6. MARCOS DE REFERENCIA
6.1. MARCO CONTEXTUAL - HISTÓRICO
6.1.3. Universidad del Valle sede Palmira y su programa de Administración de
Q: Who are qualified to acquire a Franchise, certificate or any other form of authorization for the operation of a public utility?
A: Filipino citizens or corporations at least 60% of whose capital is Filipino owned. (Art. XII, Section
11, 1987 Constitution)
Q: Does a public utility franchise have the characteristic of exclusivity?
A: No, A franchise to operate a public utility is not an exclusive private property of the franchisee. No franchisee can demand or acquire exclusivitly in the operation of a public utility. Thus, a franchisee cannot complain of seizure or taking of property because of the issuance of another franchise to a competitor. (Pilipino Telephone
Corporation v. NRC, G.R. No. 138295, 2003)
Q: Is the power to grant licenses for or to authorize the operation of public utilities solely vested to congress?
A: No, the law has granted certain administrative agencies such power (See E.O. nos. 172& 202), Supreme Court said that Congress does not have the exclusive power to issue such authorization. Administrative bodies, e.g. LTFRB, ERB, etc., may be empowered to do so., Franchises issued by congress are not required before each and every public utility may operate. (Albano v. Reyes 175
SCRA 264)
Q: Can the Congress validly delegate its authority to issue franchises and licenses?
A: Yes, Section 10, RA 776 reveals the clear intent of Congress to delegate the authority to regulate the issuance of a license to operate domestic air transport services. (Philippine Airlines v. Civil
Aeronautics Board, G.R. No. 119528, March 26, 1997)
Also, the Supreme Court acknowledged that there is a trend towards delegating the legislative power to authorize the operation of certain public utilities to administrative agencies and
dispensing with the requirement of a
congressional franchise. However, in this case, it was held that in view of the clear requirement for a legislative franchise under PD 576‐A, the
authorization of a certificate of public
convenience by the NTC for the petitioner to operate television Channel 25 does not dispense with the need for a franchise. (Associated
Communications and Wireless Services ‐ United
Broadcasting Networks v. National
Telecommunications Commission, GR No. 144109, February 17, 2003) Q: What is a public utiliy? A: A public utility is a business or service engaged in regularly supplying the public with some commodity or service of public consequence, such as electricity, gas, water, transportation, telephone or telegraph service. To constitute a public utility, the facility must be necessary for the maintenance of life and occupation of the residents. As the name indicates, “public utility” implies public use and service to the public. (JG.
Summit Holdings v. Court of Appeals, G.R. No. 124293, September 24, 2003)
Q: Is a franchise required before one can own the facilities to operate a public utility?
A: A franchise is not required before one can own the facilities needed to operate a public utility so long as it does not operate them to serve the public. (Tatad v. Garcia, G.R. No. 114222, April 6,
1995)
Q: Is a shipyard a public utility?
A: A shipyard is not a public utility. Its nature dictates that it serves but a limited clientele whom it may choose to serve at its discretion. It has no legal obligation to render the services sought by each and every client. (JG. Summit
Holdings v. CA, G.R. No. 124293, September 24, 2003)
Q: Can the government amend a radio or television franchise to grant free airtime to COMELEC?
A: Yes, all broadcasting, whether by radio or television stations, is licensed by the Government. Radio and television companies do not own the airwaves and frequencies; they are merely given temporary privilege of using them. A franchise is a privilege subject to amendment, and the provision of BP 881 granting free airtime to the COMELEC is an amendment of the franchise of radio and television stations. (TELEBAP v.
COMELEC, G.R. No. 132922, April 21, 1998)
Q: May a foreigner who owns substantial stockholdings in a corporation engaged in the advertising industry sit as a treasurer of said corporation?
A: No, because a treasurer is an executive or a managing officer. Sec. 11 (2), Art. XVI provides that the participation of the foreign investors in the governing bodies of entities shall be limited to their proportionate share in the capital thereof, and all the managing and executive officers of such entities must be citizens of the Philippines.
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ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES IIVICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA VICE CHAIR FOR ADMINISTRATION AND FINANCE: JEANELLE C. LEE
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
Q: What is the ownership requirement imposed by the Constitution upon business entities engaged in advertising? A: 70% of their equity must be owned by Filipino citizens. (Sec. 11 (2), Art. XVI, 1987 Constitution) Q: What is the ownership requirement imposed by the Constitution upon Mass Media?
A: It must be wholly owned by Filipino citizens.
(Sec. 11 (1), Art. XVI, 1987 Constitution)
Q: What is the ownership requirement imposed by the Constitution upon educational institutions.
