EN BANC
G.R. No. 209287, February 03, 2015
MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG MAKABAYAN; JUDY M. TAGUIWALO, PROFESSOR, UNIVERSITY OF THE PHILIPPINES DILIMAN, CO-CHAIRPERSON, PAGBABAGO; HENRI KAHN, CONCERNED CITIZENS MOVEMENT; REP. LUZ ILAGAN, GABRIELA WOMEN’S PARTY REPRESENTATIVE; REP. TERRY L. RIDON, KABATAAN PARTYLIST REPRESENTATIVE; REP. CARLOS ISAGANI ZARATE, BAYAN MUNA PARTY-LIST REPRESENTATIVE; RENATO M. REYES, JR., SECRETARY GENERAL OF BAYAN; MANUEL K. DAYRIT, CHAIRMAN, ANG KAPATIRAN PARTY; VENCER MARI E. CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; VICTOR VILLANUEVA, CONVENOR, YOUTH ACT NOW, Petitioners, v. BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO N. OCHOA, JR., EXECUTIVE SECRETARY; AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
[G.R. No. 209135]
AUGUSTO L. SYJUCO JR., PH.D., Petitioner, v. FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT OF BUDGET AND MANAGEMENT; AND HON. FRANKLIN MAGTUNAO DRILON, IN HIS CAPACITY AS THE SENATE PRESIDENT OF THE PHILIPPINES,Respondents.
[G.R. No. 209136]
MANUELITO R. LUNA, Petitioner, v. SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT; AND EXECUTIVE SECRETARY PAQUITO OCHOA, IN HIS OFFICIAL CAPACITY AS ALTER EGO OF THE PRESIDENT,Respondents.
[G.R. No. 209155]
ATTY. JOSE MALVAR VILLEGAS, JR., Petitioner, v. THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B. ABAD, Respondents.
[G.R. No. 209164]
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN FROILAN M. BACUNGAN, BENJAMIN E. DIOKNO AND LEONOR M. BRIONES, Petitioners, v. DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B. ABAD, Respondents.
[G.R. No. 209260]
INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner, v. SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM), Respondents.
[G.R. No. 209442]
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN M. ABANTE AND REV. JOSE L. GONZALEZ, Petitioners, v. PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF THE PHILIPPINES, REPRESENTED BY SENATE PRESIDENT FRANKLIN M. DRILON; THE HOUSE OF REPRESENTATIVES, REPRESENTED BY SPEAKER FELICIANO BELMONTE, JR.; THE EXECUTIVE OFFICE, REPRESENTED BY EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; THE DEPARTMENT OF BUDGET AND MANAGEMENT, REPRESENTED BY SECRETARY FLORENCIO ABAD; THE DEPARTMENT OF FINANCE, REPRESENTED BY SECRETARY CESAR V. PURISIMA; AND THE BUREAU OF TREASURY, REPRESENTED BY ROSALIA V. DE LEON, Respondents.
[G.R. No. 209517]
CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE), REPRESENTED BY ITS 1ST VICE PRESIDENT, SANTIAGO DASMARINAS, JR.; ROSALINDA NARTATES, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE CONSOLIDATED UNION OF EMPLOYEES NATIONAL HOUSING AUTHORITY (CUE-NHA); MANUEL BACLAGON, FOR HIMSELF AND AS PRESIDENT OF THE SOCIAL WELFARE EMPLOYEES ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT CENTRAL OFFICE (SWEAP-DSWD CO); ANTONIA PASCUAL, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE DEPARTMENT OF AGRARIAN REFORM EMPLOYEES ASSOCIATION (DAREA); ALBERT MAGALANG, FOR HIMSELF AND AS PRESIDENT OF THE ENVIRONMENT AND MANAGEMENT BUREAU EMPLOYEES UNION (EMBEU); AND MARCIAL ARABA, FOR HIMSELF AND AS PRESIDENT OF THE KAPISANAN PARA SA KAGALINGAN NG MGA KAWANI NG MMDA (KKK-MMDA), Petitioners, v. BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO OCHOA, JR., EXECUTIVE SECRETARY; AND HON. FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
[G.R. No. 209569]
VOLUNTEERS AGAINST CRIME AND CORRUPTION (VACC), REPRESENTED BY DANTE L. JIMENEZ, Petitioner, v. PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
R E S O L U T I O N
BERSAMIN, J.:
The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be allowed to sap its strength nor greed for power debase its rectitude.1Before the Court are the Motion for Reconsideration2 filed by the respondents, and the Motion for Partial Reconsideration3 filed by the petitioners in G.R. No. 209442.
