Section 10, second paragraph, Article XII of the 1987 Constitution, which provides that "In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos," is a self-executing provision and requires that a qualified Filipino bidder be allowed to match the highest bid of a foreign bidder in transactions involving national patrimony, and upon matching, the award should go to the Filipino bidder.

The case arose from the Philippine Government's privatization program under Proclamation No. 50. Respondent Government Service Insurance System (GSIS) decided to sell 30% to 51% of its shares in respondent Manila Hotel Corporation (MHC), which owns the historic Manila Hotel. The sale was intended to attract a "strategic partner" to provide management expertise, an international marketing/reservation system, and financial support to enhance the Manila Hotel's profitability.

• Respondent GSIS, as part of the government's privatization program, decided to sell 30% to 51% of its shares in Manila Hotel Corporation (MHC).
• In a public bidding held on September 18, 1995, only two bidders participated: petitioner Manila Prince Hotel Corporation (MPH), a Filipino corporation, which bid P41.58 per share for 51% of MHC shares (15,300,000 shares), and Renong Berhad, a Malaysian firm, which bid P44.00 per share for the same number of shares.
• The bidding rules stated that the Highest Bidder would be declared the Winning Bidder/Strategic Partner after execution of necessary contracts and obtaining requisite approvals.
• Pending declaration of Renong Berhad as the winner, MPH, in a letter dated September 28, 1995, matched Renong Berhad's bid of P44.00 per share.
• On October 10, 1995, MPH sent a manager's check for P33,000,000.00 as bid security to match the Malaysian group's bid, which GSIS refused to accept.
• MPH filed a petition for prohibition and mandamus, invoking the Filipino First Policy under Sec. 10, Art. XII of the 1987 Constitution.
• The bidding rules (Par. V, subpar. J. 1.) provided that if the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer it to other Qualified Bidders willing to match the highest bid.

• The Manila Hotel is part of the national patrimony and its business is part of the national economy, making Sec. 10, second par., Art. XII of the 1987 Constitution (Filipino First Policy) applicable.
• The Filipino First Policy requires that petitioner, a qualified Filipino corporation, be preferred after matching the bid of the Malaysian firm, Renong Berhad.
• The bidding rules allow GSIS to offer the shares to other qualified bidders willing to match the highest bid if the highest bidder cannot be awarded the shares.
• The 51% shares of MHC carry with it the ownership and control of the business of the hotel, thus falling under the term "national economy."
• The constitutional provision is self-executing and does not require implementing legislation.

• Section 10, second par., Art. XII of the 1987 Constitution is not self-executing and requires implementing legislation.
• The Manila Hotel does not fall under the definition of "national patrimony," which respondents argue refers only to natural resources as enumerated in Sec. 2, Art. XII of the Constitution.
• The constitutional mandate is addressed to the State, not to GSIS, which has a separate legal personality.
• What is being sold is only 51% of MHC shares, not the hotel building or the land, and thus cannot be considered part of the national patrimony.
• Petitioner's reliance on the bidding rule allowing matching bids is premature, as Renong Berhad could still be awarded the shares.
• GSIS did not commit grave abuse of discretion, and petitioner has no clear legal right to mandamus.
• Petitioner is estopped from questioning the sale to a foreigner as it participated in the bidding knowing foreigners could participate.

• Whether Section 10, second paragraph, Article XII of the 1987 Constitution is a self-executing provision.
• Whether the 51% shares of the Manila Hotel Corporation form part of the national economy and patrimony covered by the Filipino First Policy.
• Whether respondent GSIS, in selling the shares, is bound by the Filipino First Policy.
• Whether petitioner Manila Prince Hotel, a qualified Filipino corporation, is entitled to be preferred in the sale of the MHC shares after matching the highest bid of a foreign corporation.

• The Supreme Court granted the petition, directing respondents to cease and desist from selling the 51% MHC shares to Renong Berhad and to accept the matching bid of Manila Prince Hotel Corporation.
• The Court held that Section 10, second paragraph, Article XII of the 1987 Constitution is self-executing. It is a mandatory, positive command that needs no further legislation for its enforcement. The presumption is that all constitutional provisions are self-executing unless the contrary is clearly intended.
• The term "national patrimony" is not limited to natural resources but also includes the cultural heritage of the Filipinos. The Manila Hotel, due to its historical and cultural significance, is considered part of the national patrimony. The 51% equity of MHC, representing controlling stock, comes within the purview of the constitutional protection.
• The sale of MHC shares by GSIS, a government instrumentality, constitutes "state action" and is therefore subject to the constitutional command. The prior approval of the State, through the Committee on Privatization, further solidifies this.
• The Filipino First Policy bestows preference on qualified Filipinos. When a foreign firm submits the highest bid in a public bidding concerning national economy and patrimony, a qualified Filipino bidder must be allowed to match that bid, and if matched, the award must go to the Filipino. This preference is impliedly written into the bidding rules.
• The refusal of GSIS to accept MPH's matching bid and proceed with the sale to Renong Berhad constitutes grave abuse of discretion.