A: 60% of their equity must be owned by Filipino citizens. (Sec. 4 [2], Art. XIV, 1987 Constitution)
Q: What are the requisites for the State to temporarily take over a business affected with public interest?
A:
1. There is national emergency; 2. The public interest so requires;
3. During the emergency and under reasonable terms prescribed by it;
4. The State may take over or direct the operation of any privately owned public utility or business affected with public interest. (Sec. 17, Article XII, 1987
Constitution)
Q: Who has the prerogative in the Classification of Public Lands?
A: The prerogative of classifying public lands pertains to administrative agencies which have been specially tasked by statutes to do so and the courts will not interfere on matters which are addressed to the sound discretion of government and/or quasi‐judicial agencies entrusted with the regulation of activities coming under their special technical knowledge and training. (Republic v. Mendoza, GR
no.153727. March 28, 2007) e. Acquisition, Ownership and Transfer of Public and Private Lands Q: When does land of the public domain become private land?
A: When it is acquired from the government either by purchase of by grant. (Oh Cho v. Director
of Lands, G.R. No. 48321, Aug. 31, 1946)
Q: What is the requirement for the reclassification or conversion of lands of public domain?
A: There must be a positive act of government; mere issuance of title is not enough. (Sunbeam
Convenience Food v. CA, G.R. No. 50464, Jan. 29, 1990)
Q: Can public land be transformed into private land thru prescription?
A: Yes, if it is alienable land. OCENCO for more than 30 years must, however, be conclusively established. This quantum of proof is necessary to avoid erroneous validation of actually fictitious claims or possession over the property in dispute.
(San Miguel Corporation v. CA, GR No. 57667, May 28, 1990)
Q: What is the rule on private lands?
A:
GR: No private land shall be transferred or conveyed except to individuals, corporations or associations qualified to acquire or hold lands of the public land.
XPNs:
1. Foreigners who inherit through
intestate succession;
2. Former natural‐born citizen may be a transferee of private lands subject to limitations provided by law;
3. Ownership in condominium units; 4. Parity right agreement, under the 1935
Constitution.
Q: Can a natural born citizen of the Philippines who has lost his Philippine citizenship be a transferee of private lands?
A: Yes, subject to the limitations imposed by Law, Thus, even if private respondents were already Canadians when they applied for registration of the properties in question, there could be no legal
impediment for the registration thereof,
considering that it is undisputed that they were formerly natural‐born citizens. (Republic of the
Philippines v. CA, G.R. No. 108998, August 24, 1984)
Q: Can private corporations and associations acquire public lands?
A: No. They are only allowed to lease public lands.
(Sec. 3, Art. XII)
Q: Does the constitutional policy of a “self‐ reliant and independent national economy” rule out foreign competition?
A: No. It contemplates neither “economic seclusion” nor “mendicancy in the international community.”
Aside from envisioning a trade policy based on “equality and reciprocity,” the fundamental law encourages industries that are “competitive in both domestic and foreign markets,” thereby demonstrating a clear policy against a sheltered domestic trade environment, but one in favor of the gradual development of robust industries that can compete with the best in the foreign markets.
(Tañada v. Angara, G.R. No. 118295, May 2, 1997)
Q: Has the concept of native title to natural resources, like native title to land, been recognized in the Philippines?
A: No. While native title to land or private ownership by Filipinos of land by virtue of time immemorial possession in the concept of an owner was acknowledged and recognized as far back during the Spanish colonization of the Philippines, there was no similar favorable
treatment as regards natural resources. The unique value of natural resources has been acknowledged by the State and is the underlying reason for its consistent assertion of ownership and control over said natural resources from the Spanish regime up to the present. (Noblejas,
Philippine Law on Natural Resources, 1961 Revised Ed., p. 6)
On the other hand, the United States viewed natural resources as a source of wealth for its nationals. As the owner of natural resources over the Philippines after the latter’s cession from Spain, the United States saw it fit to allow both Filipino and American citizens to explore and exploit minerals in public lands, and to grant patents to private mineral lands. x x x The framers of the 1935 Constitution found it necessary to maintain the State’s ownership over natural resources to insure their conservation for future generations of Filipinos, to prevent foreign control of the country through economic domination; and to avoid situations whereby the
Philippines would become a source of
international conflicts, thereby posing danger to its internal security and independence.
The declaration of State ownership and control over minerals and other natural resources in the 1935 Constitution was reiterated in both the 1973 and 1987 Constitutions. (Separate Opinion,
Kapunan, J., in Cruz v. Secretary of Environment and Natural Resources, G.R. No. 135385, Dec. 6, 2000, En Banc [Per Curiam])
Q: Is a religious corporation qualified to have lands in the Philippines on which it may build its church and make other improvements provided these are actually, directly, exclusively used for religious purposes?
