The document discusses key aspects of the national economy and patrimony according to the Philippines' constitution. It defines the national economy and patrimony, outlines three goals of the national economy (equity, growth, and productivity), and describes strategies and guidelines to accomplish these goals, including developing a self-reliant economy, promoting industrialization and full employment, and protecting Filipino enterprises. It also covers classifications of public lands, exploration and development of natural resources, ownership and transfer of private lands, and protection of indigenous communities' ancestral lands.

1. ARTICLE XII
NATIONAL
ECONOMY AND
PATRIMONY

2. SECTION 1:
The goals of the national are more equitable distribution of
opportunities, income and wealth; a sustained increase in the
amount of goods and services produced by the nation for the
benefit of the people; and an expanding productivity as the key to
raising quality of life foe all, especially the underprivileged.
Concept of national economy and patrimony.
1. The national economy refers to the entire structure of economic life
in a country. It encompasses all the activities relating to or concerned
with the production, distribution and consumption of goods and
services and what are called “factors of production”.
2. The national patrimony refers primarily to the natural resources of the
country which under the Constitution include “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,
fauna,” and “all marine wealth in its archipelagic waters, territorial sea
and exclusive maritime zone,” and “our cultural heritage”.

3. Three-folds goals of the national economy
1. Equity a more equitable distribution of opportunities, income
and wealth. One important aid in promoting equity is the control
of monopoly and the prevention of unfair competition.
2. Growth sustained increase in the amount of goods and services
produced by the nation for the benefit of the people. Economic
growth is conventionally measured by the increase of the gross
domestic product(GDP) which is the estimated total value of all
the goods and services produced by the economy.
3. Productivity an expanding productivity as the key to raising
the quality of life for all especially the unprivileged. Productivity is
the ability, capacity or degree of effectiveness for making greater
output out of every unit of input employed.

4. Strategies to accomplish goals.
In the pursuit of the goals of the national economy, the
Constitution mandates the State in Section 19 of article II
and in Section 1 above, aside from other provisions.
1. to develop a self reliant and independent national
economy effectively controlled by Filipinos.
2. To promote industrialization and full employment.
3. to protect Filipino enterprises against unfair foreign
competition and trade practices.
4. To give all economic sectors and regions of the country
optimum opportunity to develop; and
5. To encourage private enterprises, including
corporations, cooperatives and similar collective
organizations to broaden the base of their ownership.

5. Guidelines in the development of the national economy
1. Self-reliant economy. In providing for economic self-reliance,
the intent is not to pursue a policy of economic seclusion from
the international economic community.
Self reliance simply means that the Philippines must have the
ability to cope with its economic problems or to implement its
development programs by the use of its own resources with a
minimum of dependence from foreign governments,
inventors or financing institutions for loans and investments.
2. Independent economy. The national economy must be free
from undue foreign control or intervention.
3. Economy effectively controlled by Filipinos. “The principal
responsibility for development belongs to Filipino citizens.
They must be the principal determinants as well as the chief
beneficiaries of economic progress”

6. Promotion of Industrialization and Full Employment.
1. The importance and urgency in the Philippines. For the
developing country like Philippines, with growth and an
a large population growth and excess labor supply,
there is an inherent advantage in adopting a
development strategy that promotes industrialization
and full employment.
 An important aspect of industrialization is that it
generates a high level of employment.

7. (2) Based on sound agricultural development and agrarian reform.
 agriculture is not the only main source of livelihood.
 agricultural development is important to a low-income
country like the Philippines with a large agricultural base.
 agrarian reform takes on a central position as component of
policies for raising agricultural productivity.
 agriculture as a source of export earnings even assists
industry in providing its foreign exchange needs.
 all the "tiger economies" of East Asia have anchored their
industrialization on agricultural modernization.
(3) Balance between agricultural development and
industrialization. The primary shall be in agriculture and as
agricultural growth is being achieved, the emphasis shall
increasingly shift to industrial development.
(4) Adaptation of a flexible economic policy. Agricultural
development must be pursued not at the expense of
industrialization but on a complementary basis to insure the growth
of both.

