageougovernment or even illegal, becomes a fait accompli. This negates the State policy of full transparency on matters of pucern, a situation which the framers of the Constitution could not have intended. Such a requirement will prevent the citiz

m participating in the public discussion of any proposedcontract, effectively truncating a basic right enshrined in the Bilhts. We can allow neither an emasculation of a constitutional right, nor a retreat by the State of its avowed "policy of fullclosure of all its transactions involving public interest."

e right covers three categories of information which are "matters of public concern," namely: (1) official records; (2) docu papers pertaining to official acts, transactions and decisions; and (3) government research data used in formulating po

e first category refers to any document that is part of the public records in the custody of government agencies or officialond category refers to documents and papers recording, evidencing, establishing, confirming, supporting, justifying orlaining official acts, transactions or decisions of government agencies or officials. The third category refers to research

ether raw, collated or processed, owned by the government and used in formulating government policies.

e information that petitioner may access on the renegotiation of the JVA includes evaluation reports, recommendations,

expert opinions, minutes of meetings, terms of reference and other documents attached to such reports or minutes, allting to the JVA. However, the right to information does not compel PEA to prepare lists, abstracts, summaries and the lting to the renegotiation of the JVA.34 The right only affords access to records, documents and papers, which means theortunity to inspect and copy them. One who exercises the right must copy the records, documents and papers at his ex

e exercise of the right is also subject to reasonable regulations to protect the integrity of the public records and to minimiuption to government operations, like rules specifying when and how to conduct the inspection and copying. 35

e right to information, however, does not extend to matters recognized as privileged information under the separation ofwers.36 The right does not also apply to information on military and diplomatic secrets, information affecting national secu


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information on investigations of crimes by law enforcement agencies before the prosecution of the accused, which coue long recognized as confidential.37 The right may also be subject to other limitations that Congress may impose by law

ere is no claim by PEA that the information demanded by petitioner is privileged information rooted in the separation ofwers. The information does not cover Presidential conversations, correspondences, or discussions during closed-door Cetings which, like internal deliberations of the Supreme Court and other collegiate courts, or executive sessions of either

se of Congress,38

are recognized as confidential. This kind of information cannot be pried open by a co-equal branch ofernment. A frank exchange of exploratory ideas and assessments, free from the glare of publicity and pressure by interties, is essential to protect the independence of decision-making of those tasked to exercise Presidential, Legislative anicial power.39 This is not the situation in the instant case.

rule, therefore, that the constitutional right to information includes official information on on-going negotiat ionsbefore tract. The information, however, must constitute definite propositions by the government and should not cover recognizeeptions like privileged information, military and diplomatic secrets and similar matters affecting national security and puber.40 Congress has also prescribed other limitations on the right to information in several legislations.41

xth issue: wh ether st ipulat ions in the Am ended JVA for the transfer to AMARI of lands, reclaimed o r to b e recla

violate the Consti tut ion.

e Regalian Doctrin e

e ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds thatte owns all lands and waters of the public domain. Upon the Spanish conquest of the Philippines, ownership of all "landtories and possessions" in the Philippines passed to the Spanish Crown. 42 The King, as the sovereign ruler andresentative of the people, acquired and owned all lands and territories in the Philippines except those he disposed of byale to private individuals.

e 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the State, in lieu of the King, ner of all lands and waters of the public domain. The Regalian doctrine is the foundation of the time-honored principle ofnership that "all lands that were not acquired from the Government, either by purchase or by grant, belong to the publicmain."43 Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regaltrine.

nership and Disposi t ion of Reclaimed Lands

e Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition of reclaimed lands ippines. On May 18, 1907, the Philippine Commission enacted Act No. 1654 which provided for th e lease, but no t theeclaimed lands of the governm ent to corporat ions and indiv idu als. Later, on November 29, 1919, the Philippineislature approved Act No. 2874, the Public Land Act, which authorized the lease, bu t not th e sale, of reclaimed land sgovernment to corporat ions and indiv iduals. On November 7, 1936, the National Assembly passed Commonwealth141, also known as the Public Land Act, which autho rized the lease, but n ot the sale, of reclaimed lands o f the

vernment to cor porat ions and indiv iduals. CA No. 141 continues to this day as the general law governing the classifi disposition of lands of the public domain.

e Spanish Law of Waters of 1866 and the Civi l Code of 1889

der the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the maritime zone of the Sptory belonged to the public domain for public use.44 The Spanish Law of Waters of 1866 allowed the reclamation of the er Article 5, which provided as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provin


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pueblos or private persons, with proper permission, shall become the property of the party constructing sucworks, unless otherwise provided by the terms of the grant of authority."

der the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the reclamation, provideernment issued the necessary permit and did not reserve ownership of the reclaimed land to the State.

cle 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 Sriverbanks, 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 pservice, or in the development of the national wealth, such as walls, fortresses, and other works for the defethe territory, and mines, until granted to private individuals."