A: No. The mere fact that a corporation is religious does not entitle it to own public land. As held in Register of Deeds v. Ung Siu Si Temple
(G.R. No. L‐6776), land tenure is not indispensable
to the free exercise and enjoyment of religious profession of worship. The religious corporation can own private land only if it is at least 60% owned by Filipino citizens.
Q: Is a corporation sole qualified to purchase or own lands in the Philippines?
A: Yes. Sec. 113, BP Blg. 68 states that any corporation sole may purchase and hold real estate and personal property for its church, charitable, benevolent or educational purposes, and may receive bequests or gifts for such
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POLITICAL LAW TEAM:
ADVISER: ATTY. EDWIN REY SANDOVAL; SUBJECT HEAD: RACHEL MARIE L. FELICES; ASST. SUBJECT HEADS: WIVINO E. BRACERO II &
HERAZEUS CHRISTINE Y. UY; MEMBERS: LAWRENCE PAULO H. AQUINO, LEANDRO RODEL V. ATIENZA, MARINETH EASTER AN D. AYOS,
CARLO R. BALA, WILFREDO T. BONILLA, JR., KEEL ACHERNAR R. DINOY, APRIL V. ENRILE, KENNETH JAMES CARLO C. HIZON, JOSE MARIA
purposes. There is no doubt that a corporation sole by the nature of its Incorporation is vested with the right to purchase and hold real estate and personal property. It need not therefore be treated as an ordinary private corporation because whether or not it be so treated as such, the Constitutional provision involved will, nevertheless, be not applicable. (Republic of the
Philippines v. IAC., G.R. No. 75042, Nov. 29, 1988)
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ACADEMICS CHAIR: LESTER JAY ALAN E. FLORES IIVICE CHAIRS FOR ACADEMICS: KAREN JOY G. SABUGO & JOHN HENRY C. MENDOZA VICE CHAIR FOR ADMINISTRATION AND FINANCE: JEANELLE C. LEE
VICE CHAIRS FOR LAY‐OUT AND DESIGN: EARL LOUIE M. MASACAYAN & THEENA C. MARTINEZ
Q: Is a religious corporation allowed to lease private land in the Philippines?
A: Yes. Under Sec. 1 of P.D. 471, corporations and associations owned by aliens are allowed to lease private lands up to 25 years, renewable for a period of 25 years upon the agreement of the lessor and the lessee. Hence, even if the religious corporation is owned by aliens, it may still lease private lands.
Q: Are lands devoted to swine, poultry and livestock raising included in the definition of agricultural land? A: No. (Luz Farms v. Secretary of Agrarian Reform, G.R. No. 86889, Dec. 4, 1990) Q: Is fishpond considered within the definition of agricultural land? A: Yes, according to the definition adopted by the Constitutional Commission. f. PRACTICE OF PROFESSION
Q: What is the State policy with regard to professionals and skilled workers?
A: The sustained development of a reservoir of national talents consisting of Filipino scientists, entrepreneurs, professionals, managers, high‐ level technical manpower and skilled workers and craftsmen in all fields shall be promoted by the State. (Par. 1, Sec. 14, Art. XII, 1987 Constitution)
Q: Who may practice their profession in the Philippines?
A:
GR: The practice of all professions in the Philippines shall be limited to Filipino citizens.
XPN: In cases provided by law. (Par. 2, Sec. 14,
Art. XII, 1987 Constitution)
Q: What does Section 14, Article XII of the Constitution seek to achieve?
A: Section 14 reflects the desire not only to
develop a ready reservoir of Filipino
professionals, scientists and skilled workers but also to protect their welfare. (ibid.) g. ORGANIZATION AND REGULATION OF CORPORATIONS, PRIVATE AND PUBLIC
Q: May Congress provide for the organization and regulation of private corporations?
A: The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. (Sec. 16, Art.
XII, 1987 Constitution)
Q: What is the purpose of this provision?
A: Its purpose is to insulate Congress against pressures from special interests. To permit the law making body by special law to provide for the organization or formation or regulation of private corporations x x x would be in effect to offer to it the temptation in many cases to favor certain groups to the prejudice of others or to the prejudice of the interests of the country. (Bernas,
The 1987 Constitution of the Philippines: A Commentary)
Q: May Congress enact a law creating Government‐Owned and Controlled corporations?
A: Government‐owned and controlled
corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability.
(Sec. 14, Art. XII, 1987 Constitution)
Q: What does the phrase ‘in the interest of the public good and subject to the test of economic viability’ mean?