8. Protection of Filipino enterprises against unfair foreign competition
and trade practices.
*protection guaranteed is not against foreign competition but unfair
foreign trade practices.
1. Permanent protection not contemplated. But protection is not
intended as a permanent support for "non-infant" enterprises.
a. It perpetuates the "colonial" of Filipinos to prefer foreign goods
and not local products.
b.Having attained greater efficiency, the price of its products should
fall and, hence, benefit consumers.
c. It is also prejudicial to some industries that breed imported raw
materials for processing of products for domestic sale or export.
d.Finally, the constitution rejects the principle of absolute
protectionism also it would invite retaliatory measures by other
countries.
2. When protection justified. The Philippine government has the
exclusive right to define what shall constitute unfair competition or
trade practices justifying protection of Filipino enterprises.

9. 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, wild life, flora and fauna,
and other natural resources are owned by the State. With the
exception of agricultural lands, all other natural resource shall
not be alienated. The exploration, development, and
utilization of natural resources shall be under the full
controlling and supervision of the State. 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
sixty per centum of whose capital is owned by the citizen.

10. The constitution declares that all lands of the public domain and all
other natural resources of the Philippines "are owned by the State."
(par.1.) In furtherance the constitutional policy on natural resources,
Section 2 prohibits the transfer or conveyance to aliens of private lands
save in hereditary succession. (Sect. 7, infra.)
1. Our constitution adopts the Regalian Doctrine with respect to the
natural resources of the country. This doctrine holds that all
minerals, coal, etc. found either in public lands or in private lands
belong to the State.
2. Under the doctrine, all lands of the public domain belong to the
State and lands not otherwise appearing time be clearly within
private ownership are presumed to belong to the State. Unless
public land is shown to have been reclassified as alienable or
disposable, and subsequently alienated by the State, it remains
part of the public domain. Occupation or possession thereof by a
person in the concept of the owner, no matter how long cannot
ripen in ownership.

11. Objectives of policy on natural resources.
The adoption of the Regalian Theory of ownership over the national
resources of the country was deemed necessary:
1. To ensure their conservation of national defense, helping prevent
the extension into the country of the foreign control through
peaceful economic penetration; and
2. To prevent making the Philippines a source of international conflicts
with the consequent danger to its internal security and
independence.
Alienation of agricultural lands of through public domain.
The State is not authorized to alienate, not even to Filipino citizens, the
natural resources of the country. Only agricultural lands of the public
domain may be alienated (Sects. 2, 3.) and only to Filipino citizens.
Alienation is allowed because other provisions insure their
conservation and development by Filipino citizens (see Secs. 3, 5, 7, 8,
10.) so that such lands may be utilized and developed for the benefit of
Filipinos.

12. Exploration development and utilization of natural resources.
1. Former scheme. - before, the exploration, etc. of any of the natural
resources may be granted by the government by license,
concession or lease to citizens of the Philippines or to corporations
or associations at least 60% of the capital of which is owned by such
citizens. The role of the government was merely to give the
permission.
2. More active role by through State. - Section 2 now requires that the
State should take a more active role in the exploration,
development and utilization of natural resources.
3. Options available to the State. - The State (a) may undertake such
activities directly, or (b) 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 owned
by such citizens (par. 1.), or (c) it may enter into agreements with
foreign-owned corporations for large-scale exploration, etc. (par. 4)
The old system whereby the natural resources are explored, etc., by
license or concession without any participation of the State is no
longer allowed.

13. Period of agreement for exploration, etc., of natural
resources.
1. The agreement for the exploration, development, or
utilization of any of the natural resources may be for a
period not exceeding twenty-five (25) years, renewable
for not more than twenty-five (25) years. (par. 1). This
period is believed long enough for capital, local and
foreign, to realize profit on investments in natural
resources.
2. With respect to water rights for irrigation, water supply,
fisheries or industrial uses, the measure and limit of the
grant is their beneficial use. (Ibid.) The period of twenty-
five (25) years is considered not a satisfactory criterion
for these resources as it might be too short in some
cases and too long in others.

14. Protection of the marine wealth.
The state has the obligation:
1. To protect the nation's marine wealth in its archipelagic waters, territorial
sea, and exclusive economic zone (see Art. 1.); and
2. To reserve its use and enjoyment exclusively to Filipino citizens.
Technical or financial assistance agreements with foreign-owned corporations.
*This refers to the third major scheme.
*The Constitution imposes the ff. conditions on such agreements entered into by
the President:
1. Three agreement must involve only either technical or financial assistance;
2. It must be for a large-scale for exploration, etc. of minerals, petroleum and
other mineral oils;
3. It provisions must break according to the general terms and conditions
provided by Law, based on real contributions to the economic growth and
general welfare of the country;
4. The President shall sequent notify congress of the Congress of the contract
within 30 days from its execution; and
5. In such agreement, the State shall promote the development and use of local
scientific and technical resources.

