3S.

epublic of tbe ~bilippines

~upreme ~ourt
;Jflllanila

SECOND DIVISION

REPUBLIC OF THE G.R. No. 220828

PHILIPPINES, represented by the
PHILIPPINE MINING Present:
DEVELOPMENT
CORPORATION, PERLAS-BERNABE, S.A.J,
Petitioner, Chairperson,
HERNANDO,
INTING,
- versus - DELOS SANTOS, and
BALTAZAR-PADILLA,* JJ

APEX MINING COMPANY Promulgated:

INC.,
Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - -- - ---x

DECISION

INTING, J. :

Before the Court is a Petition for Review' under Rule 45 of the

Rules of Court assailing the Decision2 dated December 22, 2014 and the
Resolution3 dated September 23, 2015 of the Court of Appeals (CA) in
CA-G.R. SP No. 133927. The assailed CA Decision reversed and set
aside the Decision4 dated October 28, 2009 of the Mines Adjudication
Board (MAB), Department of Environment and Natural Resources
(DENR) in MAB Case Nos. 0156-07 and 0157-07; and declared Apex
Mining Company, Inc. (Apex) to have prior and preferential rights in its

On leave.
1
Rollo. pp. 16-55. ·
Id. at 59-93; penned by Associate Justice Myra V. Garcia-Fernandez with Associate Justices
l\lariflor P. Punzalan Castillo and Francisco P. Acosta, concurring.
3
Id. at 94-98.
• Id. at 810-817; signed b~ Chairman Jose L. Atienza, Jr., and Members Eleazar P. Quinto and
1

Horacio C. Ramos.
Decision 2 G.R. No. 220828

applications for mineral production sharing agreement with the DENR.

The assailed CA Resolution, on the other hand, denied the Motion for
Reconsideration (of the Decision dated December 22, 2014 )5 filed by the
Philippine Mining Development Corporation (PMDC).

The Facts

Republic of the Philippines is represented in this case by the

PMDC, a government corporation attached to the DENR. The PMDC
became the successor-in-interest of the mining rights of North Davao
Mining Corporation (NDMC).

NDMC held mining claims over areas located in the Province of

Compostela Valley which were covered by mining lease contracts and
published lode lease '.ipplications, as follows :

I. By .Mining Lease Contracts -

A. Owned. by NDMC:
LLC N o. V - 523 granted on January 22, 1965
MLC N o. MRD-1 55 granted on December 13, 1978
MLC N o. MRD- 156 granted on December 13, 1978
MLC No. MRD-157 granted on December 13; 1978
MLC No. MRD-158 granted on December 13, 1978

B. Under Operating Agreement with NDMC:

MLC 1\fq. MRD-290 granted on March2::, 1982

II. By Published Lode Lease Aprlications -

A. LLA 1,io. V-14203 Amd published in the newspaper on

November 18, 1982 and posted on the same date

B. LLA No. 14204 [sic] 6 published in the 11ewspaper·on March ·

31, 1988 and posted on the same date.

C. LLA No. V-14205 published in the newpaper of general

circulation [on] March 31 , 1988 and posted on the same
date.7

Id. at 99- I I 7.
6
Should be "LLA No. V-J,1204."
7
See Mines Adjudication noard (MAB) Dec.is ion dated October 28, ,:()09, rol/o, p. 8 11 .
Decision 3 G.R. No. 220828

NDMC had two mining projects in the Province of Compostela

Valley, namely: (1) the Amacan Copper Project, which commenced
commercial operatio,1 in August 1982 and ceased in May 1992; and (2)
the Hijo Gold Project, which commenced in M ay 1980 and ceased in
1985.8 .

During its commercial operations, NDMC secured a loan from the

Philippine National Bank (PNB) using its properties, including its
mining claims and rights, as collateral for the loan. As of June 30, 1986,
NDMC' s outstanding loan balance with the PNB amounted to
P4,708,135,920.00. Due to NDMC's inability to pay the loan and its
interest, the PNB foreclosed its properties, including the subject mining
claims. 9

On February · 27, 1987, the National Government of the

Philippines (Government) and the PNB executed a Deed of Transfer, 10
whereby the PNB turned over several of its assets to the Government,
including NDMC's mining claims and rights.

Meanwhile, P1·oclamation No. 50 11 was issued by then President

Corazon C . Aquino on December 8, 1986, creating the Committee on
Privatization (COP) and the Asset Privatization Trust (APT). The COP
and the APT were primarily tasked to take title to and possession of,
conserve, provisionally manage and dispose -of, assets identified for
privatization or disposition and transferred to APT for the benefit of the
Government.

On April 21, 1995, Apex filed with the Mines and Geo-Sciences
Bureau (MGB), Regional Office No. XI, Davao City applications for
Mir1eral Production ~haring Agreement (MPSA). The applications were
denominated as APSA (XI) 99 and APSA (XI) 100. On July 26, 1995,

B Id.
9 Id.
10
Id. at 154-163.
11
Entitled " Proclaim ing and Launchin g a Program fo r the Expeditious Disposition and Privatization
of Certain Government Corporations and/or the Assets T hereof, and Creating the Committee on
Privatization and Asset Privatization Trust."
Decision 4 G.R. No. 220828

Apex fi led another MPSA application denominated as APSA (XI) 112. 12

Apex and other claimants averred that their applications cover mining
claims situated in the Municipalities of Maco, Nabunturan and
Maragusan in Compostela Valley, held by them either as registered
claim owners, assignees or operators. 13

On January 8, 1996, the NDMC filed an application for Financial

and Technical Assistance Agreement (FTAA) with the MGB Regional
Office No. XI, Davao City. 14 The FTAA application was registered as
FTAA No. (XI) 014. 15 It covered, among others, the mining areas subject
of Lode Lease Contract No. V-523, Mining Lease Contract Nos. MRD-
155, MRD-156, MRD-157, MRD-158 and .tviRD-290, as well as
published Lease Application Nos. V-14203 Amd, V-14204 and V-
14205, covering a total area of 27,058 hectares. However, after the
plotting was conducted, the MGB found that the FTAA application
overlapped the valid mining rights belonging to other persons within the
area in question. Thus, the MGB excluded the areas covered by these
mining rights, thereby reducing the FTAA application to 20,237
hectares. 16

On September 17, 1997, then Acting DENR Secretary Antonio G.

M. La Vina issue;d a Memorandum 17 enjoining all MGB Regional
Directors to close areas to new mining locations or applications if these
areas are covered by valid and existing mining claims held in trust by
APT or other similar entities.

One year later, or on September 17, 1998, Apex filed an Adverse

Claim/Protest 18 against the FTAA application ofNDMC before the Panel
of Arbitrators (POA) for MGB Regional Office No. XI, Davao City. In
the main, Apex argued that NDMC's mining claims were null and void
for failure to comply with the mining laws.

