ARTICLE XII – NATIONAL ECONOMY AND PATRIMONY
SEC. 1. GOALS OF THE
NATIONAL ECONOMY
Three-fold goal:
1.
More
equitable distribution of opportunities, income and wealth;
2.
Sustained
increase in the amount of goods and services produced by the nation for the
benefit of the people; and
3.
Expanding
productivity, as the key to raising the quality of life for all.
The State shall promote
industrialization and full employment
1.
It
should be based on sound agricultural development and agrarian reform
2.
It should be through industries that make full
and efficient use of human and natural resources. Industries should also be
competitive in both domestic and foreign markets.
Protection of Filipino
enterprises
The State shall protect
Filipino enterprises against unfair foreign competition and trade practices.
Role of Private
Enterprises
Private enterprises, including
corporations, cooperatives, and similar collective organizations, shall be
encouraged to broaden the base of their ownership.
Section 2. REGALIAN
DOCTRINE
Distinction between
Imperium and Dominium
1.
Imperium
Government authority possessed
by the State which is appropriately embraced in sovereignty.
2. Dominium
a.
The
capacity of the State to own and acquire property.
b. It
refers to lands held by the government in a proprietary character: can provide
for the exploitation and use of lands and other natural resources.
Scope:
The following are owned
by the State:
1.
Lands of the public domain: Waters
Minerals, coals,
petroleum, and other mineral oils; All sources of potential energy;
Fisheries; Forests or
timber; Wildlife;
Flora
and fauna; and Other natural resources.
Alienation of Natural
Resources
1.
General
Rule: All natural resources CANNOT be alienated
2.
Exception:
Agricultural lands
Exploration, Development
and Utilization of Natural Resources
1.
Shall
be under the full control and supervision of the State
2.
Means
A. The
state may DIRECTLY UNDERTAKE such activities
B.
The
state may enter into CO-PRODUCTION, JOINT VENTURE OR PRODUCTION-SHARING
arrangements with
1.
Filipino
citizen or
2. Corporation
or association at least 60% of whose capital is owned by such citizens
3.
Limitations:
A. Period:
It should not exceed 25 years, renewable for not more than 25 years
B.
Under
terms and conditions as may be provided by law.
4.
In
case of water rights/water supply/fisheries/industrial uses other than the
development of water power
The
beneficial use may be the measure and limit of the grant.
Small-scale Utilization
of Natural Resources
1.
Congress
may, by law, authorize small-scale utilization of natural resources by Filipino
citizens
2. Congress
may also authorize cooperative fish farming with priority given to subsistence
fishermen and fishworkers in the rivers, lakes, bays and lagoons.
Large-Scale
Exploration, Development and Utilization of Minerals/Petroleum/Other
Mineral Oils
1.
The
President may enter into agreements with foreign owned corporations involving
technical or financial assistance for large-scale exploration etc. of minerals,
petroleum, and other mineral oils. These agreements should be in accordance
with the general terms and conditions provided by law.
2.
They
should be based on the real contributions to economic growth and general
welfare of the country.
3.
In
the agreements, the State should promote the development and use of local
scientific and technical resources.
4.
The
President should notify Congress of every contract under this provision within
30 days from its execution.
5.
Management
and service contracts are not allowed under this rule.
Protection of Marine
Wealth
1.
The
State shall protect its marine wealth in its Archipelagic waters
Territorial sea & EEZ
2.
The
State shall reserve its use and enjoyment exclusively to Filipino citizens.
Section 3. LANDS OF THE
PUBLIC DOMAIN ARE CLASSIFIED INTO
1.
Agricultural
2.
Forest/timber
3. Mineral
lands &
4.
National
Parks
Note:
1. Classification of public
lands is an exclusive prerogative of the Executive Department through the
Office of the President, upon recommendation by the DENR.
2. Classification
is descriptive of the legal nature of the land and NOT what it looks like.
Thus, the fact that forest land is denuded does not mean it is no longer forest
land.
Alienable lands of
public domain
1. Only agricultural lands
are alienable.
2. Agricultural
lands may be further classified by law according to the uses to which they may
be devoted.
Limitations regarding Alienable Lands of the Public Domain
1.
For
private corporations or associations
A.