15. 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 to w/c 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
domains except by lease, for a period exceeding twenty-one
years and not 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.
.

16. Classifications of lands of the public domain.
Agricultural – land devoted principally to the raising of crops such as rice,
sugar, tobacco, coconut, etc., or for farming
Forest or timber – land producing wood or able to produce wood or if
agricultural crops on the same land will not bring the financial return that
timber will or if the same land is needed for protection purposes;
Mineral – Land in w/c minerals exist in sufficient quantity or quality to justify he
necessary expenditures to be incurred in extracting and utilizing such minerals
National parks – land maintained by the national government as a place of
beauty or for public recreation, like the Rizal Park or forested land reserved
from settlement and maintained in its natural state for public use (as by
campers or hunters) or as wildlife refuge.
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 therefore.

17. Basis and rationale of classification
1. The classification of land (1973 Constitution)
a) Agricultural
b) Industrial / commercial
c) Residential
d) Resettlement
e) Mineral
f) Timber of forest
g) Grazing lands
2. The rationale for the change is to limit the lands
of the public domain w/c may be alienated to
public agricultural lands.

18. Determination of size of landholdings and conditions therefore.
 The constitutions authorizes Congress to determine by law
the size of alienable lands of the public domains w/c any
qualified individual, corporation or association may develop,
hold or acquire or lease and the conditions therefor.
 According to studies made 42% of the land area of the
Philippines should be forest in order to maintain the proper
ecological balance.
Maximum size of landholdings
• Individual – the maximum area of public agricultural lands may be
acquired by purchase, homestead or grant is 12 hectares (reduced
from 24 hectares) and by lease, 500 hectares.
• Corporations and associations – the maximum area that may be
leased 1,000 hectares.
 Lease period shall not exceed 25 years renewable for not
more than 25 years.

19. SECTION 4:
The Congress shall, as soon as possible, determine by law the
specific limits of forest lands and national parks, marking
clearly their boundaries on the ground. Thereafter, such
forest lands and national parks shall be conserved and may
not be increased nor diminished, except by law. The
Congress shall provide, for such period as it may determine
measures to prohibit logging in endangered forests and
watershed areas.

20. Grant. Now a mode for acquisition of public lands
Grant alienable and disposable public lands to qualified individual citizens; the
recipient will not pay for the land, although he may be made to shoulder the cost
of titling and surveying.
(1973 constitution; 1984 plebiscite)
REASONS:
1. It is timely step in making vast parcels of idle public lands available to the less
fortunate citizens and in boosting agricultural production in the country.
2. The land grant is designed to benefit only qualified farmers, landless
agricultural workers, and other landless citizens
3. Only individuals w/ considerable resources have been able to acquire public
lands, defeating the constitutional intent to benefit small settlers in the
distributions of public lands to uninformed but deserving citizens w/in a
relatively short period of time.
4. Gives social justice and renders public land distribution more honored in
practice than in theory; it provides safeguard to prevent abuses and ensure
that public lands of suitable areas will go to the really deserving.
5. A simple method of land acquisition has become imperative to legitimize the
tenure of some three million landless agricultural workers and landless families
now occupying or “squatting” on public agricultural production and economic
development.

21. SECTION 5:
The state, subject to the provisions of this Constitutions and
national development policies and programs, shall protect
the rights of indigenous cultural communities to their
ancestral lands to ensure their economic, social and cultural
well-being.
The Congress may provide for the applicability of customary laws governing
property rights or relations in determining the ownership and extent of ancestral
domain.
Protection of rights of indigenous cultural communities to their ancestral
lands
 Communal ownership of lands
 Applicability of indigenous customary laws.
 Ancestral domain embraces all lands located within and generally belong
to what is called a “ cultural region” including lands w/c are not yet
strictly occupied.
 Ancestral land refers to be the occupied portions of the ancestral domain.