A: It means that government‐owned and controlled corporations must show capacity to function efficiently in business and that they should not go into activities which the private sector can do better. Moreover, economic viability is more than financial viability but also included capability to make profit and generate benefits not quantifiable in financial terms.
(Bernas, The 1987 Constitution of the Philippines: A Commentary)
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POLITICAL LAW TEAM:ADVISER: ATTY. EDWIN REY SANDOVAL; SUBJECT HEAD: RACHEL MARIE L. FELICES; ASST. SUBJECT HEADS: WIVINO E. BRACERO II &
HERAZEUS CHRISTINE Y. UY; MEMBERS: LAWRENCE PAULO H. AQUINO, LEANDRO RODEL V. ATIENZA, MARINETH EASTER AN D. AYOS,
CARLO R. BALA, WILFREDO T. BONILLA, JR., KEEL ACHERNAR R. DINOY, APRIL V. ENRILE, KENNETH JAMES CARLO C. HIZON, JOSE MARIA
G. MENDOZA, ROGER CHRISTOPHER R. REYES, ROMILINDA C. SIBAL, JASMIN M. SISON, ZARAH PATRICIA T. SUAREZ, RALPH JULIOUS L. h. MONOPOLIES, RESTRAINT OF TRADE AND
UNFAIR COMPETITION
Q: What is the State policy regarding monopolies?
A: The State shall regulate or prohibit monopolies when the public interest so requires. No combination in restraint of trade or unfair competition shall be allowed. (Sec. 19, Art. XII,
1987 Constitution)
Q: What is meaning of the phrase “Unfair
Foreign Competition And Trade Practices”?
A: The phrase is not to be understood in a limited legal and technical sense but in the sense of anything that is harmful to Philippine enterprises. At the same time, however, the intention is not to protect local inefficiency. Nor is the intention to protect local industries from foreign competition at the expense of the consuming public. (Bernas,
The 1987 Philippines Constitution: A Reviewer ‐ Primer, 2006)
Q: What is a monopoly?
A: A monopoly is a privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive right (or power) to carry on a particular business or trade, manufacture a particular article, or control the sale of a particular commodity. (Agan, Jr. v.
PIATCO, G.R. No. 155001, May 5, 2003)
Q: What is the rationale behind the provision?
A: The provision is a statement of public policy on monopolies and on combinations in restraint of trade. Section 19 is anti‐trust in history and spirit. It espouses competition. Only competition which is fair can release the creative forces of the market. Competition underlies the provision. The objective of anti‐trust law is ‘to assure a competitive economy based upon the belief that through competition producers will strive to satisfy consumer wants at the lowest price with the sacrifice of the fewest resources. Competition among producers allows consumers to bid for goods and services, and, thus matches their
desires with society’s opportunity costs.
Additionally, there is a reliance upon “the operation of the ‘market’ system (free enterprise) to decide what shall be produced, how resources shall be allocated in the production process, and to whom various products will be distributed. The market system relies on the consumer to decide what and how much shall be produced, and on
competition, among producers who will
manufacture it. (Energy Regulatory Board v. CA
G.R. No. 113079, April 20, 2001)
Q: Are monopolies prohibited by the Constitution?
A: Monopolies are not per se prohibited by the Constitution but may be permitted to exist to aid the government in carrying on an enterprise or to aid in the interest of the public. However, because monopolies are subject to abuses that can inflict severe prejudice to the public, they are subjected to a higher level of State regulation than an ordinary business undertaking. (Agan, Jr.
v. PIATCO, G.R. No. 155001, May 5, 2003)
Q: Are contracts requiring exclusivity void?
A: Contracts requiring exclusivity are not per se void. Each contract must be viewed vis‐à‐vis all the circumstances surrounding such agreement in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition. (Avon v. Luna, G.R. No. 153674, December 20, 2006) Q: What is prohibited by Section 19?
A: Combinations in restraint of trade and unfair competition are prohibited by the Constitution.
(Sec. 19, Art. XII, 1987 Constitution)
Q: When is a monopoly considered in restraint of trade and thus prohibited by the Constitution?
A: From the wordings of the Constitution, truly then, what is brought about to lay the test on whether a given an unlawful machination or combination in restraint of trade is whether under the particular circumstances of the case and the nature of the particular contract involved, such contract is, or is not, against public policy.
(Avon v. Luna, G.R. No. 153674, December 20, 2006)
Q: Does the government have the power to intervene whenever necessary for the promotion of the general welfare?
A: Yes, although the Constitution enshrines free enterprise as a policy, it nevertheless reserves to the Government the power to intervene whenever necessary for the promotion of the general welfare, as reflected in Sections 6 and 19 of Article XII. (Association of Philippine Coconut