perty devoted to public use referred to property open for use by the public. In contrast, property devoted to public servic

erred to property used for some specific public service and open only to those authorized to use the property.

perty of public dominion referred not only to property devoted to public use, but also to property not so used but employvelop th e national wealth. This class of property constituted property of public dominion although employed for somenomic or commercial activity to increase the national wealth.

cle 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into private property, to w

"Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of the territorshall become a part of the private property of the State."

s provision, however, was not self-executing. The legislature, or the executive department pursuant to law, must declare

perty no longer needed for public use or territorial defense before the government could lease or alienate the property toate parties.45

No. 1654 of the Phi l ippine Comm ission

May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed and foreshore lae salient provisions of this law were as follows:

"Section 1. The control and disposi t ion of the foreshoreas defined in existing law, and the t i t le to al lGovernment or pub l ic lands m ade or reclaimed by the Government by d redging or f i l l ingor otherwisthroughout the Philippine Islands, shal l be retained by the Governmentwithout prejudice to vested rightswithout prejudice to rights conceded to the City of Manila in the Luneta Extension.

Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or reclaimed byGovernment by dredging or filling or otherwise to be divided into lots or blocks, with the necessary streets aalleyways located thereon, and shall cause plats and plans of such surveys to be prepared and filed with thBureau of Lands.

(b) Upon completion of such plats and plans the Governor-General shall give notice to the publ ic that sparts of the lands so made or reclaimed as are not needed for pub l ic purposes w i l l be leased for

commercial and business purposes, x x x.


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x x x

(e) The leases above prov ided for shal l be disposed of to the highest and b est biddertherefore, subjesuch regulations and safeguards as the Governor-General may by executive order prescribe." (Emphasissupplied)

No. 1654 mandated that the government sh ould retain t i t le to al l lands reclaimed by th e government. The Act alsted in the government control and disposition of foreshore lands. Private parties could lease lands reclaimed by theernment only if these lands were no longer needed for public purpose. Act No. 1654 mandated publ ic biddingin the leernment reclaimed lands. Act No. 1654 made government reclaimed lands sui g enerisin that unlike other public landsgovernment could sell to private parties, these reclaimed lands were available only for lease to private parties.

No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did not prohibit privatties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea by prities with government permission remained private lands.

No . 2874 of the Phil ippine Legislatu re

November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.46

The salient provisions of A4, on reclaimed lands, were as follows:

"Sec. 6. The Governor-General , upon th e recommendation of th e Secretary of Agricul ture and NaturResources, shall from tim e to time classi fy the lands of the pub l ic domain into

(a) Al ienable 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, theGovernor-General , upon recommendation by the Secretary of Agricul ture and Natural Resources, sh

from tim e to time declare what lands are open to dispos i t ion or conc ession under this Ac t."

Sec. 8. Only those lands sh al l be declared open to dispos i t ion or co ncession w hich have been off icdel imi ted or classi f iedx x x.

x x x

Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall be classifas sui table for residentia l purposes or fo r commercial , industr ia l , or oth er product ive pur poses otheagricul tural purposes, and shall be open to disposition or concession, shall be disposed of under the prov

of this chapter, and not otherwise.

Sec. 56. The lands disposable under this t i t le shal l be classi f ied as fol lows:

(a) Lands reclaimed by the Governm ent by d redging, f i l ling, or oth er means;

(b) Foresho re;


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(c) Marshy land sor lands covered with water bordering upon the shores or banks of navigable lakerivers;

(d) Lands not included in any of the foregoing classes.

x x x.

Sec. 58. The lands com prised in c lasses (a), (b), and (c) of section fi fty -six shal l be dispo sed of to p rpart ies by lease only and n ot otherwise, as soon as the Governor-General, upon recommendation b ySecretary of A gricul ture and Natural Resourc es, shal l declare that the same are not n ecessary for th

publ ic service and are open to dispo si t ionunder this chapter. The lands included in c lass (d) may bedispos ed of by sale or lease under the provis ions of this A ct." (Emphasis supplied)

ction 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain into x x x alienable orposable"47 lands. Section 7 of the Act empowered the Governor-General to "declare what lands are open to disposition ocession." Section 8 of the Act limited alienable or disposable lands only to those lands which have been "officially delim classified."

ction 56 of Act No. 2874 stated that lands "disposable under this title48

shall be classified" as government reclaimed, fore marshy lands, as well as other lands. All these lands, however, must be suitable for residential, commercial, industrial o

er productive non-agricul turalpurposes. These provisions vested upon the Governor-General the power to classifyienable lands of the public domain into disposable lands of the public domain. These provisions also empowered thevernor-General to classify further such disposable lands of the public domain into government reclaimed, foreshore or mds of the public domain, as well as other non-agricultural lands.