22. SECTION 6:
The use of property bears a social function and all economic
agents shall contribute to the common good. Individual and
private groups, including corporations, cooperatives, and similar
collective organizations, shall have the right to own, establish and
operate economic enterprises subject to the duty of the State to
promote distributive justice and to intervene when the common
good so demands.
Right to own, establish and operate economic enterprises
1. Many economic systems
2. Free enterprise system – “free private enterprise” persons can
own and operate business enterprises risking their own
resources and thereby taking the profits or the losses in
consequence.
3. Intervention by the State
4. Regulated capitalism

23. SECTION 7:
Save in cases of hereditary successions, no private lands shall
be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands of the public domain.
Acquisition of private lands.
Private lands- are lands of
private ownership.
They include those owned by
private individuals,
corporations, or associations
and those owned by the State
and municipal corporations
which are not intended for
public use, or for some public
service, or for development of
the national wealth.
Private lands may be transferred or
conveyed to the following:
1. Filipino Citizens
2. Corporations and associations
at least 60% of the capital of
which is owned by Filipino
citizens.
3. Aliens but not only in cases of
hereditary succession.
4. Natural-born Filipino citizens
who have lost their Philippine
citizenship subject to limitations
provided by law.

24. CONSEQUENCE OF VIOLATION OF PROHIBITION.
RESTORATION OF THE STATUS QUO. A SALE OF LAND IN
VIOLATION OF THE CONSTITUTIONAL PROHIBITION AGAINST THE
TRANSFER OF LANDS TO ALIENS IS VOID. IN OTHERS WORDS, THE
SELLER CAN RECOVER THE LAND FROM THE BUYER (ALIEN) WHO
HAS RIGHT TO BE REIMBURSED WITH THE AMOUNT OF THE
PURCHASE PRICE.
WHERE VIOLATION IS DISGUISED. THE PUBLIC POLICY TO
CONSERVE LANDS FOR THE FILIPINOS WOULD BE DEFEATED AND
ITS CONTINUED VIOLATION SANCTIONED, IF THE COURTS WOULD
NOT ORDER THE RESTORATION OF THE PROPERTY.

25. SECTION 8:
Notwithstanding the provisions of Section 7 of this Article, a
natural-born citizen of the Philippines who has lost his
Philippines citizenship may be a transferee of private lands,
subject to limitations provided by law.
RIGHT OF NATURAL- BORN CITIZENS WHO HAVE LOST
THEIR CITIZENSHIP TO ACQUIRE PRIVATE LANDS.
PERMITS NATURAL-BORN FILIPINOS WHO HAVE LOST THEIR
CITIZENSHIP TO BE A TRANSFEREE OF PRIVATE LANDS (NOT
LANDS OF PUBLIC DOMAIN).

26. The reasons for Section 8 are better explained by the “whereas clauses” of Resolution
No.1 of the former Batasang Pambansa proposing a 1981 amendment to 1973
Constitution, to wit:
Whereas, many natural-born citizens of the Philippines have migrated to foreign
countries, particularly to Hawaii and other states of the United States of America, where
they eventually acquired the citizenship of the countries to which they migrated as a
consequence, lost their Philippine citizenship;
Whereas, in spite of their ne citizenship these former Filipino citizens continue to
maintain their filial links with their relatives in the Philippines and an identity with ou
people;
Whereas, thousands of these former Filipino natural-born citizens expressed a desire
to return to the Philippines and reside here permanently so as to be able to spend the
remaining years of their lives in the land of their birth and contribute in whatever way
they can towards the development of our country and the well-being of our people;
Whereas, it is in the national interest to give encouragement to this beautiful
sentiment of our blood-brothers and to make it possible for them to bring to fruition
their expressed desire;
Whereas, it would be necessary to amend the Constitution so as to enable these
natural-born citizens of the Philippines to own the land on which they reside.

27. SECTION 9:
THE CONGRESS MAY ESTABLISH AN INDEPENDENT
ECONOMIC AND PLANNING AGENCY HEADED BY THE
PRESIDENT, WHICH SHALL, AFTER CONSULTATIONS WITH
THE APPROPRIATE PUBLIC AGENCIES, VARIOUS PRIVATE
SECTORS, AND LOCAL GOVERNMENT UNITS,
RECOMMENDED TO CONGRESS, AND IMPLEMENT
CONTINUING INTEGRATED AND COORDINATED PROGRAMS
AND POLICIES FOR NATIONAL DEVELOPMENT.
UNTIL THE CONGRESS PROVIDES OTHERWISE, THE
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
SHALL FUNCTION AS THE INDEPENDENT PLANNING AGENCY
OF THE GOVERNMENT.

