Law on Natural Resources

The Law On Natural Resources

By: Prof. Benjamin A. Cabrido Jr.By: Prof. Benjamin A. Cabrido Jr.USJ-R College of LawUSJ-R College of Law

The Law On Natural The Law On Natural ResourcesResources

MEANING OF NATURAL RESOURCES Refer to the material objects of economic

value and utility to man produced by nature. They constitute the “patrimony of the nation

LAWS COVERING THE SUBJECT

Public Land Act (C.A. No. 141) The Phil. Mining Act of 1995 (R.A. 7942) The Petroleum Act of 1949 (R.A. 387) The Coal Land Act and P.D. 972 Revised Forestry Code (P.D. 389 & 705) The Water Code of the Phil (P.D. 1067) Fisheries Code of 1998 (R.A. 8550) IPRA (R.A. 8371)

MANILA PRINCE HOTEL v. GSIS & MANILA HOTEL, ET. AL [GR No. 122156, Feb. 3 1997]

“When the Constitution speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the term natural resources, but also to the cultural heritage of the Filipinos”

DOCTRINE OF CONSTITUTIONAL SUPREMACY

If a law or contract violates any norm of the constitution that law or contract whether promulgated by the legislative or by the executive branch or entered into by private persons for private purposes is null and void and without any force and effect.

Since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract.

Justice (now CJ) Puno dissenting:

2nd par. of section 10, Article XII of the Constitution is pro-Pilipino but not anti-alien;

It is pro-Filipino for it gives preference to Filipinos

CJ Puno’ dissent (cont.)

It is not, however, anti-alien per se for it does not absolutely bar aliens in the grant of rights, privileges and concessions covering the national economy and patrimony.

In the absence of qualified Filipinos, the State is not prohibited from granting these rights, privileges and concessions to foreigners if the act will promote the weal of the nation.

CONCEPT OF JURA REGALIA

It is the universal feudal theory that all lands were held from the Crown. (Carino v. Insular Govt, 41 Phil. 935)

It is the foundation of the 1st sentence of Sec. 2, Art. XII, 1987 Constitution.

As adopted in the Republican system, the medieval concept of jura regalia has been stripped of its regalian overtones. (Lee Hong Kok v. David, 48 SCRA 372)

CONSTITUTIONAL PROVISIONS ON JURA REGALIA

1st Sentence, Sec. 2, Art. XII, 1987 Constitution: ALL LANDS OF THE PUBLIC DOMAIN, WATERS, MINERALS, COAL, PETROLEUM AND OTHER MINERAL OIL, ALL FORCES OF POTENTIAL ENERGY, FISHERIES, FORESTS OR TIMBER, WILDLIFE, FLORA AND FAUNA, AND OTHER NATURAL RESOURCES ARE OWNED BY THE STATE.

2nd Sentence, Sec. 2, Art. XII: WITH THE EXCEPTION OF AGRICULTURAL LANDS, ALL OTHER NATURAL RESOURCES SHALL NOT BE ALIENATED

3rd Sentence (Ibid): THE EXPLORATION, DEVELOPMENT, AND UTILIZATION OF NATURAL RESOURCES SHALL BE UNDER THE FULL CONTROL AND SUPERVISION OF THE STATE

4th Sentence (Ibid): THE STATE MAY DIRECTLY UNDERTAKE SUCH ACTIVITIES, OR IT MAY ENTER INTO CO-PRODUCTION, JOINT VENTURE, OR PRODUCTION-SHARING AGREEMENTS WITH FILIPINO CITIZENS, OR CORPORATIONS OR ASSOCIATIONS AT LEAST 60% OF WHOSE CAPITAL IS OWNE BY SUCH CITIZENS.

5th Sentence (Ibid): SUCH AGREEMENTS MAY BE FOR PERIOD NOT EXCEEDING TWENTY-FIVE YEARS, RENEWABLE FOR NOT MORE THAN TWENTY-FIVE YEARS, AND UNDER SUCH TERMS AND CONDITIONS AS MAY BE PROVIDED BY LAW

6th Sentence (Ibid): IN CASE OF WATER RIGHTS FOR IRRIGATION, WATER SUPPLY, FISHERIES, OR INDUSTRIAL USES OTHER THAN THE DEVELOPMENT OF WATER POWER, BENEFICIAL USE MAY BE THE MEASURE AND LIMIT OF THE GRANT

2nd Par. (Ibid): THE STATE SHALL PROTECT THE NATION’S MARINE WEALTH IN ITS ARCHIPELAGIC WATERS, TERRITORIAL SEA, AND EXCLUSIVE ECONOMIC ZONE, AND RESERVE ITS USE AND ENJOYMENT EXCLUSIVE TO FILIPINO CITIZENS.

3rd Par. (Ibid): THE CONGRESS MAY, BY LAW, ALLOW SMALL-SCALE UTILIZATION OF NATURAL RESOURCES BY FILIPINO CITIZENS, AS WELL AS COOPERATIVE FISH FARMING, WITH PRIORITY TO SUBSISTENCE FISHERMEN AND FISHWORKERS IN RIVERS, LAKES, BAYS, AND LAGOONS

4th Par. (Ibid): THE PRESIDENT MAY ENTER INTO AGREEMENTS WITH FOREIGN-OWNED CORPORATIONS INVOLVING EITHER TECHNICAL OR FINANCIAL ASSISTANCE FOR LARGE-SCALE EXPLORATION, DEVELOPMENT, AND UTILIZATION OF MINERALS, PETROLEUM, AND OTHER MINERAL OILS . . .

ACCORDING TO THE GENERAL TERMS AND CONDITIONS PROVIDED BY LAW, BASED ON REAL CONTRIBUTIONS TO THE ECONOMIC GROWTH AND GENERAL WELFARE OF THE COUNTRY. IN SUCH AGREEMENTS, THE STATE SHALL PROMOTE THE DEVELOPMENT, AND USE OF LOCAL SCIENTIFIC AND TECHNICAL RESOURCES

Last par. (Ibid): THE PRESIDENT SHALL NOTIFY THE CONGRESS OF EVERY CONTRACT ENTERED INTO IN ACCORDANCE WITH THIS PROVISION, WITHIN THRITY DAYS FROM ITS EXECUTION.

JURE IMPERII vis-à-vis JURE GESTIONIS See U.S. v. Ruiz, 136 SCRA 487 In public law, ‘Imperium’ is the government

authority possessed by the State which is expressed in the concept of sovereignty; ‘Dominium’ is the capacity of the State to own or acquire property.

PRESUMPTION OF STATE OWNERSHIP OVER PUBLIC LANDS

Oh Cho v. Dir. Of Lands, 75 Phil 890: All lands that were not acquired from the government either by purchase or grant, belong to the public domain.

Exception: possession since time immemorial.

NATURE OF POSSESSION BY THE NATIVES (Cruz v. Secretary, GR 135385, Dec. 6, 2000)

Ancestral domain and ancestral lands are not part of lands of the public domain.

The right of natives does not include natural resources.

What is given is priority rights, not exclusive right.

State not precluded from entering into agreements with private entities.

Ancestral Domain

All embracing concept which refers to lands, inland waters, coastal areas, and natural resources therein.

Includes: Ancestral lands, Forests land, Pasture land, Residential lands Agricultural lands, and

Other lands individually owned whether alienable or not;

Hunting grounds; Burial Grounds; Worship Areas; Bodies of water; and Other natural resources Also includes land which may no longer be exclusively

occupied by indigenous cultural communities but to which they had traditionally had access for their subsistence and traditional activities

Ancestral Lands

Narrower in concept; Refers to those land held under the same

conditions of ancestral domain BUT LIMITED TO LANDS THAT ARE NOT

MERELY OCCUPIED AND POSSESSED BUT ARE ALSO UTILIZED BY CULTURAL COMMUNITIES UNDER THE CLAIM OF INDIVIDUAL OR TRADITIONAL GROUP OWNERSHIP.

Includes [but not limited to]: Residential lots, Rice terraces or paddies, private forests, farms and tree lots.

CONVERSION TO ALP: EXECUTIVE PREROGATIVE In Republic v. Reg. of Deeds of Q.C., 244

SCRA 537: The classification of public lands is, thus, an exclusive prerogative of the Executive Department through the Office of the President.

Courts have no authority to convert lands of public domain into alienable and disposable lands.

TITLE OVER LAND PART OF FOREST IS VOID In Sunbeam v. CA, 181 SCRA 443: Before any

land may be converted into alienable or disposable land for agricultural or other purposes, there must be positive act from the govt.