The respondents maintain that the issues in these consolidated cases were mischaracterized and unnecessarily constitutionalized; that the Court’s interpretation of savings can be overturned by legislation considering that savings is defined in the General Appropriations Act (GAA), hence making savings a statutory issue;7 that the withdrawn unobligated allotments and unreleased appropriations constitute savings and may be used for augmentation;8 and that the Court should apply legally recognized norms and principles, most especially the presumption of good faith, in resolving their motion.9chanRoblesvirtualLawlibraryPROCEDURAL I
WITHOUT AN ACTUAL CASE OR CONTROVERSY, ALLEGATIONS OF GRAVE ABUSE OF DISCRETION ON THE PART OF ANY INSTRUMENTALITY OF THE GOVERNMENT CANNOT CONFER ON THIS HONORABLE COURT THE POWER TO DETERMINE THE CONSTITUTIONALITY OF THE DAP AND NBC NO. 541II
PETITIONERS’ ACTIONS DO NOT PRESENT AN ACTUAL CASE OR CONTROVERSY AND THEREFORE THIS HONORABLE COURT DID NOT ACQUIRE JURISDICTIONIII
PETITIONERS HAVE NEITHER BEEN INJURED NOR THREATENED WITH INJURY AS A RESULT OF THE OPERATION OF THE DAP AND THEREFORE SHOULD HAVE BEEN HELD TO HAVE NO STANDING TO BRING THESE SUITS FOR CERTIORARI AND PROHIBITIONIV
NOR CAN PETITIONERS’ STANDING BE SUSTAINED ON THE GROUND THAT THEY ARE BRINGING THESE SUITS AS CITIZENS AND AS TAXPAYERSV
THE DECISION OF THIS HONORABLE COURT IS NOT BASED ON A CONSIDERATION OF THE ACTUAL APPLICATIONS OF THE DAP IN 116 CASES BUT SOLELY ON AN ABSTRACT CONSIDERATION OF NBC NO. 5415chanRoblesvirtualLawlibrarySUBSTANTIVE
I
THE EXECUTIVE DEPARTMENT PROPERLY INTERPRETED “SAVINGS” UNDER THE RELEVANT PROVISIONS OF THE GAAII
ALL DAP APPLICATIONS HAVE APPROPRIATION COVERIII
THE PRESIDENT HAS AUTHORITY TO TRANSFER SAVINGS TO OTHER DEPARTMENTS PURSUANT TO HIS CONSTITUTIONAL POWERSIV
THE 2011, 2012 AND 2013 GAAS ONLY REQUIRE THAT REVENUE COLLECTIONS FROM EACH SOURCE OF REVENUE ENUMERATED IN THE BUDGET PROPOSAL MUST EXCEED THE CORRESPONDING REVENUE TARGETV
THE OPERATIVE FACT DOCTRINE WAS WRONGLY APPLIED6
FAILED TO DECLARE AS UNCONSTITUTIONAL AND ILLEGAL ALL MONEYS UNDER THE DISBURSEMENT ACCELERATION PROGRAM (DAP) USED FOR ALLEGED AUGMENTATION OF APPROPRIATION ITEMS THAT DID NOT HAVE ACTUAL DEFICIENCIES10They submit that augmentation of items beyond the maximum amounts recommended by the President for the programs, activities and projects (PAPs) contained in the budget submitted to Congress should be declared unconstitutional.cralawred
Under our system of constitutional government, the Legislative department is assigned the power to make and enact laws. The Executive department is charged with the execution of carrying out of the provisions of said laws. But the interpretation and application of said laws belong exclusively to the Judicial department. And this authority to interpret and apply the laws extends to the Constitution. Before the courts can determine whether a law is constitutional or not, it will have to interpret and ascertain the meaning not only of said law, but also of the pertinent portion of the Constitution in order to decide whether there is a conflict between the two, because if there is, then the law will have to give way and has to be declared invalid and unconstitutional.The respondents cannot also ignore the glaring fact that the petitions primarily and significantly alleged grave abuse of discretion on the part of the Executive in the implementation of the DAP. The resolution of the petitions thus demanded the exercise by the Court of its aforedescribed power of judicial review as mandated by the Constitution.cralawred
x x x x
We have already said that the Legislature under our form of government is assigned the task and the power to make and enact laws, but not to interpret them. This is more true with regard to the interpretation of the basic law, the Constitution, which is not within the sphere of the Legislative department. If the Legislature may declare what a law means, or what a specific portion of the Constitution means, especially after the courts have in actual case ascertain its meaning by interpretation and applied it in a decision, this would surely cause confusion and instability in judicial processes and court decisions. Under such a system, a final court determination of a case based on a judicial interpretation of the law of the Constitution may be undermined or even annulled by a subsequent and different interpretation of the law or of the Constitution by the Legislative department. That would be neither wise nor desirable, besides being clearly violative of the fundamental, principles of our constitutional system of government, particularly those governing the separation of powers.13