28. Independent Economic and Planning agency headed by the President to be
established.
(1) NEED FOR A CENTRAL ECONOMIC PLANNING BODY. Economic planning is an
essential part of development policy. It may cover the whole economy, or only
certain sectors of it, or particular region of a country.
(2) FEATURES AND FUNCTIONS. The following are the features and functions of
the economic and planning agency which Congress is mandated to establish:
(a) It is independent;
(b) It is a central body for economic planning and policy;
(c) It is headed by the President, making it the highest economic policy
planning organ.
(d) It shall prepare programs and policies for national development;
(e) It shall prepare such programs and policies for approval of Congress;
(f) It shall prepare, recommend, and implement “continuing, integrated,
and coordinated programs and policies”:
1) continuing because it is a continuous process of preparation,
review and implementation, evaluation and follow-up;
2) Integrated because it has to present a unified set of policies;
3) coordinated because cooperation and interaction among all is
essential to success any development plan.
(3)National Economic and Development Authority (NEDA). This body shall function
as the independent planning agency of the government.

29. SECTION 10:
The Congress shall, upon recommendation of the
economic and planning agency, when the national interest
dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of
whose capital is owned by such citizens , or such higher
percentage as Congress may prescribe, certain areas of
investments. The congress shall enact measures hat will
encourage the formation and operation of enterprise whose
capital is wholly-owned by Filipino.

30. Filipinization of certain areas of investments.
Congress shall reserve citizens of the Philippines or to
corporations or associations at least 60% of whose capital is owned by
such citizens or such higher percentage as Congress may prescribe
(up to 100%), certain traditional areas of investments, upon certain
conditions:
(1) There is a recommendation by the economic and planning agency ;
and
(2) The national interest so dictates.
In the grant of rights, privileges, and concessions covering
the national economy and patrimony, the State shall give
preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in accordance with
its national goals and priorities.

31. Existing laws limiting certain activities to Filipino citizens or
corporations.
Under the present laws, activities in the following, among others,
are limited to Filipino citizens or corporations wholly- owned by Filipino
citizens:
(1) Operation of rural banks:
(2) Engaging in the retail of trade business;
(3) Operations of registered overseas shipping;
(4) Engaging in the rice and corn industry;
(5) Engaging in tax-free cottage industries;
(6) Contracts for the supply of materials, equipment, goods and
commodities for the government; and
(7) Operations of atomics energy facilities.
Regulation of foreign investments
(1) Sources of investment.
(2) Kinds of investment.
(3) Benefits and negative aspects of foreign direct investments.
(4) Need for foreign investment in the Philippines.
(5) Foreign investment policy.
(6) Objective of regulation.

32. SECTION 11:
No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the laws of
the Philippines at least sixty per centum of whose capital is owned by such
citizens, nor shall such franchise, certificate, or authorization be exclusive
in character for a longer period than fifty years. Neither shall any such
franchise or right to be granted except under the condition that it shall be
subject to amendment, alteration, or repeal by the Congress when the
common good so requires. The State shall encourage equity participation
in public utilities, by the general public. The participation of foreign
investors in the governing body of any public utility enterprise shall be
limited to their proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be citizens of
the Philippines.

33. Meaning of franchise.
FRANCHISE- includes any special privilege or right conferred by the
State on persons or corporations. It may mean either the:
(1) Corporate or primary franchise, which is the right granted to a
group of individuals to exist and act as a corporation;
(2) Secondary or special franchise, which is the right granted to an
individual, or to a corporation after its incorporation, to
exercise certain power and privileges.
Meaning of public Utility.
A public utility has been described as a business organization
which regularly supplies the public with some service, as electricity,
gas, water, transportation, or telephone or telegraph service.
Public utilities are also known as public service companies. Public
market are public services or utilities under the constitutional
provision.

34. Limitations upon grant of franchise, etc.
The limitations upon the grant of any franchise, certificate or any
other form of authorization for the operation of a public utility are:
(1) The guarantee must be a citizen of the Philippines or a
corporation or association (a) organized under the laws of the Philippines
(b) at least 60% of the capital of which is owned by citizens of the
Philippines. This means that 40% of said capital may be owned by aliens:
(2) Such franchise, certificate, or authorization shall not be exclusive
in character;
(3) Such franchise, etc. shall not be for a longer period of fifty (50)
years;
(4) Such franchise (although it is in the nature of a contract between
the government and the grantee) or right shall be subject to amendment,
alteration, or repeal by Congress when the common good so requires.
The provision is a recognition of the very strategic position of public
utilities both in our country’s economy and security.