They
can only hold alienable lands of the public domain BY LEASE
B. Period:
Cannot exceed 25 years, renewable for not more than 25 years
C.
Area:
Lease cannot exceed 1,000 hectares
Note: A
corporation sole is treated like other private corporations for the purpose of
acquiring public lands.
2.
For
Filipino citizens
A.
Can
lease up to 500 hectares
B. Can
ACQUIRE not more than 12 hectares by purchase, homestead or grant
Taking into account the
requirements of conservation, ecology and development, and subject to the
requirements of agrarian reform, Congress shall determine by law the size of
the lands of the public domain which may be acquired, developed, held or lease
and the conditions therefore.
Means by Which Lands of
the Public Domain Become Private Land
1. Acquired from government
by purchase or grant;
2. Uninterrupted possession
by the occupant and his predecessors-in-interest since time immemorial; and
3. Open,
exclusive, and undisputed possession of ALIENABLE (agricultural) public land
for a period of 30 years.
A. Upon completion of the
requisite period, the land becomes private property ipso jure without need of
any judicial or other sanction.
B. Here, in possession
since time immemorial, presumption is that the land was never part of public
domain.
C. In computing 30 years,
start from when land was converted to alienable land, not when it was still
forest land
D. Presumption is that land
belongs to the State.
Section 4. Congress shall, as soon as possible,
determine by law, the specific limits of forest lands and national parks,
marking clearly their boundaries on the ground. Thereafter, such forest lands
and national parks shall be conserved and may not be increased or diminished,
EXCEPT by law. Congress shall provide measures to prohibit logging in
a. Endangered forest and
b. Watershed areas
-for such period as it
may determine.
Section 5. ANCESTRAL
LANDS
Protection of Indigenous
Cultural Communities
1. The State protects the
rights of indigenous cultural communities to their ancestral lands
A. Subject to
Constitutional provisions
B. Subject to national
development policies and programs
2. In
determining ownership and extent of ancestral domain, Congress may use
customary laws on property rights and relations.
3. “ANCESTRAL DOMAIN”
A. It
refers to lands which are considered as pertaining to a cultural region
B. This includes lands not
yet occupied, such as deep forests.
Section 7. PRIVATE LANDS
General rule
1. Private lands CAN only
be transferred or conveyed to:
A. Filipino
citizens
B. Corporations
or associations incorporated in the Philippines, at least 60% of whose capital
is owned by Filipino citizens
2.
Exceptions
A.
In
intestate succession, where an alien heir of a Filipino is the transferee of
private land.
B.
A
natural born citizen of the Philippines who has lost his Philippine citizenship
may be a transferee of PRIVATE ALND, subject to limitation provided by law.
Hence, land can be used only for residential purposes. In this case, he only
acquires derivative title.
C. Foreign
states may acquire land but only for embassy and staff residence purposes.
3. Filipino
citizenship is only required at the time the land is acquired. Thus, loss of
citizenship after acquiring the land does not deprive ownership.
4. Restriction
against aliens only applies to acquisition of ownership. Therefore:
A.
Aliens
may be lessees or usufructuaries of private lands
B. Aliens
may be mortgages of land, as long as they do not obtain possession thereof and
do not bid in the foreclosure sale.
5. Land
tenure is not indispensable to the free exercise of religious profession and
worship. A religious corporation controlled by non-Filipinos cannot acquire and
own land, even for religious purposes.
Remedies to recover
private lands from disqualified aliens:
1. Escheat proceedings
2. Action
for reversion under the Public Land Act
3. An action by the former
Filipino owner to recover the land
A. The
former pari delicto principle has been abandoned
B. Alien still has the
title (didn’t pass it on to one who is qualified)
Section 10. NATIONAL
ECONOMY AND PATRIMONY/INVESTMENTS
Power of Congress
1. Congress, upon the
recommendation of NEDA, can reserve to Filipino citizens or to corporations or
associations at least 60% of whose capital is owned by such citizens, or such
higher percentage as Congress may prescribe, certain areas of investment. This
may be done when the national interest dictates.
2. Congress
shall also enact measures to encourage the formation and operation of
enterprises whose capital is wholly owned by Filipinos.
National Economy and
Patrimony
In the grant of rights, privileges and concessions covering
the national economy and patrimony, the State shall give preference to
QUALIFIED Filipinos.