The mere fact that a title was issued by the Dir. Of Lands does not confer owner-ship where it is part of the public forest.

See also Ituralde v. Falcasantos, G.R. No. 128017, Jan. 20, 1999.

CONSTITUTIONAL LIMITS ON JURA REGALIA NO. 1 General Rule: All natural resources shall not

be alienated. Exception: Only agricultural lands of the

public domain may be alienated.

GOVERNMENT LANDS NOT ALL PUBLIC LANDS

Montano v. Insular Govt, 12 Phil. 572 Government lands and public lands are not

synonymous terms. GL is more extensive and embraces not only

PL but also other lands of the govt already reserved or devoted to public use.

Friar lands not included as public lands.

Nature of Friar Lands

(Strong v. Repide, 213 U.S. 419 [1909]) Friar Lands are those lands of certain

haciendas which were acquired by the U.S. government from religious orders/corporations or organizations acquired on July 5, 1903 at a price of $ 6,043,219.47 in gold.

Philippine Sugar Estates Development Company, Ltd. owned the title over these lands.

Dominican lands form more than ½ of Friar Lands.

HOW FRIAR LANDS MAY BE DISPOSED

OF In Alonso v. Cebu Country Club, G.R. 130876,

Jan. 31, 2002 Under Act No. 1120, which governs the

administration and disposition of friar lands, the purchase by an actual and bona fide settler or occupant of any portion of friar land shall be "agreed upon between the purchaser and the Director of Lands, subject to the approval of the Secretary of Agriculture and Natural Resources .

ALONSO v. CEBU COUNTRY CLUB, G.R. 130876, Jan. 31, 2002

Approval by the Secretary of Agriculture and Commerce of the sale of friar lands is indispensable for its validity, hence, the absence of such approval made the sale null and void ab-initio

Necessarily, there can be no valid titles issued on the basis of such sale or assignment.

HOW LANDS OF THE PUBLIC DOMAIN CLASSIFIED?

Agricultural Forest or Timber Mineral National Parks

CAN THERE BE MIXED CLASSIFICATION?

No. In Republic v. CA, 160 SCRA 228 (1988) The rights over the land are indivisible No such thing as half agricultural, half mineral Once mining claim is perfected, forest land ceased to be

so; it now becomes completely mineral land

SURFACE OWNER NO RIGHT OVER THE MINERALS UNDERNEATH

No. In the exercise of the State’s sovereign prerogative, use of the surface land may be discontinued once minerals are discovered underneath.

For his loss, the owner is entitled to compensation under the Mining Law or in appropriate expropriation proceedings.

HOW ARE MANGROVE SWAMPS (MANGLARES) CLASSIFIED?

Forest Lands In Director of Forestry v.

Villareal, G.R. 32266, Feb. 27, 1989: “The classification by the Administrative Code of the Phil. manglares as forest lands has not been changed”

RULES ON THE DISPOSITION OF ALP

Private corp./assn. cannot acquire ALP Private corp. may lease maximum 1,000

hectares. Qualified individuals can acquire 12 has;

lease up to 500 hectares Term: 25 years; renewable for another 25

years.

PURPOSE OF BANNING CORP FROM ACQUIRING ALP

In Lausan Ayog, et al. v. Cusi, G.R. 46729, Nov. 19, 1982:

To equitably diffuse land ownership or to encourage "owner-cultivatorship” and the “economic family- size farm"

Huge landholdings by corporations or private persons had sown social unrest.

Exception: Corporations Validly

Owning Public Lands Maximum: 1,024 hectares (Republic v.

Quasha, G.R. No. L-30299 Aug. 17, 1972) Note: Americans may own ALP (same limit)

under Parity Agreement (Tydings-McDuffie) appended in the 1935 Constitution & revised by the Laurel-Langley Agreement.

Republic v. Quasha, G.R. No. L-30299 Aug. 17, 1972 Under the ‘Parity Amendment’, US citizens &

corporations may acquire lands of the public domain.

But they cannot acquire PRIVATE agricultural lands.

Their right is until July 3, 1974.

LAUSAN AYOG, ET AL. v. CUSI, G.R. 46729, Nov. 19, 1982 Vested right has to be respected. lt could not be abrogated by the new

Constitution. Section 2, Article XIII of the 1935 Constitution

allows private corporations to purchase public agricultural lands not exceeding 1024 hectares.

RIGHTS OF NATURAL-BORN FILIPINO

WHO HAVE LOST THEIR CITIZENSHIP Under R.A. 8179, former natural-born Filipino

citizens may acquire the following: 500 sq. m. – Urban land 3,000 sq. m. – Rural land For business or other purposes

CONSTITUTIONAL LIMITS ON JURA REGALIA NO. 2

Exploration, Development and Utilization of Natural Resources must be under Full Control and Supervision of the State under the constitutionally allowed modes

ALLOWED MODES IN EDUOF NATURAL RESOURCES Direct Undertaking Co-Production Agreement Joint-Venture Agreement Production-Sharing Agreement Financial or Technical Assistance Agreement

MEANING OF FULL CONTROL(La Bugal-B’laan Tribal Assn. vs. Ramos, G.R. 127882, Dec. 1, 2004) Full control is not anathematic to day-to-day

management by the contractor, provided that the State retains the power to direct overall strategy; and to set aside, reverse or modify plans and actions of the contractor.  The idea of full control is similar to that which is exercised by the board of directors of a private corporation: the performance of managerial, operational, financial, marketing and other functions may be delegated to subordinate officers or given to contractual entities, but the board retains full residual control of the business.

“full control and supervision” cannot be taken literally to mean that the State controls and supervises everything down to the minutest details and makes all required actions, as this would render impossible the legitimate exercise by the contractor of a reasonable degree of management prerogative and authority, indispensable to the proper functioning of the mining enterprise. 

Control, as utilized in Section 2 of Article XII, must be taken to mean a degree of control sufficient to enable the State to direct, restrain, regulate and govern the affairs of the extractive enterprises. 

Control by the State may be on a macro level, through the establishment of policies, guidelines, regulations, industry standards and similar measures that would enable government to regulate the conduct of affairs in various enterprises, and restrain activities deemed not desirable or beneficial, with the end in view of ensuring that these enterprises contribute to the economic development and general welfare of the country, conserve the environment, and uplift the well-being of the local affected communities. 

Such a degree of control would be compatible with permitting the foreign contractor sufficient and reasonable management authority over the enterprise it has invested in, to ensure efficient and profitable operation.

In fine, the FTAA provisions do not reduce or abdicate State control.

MEANING OF CO-PRODUCTIONAGREEMENT

An agreement between the Government and the contractor wherein the Government shall provide inputs to the mining operations other than the mineral resource. (Sec. 26[b], R.A. 7942, The Philippine Mining Act of 1995)

MEANING OF JOINT VENTUREAGREEMENT An agreement where a joint-venture

company is organized by the Government and the contractor with both parties having equity shares. Aside from earnings in equity, the Government shall be entitled to a share in the gross output. (Sec. 26 [c], R.A. 7942, The Philippine Mining Act of 1995)

MEANING OF PRODUCTION SHARING AGREEMENT An agreement where the Government grants

to the contractor the exclusive right to conduct mining operations within a contract area and shares in the gross output. The contractor shall provide the financing, technology, management and personnel necessary for the implementation of this agreement. (Sec. 26 [c], R.A. 7942, The Philippine Mining Act of 1995)

MEANING OF FTAA

Sec. 3[r], R.A. 7942: Financial or technical assistance agreement

means a contract involving financial or technical assistance for large-scale exploration, development, and utilization of mineral resources.

FTAA CONSTRUED IN LA BUGAL (G.R. No. 127882 DEC. 1, ’04)

The agreements involving either technical or financial assistance referred to in paragraph 4 are in fact service contracts, but such new service contracts are between foreign corporations acting as contractors on the one hand, and on the other hand government as principal or “owner” (of the works), whereby the foreign contractor provides the capital, technology and technical know-how, and managerial expertise in the creation and operation of the large-scale mining/extractive enterprise, and government through its agencies (DENR, MGB) actively exercises full control and supervision over the entire enterprise.

Such service contracts may be entered into only with respect to minerals, petroleum and other mineral oils.  The grant of such service contracts is subject to several safeguards, among them: (1) that the service contract be crafted in accordance with a general law setting standard or uniform terms, conditions and requirements; (2) the President be the signatory for the government; and (3) the President report the executed agreement to Congress within thirty days.