35. Foreign participation in any public utility.
(1) Investment. Foreigners may invest in public utility
enterprises but to the extent of not more than 40% of the
capital of the same. The entry of foreign capital is allowed
because the establishment and operation of public utilities
may require the investment of a big amount of capital which
Filipino citizens may not afford.
(2)Governing body and management. Foreigners can even be
elected to the governing body of any public utility
enterprises but their number shall be limited to their
proportionate share in the capital thereof.

36. SECTION 12:
The State shall promote the preferential use of Filipino labor,
domestic materials and locally produced goods, and adopt
measures that help make them competitive.
Adoption of “Filipino First” policy.
This is also provided in the above section:
(1) Duty of the State. The State shall:
(a) promote the preferential use of Filipino labor, domestic materials
and locally produced goods; and
(b) adopt measures that help make them competitive.
(2) Aim of Policy. The constitutional policy is to give preference or dominance
to Filipinos in their own country especially in the grant of rights, privileges and
concessions involving our national economy and patrimony, and make them
competitive as against foreigners in both domestic and foreign competition.
(3) Duty of buying public. Many Philippine-made products are at part with the
world’s best. It is the duty of every self-respecting Filipino citizen to buy the
products of his own countrymen.

37. SECTION 13:
The State shall pursue a trade policy that serves the general
welfare and utilizes all forms and arrangement of exchange
on the basis of equality and reciprocity.
Promotion of trade policy that serves the general welfare.
(1) Trade policy as an implement to achieve specific goals. A trade policy is a policy
affecting exports and imports and domestic commerce formulated to achieve
specific goals. Thus:
(a) High tariffs or duties, import quotas or even total import ban of certain
commodities may be imposed to protect local industries producing similar articles;
(b) Tariffs are made relatively low so as not to discourage imports and thus
raise more revenues;
(c) Import controls are relaxed when they tend to encourage production of
goods that are high-priced and low quality;
(d) A trade policy may be designed to promote export industries to earn
more foreign exchange or the domestic-oriented industries to replace imports:
and
(e) The government may impose dumping duty on imported articles sold in
the Philippines at less than their fair market value or countervailing duty on such
articles.

38. SECTION 14:
The sustained development of a reservoir of national talents
consisting of Filipino scientists, entrepreneurs, professionals,
managers, high-level technical manpower and skilled workers
and craftsmen in all fields shall be promoted by the State. The
State shall encourage appropriate technology and regulate its
transfer for the national benefit.
The practice of all professions in the Philippines shall
be limited to Filipino citizens, save in cases prescribed by law.
Promotion of national talent pool of Filipinos.
Human resources- people- are the most critical sources of economic growth. They
are the active factors of development that utilize through their labor the passive
factors (land and capital) to produce goods and services needed by a growing
economy. They determine the pace and quality of economic, social and political
development. A country is only as good as its human resources.

39. (2) Paramount objective of trade policy. The Constitution makes it
clear that the trade policy which it requires the State to promote
must be one that serves the general welfare.
(3) Benefits from international trade. International trade benefits a
country by allowing it to buy from other countries, goods it lacks, or
cannot produce better, or can produce only at higher cost, and sell
surplus goods, or those it can produce better and cheaper.
(4) Exchange rates of different currencies. However, since countries
used different currencies, international trade necessarily involves
exchanging one into the other at the prevailing rate of exchange.
(5) Special problems arsing from international trade. Special
problems usually arise from international economic relations.

40. Regulation of Technology transfer.
1). Benefits from technology transfer. – It is safe to say that underdeveloped
economies are so because they continue to depend on traditional technology
particularly in agriculture. The growth gap between developed and
underdeveloped countries is generally wide as the technological gap.
2). Safeguard against import of inappropriate foreign technology. – The transfer or
appropriation of technology, however, is not necessarily the solution. There must
be safeguards against import of obsolete foreign technologies particularly where
they involve the payment of high charges such as royalties and license fees.
Practice of all professions limited to Filipinos
Profession - has been defined as a calling which requires the passing of an
appropriate government or bar examination, such as the practice law, medicine,
public accountancy, engineering, etc.
• Nature of right to practice – The practice of profession involves public interest
and is open only to persons who have undergone the necessary academic
preparation and passed the appropriate government examination and who
possesses such other special qualification prescribed by law.
• Exercise of privilege by aliens. – The Constitution limits the practice of all
professions in the Philippines to Filipino citizens. However, Congress may
provide otherwise in certain cases, pursuant to the treaty, or on grounds of
reciprocity.