Section 25. x x xSection 38 and Section 39, Chapter 5, Book VI of the Administrative Code provide:ChanRoblesVirtualawlibrary
x x x x
5) No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.
x x x x
Section 38. Suspension of Expenditure of Appropriations. - Except as otherwise provided in the General Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services appropriations used for permanent officials and employees.In the Decision, we said that:ChanRoblesVirtualawlibrary
Section 39. Authority to Use Savings in Appropriations to Cover Deficits.—Except as otherwise provided in the General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations Act for programs and projects of any department, office or agency, may, with the approval of the President, be used to cover a deficit in any other item of the regular appropriations: Provided, that the creation of new positions or increase of salaries shall not be allowed to be funded from budgetary savings except when specifically authorized by law: Provided, further, that whenever authorized positions are transferred from one program or project to another within the same department, office or agency, the corresponding amounts appropriated for personal services are also deemed transferred, without, however increasing the total outlay for personal services of the department, office or agency concerned. (Bold underscoring supplied for emphasis)
Unobligated allotments, on the other hand, were encompassed by the first part of the definition of “savings” in the GAA, that is, as “portions or balances of any programmed appropriation in this Act free from any obligation or encumbrance.” But the first part of the definition was further qualified by the three enumerated instances of when savings would be realized. As such, unobligated allotments could not be indiscriminately declared as savings without first determining whether any of the three instances existed. This signified that the DBM’s withdrawal of unobligated allotments had disregarded the definition of savings under the GAAs.We now clarify.
x x x x
The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to justify the withdrawal of unobligated allotments. But the provision authorized only the suspension or stoppage of further expenditures, not the withdrawal of unobligated allotments, to wit:
x x x x
Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38, supra, but instead transferred the funds to other PAPs.20
Although the withdrawal of unobligated allotments may have effectively resulted in the suspension or stoppage of expenditures through the issuance of negative Special Allotment Release Orders (SARO), the reissuance of withdrawn allotments to the original programs and projects is a clear indication that the program or project from which the allotments were withdrawn has not been discontinued or abandoned. Consequently, as we have pointed out in the Decision, “the purpose for which the withdrawn funds had been appropriated was not yet fulfilled, or did not yet cease to exist, rendering the declaration of the funds as savings impossible.”21 In this regard, the withdrawal and transfer of unobligated allotments remain unconstitutional. But then, whether the withdrawn allotments have actually been reissued to their original programs or projects is a factual matter determinable by the proper tribunal.
5.7.1 Reissued for the original programs and projects of the agencies/OUs concerned, from which the allotments were withdrawn; 5.7.2 Realigned to cover additional funding for other existing programs and projects of the agency/OU; or 5.7.3 Used to augment existing programs and projects of any agency and to fund priority programs and projects not considered in the 2012 budget but expected to be started or implemented during the current year.
x x x contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions.On the other hand, Section 39 is evidently in conflict with the plain text of Section 25(5), Article VI of the Constitution because it allows the President to approve the use of any savings in the regular appropriations authorized in the GAA for programs and projects of any department, office or agency to cover a deficit in any other item of the regular appropriations. As such, Section 39 violates the mandate of Section 25(5) because the latter expressly limits the authority of the President to augment an item in the GAA to only those in his own Department out of the savings in other items of his own Department’s appropriations. Accordingly, Section 39 cannot serve as a valid authority to justify cross-border transfers under the DAP. Augmentations under the DAP which are made by the Executive within its department shall, however, remain valid so long as the requisites under Section 25(5) are complied with.
Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100 typewriters but DBM rules we need only 10 typewriters and sends its recommendations to Congress without even informing us, the autonomy given by the Constitution becomes an empty and illusory platitude.
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. x x x23
x x x The concept of the Constitution as the fundamental law, setting forth the criterion for the validity of any public act whether proceeding from the highest official or the lowest functionary, is a postulate of our system of government. That is to manifest fealty to the rule of law, with priority accorded to that which occupies the topmost rung in the legal hierarchy. The three departments of government in the discharge of the functions with which it is [sic] entrusted have no choice but to yield obedience to its commands. Whatever limits it imposes must be observed. Congress in the enactment of statutes must ever be on guard lest the restrictions on its authority, whether substantive or formal, be transcended. The Presidency in the execution of the laws cannot ignore or disregard what it ordains. In its task of applying the law to the facts as found in deciding cases, the judiciary is called upon to maintain inviolate what is decreed by the fundamental law. Even its power of judicial review to pass upon the validity of the acts of the coordinate branches in the course of adjudication is a logical corollary of this basic principle that the Constitution is paramount. It overrides any governmental measure that fails to live up to its mandates. Thereby there is a recognition of its being the supreme law.Also, in Biraogo v. Philippine Truth Commission of 2010,26 we have reminded that: –
The role of the Constitution cannot be overlooked. It is through the Constitution that the fundamental powers of government are established, limited and defined, and by which these powers are distributed among the several departments. The Constitution is the basic and paramount law to which all other laws must conform and to which all persons, including the highest officials of the land, must defer. Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be simply made to sway and accommodate the call of situations and much more tailor itself to the whims and caprices of government and the people who run it.27
For the President to exercise his item-veto power, it necessarily follows that there exists a proper “item” which may be the object of the veto. An item, as defined in the field of appropriations, pertains to "the particulars, the details, the distinct and severable parts of the appropriation or of the bill.” In the case of Bengzon v. Secretary of Justice of the Philippine Islands, the US Supreme Court characterized an item of appropriation as follows:ChanRoblesVirtualawlibraryAccordingly, the item referred to by Section 25(5) of the Constitution is the last and indivisible purpose of a program in the appropriation law, which is distinct from the expense category or allotment class. There is no specificity, indeed, either in the Constitution or in the relevant GAAs that the object of augmentation should be the expense category or allotment class. In the same vein, the President cannot exercise his veto power over an expense category; he may only veto the item to which that expense category belongs to.An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation of money, not some general provision of law which happens to be put into an appropriation bill. (Emphases supplied)On this premise, it may be concluded that an appropriation bill, to ensure that the President may be able to exercise his power of item veto, must contain “specific appropriations of money” and not only “general provisions” which provide for parameters of appropriation.