ARE FTAA’s SOLELY FOR FOREIGN CORPORATIONS? No. There is no basis to believe that the framers of the

Constitution, a majority of whom were obviously concerned with furthering the development and utilization of the country’s natural resources, could have wanted to restrict Filipino participation in that area.  This point is clear, especially in the light of the overarching constitutional principle of giving preference and priority to Filipinos and Filipino corporations in the development of our natural resources.

WHO ARE QUALIFIED TO UNDERTAKE EDU? Filipino citizens Private Corp./Assn. at leash 60% of whose

capital is owned by Filipino citizens

CONSTITUTIONAL LIMITS ON JURA REGALIA NO. 3

All agreements in respect to EDU of Natural Resources should not exceed 25 years

Renewable for another 25 years

WATER RIGHTS NOT COVERED BY THE 25-YR LIMIT

Last sentence, 1st par., Sec. 2, Art. XII

IN CASES OF WATER RIGHTS FOR IRRIGATION, WATER SUPPLY, FISHERIES, OR INDUSTRIAL USES OTHER THAN DEVELOPMENT OF WATER POWER

MEASURE AND LIMIT OF THE GRANT: BENEFICIAL USE

CONSTITUTIONAL LIMITS ON JURA REGALIA NO. 4 The use and

enjoyment of the MARINE WEALTH of the archipelagic waters, territorial sea and EEZ reserved for FILIPINO CITIZENS ONLY.

MEANING OF ARCHIPELAGIC WATERS The waters around,

between and connecting the islands of the archipelago

MEANING OF TERRITORIAL SEA

The belt of the sea located between the coast and internal waters of the coastal state on the one hand, and the high seas on the other extending up to 12 NM from the low water mark, or in case of archipelagic states, from the baselines.

MEANING OF CONTIGUOUS ZONE

The area of the sea extending up to 12 NM from the territorial sea. Technically, it is not part of the territory of the state; the coastal or archipelagic state may exercise jurisdiction over the area to prevent infringement of its customs, fiscal and immigration or sanitary laws.

MEANING OF EXCLUSIVE ECONOMIC ZONE (EEZ) Area of the sea extending up to 200 NM from

the low-water mark or the baselines, as the case may be. Technically, not part of the territory.

Coastal/Archipelagic state may exercise SOVEREIGN RIGHTS over the economic resources of the sea, the seabed and subsoil.

Other states have freedom of navigation & overflight, to lay submarine cables and pipelines, & other lawful uses.

THE EEZ OF THE PHILIPPINES

CONSTITUTIONAL LIMITS ON JURA REGALIA NO. 5 Utilization of natural resources in rivers,

lakes, bays and lagoons. Allowed only on a small scale to Filipino

citizens or cooperative. Priority given to subsistence fishermen and

fisherfolk.

MARGINAL FISHERMAN VIS-À-VIS SUBSISTENCE FISHERMAN

Marginal fisherman is an individual engaged in fishing whose margin of return or reward in his harvest of fish as measured by existing price levels is barely sufficient to yield a profit or cover the cost of gathering the fish.

Subsistence fisherman is one whose catch yields but the irreducible minimum for his livelihood.

TANO V. SOCRATES, G.R. NO. 110249, AUG. 21, 1997 The so-called "preferential right" of

subsistence or marginal fishermen to the use of marine resources is not at all absolute.

Under the general welfare clause of the LGC, local government units have the power, inter alia, to enact ordinances to enhance the right of the people to a balanced ecology.

SOME IMPORTANT LEGAL DEFINITIONS OF A STATE’S FLUVIAL DOMINION

Bay – a well-marked indentation whose penetration is in such proportion to the width of its mouth as to contain land-locked waters and constitute more than a mere curvature of the coast. An indentation shall not, however, be regarded as a bay unless its area is as large as, or larger than, that of the semi-circle whose diameter is a line drawn across the mouth of that indentation. (Sec. 2, Art. 10, UNCLOS)

Lagoon –A small lake, the hollow bed of which is bounded by elevations of land. (The Gov’t of the Phil. Islands vs. Colegio de San Jose, et al., G.R. L-30829, Aug. 28, 1929)

Lake - a body of water formed in depressions of the earth. Ordinarily fresh water, coming from rivers, brooks, or springs, and connected with the sea by them. (Ibid)

River - is a natural waterway that transits water through a landscape from higher to lower elevations. It is an integral component of the water cycle. A river may have its source in a spring, lake, from damp, boggy landscapes where the soil is waterlogged, from glacial melt, or from surface runoff of precipitation.

THE PUBLIC LAND ACT (C.A. 141)

Approved: Nov. 7, 1936 Coverage: Lands of the public domain Excludes: Timber and mineral lands; Friar Lands Executive Officer charged to carry out the Act: DENR

Secretary Director of Lands has ‘direct executive control of the

survey, classification, lease, sale or any other land of the public domain

Decisions of BL Director on questions of fact appealable to Secretary

Doctrine of Indefeasibility of Torrens title

Sec. 32, PD 1529: The decree of registration and the certificate of title issued shall become incontrovertible after the lapse of one year from the date of entry

However, the State is not precluded from bringing an action for reversion of Public Land even after the lapse of 1 year if procured through fraud and misrepresentation. (Republic vs. CA, G.R. No. 104296, Mar. 29, 1996)

Actions for Reversion Do Not Prescribe[Manese v. Sps. Velasco, G.R. 164024, Jan. 29,

2009] In all actions for the reversion to the

Government of lands of the public domain or improvements thereon, the Republic of the Philippines is the real party in interest.

The action shall be instituted by the Solicitor General or the officer acting in his stead, in behalf of the Republic of the Philippines.

Such action does not prescribe. Prescription and laches will not bar actions filed by the State to recover its property acquired through fraud by private individuals.

PRE-REQUISITE FOR DISPOSITION OF ALP

Before any public land may be alienated or disposed of, it is indispensable that there be a formal declaration by the President upon the recommendation of the DENR Secretary to the effect that such lands are open to disposition or concession, and whenever practicable the lands should have been previously surveyed. (Sec. 7, CA 141)

Excluded from disposition or concession: Those reserved for public or quasi-public uses; those that have become private property or subject to private right. (Sec. 9, Ibid)

MEANING OF ALIENATION OR DISPOSTION Alienation”, “disposition”, or “concession” -

means any of the methods authorized by the C.A. 141 for the acquisition, lease, use or benefit of the lands of the public domain other than timber or mineral lands. (Sec. 10, Ibid)

MODES OF DISPOSITION OF ALP

Homestead By Sale By Lease; and By confirmation of imperfect or incomplete

titles through:a) Judicial legalizationb) Administrative legalization or free patent

MATERIAL ALLEGATIONS IN APPLICATIONS FOR GRANT OF PUBLIC LAND

Personal circumstances of the applicant and that he/it has all the legal qualifications and none of the disqualifications.

Purpose: use of the land according to the object specified in the application and for other purpose, and that the land is suitable for the purpose contemplated.

For the exclusive use of the applicant. Description and location of the land. Occupancy, cultivation, improvements on

the land, if any. Allegation that the land is not timber or

mineral land and does not contain guano or deposits of salt or coal.

Easement of 40 meters in width from bank of any river or stream for planting of trees of known economic value; applicant prohibited to make any clearing on or utilize the easement area for ordinary farming

REQUIREMENT ON PERSONAL TILLAGE (P.D. 152) Applicant or his transferee must enter and

work upon, improve and cultivate the land by himself within the periods prescribed for the various mode of concession under the Public Land Act.

Share tenancy prohibited; violation will result to cancellation of the grant and forfeiture of the improvements on the land in favor of the government.

REMEDIES FROM ADVERSE DECISION OF BL DIRECTOR

Motion for reconsideration based on any grounds for new trial under Rule ___; or

Appeal to the DENR Secretary If affirmed by DENR Secretary, file a motion

for reconsideration; If MR is denied, file special civil action on

certiorari under Rule 65. Notes: (a) Decision of the BL cannot be

collaterally attacked; (b)

MODE NO. 1: HOMESTEAD

Concept: It is the home, the house and the adjoining land where the head of the family dwells, the home farm; the fixed residence of the head of a family, with the land and buildings surrounding the main house.