ction 58 of Act No. 2874 categorically mandated that disposable lands of the public domain classified as governmentaimed, foreshore and marshy lands "s hal l be disposed of to private part ies by lease only and n ot otherwise."Thevernor-General, before allowing the lease of these lands to private parties, must formally declare that the lands were "noessary for the public service." Act No. 2874 reiterated the State policy to lease and not to sell government reclaimed,

eshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No. 1654. Government reclaimedeshore and marshy lands remained sui g eneris, as the only alienable or disposable lands of the public domain that theernment could not sell to private parties.

e rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy public lands for non-agricuposes retain their inherent potential as areas for public service. This is the reason the government prohibited the sale, ay allowed the lease, of these lands to private parties. The State always reserved these lands for some future public serv

No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy lands into other non-cultural lands under Section 56 (d). Lands falling under Section 56 (d) were the only lands for non-agricultural purposesernment could sell to private parties. Thus, under Act No. 2874, the government could not sell government reclaimed,

eshore and marshy lands to private parties, unless th e legislature pass ed a law allowing t heir sale.49

No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of the Spanish Law of W

866. Lands reclaimed from the sea by private parties with government permission remained private lands.

posi t ions u nder the 1935 Consti tut ion

May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The 1935 Constitution, in adoRegalian doctrine, declared in Section 1, Article XIII, that

"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum


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other mineral oils, all forces of potential energy and other natural resources of the Philippines belong to the and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines orcorporations or associations at least sixty per centum of the capital of which is owned by such citizens, subjany existing right, grant, lease, or concession at the time of the inauguration of the Government establishedthis Constitution. Natural resources, wi th th e exception of publ ic agricul tural land, shal l not be al ienaand 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 yearexcept as to water rights for irrigation, water supply, fisheries, or industrial uses other than the developmentwater power, in which cases beneficial use may be the measure and limit of the grant." (Emphasis supplied

e 1935 Constitution barred the alienation of all natural resources except public agricultural lands, which were the only naources the State could alienate. Thus, foreshore lands, considered part of the State's natural resources, became inalienconstitutional fiat, available only for lease for 25 years, renewable for another 25 years. The government could alienateeshore lands only after these lands were reclaimed and classified as alienable agricultural lands of the public domain.vernment reclaimed and marshy lands of the public domain, being neither timber nor mineral lands, fell under the classifublic agricultural lands.50 However, government reclaimed and marshy lands, although subject to classification as dispolic agricultural lands, could only be leased and not sold to private parties because of Act No. 2874.

e prohibition on private parties from acquiring ownership of government reclaimed and marshy lands of the public domaiy a statutory prohibition and the legislature could therefore remove such prohibition. The 1935 Constitution did not prohividuals and corporations from acquiring government reclaimed and marshy lands of the public domain that were classificultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution provided as follows:

"Section 2. No private corporat ion o r associat ion may acquire, lease, or hold p ubl ic agricul tural landexcess of one thous and and twenty four hectares, nor m ay any indiv idual acquire such lands by

purch ase in excess of one hund red and forty hectares, or by lease in excess of on e thousand and tw

four hectares, or by homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceedinthousand hectares, may be leased to an individual, private corporation, or association." (Emphasis supplied

, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No. 2874 to open for sale tate parties government reclaimed and marshy lands of the public domain. On the contrary, the legislature continued the

ablished State policy of retaining for the government title and ownership of government reclaimed and marshy lands of tlic domain.

mmonweal th Act No. 141 of the Phi l ippine National Assembly

November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the Public Land Act, wmpiled the then existing laws on lands of the public domain. CA No. 141, as amended, remains to this day the exist ingneral lawgoverning the classification and disposition of lands of the public domain other than timber and mineral lands.

ction 6 of CA No. 141 empowers the President to classify lands of the public domain into "alienable or disposable"52landpublic domain, which prior to such classification are inalienable and outside the commerce of man. Section 7 of CA No.

horizes the President to "declare what lands are open to disposition or concession." Section 8 of CA No. 141 states that

ernment can declare open for disposition or concession only lands that are "officially delimited and classified." Sections 8 of CA No. 141 read as follows:

"Sec. 6. The President, upon th e recommendation o f the Secretary of Agricul ture and Commerce, shfrom tim e to time classi fy the lands of the publ ic domain into

(a) Alienable or disp osable,

(b) Timber, and


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(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 tadministration 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 Agricul ture and Commerce, shall from time to declare what lands are open to disposi t ion or co ncessionunder this Act.