Section 11. FRANCHISES
FOR PUBLIC UTILITIES
Power to grant:
1.
Congress
may directly grant a legislative franchise; or
2. Power
to grant franchises may be delegated to appropriate regulatory agencies and/or
LGU’s
Public utility
1. In order to be
considered as a public utility, and thus subject to this provision, the
undertaking must involve dealing directly with the public.
2. Thus, a
Build-Operate-Transfer grantee is NOT a public utility. The BOT grantee merely
constructs the utility, and it leases the same to the government. It is the
government which operates the public utility (operation separate from
ownership).
To whom granted:
1. Filipino
citizens or
2. Corporations
or associations incorporated in the Philippines and at least 60% of the capital
is owned by Filipino citizens.
Terms and conditions:
1. Duration:
Not more than 50 years
2. Franchise is NOT
exclusive in character
3. Franchise
is granted under the condition that it is subject to amendment, alteration, or
repeal by Congress when the common good so requires.
Participation of Foreign
Investors
1. The participation of
foreign investors in the governing body of any public utility enterprise shall
be limited to their proportionate share in its capital.
2. Foreigners
cannot be appointed as the executive and managing officers because these
positions are reserved for Filipino citizens.
Section 16.
FORMATION/ORGANIZATION/REGULATION OF CORPORATIONS
1.
Private corporations
Congress can only provide for
the formation, etc of private corporations through a general law.
2.
GOCC’s
They may be created by:
a.
Special
charters in the interest of the common good and subject to the test of economic
viability.
b.
By
incorporation under the general corporation law.
Sections 18-19. SPECIAL
ECONOMIC POWERS OF THE GOVERNMENT
1. Temporary takeover or
direction of operations:
A. Conditions
i. National
emergency and
ii. When the public interest
requires
B. May be used against
privately owned public utilities or businesses affected with public interest.
C. Duration
of the takeover: period of emergency
D. Takeover is subject to
reasonable terms and conditions
E. No need for just
compensation because it is only temporary.
2. Nationalization of vital
industries:
A. Exercised in the
interest of national welfare or defense
B. Involves
either:
i. Establishment and
operation of vital industries; or
ii. Transfer
to public ownership, upon payment of just compensation, public utilities and
other private enterprises to be operated by the government.
Section 19. MONOPOLIES
1.
The
Constitution does NOT prohibit the existence of monopolies.
2.
The
State may either regulate or prohibit monopolies, when public interest so
requires.
3.
Combinations
in restraint of trade or unfair competition are prohibited.
Filipino citizenship
or equity requirements:
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ACTIVITY REQUIREMENTS
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CITIZENSHIP AND/OR EQUITY
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Exploitation of
natural resources
|
1.
|
Filipino citizens; or
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2.
|
Corporations incorporated in
RP, with
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60% Filipino
ownership
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Operation of Public
Utilities
|
1.
|
Filipino citizens; or
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2.
|
Corporations incorporated in
RP, with
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60% Filipino
ownership
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Acquisition of
alienable lands of
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the public domain
|
1.
|
Filipino citizens;
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2.
|
Corporations incorporated in
RP, with
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60% Filipino
ownership;
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3.
|
Former
natural-born citizens of RP, as
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transferees,
|
with
|
certain
|
legal
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restrictions; and
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4.
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Alien heirs as transferees in case of
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intestate succession.
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Practice of ALL
Professions
|
Filipino citizens only (natural
persons)
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*Congress may, by law, otherwise
prescribe
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Mass Media
|
1.
|
Filipino citizens; or
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2.
|
Corporations incorporated in
RP, and
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100% Filipino owned
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Advertising
|
1.
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Filipino citizens; or
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2.
|
Corporations incorporated in
RP, and
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70% Filipino owned.
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Educational
institution
|
1.
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Filipino citizens; or
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2.
|
Corporations incorporated in
RP, with
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60%
Filipino ownership
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EXCEPT: Schools established by religious
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groups and mission
boards.
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*Congress may,
|
by
law,
|
increase
|
Filipino
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equity requirements
for ALL educational
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institutions.
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Other economic
activities
|
Congress may, by law, reserve to
Filipino
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citizens or
to corporations 60%
Filipino
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owned (or even higher) certain
investment
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areas.
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