12 See Regional Panel of Arbitrators (POA), Mines and Geosciences Bureau De.:ision dated July 4.
2006 in MAC No. POA 98-003 (X I), rollo, p. 604.
13 I d.
14 Id.
11
See Notice of Applicatio,; fo r Financial and Technical Assistance Agreement of North Davao
Mining Corporation, id. at 164.
1
" See POA Decision dated July 4, 2006. id. at 605.
17
Id. at 179.
is Id. at 563-593.
Decision 5 G.R. No. 220828

On December 29, 1998, NDMC filed its Answer contending that

the Adverse Claim/Protest filed by Apex should be dismissed on the
ground of prescription, laches, lack of cause of action, and lack of
merit. 19

Thereafter, NDMC's Notice of Application for FTAA was

published on March 16 and 18, 1999.20

On March 2:.. , 1999, Apex filed a manifestation and motion

praying that: 1) its Adverse Claim/Protest be treate_d as an adverse claim
against the published FTAA application of NDMC; 2) the areas free of
conflict be segregated; and 3) it be allowed to file amended MPSA
applications. 21

In its Order dated January 27, 2000, the POA granted Apex's
mO'i.ion and ordered the segregation of the "free areas. " 22 NDMC moved
to reconsider the Order, but the POA denied it in its Order dated March
28, 2000.23

Meanwhile, on December 6, 2000, Executive Order No. (EO)

24
323 was issued creating the Inter-Agency Privatizatioi1 Council (PC)
and the Privatizati-,)n and Management Office (PMO) under the
Department of Finance. EO 323 was aimed to continue the privatization
of government asset~, and corporations. The PC assumed all the powers,
functions, duties and _responsibilities, all properties, real or personal
assets, equipment and records, as well as all obligations and liabilities
previously held by the COP and APT under Proclamation No. 50.25
Pursuant to EO 323, NDMC's assets were turned over from COP and
APT to PMO.26

19
Id. at 81 2.
20 Id.
21 Id.
22
Id.
2J Id.
24
Entitled "Constituting an fnter-Agency Privatization Cou ncil (PC) and Creating a Privatizatio n ·and
Ma11agement Office (PM,)) under the Department of Finance for tl1e C.:mtinuing Privatization of
Government Assets and Corporations," signed on December 6, 2000.
2
~ See MAB Decision dated October 28, 2009, rollo, pp. 812-813.
26
Id. at 813.
Decision 6 G.R. No. 220828

On July 4, 2003, the Natural Resources Mining and Development

Corporation (NRMDC) was created under Securities and Exchange
Commission (SEC) Registration No. CS200314923. 27 As stated in the
Memorandum from the President28 dated April 9, 2003 , the NRMDC
shall be primarily tasked to "conduct and can-y on the business of
exploring, developing, exchanging, selling, disposing, imp01iing,
exporting, trading and promotion of gold, silver, copper, iron and all
kinds of mineral deposits and substances."

On June 6, 2(105, the PC designated the ·NRMDc as the trustee

and disposition entity for NDMC in lieu of the PMO.29

On April 7, 2(106, the NRMDC and the Government, through the

PC, executed a Trust Agreemen_t30 whereby the mining assets of NDMC
were transferred, conveyed, and assigned · to the · NRDMC for
development and/or disposition. As a result, NDMC' s subject mining
claims have been entrusted to the NRDMC.

Thereafter, pursuant to Board Resolution No. 97, Series of 2007,

the corporate name of NRMDC was changed to P1v1DC.31

The Ruling of the POA

For ease of reference, the POA grouped the disputed claims into
six (6) clusters, den,Jininated as Clusters 1, 2, 3, 4, 5, and 6. In its
Decision32 dated July 4, 2006, the POA dismissed the adverse claim of
Apex, holding NDMC to have preferential right over Clusters I, 2, 3, 5,
and 6 only.

~1 Id.
za RE: Incorporation of the Natural Resources Mining and Devele~ment Corporation under the
Department of Env ironment and Natural Resou rces, Memorandun, fro m the President, signed .by
then Preside:1t Gloria Ma-.:npagal-Arroyo on April 9, 2003.
29
Rollo, p. 8 13.
Jo Id. at 180- 185.
JI See Secretary's Certifi cak dated April 15, 2007, id. at 186.
n Id. at 594-6 I 6; signed by Chairperson Ma. Mercedes Villarosa-Dumagan, and Members Maximo
G. Lim and Roberto Luis (. de la Fuente
Decision 7 G.R. No. 220828

Apex filed a lVfotion for Reconsideration (of Decision dated 4 July

2006). 33 NDMC also filed a motion for partial reconsideration with
respect to the POA' s ruling that it does not have preferential rights over
Cluster 4. 34 ·

On June 14, 2007, the POA issued an Order35 denying both

motions. Thus, Apex and NDMC filed their respective appeals36 with the
MAB.

The Ruling of the MAB

On October 2~, 2009, the MAB rendered its Decision37 in favor of

NDMC, and dismissed Apex's _appeal for lack of merit. The MAB set
aside the POA Decision insofar as it declared that ne-ither party had
pre:i:-erential rights O\ er Cluster 4, and insofar as how Clusters l and 2
were plotted. Accor,1ingly, NDMC was declared to have preferential
rights over Cluster 4 in addition to Clusters 1, 2, 3, 5 and 6. The plotting
of Clusters 1 and 2 was likewise ordered amended to conform to the
plotting of LLA No. V-14203-Amd and LLA No. V-14205, as
published.

On December 23, 2009, Apex filed a Motion for Reconsideration

( of Decision dated 28 October 2009),38 which the MAB denied in its
Resolution39 dated Dt~cember 26, 2013 . Consequently, Apex elevated the
case to the CA via a ?etition for Review.40

The Ruling ofthe CA

In the assailed Decision41.dated December 22, 2014, the CA ruled

in favor of Apex and set aside the MAB Decision dated October 28,

33
Id. at 617-663.
34 See Court of Appeals Decision dated December 22, 2014, id. at 69.
31
Id. at 66S-672.
36
Id. at 673-795, 796-809.
37
Id. at81 0-81 7.
38
Id. at 81 8-860.
39
Id. at 864-872; signed by S hairman Ramon J.P. Paje, and Member:, Leo L. Jasareno and Demetri o
L. lg nac ic, Jr.
40
Id. at 41 1-556.
41
Id. at 59-93.
Decision 8 · G.R. No. 220828

2009 and Resolution dated December 26, 2013 . The dispositive portion
of the CA Decision reads:

WHEREFORE, the petition for review is GRANTED. The

decision of the Mines Adjudication Board (MAB) dated October 28,
2009 and resolution dated December 26, 2013 in MAB Case No.
0156-07 and MAB Case No. 0157-07, are REVERSED and SET
ASIDE. Petitioner Apex Mining Company, Inc. is declared to have
prior and preferential right in its applications for mineral production
sharing agreement w ith the Department of Environment and Natural
Resources pursuant to Section 29 of Rep. Act No. 7942, covering
areas subject of its applications, patiicularly, Clusters 1, 2, 3, 4, 5 and
6 as shown in Annex 7 of the Panel of Arbitrators' decision dated July
4, 2006~ with Clusters 1 and 2 to be amended to conform to the
plotting of LLA No. V-14203-Amd and LLA No. V-14205 as
mentioned in the Mines Adjudication Board's decision dated October.
28, 2009.