It is a legal fiction of law, an artificial estate in land, devised to protect the possession and enjoyment of the owner against the claims of his creditors, by withdrawing the property from execution and forced sale, so long as the land is occupied as a home

Statutory Privileges Accorded to Homestead Land

1. Exempt from execution (see Sec. 13[a],Rule 39, Rules of Court and );

2. Cannot be held liable for satisfaction of an obligation within (5) years from issuance of patent (Saltiga v. CA, G.R. No. 109307, Nov. 25, 1999);

3. If validly mortgaged, right of redemption granted within (5) years from the date of sale, not from date of registration at the RoD. The 5-year period to be reckoned from the expiration of the one-year period under Act. 3135;

4. If validly mortgaged to a Rural bank, the 5-year period to commence to run after the expiration of the two-year period of redemption allowed under R.A. 720 or the Rural Banks Act

THE PREVAILING RULE: HOMESTEAD LANDS NOT EXEMPT FROM COVERAGE OF AGRARIAN REFORM LAW In Paris v. Alfeche, [G.R. No. 139083, Aug. 30,

2001): “Homesteads are not exempt from the

operation of the Land Reform Law.  The right to retain (7) hectares of land is

subject to the condition that the landowner is actually cultivating that area or will cultivate it upon the effectivity of the said law.

Rural Bank of Davao City vs. Court of

Appeals, 217 SCRA 554, Jan. 27, 1993 If the land is mortgaged to a rural bank under R.A. No.

720, as amended, the mortgagor may redeem the property within two (2) years from the date of foreclosure or from the registration of the sheriff's certificate of sale at such foreclosure if the property is not covered or is covered, respectively, by a Torrens title.

If the mortgagor fails to exercise such right, he or his heirs may still repurchase the property within five (5) years from the expiration of the two (2) year redemption period pursuant to Sec. 119 of the Public Land Act (C.A. No. 141.

If the land is mortgaged to parties other than rural banks, the mortgagor may redeem the property within one (1) year from the registration of the certificate of sale pursuant to Act No. 3135;

If he fails to do so, he or his heirs may repurchase the property within five (5) years from the expiration of the redemption period also pursuant to Sec. 119 of the Public Land Act.

QUALIFIED TO OBTAIN HOMESTEAD

Filipino 18 yrs old or head of the family Must not own more than (12) has. of

land nor has had the benefit of any gratuitous allotment of more than (12) has. of land

If applicant is a married woman: She must be living separately from her

husband and not dependent on him for support; or

Her husband is insane or physically incapacitated to work;

When her husband is in prison, serving a term of such duration as would prevent him from complying with the requirements of the law regarding residence of land.

Mandatory Conditions/Requirements in Homestead Application

Within 6 months after approval, homesteader must start to improve and cultivate the land;

Within a period of not less than 1 year or more than 5 years from date of approval of application – homesteader must have cultivated at least 1/5 of the land;

Continuous residency in the same municipality where homestead is located or in an adjacent municipality for at least 1 year; and

Non- abandonment (voluntary) for more than 6 months at any one time during period of required residency and occupation.

When vested right in homestead fixed In Balboa vs. Farrales,G.R. No. L-27059, Feb. 14, 1928: ‘After Buenaventura Balboa had submitted his final proof

and after the same had been approved by the Government, and while Act No. 926 was still in force, he became the owner of the land and "entitled to a patent."

At least on that date his right to the land, as owner, ripened into a vested right. It was no longer expectant as depending on the continuance of existing circumstances, or contingent as depending on some events or the performance of some conditions.’

WHEN HOMESTEAD IS DEEMED CONJUGAL PROPERTY (De Ocampo v. Delizo, G.R. No. L-32820, Jan. 20, 1976) The fact that a parcel of land was acquired as

homestead during the period of the first marriage does not necessarily mean that it should be considered as property of the first marriage. The decisive factor in determining whether a parcel of land acquired by way of homestead is conjugal property of the first or second marriage, is not necessarily the issuance of the homestead patent but the time of the fulfillment of the requirements of the public land law for the acquisition of such right.”

CONDITIONS BEFORE APPLICANT MAY VALIDLY TRANSFER HIS RIGHTS BEFORE ISSUANCE OF PATENT He has already complied with all the

requirements; His non-continuance is of no fault of his own; Made to a bona fide purchaser legally

qualified to apply for homestead; Not for speculative purpose; and Approved by the Director, Bureau of Lands

RESTRICTIONS ON SUBSEQUENT ALIENATION AND ENCUMBRANCE (Sec. 118, C.A. 141 as amended by C.A. 456) Homestead cannot encumbered or alienated during the

period from date of approval up to the date of issuance of patent;

Encumbrance or alienation within 5 years from date of issuance of patent or grant is prohibited;

Homestead cannot be liable to the satisfaction of any debt contracted prior to the expiration of said period;Exception: Improvements or crops on the homestead land

Alienation, transfer, or conveyance after 5 years and before 25 years requires approval of the DENR Secretary (deemed as directory and formality)

Nature of Proceedings in Homestead

Not in rem, hence a homestead patent issued is not binding upon the whole world;

However, when a homestead patent is registered under the Torrens System, its title becomes indefeasible.

RULES ON THE EXERCISE OF THE RIGHT OF REDEMPTION/REPURCHASE OF HOMESTEAD LAND 5 years – if mortgaged or sold to a private person or the

subject of sale under pacto de retro; 6 years – If mortgaged covered under Act 3135; 7 years – If mortgaged to a Rural Bank; None – If sold to immediate member of a family. None – If land is no longer devoted to agriculture,

patentee is already 71 years old not anymore residing in the property and his motivation for the repurchase was purely for profit. (Santana v. Marinas, G.R. No. L-35537, Dec. 27, 1979)

Note: Period must be reckoned from the date of conveyance or sale.

MODE NO. 2 : SALE OF PUBLIC AGRICULTURAL LANDS

Qualified to purchase: Filipino citizens, legal age or head of

the family; Maximum area: 12 hectaresNote: Corporations cannot acquire by

purchase Public Agricultural Lands by express prohibition under Sec. 3, Art. XII, 1987 Constitution

PREFERENCE GIVEN TO ACTUAL OCCUPANTS (Sec. 25, CA 141)

Conditions: ALP must not be located: (a) within 10 kms

from the boundaries of the city proper in chartered cities; or (b) within 5 kms from the municipal hall or town plaza of any municipality.

There must actual occupation on the lands. Total landholdings must not exceed 5

hectares

EXCESS LANDHOLDING WHEN ALLOWED

In case of foreclosure sale; However, the excess must be disposed

of within 5 years; Failure to dispose of within the period –

surtax of 50% will be charged over the ordinary real property tax.

WHAT IS DEEMED EXCESS LANDHOLDING? For qualified individuals: the area in excess of

12 hectares. For corporations: Any land acquired by virtue

of foreclosure is deemed in excess of landholding hence must be disposed of within 5 years.

PROCEDURE IN THE SALE OF ALP

Filing of application in prescribed form. Appraisal conducted by the BL Director and approved by

the DENR Secretary. Publication of the notice of sale: Once a week for 3

consecutive weeks in the O.G., and in 2 newspapers, one published in Manila and the other in the municipality or province where the land is situated.

Posting in the Bulletin Board of the LMB, Q.C. and in 3 conspicuous places in the provincial capitol and the municipal hall where the land is situated

Submission of Bids in sealed envelope, addressed to the BL Director together with the 10% amount of the bid in cash, certified check, treasury warrant, or postal money order.

Opening of bids and awarding to the highest bidder.

PREFERENCE GRANTED TO APPLICANT IN AWARDING OF ALP In case of two or more highest equal bids and

one belongs to applicant, latter wins; If the highest bid is not that of applicant, Oral

Bidding is called and the highest oral bidder is awarded;

In all instances, applicant is given the option to equal the highest bidder.

Payment of price may be in full or in 10 equal annual installments reckoned from the date of the award.

Overdue installment subject to 4% interest P.A.

Purchaser’s right over the ALP is still inchoate until such time the patent has already been issued.

CONDITIONS IN SALE ARE OBLIGATORY (Jimenez v. Macaraig,

G.R. 94542, Mar. 1, 1993) Facts: Jimenez was awarded by way of sale ALP for town site in 1955. It was subject to condition that he will commence construction of improvements within 6 months and complete all within 18 months from date of award. In 1972, Guirnalda occupied the land, cleared it and introduced levelling and riprapping. She also built a shack which was used by her and her family. In 1984, the daughter of Jimenez asked her to vacate the land. Guirnalda filed a protest with the BL as sought for cancellation of the award. In 1986, BL cancelled the award. On MR, it was reversed but set aside by the DENR Secretary.