Sec. 8. Only those lands sh al l be declared open to dispos i t ion or co ncession w hich have been off icdel imited and classifiedand, when practicable, surveyed, and which have not been reserved for publ iquasi -publ ic uses, nor appropriated by the Government, nor in any manner become private property, nor ton which a private right authorized and recognized by this Act or any other valid law may be claimed, or whhaving been reserved or appropriated, have ceased to be so. x x x."

us, before the government could alienate or dispose of lands of the public domain, the President must first officially classse lands as alienable or disposable, and then declare them open to disposition or concession. There must be no law resse lands for public or quasi-public uses.

e salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public domain, are asows:

"Sec. 58. Any tract of land of the pub l ic domain wh ich, being n ei ther t imber nor mineral land, is inteto be us ed for residential purpos es or for c ommercial , indus tr ia l, or other produc t ive purposes othe

agricul tural , and is open to dispo si t ion or con cession, shal l be disposed of un der the provis ions of

chapter and not otherwise.

Sec. 59. The lands disposable under this t i t le shall be classi f ied as fol lows:

(a) Lands reclaimed by the Governm ent by d redging, f i l ling, or oth er means;

(b) Foresho re;

(c) Marshy land sor lands covered with water bordering upon the shores or banks of navigable lakerivers;

(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 perscorporation, or association authorized to purchase or lease public lands for agricultural purposes. x x x.

Sec. 61. The lands com prised in c lasses (a), (b), and (c) of section fi fty -nine shal l be dispos ed of to

private part ies by lease only and not o therwise, as soon as the President, upon recommendation by thSecretary of Agriculture, shal l declare that the same are not necessary for th e publ ic serviceand are odisposition under this chapter. The lands inc luded in class (d) may be disposed of b y sale or lease undthe prov is ions of th is Act ." (Emphasis supplied)

ction 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874 prohibiting theovernment reclaimed, foreshore and marshy disposable lands of the public domain. All these lands are intended fordential, commercial, industrial or other non-agricultural purposes. As before, Section 61 allowed only the lease of such

private parties. The government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or tho


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ds for non-agricultural purposes not classified as government reclaimed, foreshore and marshy disposable lands of the main. Foreshore lands, however, became inalienable under the 1935 Constitution which only allowed the lease of these

ualified private parties.

ction 58 of CA No. 141 expressly states that disposable lands of the public domain intended for residential, commercial,ustrial or other productive purposes other than agricultural "shal l be disposed of under the provis ions o f this chapte

otherwise." Under Section 10 of CA No. 141, the term "disposition" includes lease of the land. Any disposition ofernment reclaimed, foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter IXf CA No. 141,54 unless a subsequent law amended or repealed these provisions.

is concurring opinion in the landmark case ofRepublic Real Estate Corpor ation v. Court of A ppeals,55 Justice Reynno 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 thegovernment by dredging, filling, or other means. Act 1654 mandated that the control and disposition of theforeshore and lands under water remained in the national government. Said law allowed only the 'leasing' oreclaimed land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and lands reclaimethe 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 Resourchad first to determine that the land reclaimed was not necessary for the public service. This requisite must hbeen met before the land could be disposed of. But even then, the foreshore and lands u nder water weto b e al ienated and sold to private part ies. The disposi t ion of th e reclaimed land w as only by lease.

land remained property of the State." (Emphasis supplied)

observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained in effect at present."

e State policy prohibiting the sale to private parties of government reclaimed, foreshore and marshy alienable lands of thlic domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. Thehibition on the sale of foreshore lands, however, became a constitutional edict under the 1935 Constitution. Foreshore laame inalienable as natural resources of the State, unless reclaimed by the government and classified as agricultural lanpublic domain, in which case they would fall under the classification of government reclaimed lands.

er the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the public domain conte only leased and not sold to private parties.56 These lands remained sui g eneris, as the only alienable or disposable l

he public domain the government could not sell to private parties.

ce then and until now, the only way the government can sell to private parties government reclaimed and marshy disposds of the public domain is for the legislature to pass a law authorizing such sale. CA No. 141 does not authorize the Preeclassify government reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands classifieer Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the government could selate parties.

reover, Section 60 of CA No. 141 expresslyrequires congressional authority before lands under Section 59 that the

ernment previously transferred to government units or entities could be sold to private parties. Section 60 of CA No. 14lares that

"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary of Agriculand Natural Resources, be reasonably necessary for the purposes for which such sale or lease is requesteshall not exceed one hundred and forty-four hectares: Provided, however, That this limitation shall not applygrants, donations, or transfers made to a province, municipality or branch or subdivision of the Governmentthe purposes deemed by said entities conducive to the public interest; but the land so g ranted, donated, transferred to a province, municipal i ty or branch or subd ivis ion of the Government s hal l not be al ie


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encumbered, or otherwise disp osed of in a manner affect ing i ts t i t le, except when authorized by

Congress: x x x." (Emphasis supplied)

e congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority required in Section 56 of A2874.