SO ORD:~RED. 42

The CA fou1d that under Republic Act No. (RA) 7942,43

otherwise known as the Philippine Mining Act of 1995, the requirements
for the filing and approval of mineral agreements are different from the
requirements for the filing and approval of FTAA applications. The CA
relied on the ruling in the case of Diamond Drilling Corp. of the Phils. v.
Newmont Phils., Inc. 44 (Diamond Drilling Corporation), which applied
Section 845 ofDENR Administrative Order No. 63 _Series of 1991 (DAO
42
Id. at 92-93.
43
Entitled "An Act lnstitu:ing a New System of Mineral Resources Exploration, Development,
Utilization, and Conservn'.·ion," approved on March 3, 1995.
44
664Phi l. 688(2011).
45
Section 8 of Department of Environment and Natural Resources (DENR) Administrative Order
No. G3, Series of 1991 (CAO 63) reads:
SEC. 8. Acceptance encl Eva/11ation of FTAA. - All FTAA proposals shall be fi led with and
accepted by the C~ntral Cffice Technical Secretariat (MG B) after payment of the requisite fees to
the Mines and Geoscier,r;es Bureau, copy furnished the Regional Office concerned within 72
hours. The Regional Office shall verify the area and declare the availability of the area for FTAA
and shall submit its recommendations within thirty (30) days from receipt. In the event that there
are two or more applicants over the same area, priority shall be given to the applicant who first
filed his application. In any case, the Undersecretaries for Planning, Policy and Natural Resources
Management; Legal Services, Legislative, Liaison and Management of FASPO; Field Operations
and Environment and Research, or its equ ivalent, shall be given ten (l 0) .days from receipt of
FTAA proposal within which to submit their comments/recor: ·11endations and the Regional
Office, in the preparatir.,1 of its recommendation shall consider the financial and technical
capabilities of the appli ;ant, in addition to the proposed Gove, :iment share. Within five (S)
working days from receipt of said recommendations, the Technical Secretariat shall consolidate all
comments cl!:d reco,r,mer. -Jations thus received and shall forward the same to the members of the
Decision 9 G.R. No. 220828

63),46 stating in part that priority shall be given to _the applicant that first
filed its application. over the same area. Thus, as between the MPSA
applications of Apex and the FT AA application of NDMC, the CA held
that Apex should be- given priority since it filed its MPSA applications
over the contested mining areas on April 21, 1995 and on July 26, 1996,
whik NDMC filed its FTAA application only on January 8, 1996.

Moreover, ,he CA held that DENR Memorandum dated

September 17, 199·,, ·which directed all MGB Regional Directors to
close to new mining applications areas already covered by valid and
existing mining claims, was not an impediment to the application of
Apex. The CA ratiocinated that at the time of the issuance of the
Memorandum, Apex had already filed its MPSA applications with the
. MGB, during which 'tiine the subject mining areas. were not yet closed to
miring applications.

Furthermore, :he CA held that the MAB committed reversible

en-or in upholding the mining lease contracts or published lode lease
applications of NDf,,1C in support of the latter's FTAA application
despite noncompliance with RA 7942 and its implementing rules and
regulations (IRR) f.:.r continued recognition of its mining claims. The
CA ruled that NDMC failed to submit or file any application for mineral
agreement on or before September 15, 1997, the mandatory deadline for
the filing of mineral agreement applications by holders of valid and
existing mining claims.and lease/quan-y applications, pursuant to Section
11347 of RA 7942, Section 273 48 of DAO 96-4049 (IRR of RA 7942), and

FTAA Negotiating Panel ;or evaluation at least within thi1ty (30) working days. (Italics supplied)
46
Guidelines for the Accepi,mce, Consideration and Evaluation of Financial or Technical Assistance
Agreement Proposals; sig,_1ed on December 12, 1991.
47
Section 113 of Republic .'\ ct No. (RA) 7942 reads:
Section 113. Rec,,gnition of Valid and Existing Mining Claims and Lease/Quarry
App!:cations. - Holder, of valid and existing mining claims, lea$e/quarry applications shall be
given preferential rights l .1 enter into any mode of mineral agreement with the government within
1

two (2) years from the promulgation of the rules and regulations implementing this Act.
48
Section 273 of DAO 96-40 reads:
Section 273. Recognition ,,f Valid and Existing Mining Claims and !.,ease/Quarry Applications.
Holders of valid and existing mining claims, lease/quarry appJications shi'!ll be given
preferential rights to enter into any mode of Mineral Agreement with the Government until
September 14, 1997: Provided, That failure on the part of the holders of valid and subsisting
mining claims, lease/quarry applications to exercise their preferential rights within the said period
to enter into any mode of Mineral Agreements shall constitute automatic abandonment of the
mining claims, quarry/lease applications and the area thereupon sh?ll be declared open for mining
application by other interf'sted parties.
Decision 10 G.R. No. 220828

Section 850 of DEl--JR Memorandum Order· No. (DMO) 97-07.51

According to the CA, the FTAA application of NDMC does not partake
of the nature of a mineral agreement. It cited Section 3(ab) of RA 7942
which defines a mineral agreement as "a cpntract between the
government and a contractor, involving mineral production-sharing
agreement, co-production agreement, or joint-venture agreement;" and
declared that FTAA, on the other hand, is a service contract for financial
and technical assistance.

The CA concluded that NDMC in effect abandoned its mmmg

claims when it failed to file an application for mineral agreement on ·or
before September 15, 1997. Additionally, it held that NDMC's
abandonment of its mining claims is coupled by the fact of the
bankruptcy and revocation of its certificate of registration by the SEC
and the suspension of its mining operations.