Ruling: Jimenez was not able to prove that the

improvements were commenced, hence the rescission of the award was proper;

But, the rescission did not amount to recognition of other occupant’s claim on the subject land. Whatever claim that Guirnalda has over the land must still be presented before the proper forum and must under proper procedure as set by law.

TWO INSTANCES WHEN ORAL BIDDING ALLOWED When two or more of such sealed bids turn

out to be equal and the highest, and that of the applicant is not one of them. In such case, the Director of Lands will call for an oral bidding, without need for applicant to participate in it since he has the option to put up a bid to equal that of the highest bidder; and

Where the ALP to be sold has been declared to be vacant and no applicant is recognized to have preferential rights over it.

PRE-REQUISITES BEFORE SALES PATENT IS ISSUED He must have occupied the land applied for; He must have cultivated at least 1/5 of the

land within 5 years after the date of award; Where the application is for pasture, he must

have grazed on the land with his own cattle numbering at the rate of one head for every 2 hectares;

Failure to comply or any voluntary abandonment for ore than one year at any given time, the land may be reverted and all prior payments forfeited.

CONVEYANCE OF LAND PRIOR TO ISSUANCE OF SALES PATENT VALID Sec. 29 allows applicant to convey or

encumber his rights after cultivation has started;

CONDITIONS: It does not affect the interest of the

government; The transferor is not delinquent in paying the

installment due; and There must be prior approval of the DENR

Secretary

EFFECT OF SALE WITHOUT DENR APPROVAL (Javier v. C.A., et al., 231 SCRA 498, Mar. 28, 1994) The sale pending issuance of patent without

approval of the BL violates Sec. 29, C.A. 141. The effect is annulment of the sales

application as if none had been filed.

JOINT VENTURE ALLOWED IN SALE OF PUBLIC LAND [Barreo v. Rivera, 61 O.G.

14, April 5, 1965 CA] Where one person contributes his capital, consisting of

his duly approved sales application and recognized right of possession over a parcel of public land which he has begun cultivating and over which he has already spent time and effort, and another contributes his labor and money to finalize the cultivation of the same land, with the understanding that both shall divide the land in the proportion agreed upon by them, a joint venture or partnership is formed under Art. 1767 of the Civil Code, and each partner is bound as a trustee to be ever loyal to his partner under Art. 1807 of the same Code.”

BUT JOINT VENTURE NOT SANCTIONED IN HOMESTEAD [Addun v. De Yro, 62 O.G. 37, Sept. 12, 1966 CA] In the case of homestead, however, the

treatment of a similar situation apparently is different.

A homestead applicant is required by law to occupy and cultivate the land for his own and his family’s benefit, and not for the benefit of someone else.

If the homesteader occupies and cultivates the land on behalf of another person and obtains title on the understanding that a portion would be transferred to the latter, it is INVALID, hence bars issuance of the patent;

Even if patent is already issued and title becomes indefeasible, the same agreement is still null and void since Sec. 118 prohibits the encumbrance or alienation of a homestead except in favor of the government or any of its branches from the date of the approval of the application and for a term of 5 years from the date of issuance of patent.

RESTRICTIONS IN SALE OF PUBLIC LAND1) Survey plan must be made before issuance

of sales patent;2) Mineral deposits not included in

conveyance;3) Land subject to legal servitudes;4) Subject to ROW not exceeding 60 m in

width for public highways, railroad, irrigation canals, aqueduct, etc.;

5) After grant of title, subsequent transfer within 10 years from grant or cultivation is not valid without consent from the state.

WHEN LAND BECOMES OF PRIVATE OWNERSHIP [Visayan Realty Inc. v. Meer, 96 Phil 515] It is only upon issuance of the sales patent

that the Government is divested with its title. Approval of the application merely authorizes

applicant to take possession of the land in order for him to comply with the requirements set by law.

Meanwhile, the Government still remains the owner; the application can still be cancelled and the land awarded to another if it is shown the requirements are not complied with.

WHEN LAND UNDER SALES PATENT IS DEEMED EXCLUSIVE PROPERTY [Fiel, et al. v. Wagas, et al., 48 O.G. 195] Where the balance of the purchase

price of the land applied for sales patent was paid by applicant after the dissolution of the marriage due to death of his spouse, the land is considered exclusive property of the applicant;

This is true even if the sales patent application was filed and approved during the subsistence of the marriage.

ANNULMENT OF PATENT AND TITLE IS JUDICIAL IN NATURE True that the Director of Lands can

investigate violations even while the patent and the corresponding title have already been issued;

But he cannot render a decision annulling the sales patent and title for the alleged violations since annulment of a title under Sec. 101 of CA 141 is a judicial process.

MODE NO. 3: LEASE OF ALP

Qualified to lease ALP: Filipino citizen of legal age (up to 500

hectares); and Private corporation or association registered

under the laws of the Philippines whose capital stock of at least 60% is owned by Filipinos (up to 1,000 hectares).

LIMITATIONS IN THE LEASE OF ALP

Any officer, employee, stockholder, etc. of a corporation/association already holding ALP may not apply for lease of such land. In case it may be allowed, it must be reasonably necessary to carry on his business, in case of an individual or the business for which the corporation is created under its Articles of Incorporation.

PROCEDURE IN THE LEASE OF ALP (Substantially the same as in sale) Filing of application in prescribed form. Appraisal conducted by the BL Director and approved by

the DENR Secretary. Publication of the notice of sale: Once a week for 3

consecutive weeks in the O.G., and in 2 newspapers, one published in Manila and the other in the municipality or province where the land is situated.

Posting in the Bulletin Board of the LMB, Q.C. and in 3 conspicuous places in the provincial capitol and the municipal hall where the land is situated

Submission of Bids in sealed envelope, addressed to the BL Director together with the 10% amount of the bid in cash, certified check, treasury warrant, or postal money order.

Opening of bids and awarding to the highest bidder.In addition: No bid will be considered if the proposed rent is less

than 3% of the appraised value of the land or the bidder did not deposit rental equivalent to at least the first 3 months of the lease.

If the land applied for is for grazing, annual rental must not be less than 2%.

OTHER CONDITIONS IN LEASE OF ALP Rental: to be paid in advance starting from the date of

approval of the lease; subject to automatic increase if the rent falls below 3% in case of re-appraisal.

Period: 25 years, renewable for another 25 years. Extension is not a matter of right. Lessee must justify the extension by showing he has introduced important improvements on the leased land.

Cultivation: Applicant must have broken and cultivated at least 1/3 of the land within 5 years from approval.

RESTRICTION TO SUB-LEASE

Lessee cannot assign, encumber, or sublet his right over the leased land without approval from the DENR Secretary.

Reason: To avoid speculation purposes or situation where the land is used by other persons not legally qualified to lease ALP.

CAN THE LESSEE SUBLEASE THE IMPROVEMENTS ON THE LAND WITHOUT CONSENT FROM GOV’T? No. In Bachrach Motor Co. Inc. v. Universal

Trading Co. Inc., et al., 62 O.G. 30, July 25, 1966, it was ruled:

In lease contract of ALP, a provision is found that ‘upon the breach thereof by the lessee, the gov’t as lessor may elect to declare the lease forfeited and enter and take possession of the premises and ALL IMPROVEMENTS actually existing thereon.’

Hence, this can only mean that the improvements are also subject to forfeiture.

ADDITIONAL RESTRICTIONS

Lessee cannot remove or dispose of any valuable timber, stone, oil, coal, salts or other minerals, including medicinal mineral waters.

The leased land is subject to the same conditions and restriction imposed on sale of ALP regarding taxes, servitudes, easements, mines and water rights

PREFERENCE OF LESSEE TO BUY LEASED LAND

If the ALP leased is to be sold by the Government during the subsistence of the lease, LESSEE will have the option to purchase the property, subject to conditions and restrictions governing sale of ALP.

LESSEE HAS LEGAL STANDING TO OPPOSE REGISTRATION OF ALP OBJECT IN LEASE If lessee has already introduced substantial

improvements on the leased land, he is considered a party in interest entitled to file opposition in application for registration of the same land.