e reason for the congressional authority is that Section 60 of CA No. 141 exempted government units and entities from tximum area of public lands that could be acquired from the State. These government units and entities should not just tund and sell these lands to private parties in violation of constitutional or statutory limitations. Otherwise, the transfer of non-agricultural purposes to government units and entities could be used to circumvent constitutional limitations on ownlienable or disposable lands of the public domain. In the same manner, such transfers could also be used to evade theutory prohibition in CA No. 141 on the sale of government reclaimed and marshy lands of the public domain to private p

ction 60 of CA No. 141 constitutes by operation of law a lien on these lands. 57

ase ofsale or leaseof disposable lands of the public domain falling under Section 59 of CA No. 141, Sections 63 and 6uire a public bidding. Sections 63 and 67 of CA No. 141 provide as follows:

"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public purposes, the

Director of Lands shall ask the Secretary of Agriculture and Commerce (now the Secretary of Natural Resofor authority to dispose of the same. Upon receipt of such authority, the Director of Lands shall give notice bpublic advertisement in the same manner as in the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shal l be made by oral bidding; and adjudicat ion shal l be made to the highbidder. x x x." (Emphasis supplied)

us, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable or disposable lands of lic domain.58

e 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. Pties could still reclaim portions of the sea with government permission. However, the reclaimed land could become pr

d only i f classi f ied as al ienable agricul tural land o f the pu bl ic domainopen to disposition under CA No. 141. The 1nstitution prohibited the alienation of all natural resources except public agricultural lands.

e Civi l Code o f 1950

e Civil Code of 1950 readopted substantially the definition of property of public dominion found in the Civil Code of 1889cles 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 tState, 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 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 formof the patrimonial property of the State."


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ain, the government must formally declare that the property of public dominion is no longer needed for public use or pubvice, before the same could be classified as patrimonial property of the State.59 In the case of government reclaimed andrshy lands of the public domain, the declaration of their being disposable, as well as the manner of their disposition, iserned by the applicable provisions of CA No. 141.

e the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those properties of the State wh

hout being for public use, are intended for public service or the "development of the national wealth." Thus, governmeaimed and marshy lands of the State, even if not employed for public use or public service, if developed to enhance theonal wealth, are classified as property of public dominion.


e 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian doctrine. Section 8, Article XI1973 Constitution stated that

"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces ofpotential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State. With exception of agricul tural, industr ia l or c omm ercial , residentia l , and resett lement lands of th e publ ic

domain, natural resources sh al l not b e alienated, and no license, concession, or lease for the exploratiodevelopment, exploitation, or utilization of any of the natural resources shall be granted for a period exceedtwenty-five years, renewable for not more than twenty-five years, except as to water rights for irrigation, watsupply, fisheries, or industrial uses other than the development of water power, in which cases, beneficial umay be the measure and the limit of the grant." (Emphasis supplied)

e 1973 Constitution prohibited the alienation of all natural resources with the exception of "agricultural, industrial ormmercial, residential, and resettlement lands of the public domain." In contrast, the 1935 Constitution barred the alienationatural resources except "public agricultural lands." However, the term "public agricultural lands" in the 1935 Constitutioompassed industrial, commercial, residential and resettlement lands of the public domain.60 If the land of public domainher timber nor mineral land, it would fall under the classification of agricultural land of the public domain. Bot h the 193573 Consti tut ions, therefore, prohibi ted the al ienation o f al l natural resources except agricul tural lands o f the pub

main.

e 1973 Constitution, however, limited the alienation of lands of the public domain to individuals who were citizens of theippines. Private corporations, even if wholly owned by Philippine citizens, were no longer allowed to acquire alienable lahe 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 requiremof the natural resources, shall determine by law the size of land of the public domain which may be developheld or acquired by, or leased to, any qualified individual, corporation, or association, and the conditionstherefor. No private corporat ion or assoc iat ion m ay hold al ienable lands o f the publ ic domain excepleasenot to exceed one thousand hectares in area nor may any citizen hold such lands by lease in excesshundred hectares or acquire by purchase, homestead or grant, in excess of twenty-four hectares. No privatcorporation or association may hold by lease, concession, license or permit, timber or forest lands and othe

timber or forest resources in excess of one hundred thousand hectares. However, such area may be increaby the Batasang Pambansa upon recommendation of the National Economic and Development Authority."(Emphasis supplied)

us, under the 1973 Constitution, private corporations could hold alienable lands of the public domain only through lease.viduals could now acquire alienable lands of the public domain, and private corporat ions became absolutely barredquir ing any kind of al ienable land o f the publ ic domain. The constitutional ban extended to all kinds of alienable landpublic domain, while the statutory ban under CA No. 141 applied only to government reclaimed, foreshore and marshynable lands of the public domain.


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No. 1084 Creating th e Public Estates Au thor i ty

February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 creating PEA, a wholly governed and controlled corporation with a special charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following pu powers:

"Sec. 4. Purpose. The Authority is hereby created for the following purposes:

(a) To reclaim land, including foreshore and submerged areas, by dr edging, f i ll ing or other means, oacqu ire reclaimed land;

(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sel l any and all kindslands, buildings, estates and other forms of real property, owned, managed, controlled and/or operated by government;

(c) To provide for, operate or administer such service as may be necessary for the efficient, economical andbeneficial utilization of the above properties.

Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for which it icreated, have the following powers and functions:

(a)To prescribe its by-laws.

x x x

(i) To hold lands of the pub l ic domainin excess of the area permitted to private corporations by statute.

(j) To reclaim landsand to construct work across, or otherwise, any stream, watercourse, canal, ditch, flumx.

x x x

(o) To perform such acts and exercise such functions as may be necessary for the attainment of the purposand objectives herein specified." (Emphasis supplied)

No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain. Foreshore areas are thered and uncovered by the ebb and flow of the tide.61 Submerged areas are those permanently under water regardless and flow of the tide.62 Foreshore and submerged areas indisputably belong to the public domain63 and are inalienable uaimed, classified as alienable lands open to disposition, and further declared no longer needed for public service.

e ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain did not apply tce it was then, and until today, a fully owned government corporation. The constitutional ban applied then, as it still appli

w, only to "private corporations and associations." PD No. 1084 expressly empowers PEA "to hold lands of the publ icmain" even "in excess of the area permitted to private corporations by statute." Thus , PEA can hold ti t le to pr ivate lanl l as ti t le to lands of the pu bl ic dom ain.

order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there must be legislatihority empowering PEA to sell these lands. This legislative authority is necessary in view of Section 60 of CA No.141, wes

"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or branch or


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subdivision of the Government shall not be alienated, encumbered or otherwise disposed of in a manner affits title, except when authorized by Congress; x x x." (Emphasis supplied)

hout such legislative authority, PEA could not sell but only lease its reclaimed foreshore and submerged alienable landslic domain. Nevertheless, any legislative authority granted to PEA to sell its reclaimed alienable lands of the public dom

uld be subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain. Henc

h legislative authority could only benefit private individuals.


e 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine. The 1987 Constilares that all natural resources are "owned b y the State," and except for alienable agricultural lands of the public domaural 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 forcespotential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are ownthe State. With the exceptio n of agricu ltural lands, al l oth er natural resourc es shal l not be alienated

exploration, development, and utilization of natural resources shall be under the full control and supervision

State. x x x.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and naparks. Agricultural lands of the public domain may be further classified by law according to the uses which tmay be devoted. Al ienable lands of the pub l ic domain shal l be l imi ted to agricul tural lands. Privatecorpo rat ions or associat ions m ay not ho ld such al ienable lands of the pu bl ic dom ain except by leas

a period n ot exceeding twenty-f ive years, renewable for not more th an twenty-f ive years, and not to

exceed o ne thous and hectares in area. Citizens of the Philippines may lease not more than five hundredhectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and subject to therequirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domawhich may be acquired, developed, held, or leased and the conditions therefor." (Emphasis supplied)

e 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from acquir ing anyal ienable land o f the pub l ic dom ain. Like the 1973 Constitution, the 1987 Constitution allows private corporations to hnable lands of the public domain only throu gh lease. As in the 1935 and 1973 Constitutions, the general law governingse to private corporations of reclaimed, foreshore and marshy alienable lands of the public domain is still CA No. 141.

e Rationale behind the Const i tution al Ban

e rationale behind the constitutional ban on corporations from acquiring, except through lease, alienable lands of the pubmain is not well understood. During the deliberations of the 1986 Constitutional Commission, the commissioners probed onale behind this ban, thus:

"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says:

`No private corporation or association may hold alienable lands of the public domain except by lease, not toexceed one thousand hectares in area.'

If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the 1973Constitution. In effect, it prohibits private corporations from acquiring alienable public lands. But i t has not very clear in jur isprudence what the reason for this is. In some of the cases decided in 1982 and 1983,


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was indicated that the purpose of this is to p revent large landholdings. Is that the intent of this provisi

. VILLEGAS: I think that is the spirit of the provision.

FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the Iglesia ni was not allowed to acquire a mere 313-square meter land where a chapel stood because the Supreme Cou

it would be in violation of this." (Emphasis supplied)

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 privacorporations is to equitably diffuse land ownership or to encourage 'owner-cultivatorship and the economic size farm' and to prevent a recurrence of cases like the instant case. Huge landholdings by corporations or persons had spawned social unrest."

wever, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply limited the size ofnable lands of the public domain that corporations could acquire. The Constitution could have followed the limitations onviduals, who could acquire not more than 24 hectares of alienable lands of the public domain under the 1973 Constitutio

not more than 12 hectares under the 1987 Constitution.

e constitutional intent is to encourage economic family-size farms, placing the land in the name of a corporation would bre effective in preventing the break-up of farmlands. If the farmland is registered in the name of a corporation, upon the he owner, his heirs would inherit shares in the corporation instead of subdivided parcels of the farmland. This would precontinuing break-up of farmlands into smaller and smaller plots from one generation to the next.