Fu11hermore, the CA ruled that the MAB ened in declaring

NDMC to have preferential rights in its FTAA application despite the
absence of certain requirements provided under RA 7942, including the
following: 1) prior evaluation of the application by the MGB ; 2) findings
by the MGB of the sufficiency .and merit of the proposal of the FTAA;
and 3) the eligibility and qualification of NDMC or its successor
•• "Revised Implementing Ru les and Regulations of Republic Act No. 7942, Otherwise Known as
the 'Phil ippine Mining Act of 1995,"' dated December 19, 1996.
;o Section .8 of DENR Memorandum Order No. 97-07 (OMO 97-07) reads:
Section 8. Claimants/Applicants Required to File Mineral Agreement
Only holders of mining claims and lease/quarry application:; fi led prior to the effectivity, of
the Act which are valid a·nd existing as defined in Section 5 hereof who have not filed any Mineral
Agreement applications over areas covered by such mining claims and .lease/quatTy ·applications
are required to file Mineral Agreement applications pursuant to Section 273 of the !RR on or
before September 15, I997; Provided, that the holder of such a mining claim or lease/quan-y
application involved in a mining dispute/case shall instead fi le on or before said deadline a Letter
of lntent to file the necessary Mineral Agreement application; Provided, further , That if the
mining claim or lease/quarry app lication is not determined to be invalid in the dispute/case, the
claimant or applicant shall have thirty (3) days from the final resolution of the dispute/case to filed
the necessary Mineral Agre!;!ment application; Provided, .finally, that failure by the claimant or
applicant to file the necessary Mineral Agreement application within said thirty (30)-day period
shall result in the abandonment of such claim or application, after which, any area covered by the
same shall be opened for Mining Applications.
Holders of such valid and existing mining claims and lease/quarry applications who had fil ed
or been granted applications other than those for Mineral Agreements prior to September 15, 1997
shall have until such date to file/convert to Mineral Agreement applications, otherwise, such
previously fi led or granted applications shall be cancelled.
1
~ "Guidelines ln The Impkmentation Of The Mandatory September 15, 1997 Deadline For The
F:iing Of Mineral Agreelllent Applications By Holders Of Valid And Existing Mining claims And
Lease/Quarry Applications And For Other Purposes," dated Augu~t 27, 1997.
Dec:sion 11 G.R. No. 220828

corporation to enter into an FTAA. The CA stressed that NDMC is

presently a non-operating mining corporation whose mining exploration
activities have been suspended during its insolvency aqd conservation by
APT/PMDC.

Finally, the CJ\ held that when APT filed the FTAA proposal on
January 8, 1996 in t!ie name of NDMC, it should not be understood: to
mean that the State bad undertaken by itself and on its own its mandate
under Section 2, 52 Article XII of the 1987 Philippine Constitution
(Constitution). The 1.=:A declared that the fact that NDMC was placed
under APT does not mean that the State will undertake on its own the
exploration and dev1:-1opment of natural resources.

The PMDC filed a Motion for Reconsideration (of the Decision

dated December 22, 2014)5 3 and a Supplemental Motion for
Reconsideration (of the Decision dated December_22, 2014). 54 However,
these were denied in the CA Resolutions5 dated September 23, 2015.

Hence, the instant petition with the following · assignment of

errors:

THE COURT OF APPEALS GRAVELY ' ERRED WHEN IT

RULED THAT '\PEX HAS PRIOR AND PREFERENTIAL RIGHT
OVER APT/Nf.1MC BY VIRTUE OF ITS EARLIER MPSA
APPLICATION.

52
Sectio n 2, Article X II of the Constituti on reads:
Section 2. All lands of the public domain, waters, minera is, coai, petroleum, and other
mineral oils, all fo rces of potential energy, fisheries, fo rests or timber, wild life, flora and fauna,
and other natural resources are owned by the State. With the exct-ption of agricultural lands, all
other natural resources s11all not be a lienated. The exploration, oevelopment, and utilization of
natural resources shall b ~ under the fu ll contro l and supervis ion of the State. The State 1;nay
directly undertake such a•.:tivities, or it may enter into co-production, joint venture, or production-
sharing agreements with F ilipino citizens, or corporations or associations at least sixty per centum
of whose capital is ownt'l by such citizens. Such agreements may be for a period not exceeding
twenty-five years, rene"' '!ble fo r not more than twenty-five yea,.~, and Linder such terms and
conditions as may be p ·nvided by law. In cases of water rights for irrigation, water supply
foheries, o r industrial us~s other than the develop ment of water power, beneficial use may be the
measure and limit of the be ant.
sJ Rollo, pp. 99-117.
4
~ Id. at 121-132.
11
Id. at 94-98.
Decision 12 G.R. No. 220828

II

THE COURT OF APPEALS GRAVELY ERRED WHEN IT

FOUND THAT AT THE TIME OF APEX' MPS ..\ APPLICATION,
THE SUBJECT MINING AREAS ARE NOT YET CLOSED TO
MINING APPLICATIONS.

III

THE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD

THAT THE MINES AND ADJUDICATION BOARD
COMMITTED REVERSIBLE ERROR IN UPHOLDING
NDMC/APT'S MINING LEASE CONTRACTS OR PUBLISHED·
LODE LEASE /' PPLICATIONS.

IV

THE COURT OF APPEALS GRAVELY ERRED WHEN IT

RULED THAT THE - MAB COMMITTED AN ERROR IN
DECLARING NDMC/PMDC TO HAVE PREFERENTIAL RIGi-IT
IN ITS FTAA APPLICATION DESPITE THE ABSENCE OF THE
REQUIREMENTS UNDER REPUBLIC ACT NO. 7942.

THE COURT OF APPEALS GRAVELY ERRED WHEN IT

CONCLUDED [HAT APT'S FILING OF FTAA IN THE NAME
OF NDMC IS NOT TO BE UNDERSTOOD AS THE STATE' S
INTENTION Tt) EXPLORE, DEVELOP, AND UTILIZE THE
COUNTRY'S N\TURAL RESOURCES. 56

Essentially, the main issue to be resolved in this case is: Who

between the P MDC, as the successor-in-interest of NDMC, and Apex
has preferential rights over the contested mining areas?

The Court 's Ruling

The petition i~ impressed with merit.

i r, Id. at26-27.
Decision 13 G.R. No. 220828

I. The factual findings of the MAB are treated with

deference in recognition of its expertise and .
technical knowledge over disputes relative to mining
rights; they are deemed conclusive and binding on
the parties.

Factual considerations relating to mining apµlications properly fall

within the administrative competence of the DENR. 57 The factual
findings of the DENR are binding upon this Court in the absence of any
showing of grave ab-use of discretion, or that the factual findings were
anived at arbitrarily or in disregard of the evidence on record. 58 Since
the DBNR possesses the specialized knowledge and expe1iise in its field,
its factual findings (I.re accorded great respect and even finality by the
appellate courts. 59

The POA and the MAB are quasi-judicial bodies within the
DENR which have been created pursuant to the enactment of RA 7942.60
These bodies are charged to resolve mining disputes. A mining dispute is
a dispute involving (a) rights to mining areas, (b) mineral agreements,
FTAAs, or permits, and (c) surface owt ers, occupants and
claimholders/concessionaires. 61

Under RA 7942, the POA is vested with exclusive and original

jurisdiction to hear and decide mining disputes.62 A pa1iy not satisfied
with the decision or order of the POA may file an appeal with the
MAB,63 whose powers and functions are listed in Section 79 of the same
Act. As explicitly stated in Section 79, "[t]he findings of fact of the
[MAB] shall be conclusive and binding on the parties and its decisions
or urder shall befinc.7 and executory."