The trial court may be compelled by mandamus to allow the lessee and his counsel to appear and oppose the application (Director v. Del Rosario, 58 O.G. 3, Jan. 15, 1962)

REGISTRATION OF LEASE CONTRACT NOT NECESSARY True that any alienation, grant, conveyance on public

lands is not effective unless registered in the office of the RD (Sec. 122, Act 496)

However, a contract of lease of ALP does not constitute title or deed of conveyance within the meaning of the above provision.

What the law contemplates are those transfers of ownership, not documents transferring mere possession (Dagdag v. Nepomuceno, 10 Phil. 216).

MODE NO. 4: CONFIRMATION OF IMPERFECT OR INCOMPLETE TITLE

I. BY JUDICIAL LEGALIZATION - When application is filed with the proper

RTC in the province or city where the land lies; or

I. BY FREE PATENT – When the application is filed with the Bureau of Lands.

JUDICIAL LEGALIZATION

When to file: Until Dec. 31, 2020 (period extended by R.A. 9176)

Where to file: RTC in the province or city where the land lies.

Notice of the application with the survey plan must be furnished the OSG, the Bureau of Lands.

Publication of the notice of initial hearing once a week for 3 consecutive weeks in the O.G., and in 2 newspapers, one published in Manila and the other in the municipality or province where the land is situated.

Posting in the Bulletin Board of the LMB, Q.C. and in 3 conspicuous places in the provincial capitol and the municipal hall where the land is situated

PERSONS ENTITLED TO JUDICIAL LEGALIZATION/ CONFIRMATION OF IMPERFECT/INCOMPLETE TITLE (a) Those who prior to the transfer of

sovereignty from Spain to the US have applied for the purchase, composition or other form of grant of lands of the public domain under the laws and royal decrees then in force and have instituted and prosecuted the proceedings in connection therewith, but have, with or without default upon their part, or for any other cause, not received title therefor, if such applicants or grantees and their heirs have occupied and cultivated said land continuously since the filing of their application;

(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, SINCE JUNE 12, 1945, immediately preceding the filing of the application of confirmation of title, except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provision of P.D. 1073; and

(c) Members of the national cultural minorities who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of lands of the public domain suitable to agriculture, whether disposable or not, under a bona fide claim of ownership since June 12, 1945.

REGISTRATION UNDER LAND REGISTRATION ACT V. REGISTRATION UNDER THE PUBLIC LAND ACT Under the Land Registration Act:

- presumption that title already exists and the court is there only to confirm;- dismissal may be with or without prejudice to refiling; and

- applicant does not risk losing his property.

Under the Public Land Act: - land applied for presumed to belong to the State

and applicant is claiming it by virtue of his open, continuous, exclusive and notorious possession amounting to imperfect title;- court hearing the application has jurisdiction and power to adjudicate the land in favor of the conflicting claimants, and if none is entitled, land is declared in favor of the Government; and- applicant runs the risk of losing the land applied for, without opportunity of refiling the application.

PRESCRIPTION LIES AGAINST ALP (Jabutay v. Dir. Of Lands, CA G.R 16969, Nov. 7 1958) “In the case where the applicant was able to establish

that he and his predecessors-in-interest had been in actual, peaceful, public, open and continuous possession of certain public land under claim of ownership for more than 65 years, he is deemed to have been conferred effective title and the subject land had ceased to a part of the public domain and had become a private property.”

Note: Generally, 30 years possession without title and in bad faith is enough in acquisitive prescription. However, in ALP, possession must be traced since June 12, 1945.

ACQUISITION BY ADMIN LEGALIZATION OR FREE PATENT Persons entitled: - Natural-born Filipino; - Not owner of more than 24 hectares (now 12 hectares;

- Since July 4, 1945 or prior thereto, has continuously occupied and cultivated, either by himself or through his predecessors-in-interest, such public lands as may be subject of disposition;- In lieu of continuous cultivation, applicant may show that he has paid real estate taxes on the property for the same period and the land has not been occupied by other persons.

LIMITATIONS IN AREA

Royal decrees: 1,000 hectares; R.A. 6236 & P.D. 1073: 144 hectares; 1973 Constitution: 24 hectares; and 1987 Constitution: 12 hectares.

PROCEDURE IN OBTAINING FREE PATENT Filing of Application with BL, accompanied with a map

and technical description of the land, and affidavits subscribed by two disinterested persons residing the same municipality or barangay where the land lies;

Posting of notices in conspicuous places in the provincial capital, the municipality and barangay where the land is situated for 2 consecutive weeks. Notice shall require those having interests to file their objection or adverse claim; and

Action by the BL.

WHEN FREE PATENT BECOMES FINAL AND CONCLUSIVE

General rule: 1 year after issuance of the free patent, title over the land becomes indefeasible and incontrovertible.

Exception: Where the land granted is not part of the public domain, but a private land, the patent and Torrens Title issued are a nullity.

IMPORTANT RESTRICTION ON FREE PATENT Land cannot be encumbered or alienated within 5 years

from date of issuance, except in favor of the government or its instrumentalities.

Improvements or crops not covered. After 5 years, the land may be alienated without need of

approval from the DENR. But it buyer is a juridical person, there must be consent

from the grantee and approval from DENR Any alienation is subject to right of repurchase by the

patentee, his heirs within 5 years from date of sale.

ALIENABLE PUBLIC LANDS OTHER THAN TIMBER, MINERAL OR AGRICULTURAL Reclaimed lands; Foreshore; Marshy land or land covered with water

bordering upon the shores or banks of navigable lakes or rivers; and

Other lands not included in above classification.

Note: The foregoing may be disposed of for residential, commercial, industrial or other productive purposes.

MEANING OF TERMS

Residential land: To be construed in its prospective and objective purposes taking into account the influx of population and the impact of commercial, industrial and social intercourse thereon. A truly residential lot could not be converted into an agricultural land simply by reserving a plot for cultivation; conversely, an agricultural land cannot be considered residential simply because a portion of it has been crisscrossed with roads and building here and there.

Reclaimed land: refers to submerged land which by deliberate act of dredging and filling has emerged to the surface. It belongs to the State. It may be declared property of adjoining owners only where it is no longer needed for public use or public service.

Foreshore: refers to that part of the land adjacent to the sea which is alternately covered and uncovered by the ordinary flow of the tides. It belongs to the State.

Note: R.A. 1899, Reclamation Act of 1957 declares as property of the LGU all reclaimed land undertaken by them.

Marshy land: that which borders on shores and banks of navigable rivers and lakes; it is generally swampy or soft wet land.

Note: All foregoing may be subject, as a rule, only of lease unless declared so by the President upon recommendation of the DENR or by legislation, i.e. R.A. 293, as amended by R.A. 1899 (June 22, 1957) allowing sale of marshy land with subsisting lease of at least 5 years to the lessee.

CASES ON RECLAIMED LANDS

Republic v. C.A. & Republic Real Estate Corp, G.R. No. 105276, November 25, 1998.

Chavez v. PEA & Amari, G.R. No. 133250, July 9, 2002, en banc decision;

REPUBLIC V. CA & REPUBLIC REAL ESTATE CORP., G.R. No. 105276, November 25, 1998

The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its meaning, much less widen the coverage thereof.

If the intention of Congress were to include submerged areas, it should have provided expressly. That Congress did not so provide could only signify the exclusion of submerged areas from the term "foreshore lands".

CHAVEZ vs. PEA and AMARI [G.R. No. 133250, July 9, 2002, en banc decision]Facts: November 20, 1973: Commissioner of Public

Highways, signed a contract with the Construction and Development Corporation of the Philippines ("CDCP" for brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The contract also included the construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry out all the works in consideration of fifty percent of the total reclaimed land.

February 4, 1977: Marcos issued Presidential Decree No. 1084 creating PEA with primary mandate "to reclaim land, including foreshore and submerged areas," and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands."

On the same date, Presidential Decree No. 1085 was signed transferring to PEA the "lands reclaimed in the foreshore and offshore of the Manila Bay" under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).

December 29, 1981: Pres. Marcos issued a memorandum directing PEA to amend its contract with CDCP directing that all future works in MCCRRP shall be funded and owned by PEA.

January 19, 1988: Pres.Aquino issued Special Patent No. 3517, granting and transferring to PEA the parcels of land already reclaimed under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters.

April 9, 1988: Parañaque RD issued TCT Nos. 7309, 7311, and 7312, in the name of PEA, covering the three reclaimed islands known as the "Freedom Islands" located at the southern portion of the Manila-Cavite Coastal Road, Parañaque City.

The Freedom Islands have a total land 157.841 hectares.