actual practice, the constitutional ban strengthens the constitutional limitation on individuals from acquiring more than thewed area of alienable lands of the public domain. Without the constitutional ban, individuals who already acquired theximum area of alienable lands of the public domain could easily set up corporations to acquire more alienable public lanvidual could own as many corporations as his means would allow him. An individual could even hide his ownership of aporation by putting his nominees as stockholders of the corporation. The corporation is a convenient vehicle to circumve

stitutional limitation on acquisition by individuals of alienable lands of the public domain.

e constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a limited area of alienablehe public domain to a qualified individual. This constitutional intent is safeguarded by the provision prohibiting corporatiom acquiring alienable lands of the public domain, since the vehicle to circumvent the constitutional intent is removed. Theilable alienable public lands are gradually decreasing in the face of an ever-growing population. The most effective way

ure faithful adherence to this constitutional intent is to grant or sell alienable lands of the public domain only to individuals, it would seem, is the practical benefit arising from the constitutional ban.

e Amended Jo int Venture Agreement

e 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 Paranaand 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 theconfiguration of the reclaimed area."65


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A confirms that the Amended JVA involves "the development of the Freedom Islands and further reclamation of about 25tares x x x," plus an option "granted to AMARI to subsequently reclaim another 350 hectares x x x."66

hort, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares o f the 750-hectare reclamaject have been reclaimed, and the rest of th e 592.15 hectares are sti l l subm erged areas formin g part o f Manila B

der the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's "actual cost" in partially reclFreedom Islands. AMARI will also complete, at its own expense, the reclamation of the Freedom Islands. AMARI will fuulder all the reclamation costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA willre, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is defined in the Amend

A as the total reclaimed area less 30 percent earmarked for common areas. Title to AMARI's share in the net usable arealing 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 thpertaining to AMARI's Land share based on the Land Allocation Plan. PEA, when requested in w ri t ing byAMARI, shal l then cause the issuanc e and delivery of the pro per certi f icates of ti t le covering AMAR

Land Share in the name of AMARI, x x x; provided, that if more than seventy percent (70%) of the titled arany given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles perta

to AMARI, until such time when a corresponding proportionate area of additional land pertaining to PEA hastitled." (Emphasis supplied)

isputably, under the Amended JVA AMARI wi l l acquire and own a maximum of 367.5 hectares of reclaimed land

ich wi l l be ti t led in i ts name.

mplement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture PEA's statutory authority, 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 andHorizontal Development as well as own the Reclamation Area, thereby granting the Joint Venture the full anexclusive right, authority and privilege to undertake the Project in accordance with the Master Development

e Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its supplemental agreemened August 9, 1995.

e Threshold Issue

e threshold issue is whether AMARI, a private corporation, can acquire and own under the Amended JVA 367.5 hectaresaimed foreshore and submerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution we that:

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forcepotential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are ownedthe State. With the exception of agricul tural lands, al l other natural resources sh al l not be al ienated.

x x x

Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private co rporator assoc iat ions m ay not ho ld such al ienable lands of the pub l ic domain except by lease, x x x."(Empsupplied)

ssi f icat ion of Reclaimed Foreshore and Submerged A reas


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A readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are alienable or disposable lhe public domain. In its Memorandum,67 PEA admits that

"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as al ienable anddispos able lands of the publ ic dom ain:

'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;

x x x.'" (Emphasis supplied)

ewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365 admitted in its Report andcommendation to then President Fidel V. Ramos, " [R]eclaimed lands are classified as al ienable and disp osable lanpubl ic domain."69 The Legal Task Force concluded that

Conclusion

Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of ownership andisposition over reclaimed lands have been transferred to PEA, by virtue of which PEA, as owner, may validconvey the same to any qualified person without violating the Constitution or any statute.

The constitutional provision prohibiting private corporations from holding public land, except by lease (Sec. XVII,70 1987 Constitution), does not apply to reclaimed lands whose ownership has passed on to PEA by stgrant."

der Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila Bay are part of the "landpublic domain, waters x x x and other natural resources" and consequently "owned by the State." As such, foreshore amerged areas "shall not be alienated," unless they are classified as "agricultural lands" of the public domain. The mereamation of these areas by PEA does not convert these inalienable natural resources of the State into alienable or dispo

ds of the public domain. There must be a law or presidential proclamation officially classifying these reclaimed lands asnable or disposable and open to disposition or concession. Moreover, these reclaimed lands cannot be classified as ali

disposable if the law has reserved them for some public or quasi-public use.71

ction 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or concession which haven offic ial ly del imited and classified."72 The President has the authority to classify inalienable lands of the public domanable or disposable lands of the public domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executipartment attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine Government fohe Chancery of the Philippine Embassy. Although the Chancery had transferred to another location thirteen years earlie

urt still ruled that, under Article 42274 of the Civil Code, a property of public dominion retains such character until formallylared otherwise. The Court ruled that