41. Agency to promote viability and growth of cooperatives to be created.
Cooperative is a type of business unit through which individual members cooperate
in providing specific types of services of mutual benefit to the membership.
Cooperatives operate under certain basic principles. They may be classified as
consumers, producers, marketing, credit, or service cooperatives.
With the mandate to create an agency to promote their viability and growth, the
new Constitution now gives proper recognition to the important role cooperatives
can play, “instrument for social justice and economic development”.
Cooperative can serve as a vehicle for attaining a more equitable distribution of
wealth by increasing the income and purchasing power of the low- income sector
of the population and providing needed services not only for their members, but
also for the community in general.
SECTION 15:
The Congress shall create an energy to promote the viability
and growth of cooperatives as instrument for social justice
and economic development.

42. SECTION 16:
The Congress shall not, except by general law, provide for the
formation, organization, or regulation of private
corporations. Government-owned or controlled corporations
may be created or established by special charters in the
interest of the common and subject to the test of economic
viability.
Formation, organization, and regulation of corporations.
Under this provision, Congress is prohibited from passing a special law or
charter for the formation, organization, or regulation of specific private
corporations. These matters are to be provided for by general law that is a
law equally applicable to all private corporations. The purpose then is to
prevent discriminatory practices wherein special privileges are granted to
a few without giving others the right to obtain those privileges or the
same conditions. The exception relates to private corporations that are
owned or controlled by the government.

43. Creation of government-owned or controlled
corporations. These corporations may be created or
established by a special charter or law but only “in the
interests of the common good and subject to the test of
economic viability”.
“Economic viability” means that the government
corporation will have the capability to make profits and
will not have to depend on budgetary appropriations or
special assistance from the government.
The limitation that the creation must be in the interest of
the common good is recognition that the private sector
should be the ”engine” of national economic progress
while the government should engage in business only
when it is absolutely necessary.

44. SECTION 17:
In times of national emergency, when the public interest so
requires, the State may, during the emergency and under
reasonable terms prescribed by it, the temporarily take over
or direct the operation of any privately utility or business
affected with public interest.
Temporary take-over or direction of private business by the
government.
Under this provision, the State( Government) in times of national emergency
when the public interest so requires, may either temporarily take over the
operation of any privately-owned public utility or business affected with public
interest, or merely direct the operation of said public utility or business. In the
first case, the government virtually becomes owner of the utility or business.
In either case, the temporary take over or direction by the government must
not last beyond the period of the public emergency and it must be under
reasonable terms prescribed by it. The President may declare a state of
national emergency and exercise the powers granted by Section 17 without
need of an emergency powers law enacted by Congress as provided under
Section 23(2) of Article VI.

45. SECTION 18:
The State may, in the interest of national welfare or defence,
establish and operate vitas industries and, upon payment of
just compensation, transfer to public ownership utilities and
other private enterprises to be operated by the Government.
Government ownership of business.
1) Under this provisions the state may do two(2) things.
2) Establish and operate vital industries(means of transportation and
communication); and
3) Transfer to public ownership, utilities and other private enterprises,
upon payment of just compensation, to be operated by the
government.
4) The government is allowed to take action in this respect not only
when national defence requires it but in all cases where the national
welfare makes it imperative as when there is economic monopoly or
subjugation by aliens prejudicial to public interest in the ownership
and operation of certain vital industries.

46. SECTION 19:
The State shall regulate or prohibit monopolies when the
public interest so requires. No combinations in restraint of
trade or unfair competition shall be allowed.
Meaning of monopoly
There is monopoly where a single seller or group of sellers acting in concert
actually controls or posses the power to control market prices. The bigness of a
company is not by itself indicative of a monopoly.
Regulation or prohibition of private monopolies
Even without the above prohibitions, the State may still regulate or
prohibit private monopolies when the public interest do requires in the exercise of
its police power. With these provisions, however, a law prohibiting private
monopolies cannot be attacked as unconstitutional for being an unreasonable
interference with the right to liberty or property that operate in restraint of trade
(infra.) do away with free and open competition and, therefore, are inimical to the
interest of consuming public.
The use of the word “regulate” in the Constitution indicates that some
monopolies, properly regulated, are in public interest.