April 25, 1995: PEA entered into a JVA with AMARI to develop the Freedom Islands. The JVA also required the reclamation of an additional 250 hectares of submerged areas surrounding these islands to complete the configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP. The JVA was entered without public bidding.

April 28, 1995: PEA Board confirmed the JVA. June 8, 1995, Pres. Ramos approved the JVA. November 29, 1996: then Senate Pres.

Maceda delivered a privilege speech calling the JVA as the "grandmother of all scams.“ A senate investigation followed.

April 27, 1998: petitioner Chavez, as taxpayer, filed a petition for mandamus contending that the government stands to lose billions of pesos in the sale by PEA of the reclaimed lands to AMARI.

Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private corporations.

March 30, 1999: PEA and AMARI signed the Amended Joint Venture Agreement.

May 28, 1999: President Estrada approved the Amended JVA.

The Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are still submerged areas forming part of Manila Bay.

Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's "actual cost" in partially reclaiming the Freedom Islands.

AMARI will also complete, at its own expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation costs of all the other areas, totaling 592.15 hectares, still to be reclaimed.

AMARI and PEA will share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common areas.

Under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of reclaimed land which will be titled in its name.

PRINCIPAL ISSUE

WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION.

RATIO DECIDENDI

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds that the State owns all lands and waters of the public domain.

Commonwealth Act No. 141, also known as the Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. CA No. 141 continues to this day as the general law governing the classification and disposition of lands of the public domain.

The State policy prohibiting the sale to private parties of government reclaimed, foreshore and marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect .

Foreshore lands became inalienable as natural resources of the State, unless reclaimed by the government and classified as agricultural lands of the public domain, in which case they would fall under the classification of government reclaimed lands.

After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the public domain continued to be only leased and not sold to private parties.

These lands remained sui generis, as the only alienable or disposable lands of the public domain the government could not sell to private parties.

Since then and until now, the only way the government can sell to private parties government reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law authorizing such sale.

CA No. 141 does not authorize the President to reclassify government reclaimed and marshy lands into other non-agricultural lands under Section 59 (d).

Lands classified under Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the government could sell to private parties.

Most importantly, Section 60 of CA No. 141 expressly requires congressional authority before lands under Section 59 that the government previously transferred to government units or entities could be sold to private parties

One reason for the congressional authority is that Section 60 of CA No. 141 exempted government units and entities from the maximum area of public lands that could be acquired from the State.

These government units and entities should not just turn around and sell these lands to private parties in violation of constitutional or statutory limitations.

The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from acquiring any kind of alienable land of the public domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the public domain only through lease.

One purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably diffuse land ownership or to encourage 'owner-cultivatorship and the economic family-size farm'. Huge landholdings by corporations or private persons had spawned social unrest."

The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are still submerged and forming part of Manila Bay.

There is no legislative or Presidential act classifying these submerged areas as alienable or disposable lands of the public domain open to disposition.

There can be no dispute that these submerged areas form part of the public domain, and in their present state are inalienable and outside the commerce of man.

The mere fact that alienable lands of the public domain like the Freedom Islands are transferred to PEA and issued land patents or certificates of title in PEA's name does not automatically make such lands private.

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain.

SUMMARY OF THE RULING:

The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.

The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man.

Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

CHAVEZ vs. PEA and AMARI [G.R. No. 133250, November 11, 2003 Resolution of MR]

Submerged lands, like the waters (sea or bay) above them, are part of the State’s inalienable natural resources. Submerged lands are property of public dominion, absolutely inalienable and outside the commerce of man. This is also true with respect to foreshore lands. Any sale of submerged or foreshore lands is void being contrary to the Constitution.

Commonwealth Act No. 141, "foreshore and lands under water were not to be alienated and sold to private

parties,"

PEA is the central implementing agency tasked to undertake reclamation projects nationwide

PEA took the place of the Department of Environment and Natural Resources ("DENR" for brevity) as the government agency charged with leasing or selling all reclaimed lands of the public domain.

In the hands of PEA, which took over the leasing and selling functions of DENR, reclaimed foreshore (or submerged lands) lands are public lands in the same manner that these same lands would have been public lands in the hands of DENR

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain.

PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction.

This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80 million strong.

As we held in our 9 July 2002 Decision, the Amended JVA "violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution.“

In our 6 May 2003 Resolution, we DENIED with FINALITY respondents’ Motions for Reconsideration. Litigations must end some time. It is now time to write finis to this "Grandmother of All Scams."

SURVEY OF RECLAMATION LAWS AND REGULATIONS The Spanish Law of Waters of 1866 Civil Code of 1889 Act No. 1654 Act No. 2874 ; Commonwealth Act No. 141; R.A. 1899 PD No. 1084 R.A. 7160

Executive Order 525, February 14, 1979 (Designating PEA as the Agency primarily responsible for all reclamation projects)

Executive Order 543, June 24, 2006 (Delegating to PRA the power to approve reclamation projects)

Executive Order No. 380, Oct. 26, 2004 (Transforming PEA into PRA)

Executive Order No. 586 Executive Order No. 654 Presidential Decree No. 1085

THE SPANISH LAW OF WATERS OF 1866

Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons, with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the grant of authority.

CIVIL CODE OF 1889 (Arts. 339 & 341) 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 State, riverbanks, 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 public service, or in the development of the national wealth, such as walls, fortresses, and other works for the defense of the territory, and mines, until granted to private individuals.

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

ACT NO. 1654, PHILIPPINE COMMISSION (MAY 8, 1907)

Section 1. The control and disposition of the foreshore as defined in existing law, and the title to all Government or public lands made or reclaimed by the Government by dredging or filling or otherwise throughout the Philippine Islands, shall be retained by the Government without prejudice to vested rights and without 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 by the Government by dredging or filling or otherwise to be divided into lots or blocks, with the necessary streets and alleyways located thereon, and shall cause plats and plans of such surveys to be prepared and filed with the Bureau of Lands.

(b) Upon completion of such plats and plans the Governor-General shall give notice to the public that such parts of the lands so made or reclaimed as are not needed for public purposes will be leased for commercial and business purposes, x x x.

(e) The leases above provided for shall be disposed of to the highest and best bidder therefore, subject to such regulations and safeguards as the Governor-General may by executive order prescribe.

Synopsis: Act 1654

Act No. 1654 mandated that the government should retain title to all lands reclaimed by the government. The Act also vested in the government control and disposition of foreshore lands. Private parties could lease lands reclaimed by the government only if these lands were no longer needed for public purpose.

Act No. 1654 mandated public bidding in the lease of government reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other public lands which the government could sell to private parties, these reclaimed lands were available only for lease to private parties.

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

ACT 2874 [Nov. 29, 1919]

Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and Natural Resources, shall from time to time classify the lands of the public domain into ?(a) Alienable 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, the Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time declare what lands are open to disposition or concession under this Act."

Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially delimited or classified x x x.

Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall be classified as suitable for residential purposes or for commercial, industrial, or other productive purposes other than agricultural purposes, and shall be open to disposition or concession, shall be disposed of under the provisions of this chapter, and not otherwise.

Sec. 56. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore; (c) Marshy lands or lands covered with water

bordering upon the shores or banks of navigable lakes or rivers;

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

Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of to private parties by lease only and not otherwise, as soon as the Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall declare that the same are not necessary for the public service and are open to disposition under this chapter. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act.

C.A. 141 [PUBLIC LAND ACT] Nov. 7, 1936

Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is intended to be used for residential purposes or for commercial, industrial, or other productive purposes other than agricultural, and is open to disposition or concession, shall be disposed of under the provisions of this chapter and not otherwise.

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;(b) Foreshore;(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers;(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 person, corporation, or association authorized to purchase or lease public lands for agricultural purposes.

Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of to private parties by lease only and not otherwise, as soon as the President, upon recommendation by the Secretary of Agriculture, shall declare that the same are not necessary for the public service and are open to disposition under this chapter. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act.

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of the public domain.

All these lands are intended for residential, commercial, industrial or other non-agricultural purposes. As before, Section 61 allowed only the lease of such lands to private parties.

The government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or those lands for non-agricultural purposes not classified as government reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands, however, became inalienable under the 1935 Constitution which only allowed the lease of these lands to qualified private parties.

The Civil Code of 1950

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 the State, 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 or for 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 form part of the patrimonial property of the State.

Government must formally declare that the property of public dominion is no longer needed for public use or public service, before the same could be classified as patrimonial property of the State.