Further, it is significant to point out that an item of appropriation must be an item characterized by singular correspondence – meaning an allocation of a specified singular amount for a specified singular purpose, otherwise known as a “line-item.” This treatment not only allows the item to be consistent with its definition as a “specific appropriation of money” but also ensures that the President may discernibly veto the same. Based on the foregoing formulation, the existing Calamity Fund, Contingent Fund and the Intelligence Fund, being appropriations which state a specified amount for a specific purpose, would then be considered as “line-item” appropriations which are rightfully subject to item veto. Likewise, it must be observed that an appropriation may be validly apportioned into component percentages or values; however, it is crucial that each percentage or value must be allocated for its own corresponding purpose for such component to be considered as a proper line-item. Moreover, as Justice Carpio correctly pointed out, a valid appropriation may even have several related purposes that are by accounting and budgeting practice considered as one purpose, e.g., MOOE (maintenance and other operating expenses), in which case the related purposes shall be deemed sufficiently specific for the exercise of the President‘s item veto power. Finally, special purpose funds and discretionary funds would equally square with the constitutional mechanism of item-veto for as long as they follow the rule on singular correspondence as herein discussed. x x x (Emphasis supplied)33
SECTION 51. Evaluation of Agency Performance.—The President, through the Secretary shall evaluate on a continuing basis the quantitative and qualitative measures of agency performance as reflected in the units of work measurement and other indicators of agency performance, including the standard and actual costs per unit of work.Pursuant to the foregoing, the Department of Budget and Management (DBM) and the Commission on Audit (COA) require agencies under various joint circulars to submit budget and financial accountability reports (BFAR) on a regular basis,39 one of which is the Quarterly Report of Income or Quarterly Report of Revenue and Other Receipts.40 On the other hand, as Justice Carpio points out in his Separate Opinion, the Development Budget Coordination Committee (DBCC) sets quarterly revenue targets for a specific fiscal year.41 Since information on both actual revenue collections and targets are made available every quarter, or at such time as the DBM may prescribe, actual revenue surplus may be determined accordingly and releases from the unprogrammed fund may take place even prior to the end of the fiscal year.42chanRoblesvirtualLawlibrary
SECTION 52. Budget Monitoring and Information System.—The Secretary of Budget shall determine accounting and other items of information, financial or otherwise, needed to monitor budget performance and to assess effectiveness of agencies’ operations and shall prescribe the forms, schedule of submission, and other components of reporting systems, including the maintenance of subsidiary and other records which will enable agencies to accomplish and submit said information requirements: Provided, that the Commission on Audit shall, in coordination with the Secretary of Budget, issue rules and regulations that may be applicable when the reporting requirements affect accounting functions of agencies: Provided, further, that the applicable rules and regulations shall be issued by the Commission on Audit within a period of thirty (30) days after the Department of Budget and Management prescribes the reporting requirements.
11. Reportorial Requirement. The DBM shall submit to the House Committee on Appropriations and the Senate Committee on Finance separate quarterly reports stating the releases from the Unprogrammed Fund, the amounts released and purposes thereof, and the recipient departments, bureaus, agencies or offices, GOCCs and GFIs, including the authority under which the funds are released under Special Provision No. 1 of the Unprogrammed Fund.Similar provisions are contained in the 2012 and 2013 GAAs.43chanRoblesvirtualLawlibrary
110. The doctrine of operative fact has nothing to do with the potential liability of persons who acted pursuant to a then-constitutional statute, order, or practice. They are presumed to have acted in good faith and the court cannot load the dice, so to speak, by disabling possible defenses in potential suits against so-called “authors, proponents and implementors.” The mere nullification are still deemed valid on the theory that judicial nullification is a contingent or unforeseen event.In the speech he delivered on July 14, 2014, President Aquino III also expressed the view that in applying the doctrine of operative fact, the Court has already presumed the absence of good faith on the part of the authors, proponents and implementors of the DAP, so that they would have to prove good faith during trial.46chanRoblesvirtualLawlibrary
111. The cases before us are about the statutory and constitutional interpretations of so-called acts and practices under a government program, DAP. These are not civil, administrative, or criminal actions against the public officials responsible for DAP, and any statement about bad faith may be unfairly and maliciously exploited for political ends. At the same time, any negation of the presumption of good faith, which is the unfortunate implication of paragraphs 3 and 4 of page 90 of the Decision, violates the constitutional presumption of innocence, and is inconsistent with the Honorable Court’s recognition that “the implementation of the DAP yielded undeniably positive results that enhanced the economic welfare of the country.”