Appeals from decisions of the MAB may be taken to the CA

through petitions fo/ review in accordance with the provisions of Rule

7
l Alecha, et al. v. Atienza, ct al. , 795 Phil. 126, 143 (2016).
ls Id. , citingJapson v. Civil 'Service Commission, 663 Phil. 665,675 ~..'.011).
l9 Id.
0
~ See Sections 77 to 79 of I ·A 7942.
61
Heirs cf Eliza Q. Zolet.-1 v. Land Bank of the Phils. , el al., 816 Phil. 389,410 (2017), citing
Gon:::cdes v. Climax Min ,11g Ltd. , 492 Phil. 682, 692 (2005).
62
See Section 77 of RA 79.:.?.. ·
63
See Section 78 of RA 794 ~.
Decision ]4 G.R. No. 220828

43 of the Rules of Court.64 It is worthy to stress Section 1065 of Rule

43 \Vhich acknowledJ.es the primacy and deference accorded to decisions
of quasi-judicial agencies, specifically stating that their factual findings,
when supported by substantial evidence, shall be binding on the CA. In
this regard, the fin&ngs of the MAB, as the administrative body with
jurisdiction over disputes relative to mining rights, should be treated
with deference in recognition of its expe11ise and technical knowledge
over such matters.66

As·found by the MAB, affirming the POA, NDMC had valid and
existing mining claims over the _contested areas denominated as Clusters
1, 2, 3, 5, and 6. Further, after evaluating the parties' respective appeals
from the Decision c-f the POA, the MAB also found that NDMC had
preferential rights over the mining areas under Cluster 4.

Cluster 1 covers NDMC's LLA No. V-14203-Amd, while Cluster

2 covers its LLA No. V-14205. As found by the POA, the notic~ ofLLA
No. V-14203-Amd 'rvas published on November 18; 1982, while the
notice ofLLA No. V-14205 was published on March 31, 1988 and April
7, 1988.67 Pursuant to Section 48 68 of Presidential Decree No. (PD) 463,69
6-1 Carpio v. Sulu Resources Devt. Corp., 435 Phil. 836, 849 (2002).
6
i Section 10, Rule 43 of the Rules of Court reads:
Section 10. Due coi.;rse. - If upon the fi li ng of the comment or such other pleadings or
documents as may be required or allowed by the Court of Appea;5 or upon the expiration of the
period for the fi ling thereof, and on the records the Court of Apneals finds prima facie that tl~e
court or agency concerned has committed errors of fact or law that would warrant reversal or
modification of the awat J , judgment, final order or resolution sought to be reviewed, it may give
due co11rse to the petitior; otherwise, it shall dismiss the same. The find ings of fact of the court or
agency concerned, whr,: 1 supported by .substantial evidence, shall be binding on the Court of
Appeals.
66
Naredico, Inc. v. Krominc,J, Inc., G.R. No. I96892, December 5, 20 18, citing JMM Promotions &
Management, lnc.y. Cou,.., of Appeals, 439 Phil. I, 10-11 (2002); Sps. Calvo v. Sps. Vergara, 423
Phil. 939, 947 (2001); Hon. Alvarez v. PICO? Resources, Inc., 538 Phil. 348,397 (2006).
67
See POA Decision dated July 4, 2006, id. at 610.
<,s Section 48 of Presidential Decree No. (PD) 463 partly reads:
SECTION 48. Protests a~d Adverse Claims. xx x .
In the case of an adverse claim against a lease application, tiled under Section 34 hereof,
such adverse claim shall be fi led wi thin fifteen ( 15) days after the first date of publication of,the
notice of lease application if such claim was not previously investigated and decided
under Presidential Decree No. 309. When an adverse is filed under this paragraph, all
proceedings, except the publication of the notice of applicatior. for lease, the submittal of1the
affidavit in connection therewith and the processinp; of application~ for temporary permit, shall be
stayed until the controVt;rsy is settled or decided by the Director: Provided, That the operations
and production under a mines temporary permit issued prior to the adverse claim shall be allowed
to continue subject to thv provisions of Section 33 concerning the posting of bonds.
•• Entitled " Providing for a '.v1~dernized System of Administration and Disposition of Mineral Lands
and to Promote and Enco, irage the Developme!~t and Exploitation Thereof ' dated May 17, 1974.
Dec;sion 15 G.R. No. 220828

the law in force at that time, Apex had 15 days from the date of first
publication to file its adverse claims, if any, against these applications.
Further, it is stated ~inder Section 40 of PD 463 that "[iV no· adverse
claim is filed within fifteen (15) days after the first pub[ication, it shall
be conclusively presumed that no such adverse claim exists and
thereafter no objection from third parties to the grant of the lease shall
be heard, except protest pending at the time of publication x x x." No
adverse claim or any kind of protest was filed .with respect to LLA No.
V-14203-Amd. 70 On 'the other hand, the adverse claim of Apex on LLA
No. V-14205 was filed on September 17, 1988, which is way beyond the
15-day period following the first date of publication on March 31,
1988. 71 Thus, the MAB correctly affirmed the POA in ruling that Apex
was already barred from questioning the validity of NDMC's mining
claims covered by Clusters 1 and 2. · ·

The POA also found that NDJ'v1C had bettel' rights to Cluster 3. It
observed that prior to NDMC, the claims over the disputed areas under
Cluster 3 were held by Myrna C. Tenorio and Fred Antonio T. Tejada,
the original holders of Declarations of Location (OOL). They later
executed in favor of NDMC Deeds of Assignment dated July 1, 1983
and July 17, 1987. 72 Apparently, there is evidence showing that NDMC
had existing claims over the areas covered by Cluster 3.

With respect to the areas under Cluster 4, while the POA ruled
that neither NDMC nor Apex had preferential rights over these areas, the
Court finds that the MAB was correct in reversing the POA and ruling
that NDMC's clairr.-. should be upheld. NDMC had been filing the
required Affidavits of Annual Work Obligations and paid the occupation
fees for several year~~on behalf of Empire, Hijo, .and Goldcoast. 73 On the
contrary, while Apex claimed the existence of DOLs, it nonetheless
admitted that these DOLs were not registered due to prior claims of
NDMC. 74 Hence, Ap;~x had not acquired any right over Cluster 4.

10
See POA Decision dated July 4, 2006. ro/lo, p. 610.
11
Id. at 611.
72
/d.at6 15.
11
· See MAB Decision dated October 28, 2009, id. at 815; see also ANNEX "O" of Petition for
Review, id. at 2 I 0-258.
74
See MAB Decision dated October 28, 2009, id. a: ~ \ 5.
Decision 16 · G.R. No. 220828

The POA was also convinced that NDMC had better rights to the
claims covered by Cluster 5. It observed:

However. based on the records of the MGB-RO No. XI, the

Panel is conviP.ced that NDMC has better rights to the claims
comprising Cluster " 5." APEX's APSA (XI) 112 dated 26 July 1995,
(consisting of the "Edgar-IV, V and VI" blocks) appears to have been
filed over areas considered closed to mining because the latter are
subject to the earlier Conunonwealth Act No. 137 claims of NDMC
("RA" claims). ~( x :X75

Th~ POA cikd Section 19(c) of RA 7942 which provides that

mineral agreement or
financial or technical assistance agreement
applications shall not be allowed "in areas covered by valid and existing
mining rights."