In the case of government reclaimed and marshy lands of the public domain, the declaration of their being disposable, as well as the manner of their disposition, is governed by the applicable provisions of

CA No. 141.

Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those properties of the State which, without being for public use, are intended for public service or the "development of the national wealth."

Thus, government reclaimed and marshy lands of the State, even if not employed for public use or public service, if developed to enhance the national wealth, are classified as property of public dominion.

Dispositions under the 1973 Constitution [Sec. 8, Art. XIV]

Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State.

With the exception of agricultural, industrial or commercial, residential, and resettlement lands of the public domain, natural resources shall not be alienated, and no license, concession, or lease for the exploration, development, exploitation, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for not more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which cases, beneficial use may be the measure and the limit of the grant."

Both the 1935 and 1973 Constitutions prohibit the alienation of all natural resources except agricultural lands of the public domain.

However, the 1973 Constitution limits the alienation of lands of the public domain to individuals who were citizens of the Philippines.

Private corporations, even if wholly owned by Philippine citizens, were no longer allowed to acquire alienable lands of the public domain unlike in the 1935 Constitution.

PD No. 1084, Feb. 4, 1977 [PEA CHARTER] Sec. 4. Purpose. The Authority is hereby created for the

following purposes: (a) To reclaim land, including foreshore and

submerged areas, by dredging, filling or other means, or to acquire reclaimed land;(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled and/or operated by the government;(c) To provide for, operate or administer such service as may be necessary for the efficient, economical and beneficial utilization of the above properties.

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

(a) To prescribe its by-laws. x x x

(i) To hold lands of the public domain in excess of the area permitted to private corporations by statute.(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal, ditch, flume x x x. x x x(o) To perform such acts and exercise such functions as may be necessary for the attainment of the purposes and objectives herein specified.

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.

Foreshore areas are those covered and uncovered by the ebb and flow of the tide.

Submerged areas are those permanently under water regardless of the ebb and flow of the tide.

Foreshore and submerged areas indisputably belong to the public domain and are inalienable unless reclaimed, classified as alienable lands open to disposition, and further declared no longer needed for public service.

The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain did not apply to PEA since it was then, and until today, a fully owned government corporation.

In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there must be legislative authority empowering PEA to sell these lands pursuant to Sec. 60, C.A. 141.

Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and submerged alienable lands of the public domain.

Reclaimed alienable lands of the public domain would still be subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain.

Hence, such legislative authority could only benefit private individuals.

Dispositions under the 1987 Constitution Section 2. All lands of the public domain,

waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. x x x.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, 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 the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor.

Rationale Of The Constitutional Ban Without the constitutional ban, individuals who

already acquired the maximum area of alienable lands of the public domain could easily set up corporations to acquire more alienable public lands.

An individual could own as many corporations as his means would allow him. An individual could even hide his ownership of a corporation by putting his nominees as stockholders of the corporation.

The corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by individuals of alienable lands of the public domain.

The Revised Administrative Code of 1987

A later law than either PD No. 1084 or EO No. 525, vests in the Department of Environment and Natural Resources ("DENR" for brevity) the following powers and functions:

"Sec. 4. Powers and Functions. The Department shall: (1) x x x x x x (4) Exercise supervision and control over forest

lands, alienable and disposable public lands, mineral resources and, in the process of exercising such control, impose appropriate taxes, fees, charges, rentals and any such form of levy and collect such revenues for the exploration, development, utilization or gathering of such resources;

x x x

(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits, concessions, lease agreements and such other privileges concerning the development, exploration and utilization of the country's marine, freshwater, and brackish water and over all aquatic resources of the country and shall continue to oversee, supervise and police our natural resources; cancel or cause to cancel such privileges upon failure, non-compliance or violations of any regulation, order, and for all other causes which are in furtherance of the conservation of natural resources and supportive of the national interest;

(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain and serve as the sole agency responsible for classification, sub-classification, surveying and titling of lands in consultation with appropriate agencies."

DENR is vested with the power to authorize the reclamation of areas under water.

PEA is vested with the power to undertake the physical reclamation of areas under water, whether directly or through private contractors.

DENR is empowered to classify lands of the public domain into alienable or disposable lands subject to the approval of the President.

PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.

PEA's Authority to Sell Reclaimed Lands

PEA's charterexpressly tasks PEA "to develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled and/or operated by the government.“

There is legislative authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public domain.

PEA may sell to private parties its patrimonial properties in accordance with the PEA charter free from constitutional limitations.

The constitutional ban on private corporations from acquiring alienable lands of the public domain does not apply to the sale of PEA's patrimonial lands.

PEA may also sell its alienable or disposable lands of the public domain to private individuals since, with the legislative authority, there is no longer any statutory prohibition against such sales and the constitutional ban does not apply to individuals.

PEA, however, cannot sell any of its alienable or disposable lands of the public domain to private corporations since Section 3, Article XII of the 1987 Constitution expressly prohibits such sales.

The legislative authority benefits only individuals. Private corporations remain barred from acquiring any kind of alienable land of the public domain, including government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the "contractor or his assignees" would not apply to private corporations but only to individuals because of the constitutional ban.

Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987 Constitutions.

Requirement of public auction in the sale of reclaimed lands

PEA must observe the provisions of Sections 63 and 67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a public auction.

Section 79 of PD No. 1445 otherwise known as the Government Auditing Code, requires government to sell valuable government property through public bidding.

It is only when the public auction fails that a negotiated sale is allowed, in which case the Commission on Audit must approve the selling price

At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore and submerged alienable lands of the public domain.

Private corporations are barred from bidding at the auction sale of any kind of alienable land of the public domain.

Republic Act No. 6957 [BOT Law]

Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance of any infrastructure projects undertaken through the build-operate-and-transfer arrangement or any of its variations pursuant to the provisions of this Act, the project proponent x x x may likewise be repaid in the form of a share in the revenue of the project or other non-monetary payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed land, subject to the constitutional requirements with respect to the ownership of the land: x x x.

R.A. 1899 [Authorizing Chartered Cities & Municipalities to reclaim] All municipalities, and chartered cities may

undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them, and may establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications.  

Any and all lands reclaimed shall become property of the respective municipalities or chartered cities.

However, the new foreshore along the reclaimed areas shall continue to be the property of the National Government.  

Municipalities and chartered cities are authorized to contract indebtedness with any person, association, corporation, or lending institution and may issue bonds in such amounts and under such terms and conditions as may be fixed by the Secretary of Finance.

Such bonds shall be guaranteed by the Government of the Philippines and their issue, servicing and liquidation shall be undertaken by the Central Bank of the Philippines.

All lands reclaimed, except such as may be necessary for wharves, piers and embankments, roads, parks and other public improvements, may be sold or leased under such rules and regulations as the municipality or chartered city may prescribe.

All proceeds derived from such sale or lease, and all berthing and other fees and such other earnings as the municipality or chartered city shall derive from the use of the port facilities and improvements, shall be credited to a special fund which shall accrue in the first instance to the sinking fund.

Any balance thereof in excess of periodic sinking fund requirements shall be available for other permanent public improvements of the municipality or chartered city.  

Republic Act 7160 [Local Gov’t Code] "Section 302. Financing, Construction,

Maintenance, Operation, and Management of Infrastructure Projects by the Private Sector.

In case of land reclamation or construction of industrial estates, the repayment plan may consist of the grant of a portion or percentage of the reclaimed land or the industrial estate constructed.

Although Section 302 of the Local Government Code does not contain a proviso similar to that of the BOT Law, the constitutional restrictions on land ownership automatically apply even though not expressly mentioned in the Local Government Code.

Either the BOT Law or the Local Government Code, the contractor or developer, if a corporate entity, can only be paid with leaseholds on portions of the reclaimed land.

If the contractor or developer is an individual, portions of the reclaimed land, not exceeding 12 hectares of non-agricultural lands, may be conveyed to him in ownership in view of the legislative authority allowing such conveyance.

Registration of lands of the public domain

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or public ownership of the land. Registration is not a mode of acquiring ownership but is merely evidence of ownership previously conferred by any of the recognized modes of acquiring ownership.

Registration does not give the registrant a better right than what the registrant had prior to the registration.

The registration of lands of the public domain under the Torrens system, by itself, cannot convert public lands into private lands.

EXECUTIVE ORDER NO. 525

PEA shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government.

All reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; Provided, that, reclamation projects of any national government agency or entity authorized under its charter shall be undertaken in consultation with the PEA upon approval of the President.