112. The policy behind the operative fact doctrine is consistent with the idea that regardless of the nullification of certain acts and practices under the DAP and/or NBC No. 541, it does not operate to impute bad faith to authors, proponents and implementors who continue to enjoy the presumption of innocence and regularity in the performance of official functions and duties. Good faith is presumed, whereas bad faith requires the existence of facts. To hold otherwise would send a chilling effect to all public officers whether of minimal or significant discretion, the result of which would be a dangerous paralysis of bureaucratic activity.45 (Emphasis supplied)
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative fact does not always apply, and is not always the consequence of every declaration of constitutional invalidity. It can be invoked only in situations where the nullification of the effects of what used to be a valid law would result in inequity and injustice; but where no such result would ensue, the general rule that an unconstitutional law is totally ineffective should apply.The quoted text of paragraphs 3 and 4 shows that the Court has neither thrown out the presumption of good faith nor imputed bad faith to the authors, proponents and implementors of the DAP. The contrary is true, because the Court has still presumed their good faith by pointing out that “the doctrine of operative fact xxx cannot apply to the authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities.” Note that the proper tribunals can make “concrete findings of good faith in their favor” only after a full hearing of all the parties in any given case, and such a hearing can begin to proceed only after according all the presumptions, particularly that of good faith, by initially requiring the complainants, plaintiffs or accusers to first establish their complaints or charges before the respondent authors, proponents and implementors of the DAP.
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the PAPs that can no longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities.48 (Bold underscoring is supplied)
Well-settled is the rule that good faith is always presumed and the Chapter on Human Relations of the Civil Code directs every person, inter alia, to observe good faith which springs from the fountain of good conscience. Specifically, a public officer is presumed to have acted in good faith in the performance of his duties. Mistakes committed by a public officer are not actionable absent any clear showing that they were motivated by malice or gross negligence amounting to bad faith. "Bad faith" does not simply connote bad moral judgment or negligence. There must be some dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of a sworn duty through some motive or intent or ill will. It partakes of the nature of fraud. It contemplates a state of mind affirmatively operating with furtive design or some motive of self-interest or ill will for ulterior purposes.The Court has further explained in Philippine Agila Satellite, Inc. v. Trinidad-Lichauco:54
The law also requires that the public officer’s action caused undue injury to any party, including the government, or gave any private party unwarranted benefits, advantage or preference in the discharge of his functions. x x x
We do not doubt the existence of the presumptions of “good faith” or “regular performance of official duty”, yet these presumptions are disputable and may be contradicted and overcome by other evidence. Many civil actions are oriented towards overcoming any number of these presumptions, and a cause of action can certainly be geared towards such effect. The very purpose of trial is to allow a party to present evidence to overcome the disputable presumptions involved. Otherwise, if trial is deemed irrelevant or unnecessary, owing to the perceived indisputability of the presumptions, the judicial exercise would be relegated to a mere ascertainment of what presumptions apply in a given case, nothing more. Consequently, the entire Rules of Court is rendered as excess verbiage, save perhaps for the provisions laying down the legal presumptions.Relevantly, the authors, proponents and implementors of the DAP, being public officers, further enjoy the presumption of regularity in the performance of their functions. This presumption is necessary because they are clothed with some part of the sovereignty of the State, and because they act in the interest of the public as required by law.55 However, the presumption may be disputed.56chanRoblesvirtualLawlibrary
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and DECLARES the following acts and practices under the Disbursement Acceleration Program, National Budget Circular No. 541 and related executive issuances UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the 1987 Constitution and the doctrine of separation of powers, namely:SO ORDERED.
(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year without complying with the statutory definition of savings contained in the General Appropriations Acts; and
(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the Executive.
The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a certification by the National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the conditions provided in the relevant General Appropriations Acts.
Endnotes:
** On leave.
1Biraogo v. Philippine Truth Commission of 2010, G.R. No. 192935 and 193036, December 7, 2010, 637 SCRA 78, 177.
2Rollo (G.R. No. 209287), pp. 1431-1482.
3 Id. at 1496-1520.
4 Id. at 1135-1241.
5 Id. at 1434-1435.
6 Id.
7 Id. at 1435-1438.
8 Id. 1444-1449.
9 Id. at 1432.
10 Id. at 1496.
11 Id. at 1435.
12 Nos. L-6355-56, 93 Phil. 696 (1953).
13 Id. at 700-702 (bold underscoring is supplied for emphasis).
14Rollo (G.R. No. 209287), pp. 1203-1204.
15 Id. at 1208.
16 Id.
17Brillantes, Jr. v. Commission on Elections, G.R. No. 163193, June 15, 2004, 432 SCRA 269, 307.
18 Supra note 7, at 1448.
19 Id. at 1449.
20 Decision, pp. 60-67.
21 Id. at 62.
22 Id. at 67.
23Bengzon v. Drilon, G.R. No. 103524, April 15, 1992, 208 SCRA 133.