The POA sin-;ilarly found NDMC to have better rights to the

claims under Cluster. 6, which is contiguous to Cluster 5. As supported
by the records of the MGB, these claims were ceded to NDMC by
Samar Mining Company, Inc. tlu·ough a Deed of Assigmnent. 76 The
POA noted that within Cluster 6, there was a mining lease contract
issued in favor of NDMC denominated as MLC-l\1RD 523. 77

It bears stressil1g that courts will not interfere in matters which are
addressed to the soLnd discretion of the government agency entrusted
with the regulation of activities coming under the special and technical
training and knowledge of such agency. 78 In their evaluation of evidence
and exercise of adjudicative functions, administrative agencies are given
wide latitude, which includes the authority to take judicial notice of the
facts within their special competence. 79

Additionally, administrative agencies like the DENR enjoy a

strong presumption ,)f regularity in the performance of official duties;
they are vested with quasi-judicial powers in enforcing the laws
affecting their respr~ctive fields of activity, the proper regulation ·of

7
i /d. at 6l 5.
76
See POA Decision dated 'Illy 4, 2006, id. at 6 16.
11 Id.
78
Dept. ofAgrarian Reform v. Samson, et al. , 577 Phil. 370, 381 (2008).
19
Id. at 38 1-382.
Decision 17 G.R. No. 220828

which requires of them such technical mastery of all relevant conditions

obtaining in the nation. Unless rebutted by clear and convincii:ig
evidence to the contrary, the presumption becomes conclusive.80

Apparently, the findings of the POA and the MAB have been
reached after a metisulous and judicious evaluation of the records and
the evidence presenti.:.d by the parties. These findings deserve the Court's
respect and should bi·: deemed conclusive and binding on the parties.

II. Apex, not being a holder of valid and exis6. 1.g 1

mining claims and leuse/quarry applications over the

contested areas prier to the ejfectivity of RA 7942,
cannot be granted ei _preferential right to enter. into
any mode of mineral agreement under Section 113 of
RA 7942, Section 273 of the IRR of RA 7942, and
Section 8 ofDMO 97-0 7.

It must be emphasized that the preferential right to enter into any

mode of mineral agreement, as mentioned in Sec·i:ion· l D of RA 7942,
Section 273 of the IRR of RA 7942, and Section 8 of DMO 97-07
applies to holders of valid and existing mining claims and lease/quarry
applications prior to the effectivity of RA 7942. No new, primary, and
original mining rights are created under these provisions. The provisions
are quote·d as follow~.: ·

Section 113 ofR.A 7942

Section 113. Recognition of Valid and Existing Mining Claims

and Lease/ Quarry Applications. - Holders of valid and existing_
mining claims, lease/quarry applications shall be given preferential
rights to -enter into any mode of mineral ag~·eement with the
government within two (2) years from the promul_gation of the rules
and regulations implementing this Act. ·.

Section 2 73 of the IRR ofRA 7942

Section 273. Re-:ognition of Valid and Existing Mining Claims and

Lease/Quarry Applications.

80
See Alecha, et al. v. A tie.•_ ·a, et al., supra note 57 at 144-1 45. Citations omitted.
Decision 18 G.R. No. 220828

Holders of valid and existing mmmg claims, lease/quarry

applications shall be given preferential rights to enter into any mode
of Mineral Agreement with the Government until September 14,
1997: Provided, That failure on the part of the holders of valid and
subsisting mining claims, lease/quarry appli cations to exercise their
preferential rights within the said period to enter into any mode of
Mineral Agreements shall constitute automatic abindonment of the
mining claims, quarry/lease applications and the area thereupon shall
be declared open for mining application by other interested paiiies.

Section 8.of DMO 97-07

Section 8. Claimants/Applicai1ts Required to File Mineral Agreement.

Only holders of mining claims and lease/quarry applicatiGms

filed prior to the effectivity of the Act which are valid and ·existing as
defined in Section 5 hereof who have not fi led ai1y Mineral
Agreement applications over areas covered by such mining claims
ai1d lease/quarry applications are required to file Mineral Agreement
applications pmsuant to Section 273 of the IRR on or before
September 15, 1997; Provided, that the holder ofsur,h a mining claim
or lease/quarry application involved in a mining dispute/case shall
instead file on or before said deadline a Letter of Intent to file the
necessary Mineral Agreement application; Provided, further, That if
the mining claim or lease/quarry application is not detem1ined to be
invalid in the dispute/case, the claimai1t or applicant shall have thirty
(30) days from the final resolution of the dispute/case to filed the
necessary Mineral Agreement application; Provided, finally, that
failure by _the clairnai1t or applicant to file the necessary Mineral
Agreement application within said thirty (30)-day period shall result
in the abandonment of such claim or application, after which, any area
covered by the same shall be opened for Mining Applications.

Holders of such valid and existing mining claims and

lease/quarry applications who had filed or been granted applications
other than those for Mineral Agreements prior to September 15, 1997
shall have unti l such date to file/convert to Mineral Agreement
applications, otherwise, such previously filed or granted applications
shall be cancelled.

NDMC filed its FTAA application on Jimuary 8, 1996, while

Apex filed its MPSA applications on April 21 , 1995 and on July 26,
1996. Notably, the applications of NDMC and Apex over the same
Decision 19 G.R. No. 220828

mining areas were all filed before September 15, 1997, the mandatory
deadline set for the filing of mineral agreement applications by holders
ofvalid and existing mining claims and lease/quarry applications.

In this case, the CA gravely erred in ruling that Apex should be

given priority as its MPSA applications were filed earlier than the
FTAA application of NDMC. The CA completely brushed aside the
MAB' s findings relative to the parties' prior claims over the areas in
dispute.

As found by the MAB, prior to the effectivity of RA 7942, it was

NDMC, not Apex, that had valid and existing mining claims over the
contested areas denominated as Clusters 1, 2, 3, 4, 5, and 6. Regrettably,
the CA altogether disregarded the factual findings of the POA and the
MAB which were inevitable considerations in applying the provisions of
Section 113 of RA 7942, Section 273 of the IRR of RA 7942, and
Section 8 ofDMO 97-07.

To highlight, the above-mentioned provisions presuppose that the

applicants are holders of valid and existing mining claims, and
lease/quarry applications prior to the effectivity of RA 7942. It is of no
consequence that Apex's MPSA applications were filed earlier than
NDMC's FTAA application in view of the finding that Apex had no pre-
existing and valid claims over the contested areas. Verily, the
preferential right under these provisions should be given to NDMC.