"The fact that the Roppongi site has not been used for a long time for actual Embassy service does notautomatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawfrom public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A property continuespart of the pub l ic domain, not avai lable for private appropriat ion o r ownership 'unt i l there is a forma

declarat ion on the part of the governm ent to wi thdraw i t from being such'(Ignacio v. Director of LandsPhil. 335 [1960]." (Emphasis supplied)

No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands reclaimed by PEA fromeshore or submerged areas of Manila Bay. On January 19, 1988 then President Corazon C. Aquino issued Special Pate


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7 in the name of PEA for the 157.84 hectares comprising the partially reclaimed Freedom Islands. Subsequently, on Ap9 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEAsuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title corresponding to land patents. To thse certificates of title are still in the name of PEA.

No. 1085, coupled with President Aquino's actual issuanceof a special patent covering the Freedom Islands, is equiva

n official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain. PD No. 10 President Aquino's issuance of a land patent also constitute a declaration that the Freedom Islands are no longer need

blic service. The Freedom Islands are thus al ienable or disposable lands of the pub l ic domain, open to dispo si t ioncession to qu al if ied part ies.

he time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the Freedom Islands althousequently there were partial erosions on some areas. The government had also completed the necessary surveys on thnds. Thus, the Freedom Islands were no longer part of Manila Bay but part of the land mass. Section 3, Article XII of thenstitution classifies lands of the public domain into "agricultural, forest or timber, mineral lands, and national parks." Beinher timber, mineral, nor national park lands, the reclaimed Freedom Islands necessarily fall under the classification ofcultural lands of the public domain. Under the 1987 Constitution, agricultural lands of the public domain are the only natources that the State may alienate to qualified private parties. All other natural resources, such as the seas or bays, areters x x x owned by the State" forming part of the public domain, and are inalienable pursuant to Section 2, Article XII of7 Constitution.

ARI claims that the Freedom Islands are private lands because CDCP, then a private corporation, reclaimed the islandsontract dated November 20, 1973 with the Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Lawters of 1866, argues that "if the ownership of reclaimed lands may be given to the party constructing the works, then it csaid that reclaimed lands are lands of the public domain which the State may not alienate." 75 Article 5 of the Spanish Laters reads as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinpueblos or private persons, with proper permission, shall become the property of the party constructing sucworks, unless otherwise provided by the terms of th e grant of authori ty." (Emphasis supplied)

der Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only with "proper permissim the State. Private parties could own the reclaimed land only if not "otherwise provided by the terms of the grant of auts clearly meant that no one could reclaim from the sea without permission from the State because the sea is property ofminion. It also meant that the State could grant or withhold ownership of the reclaimed land because any reclaimed land

sea from which it emerged, belonged to the State. Thus, a private person reclaiming from the sea without permission frte could not acquire ownership of the reclaimed land which would remain property of public dominion like the sea itaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land ownership that "all la

t were not acquired from the government, either by purchase or by grant, belong to the public domain." 77

cle 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public lparticular, CA No. 141 requires that lands of the public domain must first be classified as alienable or disposable before ternment can alienate them. These lands must not be reserved for public or quasi-public purposes.78 Moreover, the cont

ween CDCP and the government was executed afterthe effectivity of the 1973 Constitution which barred private corpom acquiring any kind of alienable land of the public domain. This contract could not have converted the Freedom Islandsate lands of a private corporation.

sidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the reclamation of areas under wateested solely in the National Government the power to reclaim lands. Section 1 of PD No. 3-A declared that

"The provis ions of any law to the contrary notwi thstanding, the reclamation of areas under water, wheforeshore or inland, shall be l imi ted to the National Government or any person authorized by i t under


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proper contract. (Emphasis supplied)

x x x."

No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas under water could nowertaken only by the National Government or by a person contracted by the National Government. Private parties may re

m the sea only under a contract with the National Government, and no longer by grant or permission as provided in Seche Spanish Law of Waters of 1866.

ecutive Order No. 525, issued on February 14, 1979, designated PEA as the National Government's implementing arm tertake "all reclamation projects of the government," which "shal l be undertaken by the PEA or throug h a proper con

ecuted by i t w i th any person or enti ty." Under such contract, a private party receives compensation for reclamation sedered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of the reclaimed land, subject stitutional ban on private corporations from acquiring alienable lands of the public domain. The reclaimed land can be upayment in kind only if the reclaimed land is first classified as alienable or disposable land open to disposition, and thenlared no longer needed for public service.

e Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are still submerged

ming part of Manila Bay. There is no legislative or Presidential act classifying these submerged areas as al ienableposable lands of the publ ic domain open to disposi t ion. These submerged areas are not covered by any patent orificate of title. There can be no dispute that these submerged areas form part of

Documents

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