24Social Justice Society (SJS) v. Dangerous Drugs Board, G.R. Nos. 157870, 158633 and 161658, November 3, 2008, 570 SCRA 410, 422-423.
25 No. L-32717, November 26, 1970, 36 SCRA 228, 234-235.
26 G.R. No. 192935 and 193036, December 7, 2010, 637 SCRA 78.
27 Id. at 137-138.
28 Supra note 7, at 1450-1451.
29 Decision, p. 36.
30 Id at 90.
31 Respondents’ Motion for Reconsideration, p. 21.
32 G.R. No. 208566, November 19, 2013, 710 SCRA 1.
33 Id. at 126-127.
34 G.R. No. 188635, January 29, 2013, 689 SCRA 385.
35 Supra note 7, at 1455-1459.
36 Id. at 1459-1465.
37Rollo (G.R. No. 209155), pp. 327, 337-339.
38 Supra note 14, at 1231-1232.
39http://budgetngbayan.com/budget-101/budget-accountability/#BAR (Visited on January 28, 2015).
40 See also the DBM and COA’s Joint Circular No. 2013-1, March 15, 2013 and Joint Circular No. 2014-1, July 2, 2014.
41 J. Carpio, Separate Opinion, p. 11.
42 In this regard, the ninth and tenth special provisions for unprogrammed funds in the 2011 GAA also provide the following:
9. Use of Income. In case of deficiency in the appropriations for the following business-type activities, departments, bureaus, offices and agencies enumerated hereunder and other agencies as may be determined by the Permanent Committee are hereby authorized to use their respective income collected during the year. Said income shall be deposited with the National Treasury, chargeable against Purpose 4 - General Fund Adjustments, to be used exclusively for the purposes indicated herein or such other purposes authorized by the Permanent Committee, as may be required until the end of the year, subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E. O. No. 292, s. 1987:
x x x x
Implementation of this section shall be subject to guidelines to be issued by the DBM.
10. Use of Excess Income. Agencies collecting fees and charges as shown in the FY 2011 Budget of Expenditures and Sources of Financing (BESF) may be allowed to use their income realized and deposited with the National Treasury, in excess of the collection targets presented in the BESF, chargeable against Purpose 4 - General Fund Adjustments, to augment their respective current appropriations, subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292: PROVIDED, That said income shall not be used to augment Personal Services appropriations including payment of discretionary and representation expenses.
Implementation of this section shall be subject to guidelines jointly issued by the DBM and DOF
The 2012 and 2013 GAAs also contain similar provisions.
43 2012 GAA provides:
8. Reportorial Requirement. The DBM shall submit, either in printed form or by way of electronic document, to the House Committee on Appropriations and the Senate Committee on Finance separate quarterly reports stating the releases from the Unprogrammed Fund, the amounts released and the purposes thereof, and the recipient departments, bureaus, agencies or offices, including GOCCs and GFIs, as well as the authority under which the funds are released under Special Provision No. 1 of the Unprogrammed Fund.
2013 GAA reads:
8. Reportorial Requirement. The DBM shall submit, either in printed form or by way of electronic document, to the House Committee on Appropriations and the Senate Committee on Finance separate quarterly reports stating the releases from the Unprogrammed Fund, the amounts released and the purposes thereof, and the recipient departments, bureaus, and offices, including GOCCs and GFIs, as well as the authority under which the funds are released under Special Provision No. 1 of the Unprogrammed Fund.
44Commission of Internal Revenue v. San Roque Power Corporation, G.R. Nos. 187485, 196113 and 197156, 690 SCRA 336.
45 Supra note 7, at 1466-1467.
46 http://www.gov.ph/2014/07/14/english-national-address-of-president-aquino-on-the-supreme-courts-decision-on-dap/ Last visited on November 13, 2014.
47 Supra note 7, at 1432.
48 Supra note 14, at 1239.
49Philippine National Bank v. Heirs of Estanislao Militar, G.R. No. 164801 and 165165, June 30, 2006, 494 SCRA 308, 319.
50 Id.
51 See Good Faith in European Contract Law, R. Zimmermann, S. Whittaker, eds., Cambridge University Press, 2000, p. 16; http://catdir.loc.gov/catdir/samples/cam032/99037679.pdf (Visited on November 24, 2014).
