Principles:: Nature of The Case

CALIBUSO, JONA CARMELI B.
CONSTITUTIONAL LAW 1
WILSON P. GAMBOA, petitioner,
vs.
FINANCESECRETARY MARGARITO B. TEVES, et al. respondents
G.R. No. 176579.

June 28, 2011.
PRINCIPLES:
SELF-EXECUTING
General Rule: CONSTI. PROVIONS ARE SELF-EXECUTING
Exemption: The provision EXPRESSLY provides for a LEGISLATIVE ENACTMENT for

its execution.
NATURE OF THE CASE:

This is an original petition for prohibition, injunction, declaratory relief and declaration
of nullity of the sale of shares of stock of Philippine Telecommunications Investment
Corporation (PTIC) by the government of the Republic of the Philippines to Metro Pacific Assets
Holdings, Inc. (MPAH), an affiliate of First Pacific Company Limited (First Pacific).
SC DECISION: WHEREFORE, we PARTLY GRANT the petition and rule that the term
"capital" in Section 11, Article XII of the 1987 Constitution refers only to shares of stock entitled
to vote in the election of directors, and thus in the present case only to common shares, and not
to the total outstanding capital stock (common and non-voting preferred shares). Respondent
Chairperson of the Securities and Exchange Commission is DIRECTED to apply this definition
of the term "capital" in determining the extent of allowable foreign ownership in respondent
Philippine Long Distance Telephone Company, and if there is a violation of Section 11, Article
XII of the Constitution, to impose the appropriate sanctions under the law.
FACTS: On 20 November 2006, the Inter-Agency Privatization Council (IPC) of the Philippine
Government announced that it would sell the 111,415 Philippine Telecommunications
Investment Corporation (PTIC) shares, or 46.125 percent of the outstanding capital stock of
PTIC, through a public bidding where the First Pacific offered to buy.
Since PTIC is a stockholder of Philippine Long Distance Telephone Company

(PLDT)., the sale by the Philippine Government of PTIC shares is actually an indirect sale of 12
million shares or about 6.3 percent of the outstanding common shares of PLDT. With the sale,
First Pacific's common shareholdings in PLDT increased from 30.7 percent to 37 percent,
thereby increasing the common shareholdings of foreigners in PLDT to about 81.47 percent.
Thus, petitioner Gamboa contends that it violates the Constitutional provision on

Filipinization of public utility, stated in Section 11, Article XII of the 1987 Philippine
Constitution, which limits foreign ownership of the capital of a public utility to not more than
40%.
ISSUE: Whether or not the Section 11, Article XII of the Constitution self-executing.
RULING: YES. Section 11, Article XII of the Constitution, like other provisions of the
Constitution expressly reserving to Filipinos specific areas of investment, such as the
development of natural resources and ownership of land, educational institutions and advertising
business, is self-executing. There is no need for legislation to implement these self-executing
provisions of the Constitution. The rationale why these constitutional provisions are self-
executing was explained in Manila Prince Hotel v. GSIS,
CALIBUSO, JONA CARMELI B.
CONSTITUTIONAL LAW 1
Hence, unless it is expressly provided that a legislative act is necessary to enforce a
constitutional mandate, the presumption now is that all provisions of the constitution are self-
executing.
If the constitutional provisions are treated as requiring legislation instead of self-

executing, the legislature would have the power to ignore and practically nullify the mandate of
the fundamental law. This can be cataclysmic. That is why the prevailing view is,
in case of doubt, the Constitution should be considered self-executing rather than

non-self-executing. . . . Unless the contrary is clearly intended, the provisions of the
Constitution should be considered self-executing, as a contrary rule would give the
legislature discretion to determine when, or whether, they shall be effective. These
provisions would be subordinated to the will of the lawmaking body, which could make them
entirely meaningless by simply refusing to pass the needed implementing statute.
To treat Section 11, Article XII of the Constitution as not self-executing would mean that
since the 1935 Constitution, or over the last 75 years, not one of the constitutional provisions
expressly reserving specific areas of investments to corporations, at least 60 percent of the
"capital" of which is owned by Filipinos, was enforceable.
In short, the framers of the 1935, 1973 and 1987 Constitutions miserably failed to
effectively reserve to Filipinos specific areas of investment, like the operation by corporations of
public utilities, the exploitation by corporations of mineral resources, the ownership by
corporations of real estate, and the ownership of educational institutions. All the legislatures that
convened since 1935 also miserably failed to enact legislations to implement these vital
constitutional provisions that determine who will effectively control the national economy,
Filipinos or foreigners.
This Court cannot allow such an absurd interpretation of the Constitution.

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CALIBUSO, JONA CARMELI B.

G.R. No. 176579.

General Rule: CONSTI. PROVIONS ARE SELF-EXECUTING

Exemption: The provision EXPRESSLY provides for a LEGISLATIVE ENACTMENT for

NATURE OF THE CASE:

Since PTIC is a stockholder of Philippine Long Distance Telephone Company

Thus, petitioner Gamboa contends that it violates the Constitutional provision on

If the constitutional provisions are treated as requiring legislation instead of self-

in case of doubt, the Constitution should be considered self-executing rather than

This Court cannot allow such an absurd interpretation of the Constitution.

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