47. Meaning of restraint of trade
The phrase restraint of trade is used (1) in reference to combinations
acts, or practices which interfere with the normal production and supply of
commodities by the suppression of competition there in or by other means
and (2) also with reference to contractual restriction upon the right of a
person to engage in trade, business or profession.
Meaning of competition
Competition implies a struggle for advantage between two or more
forces each possessing, in substantially similar, if not identical, degree,
certain characteristics essential to the business sought. It means an
independent endeavour of two or more persons to obtain the business
patronage.
Meaning of unfair competition
The simulation by one person of the name, symbols, or devices
employed by a business rival so as to induce the purchase of his goods
under a false impression as to their origin, or ownership.
Our Civil Code provides that “unfair competition in agricultural, commercial
or industrial enterprises or in labor, through the use of force, intimidation,
deceit, machination or any other unjust, oppressive or high handed method
shall give rise to the right of action by the person who thereby suffers the
damage”.

48. Combinations in restraint of trade and unfair competition
prohibited.
• The Constitution altogether prohibits combinations in
restraint of trade and unfair competition. (Sec.19).
Democracy becomes a veritable mockery if any person or
group of persons by any unjust or high-handed method
may deprive others of a fair chance to engage in business
or earn a living. The provision seeks to preserve
competition in a wholesome and free atmosphere.
• Note that what the Constitution prohibits is unfair
competition. So long as fair or legitimate means are used,
competition is proper.

49. SECTION 20:
The Congress Shall establish an independent central
monetary authority, the members of whose governing board
must be natural born Filipino citizens, of known probity,
integrity, and patriotism, the majority of whom shall come
from the private sector. They shall also be subject to such
other qualifications and disabilities as may be prescribed by
law. The authority shall provide policy direction in the areas of
money, banking, and credit. It shall have supervision over the
operations of banks and exercise such regulatory powers as
may be provided by law over the operations of finance
companies and other institution performing similar functions.
Until the Congress otherwise provides, the Central
Bank of the Philippines, operating under existing laws, shall
function as the central monetary authority.

50. Central monetary authority established.
This Provisions direct Congress to establish an independent central
monetary authority with the powers and functions mentioned therein. The
Central bank of the Philippines created by R.A No. 265 ha been constituted as the
central monetary authority pursuant to the 1973 Constitution.
1).Responsibilities and objectives – The importance of a central monetary authority
may be seen by looking at the responsibilities and objectives of Bangko Sentral ng
Pilipinas (Central bank of the Philippines) as provided by the new Central Bank
Act:
• To provide policy directions in the areas of money, banking, and credit;
• To supervise ad regulate the operation of banks, finance companies, and
non- bank financial institutions;
• To maintain price conducive to a balanced and sustainable growth of the
economy; and
• To promote and maintain stability and convertibility of peso in other
currencies.
2). Qualification of members of governing board. – The members of the governing
board of the central monetary authority must be natural born Filipinos because of
the nature of their functions. The requirement that the members must be a
persons of known probity, integrity and patriotism and that the majority of the
members shall come from the private sector is designed to promote the
independence of the central monetary authority.

51. SECTION 21:
Foreign loans may only be incurred in accordance with law
and regulation of the monetary authority. Information foreign
loans obtained or guaranteed by the Government shall be
made available to the public.
Section 21 seeks to prevent, once and for all, the injudicious
contracting of foreign loans in the past on the sole initiative of the
President even against the advice of the Monetary Board of the
Central Bank. Furthermore, more, the contract or guarantee must
be with the prior concurrence of the Monetary Board. Bu the
congressional approval is not required.
As it is the people who will ultimately shoulder the payment of the
country’s indebtedness, the Constitution also requires that the
information on foreign loans obtained or guaranteed by the
government shall be available to the public.

52. SECTION 22:
Acts which circumvent or negate any of the
Provisions of this article shall be considered inimical
to the national interest and subject to criminal and
civil sanctions, as may be provided by law.
 Acts which circumvent or negate Article XII.
Section 22 declares that:
1) Acts which circumvent or negate any of the provisions of article XII are inimical
to the national interest: and
2) They shall be subject to civil and criminal sanctions as may be provided by law.
• This provisions basically prohibits foreign use of Filipino dummies and seeks to
prevent the enjoyment of a right, franchise, privilege, or property reserved for
Filipinos by those who are not qualified. It is in response to the revelations of
abundant violations of constitutional provisions reserving to Filipinos and
Filipino Controlled corporations certain areas of investment should be severe
enough as to discourage employment of dummies by aliens
• The criminal penalties should be severe as to discourage employment of
dummies by aliens.