For POLSCI subject in College

1. ARTICLE XII:
NATIONAL ECONOMY AND PATRIMONY
Reporter: Aljoven Sinapal
Dyenicel S. Abagon
Rex Jemferl Fusingan

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.”

3. 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”. Using Awesome
Backgrounds

4. Concept of national economy and
patrimony.
• 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”.

5. 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

6. 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.

7. Strategies to accomplish goals
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.

8. 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”

9. 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.

10. Promotion of Industrialization
and Full Employment
(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.

11. Promotion of Industrialization
and Full Employment
 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.

12. Promotion of Industrialization
and Full Employment
(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.

13. 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. 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.

14. Protection of Filipino enterprises against unfair
foreign competition and trade practices
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.

15. SECTION 2:

16. 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 coproduction, 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.

17. 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.

18. 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.

19. 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.

20. 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.

21. 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.

22. Protection of the marine wealth
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.

23. 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.

24. • 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.

25. Classifications of lands of the public domain
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.

26. 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.

27. 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.

28. SECTION 4:

29. 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.

30. 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.

31. 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.

32. 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 portionsof the ancestral
domain.

33. 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.

34. 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

35. 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.

36. 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.

37. 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

38. 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).

39. 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.

40. 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.

41. 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”:

42. 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.

43. 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.

44. 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.
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.

45. 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.

46. 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.

47. 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.

48. 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.

49. 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.

50. 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.

51. 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 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.

52. 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.

53. (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 arising from international trade. Special
problems usually arise from international economic relations.

54. 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.

55. SECTION 15:
The Congress shall create an energy to promote the viability and growth of
cooperatives as instrument for social justice and economic development.
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.

56. 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.

57. 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.

58. 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.

59. SECTION 18:
The State may, in the interest of national welfare or defense, 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.

60. 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.

61. 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 endeavor 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”.

62. 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.

63. 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.

64. 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.

65. 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.

66. 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.