Apart from disregarding the prior mining lease contracts and

published lode lease applications of NDMC, the CA erroneously applied
Section 8 of DAO 63 as cited in the case of Diamond Drifling
Corporation. A reading of Section 8 of DAO 63 shows that it
specifically pertains to the acceptance and evaluation of FTAAs. Also,
the application of this provision in the Diamond Drilling Corporation
case did not have any relation to the provisions of Section 113 of1RA
7942, Section 273 of the IRR of RA 7942, and Section 8 ofDMO 971-07.
Evidently, Section 8 of DAO 63 is far from being applicable to the
instant case.
Decision 20 G.R. No. 220828

III. NDMC's FTAA application had closed the areas

covered by Clusters 1 to 6 to other mining
applications.

Under Section 19(c) of RA 7942, areas covered by valid and

existing mining rights are closed to mining applications. However, a
precondition to the closing of these areas is provided in Section 8 of
DMO 97-07. It states that holders of valid and existing mining cl6ims
and lease/quarry applications, 81 filed prior to the ejfectivity of RA 7942,
are required to file mineral agreement applications pursuant to Section
273 of the IRR on or before September 15, 1997 if they have not filed
any mineral agreement applications over areas covered by such mining
claims and lease/quarry applications.

As earlier stated, the MPSA applications of Apex and FTAA

application of NDMC were all filed before September 15, 1997.
However, since Apex had been found to have no valid and existing
mining claims and lease/quan-y applications over the areas covered by
Clusters 1 to 6, its MPSA applications were of no consequence.

81
Section 5 of OMO 97-07 defines "valid and existing mining claims and lease/quarry applications."
It reads:
Section 5. Valid and Existing Mining Claims and Lease/Quarry Applications
For purposed of this Order, a mining claim shall be considered valid and existing if it has
complied with the following requirements.
a. For a mining claim which Declaration of Location (DOL) was filed within the period form July
19, 1987 to July 18, 1988, it must be covered by a timely and duly filed Application for
Survey and Survey Returns (if a Survey Order was issued);
b. For a mining claim which DOL was filed under the provisions of Presidential Decree No. 463
as mended, Presidential Decree No. 1214 and the CMAO as Amended but not later than July
18, 1997, it must be covered by a timely and duly filed Application for Mining Lease,
Applications for Survey and Survey Returns (ifa Survey Order was issued);
c. For a mining claim located/filed under the provisions of Commonwealth Act No. 137 and/or
earlier laws, it must be <.;overed by a timely and duly filed Applications for Availment under
Presidential Decree No. 463 as Amended, Application for Mining Lease, Application for
Survey and Survey Returns (if a Survey Order was issued).
Provided, That the holder of a mining claim DOL was filed between July 19, 1988 and January 4,
1991 with or without a Letter of Intent to file for a Mineral Agreement application, shall be given
up to September 15, 1997 to file the necessary Mineral Agreement application.
For purposes of this Order, a mining lease application shall be considered valid and existing
only if all mining claims contained in such lease application are valid and existing as defined in
this section, while applications for Quan-y Licenses and Quarry Permits filed prior to April 9, 1995
shall be considered valid and existing if the concerned applicant had timely and duly filed the
Application for Survey and duly submitted the Survey Returns (is the Survey Order was issued).
Notwithstanding the preceding provisions of this section, a mining claim or lease/quarry
application over which an order of r~jection or cancellation has been issued shall not be
considered valid and existing as of the date of issuance of such order.
 I
Decision 21 G.R. No. 220828

On the other hand, given that NDMC is a holder of valid and

existing mining claims and lease applications over the contested areas,
an important issue to address is whether its FTAA application filed on
January 8, 1996 is a "mineral agreement application" within the
contemplation of Section 113 of RA 7942, Section 273 of the IRR of RA
7942, and Section 8 of DMO 97-07. Another issue to address is whether
the FTAA application ofNDMC had closed to other mining applicafions
the areas covered by Clusters 1 to 6.

Under RA 7942, a mineral agreement is defined in Section 3(ab)

as "a contract between the government and a contractor, involving
mineral production-sharing agreement, co-production agreement, or
joint-venture agreement." Section 3(r) separately defines financial or
technical assistance agreement as "a contract involving financial or
technical assistance for large-scale exploration, development, and
utilization of mineral resources."

In its Comment,82 Apex argues that an FTAA application is not

the mineral agreement required by the IRR of RA 7942. It cited the
Memorandum dated November 19, 1998 issued by the Director of the
MGB which partly states: " [w]ith Section 8 of DMO No. 97-07, it is
settled that holders of valid and existing mining claims and lease/quarry
applications can only apply for a Mineral Agreement, that is, Mineral
Production Sharing Agreement, Co-Production Agreement or Joint
Venture Agreement."83

Notably, in the same Memorandum dated November 19, 1998: the

MGB also stated:

The case of NDMC, however, should be taken differently.

Here is a situation where Government's interest is directly at stake.
With NDMC at the hands of the Asset Privatization Trust (APT), it '
has assumed the character of a government-owned entity and,
therefore, it cannot be placed in the same level with private mining
applicants. A cursory review of the Mining Act, the Revised IRR and
DMO No. 97-07 will show that practically all these regulatory
provisions, save for the provision on Government Gratuitous Permit,
refer to mineral resources disposition by contractors.

xxxx
82
Rollo, pp. 280-327.
83
/d. at 290.
Decision 22 G.R. No. 220828

Hence, this Office is of the position that the FTAA application

of NDMC is acceptable, not because there is no prohibition in the law
allowing holders of valid and existing mining claims and lease/quarry
applications to enter into other modes of mining rights other than
Mineral Agreements, but solely because of direct Government's
interest. 84

The Court observes that the MGB issued the above Memorandum
in the exercise of its quasi-judicial power. Quasi-judicial or
administrative adjudicatory power is the power to hear and determine
questions of fact to which the legislative policy is to apply and to decide
in accordance with the standards laid down by the law itself in enforcing
and administering the same law.85 The administrative body exercises its
quasi-judicial power when it performs in a judicial manner an act
essentially of an executive or administrative nature, where the power to
act in such manner is incidental to or reasonably necessary for the
performance of the executive or administrative duty entrusted to it. 86

Significantly, the MGB itself clarified in the Memorandum that an

FTAA is not one of those considered as a mineral agreement. However,
in accepting NDMC's FTAA application, the MGB took into
consideration the fact that NDMC had been placed in the hands of APT
and had assumed the character of a government-owned entity. The MGB
set aside technicalities inasmuch as the Government's interest is directly
at stake.

The opinion of MGB is well taken. In the sound exercise o'f its
quasi-judicial power, the MGB aptly considered NDMC's case as
different from that of private mining applicants. The reason for MGB 's
acceptance of the FTAA application filed on January 8, 1996 is clear- it
is solely due to the direct interest of the Government over NDMC 's
mining claims and rights, which were already entrusted to APT at the
time of the FTAA application.