• Filipino First Policy (Sec. 10, par. 2, Art. XII, 1987 Constitution) — In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The Court applied this by ruling that petitioner, a qualified Filipino corporation, must be allowed to match the highest foreign bid for the Manila Hotel shares and, upon doing so, be awarded the sale, as the Manila Hotel is part of the national patrimony.
• Self-Executing Constitutional Provisions — A constitutional provision is self-executing if it is complete in itself and becomes operative without supplementary legislation, or supplies a sufficient rule by which the right it grants may be enjoyed or protected. The Court held Sec. 10, par. 2, Art. XII to be self-executing, meaning it is directly enforceable without needing an implementing law.
• Doctrine of Constitutional Supremacy — If a law or contract violates any norm of the constitution, that law or contract is null and void. The Constitution is the fundamental, paramount, and supreme law, deemed written into every statute and contract. The Court applied this by stating that the bidding rules must conform to the Filipino First Policy, and the constitutional provision is impliedly written into them.
• National Patrimony — Pertains not only to natural resources but also to the cultural heritage of the Filipinos. The Court interpreted "national patrimony" broadly to include the Manila Hotel due to its historical significance, making its sale subject to the Filipino First Policy.
• State Action Doctrine — Acts of persons distinct from the government are considered "state action" covered by the Constitution when: (1) the activity is a "public function"; (2) the government is significantly involved with the private actor; or (3) the government has approved or authorized the action. The Court found the sale by GSIS, a government instrumentality, with approval from the Committee on Privatization, to be state action.
• Ubi jus ibi remedium — Where there is a right, there is a remedy. The Court invoked this to assert that if the Constitution declares a right (like preference for qualified Filipinos), an action may be maintained to enforce it even without specific legislation.

• "Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract."
• "When our Constitution mandates that [i]n the grant of rights, privileges, and concessions covering national economy and patrimony, the State shall give preference to qualified Filipinos, it means just that qualified Filipinos shall be preferred."
• "Verily, Manila Hotel has become part of our national economy and patrimony."
• "To insist on selling the Manila Hotel to foreigners when there is a Filipino group willing to match the bid of the foreign group is to insist that government be treated as any other ordinary market player, and bound by its mistakes or gross errors of judgment, regardless of the consequences to the Filipino people."
• "Privatization of a business asset for purposes of enhancing its business viability and preventing further losses, regardless of the character of the asset, should not take precedence over non-material values."

• Basco v. Philippine Amusements and Gaming Corporation — Cited by respondents to argue that certain constitutional provisions are mere statements of principles, not judicially enforceable. The Court distinguished this, stating that the provisions in Basco (personal dignity, sanctity of family life, etc.) are clearly guidelines for legislation, unlike the mandatory command of the Filipino First Policy.
• Tolentino v. Secretary of Finance — Also cited by respondents for the same purpose as Basco. The Court similarly distinguished it, noting that provisions on social justice, human rights, and education discussed therein were non-justiciable principles.
• Kilosbayan, Inc. v. Morato — Another case cited by respondents to support the non-self-executing nature of certain constitutional principles. The Court found the provisions cited (promotion of general welfare, sanctity of family life, etc.) to be mere legislative guidelines.
• Marbury v. Madison — Cited in a footnote for the principle of constitutional supremacy and the role of the judiciary in interpreting the constitution.

• Art. XII, Sec. 10, second par., 1987 Constitution (Filipino First Policy) — This is the central provision invoked by the petitioner and interpreted by the Court as self-executing and mandating preference for qualified Filipinos in the grant of rights, privileges, and concessions covering the national economy and patrimony.
• Art. XII, Sec. 2, 1987 Constitution — Referenced by respondents to argue that "national patrimony" is limited to natural resources. The Court rejected this narrow interpretation.
• Art. II, 1987 Constitution (Declaration of Principles and State Policies) — The Court noted that provisions in this article are generally not self-executing, but distinguished the Filipino First Policy as a mandatory command.
• Proclamation No. 50 dated 8 December 1986 — This proclamation established the privatization program of the Philippine Government, under which the sale of MHC shares was initiated.
• Bidding Rules prepared by GSIS (specifically Par. V. J. 1) — This rule, stating that GSIS may offer the shares to other qualified bidders willing to match the highest bid if the highest bidder cannot be awarded, was considered by the Court in conjunction with the constitutional mandate.

• Justice Padilla — Emphasized that "national patrimony" includes institutions like the Manila Hotel due to its historical and cultural significance, and that "preference to qualified Filipinos" must allow a qualified Filipino to match or equal the higher bid of a non-Filipino for the preference to be meaningful.
• Justice Mendoza — Argued that the only way to enforce the constitutional mandate of preference in this context is to allow the qualified Filipino corporation to match the highest foreign bid. He stated that "preference to qualified Filipinos" means favoring Filipinos when they are at a disadvantage vis-a-vis foreigners.
• Justice Vitug — Agreed that the Filipino First Policy is self-executory and that "patrimony" includes cultural heritage. He found that the only meaningful preference in this case is to allow the qualified Filipino to match the foreign bid, as bids of such magnitude are unlikely to be exactly equal.
• Justice Torres, Jr. — Focused on the historical and cultural aspect of the Manila Hotel, asserting it is part of the "patrimony of the nation." He cited Constitutional Commission deliberations to support the view that qualified Filipinos should be preferred even if a foreigner is more qualified in some aspects.

• Justice Puno — Argued that while the Filipino First Policy is self-executing and Manila Hotel is part of national patrimony, the "preference" for qualified Filipinos only applies when all bids are equal or tied. He contended that the bidding rules did not grant petitioner the right to match the highest bid unless the highest bidder was disqualified, which was not the case. Granting a right to match after losing the bid undermines the bidding process. He also argued that petitioner was estopped from assailing the winning bid of Renong Berhad as it was aware of the bidding rules and participated.
• Justice Panganiban — Concurred with Justice Puno's dissent, adding that the majority's interpretation constitutes judicial legislation by empowering a losing Filipino bidder to increase his bid to equal the winning foreign bid. He warned that this could be prejudicial to long-term Filipino interests by inviting retaliatory discrimination in other countries and that preference should only apply when bids are equal.