84
As culled from the Comment dated March 18, 20 I6, id. Underscoring omitted.
Rl The Chairman and Executive Director. Palawan Council For Sustainable Development, et al. v.
Lim, 793 Phil. 690, 698(2016).
s6 Id.
Decision 23 G.R. No. 220828

Notably, the MAB also stressed in its Decision87 that the subject
mining claims of NDMC were among the assets transferred by the PNB
to the Government. Briefly, the MAB explained:

It bears stressing that the subject mining claims were among

the assets/properties transfen-ed by PNB to the National Government.
Thereafter, a certificate of sale over [NDMC]'s properties was issued
to APT being then [sic] highest bidder. Pursuant to E. O. 323, the
[NDMC] assets, among others, were turned over to PMO from the
COP/APT. Then the assets/properties were transferred to the
NRMDC, now PMDC, as trustee and disposition entity. Finally, on 07
April 2006, the PMDC and the National Government executed a Trust
Agreement whereby the mining assets of x x x NDMC were
transferred, conveyed and assigned to PMDC to develop and/or
dispose of said properties.88

Taking the foregoing antecedents into consideration, the Court

affirms the MGB ' s determination that the FTAA application of NDMC
should be treated differently and should be understood as the State's
exercise of its right of ownership over NDMC' s mining claims. In
accepting NDMC's ~TAA application, the MGB in this case merely
recognized the rights of the Government to the mining property of
NDMC, who held valid and existing mining claims over the contested
areas. The application was not an FTAA application p er se, considering
that the Government cannot enter into an agreement with itself. By
reason of the Government's direct interest over the mineral property of
NDMC, the FT AA application was meant to close to other mining
applications the areas over which the NDMC had mining claims.
Apparently, these areas were among those ordered closed by then Acting
DENR Secretary Antonio G. M. La Vifia through his issuance of the
Memorandum89 dated September 17, 1997, which enjoined all MGB
Regional Directors to close to new mining locations or applications
those areas covered by valid and existing mining claims held in trust by
APT or other similar entities.

n Rollo, pp. 810-81 7 .

RS /d. at8J4.
89
/ d. at I 79.

//7
Decision 24 G.R. No. 220828

IV. Prescription does not lie against the State.

The CA mistakenly concluded that NDMC had in effect

abandoned its mining claims when it failed to file an application for
mineral agreement on or before September 15, 1997, holding that
NDMC's FTAA application is not a mineral agreement within the
contemplation of RA 7942. Moreover, it en-ed in holding that the
bankruptcy revocation ofNDMC's certificate of registration by the SEC
and the suspension of mining operations supported the finding that
NDMC had indeed abandoned its mining claims.

In arriving at the above conclusion, the CA failed to consider that

it was the Government's interest that was at stake. At the time of the
filing of the FTAA application, the mining claims of NDMC were
among the assets and properties turned over by the PNB to the
Government. These assets and properties were then placed in the
possession of APT. At present, the PMDC is the trustee of NDMC's
mineral property. Verily, before the Comi and the CA, the Government
has been represented by the PMDC, as the successor-in-interest of
NDMC's mining property.

The Court affirms the CA in ruling that an FTAA is not one of the
mineral agreements that holders of valid and existing mining claims and
lease/quarry applications could apply for in order to close the subject
areas to other mining applications. As explained by the MGB, a mineral
agreement could only be any of the following: an MPSA, a co-
production agreement, or a joint venture agreement.

Nonetheless, while the FTAA is admittedly not a mineral

agreement within the contemplation of RA 7942, it bears reiterating 1that
NDMC's FTAA application was not an FTAA application per se and
should be considered as the Government's direct interest and intention to
exercise its ownership over the mineral property of NDMC. In addition,
the FT AA application was also meant to close to other mining
applications the mining areas over which the NDMC had mining claims.
Therefore, it did not matter whether it was a mineral agreement or an
FTAA that was applied for by NDl'v1.C. The sole reason that the MGB
accepted the FTAA application was the Government's direct interest in
the case.
Decision 25 G.R. No. 220828

At this juncture, it is worthy to emphasize Section 2, Article XII

of the Constitution which pe1iinently states that "[a]ll lands ofthe public
domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces ofpotential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. x x x The
exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State." Thus, as the owner
of natural resources, the State has the primary power and responsibility
in their exploration, development, and utilization.

Affirming Section 2, Article XII of the Constitution is Section 4

of RA 7942 which partly reads:

Section 4. Ownership of Mineral Resources. - Mineral

resources are owned by the State and the exploration, development,
utilization, and processing thereof shall be under its full control and
supervision. The State may directly undertake such activities or it may
enter into mineral agreements with contractors.

Thus, the Court holds that the CA erred in concluding that the
FTAA application should not be considered as the State's intention to
explore, develop, and utilize the country's natural resources. To insist
that the Government should enter into a specific mineral agreement
under RA 7942 would be a direct affront to its power to fully control and
supervise the exploration, development, and utilization of the country's
mineral resources. Ultimately, it amounts to depriving the State of its
ownership of all natural resources.

In any case, it is a time-honored principle that the statute of

limitations or the lapse of time does not run against the State. 90 Hence,
even assuming that the NDMC did not file the FTAA application or
failed to file a valid mineral agreement application on or before
September 15, 1997, the areas included in the FTAA application of
NDMC would still be closed to other mining applications for the simple
reason that it is the Government that owns the mineral property of
NDMC.

90
Rep. ofthe Phils. v. Hachero, et al. , 785 Phil. 784, 797 (20 16).
Decision 26 G.R. No. 220828

WHEREFORE, the petition for review is GRANTED. The

Decision dated December 22, 2014 and the Resolution dated September
23, 2015 of the Court of Appeals in CA-G.R. SP No. 133927·, are
REVERSED and SET ASIDE. The Decision dated October 28, 2009 of
the Mines Adjudication Board, Department of Environment and Natural
Resources in MAB Case Nos. 0156-07 and 0157-07 is REINSTATED.
Accordingly, the Philippine Mining Development Corporation, as the
trustee of the mineral property of North Davao Mining Corporation, is
declared to have prior and preferential rights over the areas covered by
its application for Financial and Technical Assistance Agreement filed
on January 8, 1996.

SO ORDERED.

HEN LB. INTING

Associate Justice

WE CONCUR:

u{}_~
ESTELA lVY.}ERLAS-BERNABE
Senior Associate Justice
Chairperson

r/
EDGARDO L. DELOS SANTOS
Associate Justice

(On leave)
PRISCILLA J. BALTAZAR-PADILLA
Associate Justice
Decision 27 G.R. No. 220828

ATTESTATION

I attest that the conclusions in the above Decision had been

reached in consultation before the case was assigned to the writer of the
opinion of the Court's Division.

ESTELA ~~BERNAB~
Senior Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairperson's Attestation, I certify that the conclusions in I the
above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court's Divi ·on.

ChiefJ..ustice