52 G.R. No. 160772, July 13, 2009, 592 SCRA 394.
53 G.R. Nos. 167006-07, 14 August 2007, 530 SCRA 142.
54 G.R. No. 142362, May 3, 2006, 489 SCRA 22.
55 Words And Phrases, Vol. 35, p. 356, citing Bender v. Cushing, 14 Ohio Dec. 65, 70.
56 Section 3(l), Rule 131, Rules of Court.
57 Id.
58 http://www.gov.ph/2014/07/24/dap-presentation-of-secretary-abad-to-the-senate-of-the-philippines/ (November 27, 2014)
CARPIO, J.:
Art. III, Sec. 10Article II, Sec. 26
Section 10. No law impairing the obligation of contracts shall be passed.
Article XII, Sec. 11
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 or for a longer period than fifty years. Neither shall any such franchise or right 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.
Section 26. The State shall guarantee equal access to opportunities for public service and prohibit political dynasties as may be defined by law.While these terms in the Constitution are statutorily defined, a case involving their usage does not automatically reduce the case into one of mere statutory interpretation. On the contrary, it highlights the dynamic process of scrutinizing the statutory definition of certain terms and determining whether such definition conforms to the intent and language of the Constitution.
(1) Presentation of Secretary AbadLikewise, in their Memorandum, respondents averred that “[t]he termination of the DAP has rendered these cases moot, leaving any question concerning the constitutionality of its prior applications a matter for lower courts to decide.” Respondents alleged:ChanRoblesVirtualawlibrary
In conclusion, Your Honors, may I inform the Court that because the DAP has already fully served its purpose, the Administration’s economic managers have recommended its termination to the President. Thank you and good afternoon.4chanRoblesvirtualLawlibrary
(2) Presentation of the Solicitor General
Your Honors, what we have shown you is how the DAP was used as a mechanism for building the DREAM and other projects. This constitutional exercise, repeated 115 times, is the story of the DAP. As Secretary Abad showed you, the circumstances that justified the creation of DAP no longer obtained. The systematic issues that slowed down public spending have been resolved, and line agencies now have normal levels of budget utilization. This is indicated by the diminishing use of DAP, which lapsed into complete disuse in the second half of 2013, and thus became legally functus officio. The President no longer has any use for DAP in 2014. This is a compelling fact and development that we respectfully submit undermines the viability of the present petitions and puts in issue the necessity of deciding these cases in the first place. The same constitutional authority used by the President to pump-rise the economy in the first half of his Administration has not transitioned to providing relief and rehabilitation in areas of our country struck by destructive calamities. This only emphasized our point that generic constitutional tools can take on different purposes depending on the exigencies of the moment.
DAP as a program, no longer exists, thereby mooting these present cases brought to challenge its constitutionality. Any constitutional challenge should no longer be at the level of the program, which is now extinct, but at the level of its prior applications or the specific disbursements under the now defunct policy.5 x x x. (Emphasis supplied)
(3) Justice Leonen’s questions
JUSTICE LEONEN:
Ok, you are now saying... Alright, I heard it twice: Once, by the DBM Secretary and second, by your representations that DAP is no longer there.
SOLICITOR GENERAL JARDELEZA:
That’s right.
JUSTICE LEONEN:
Did I hear you correctly?
SOLICITOR GENERAL JARDELEZA:
That’s correct, Your Honor.
JUSTICE LEONEN:
Is there an amendatory.... is there a document, an officially released document that would clearly say that there is no longer DAP?
SOLICITOR GENERAL JARDELEZA:
I do not believe so, Your Honor, but as the Secretary has said the economic managers have, in fact, already recommended to the President that there is no need for DAP.
JUSTICE LEONEN:
Is it because the case has been filed, or because of another reason?
SOLICITOR GENERAL JARDELEZA:
No, Your Honor, because the DAP 541 has become functus officio.
JUSTICE LEONEN:
So it was not applicable in fiscal year 2013, there was no DAP in 2013?
SOLICITOR GENERAL JARDELEZA:
There was still some diminishing DAP application up to the middle of 2013 but none in the second half, Your Honor.
JUSTICE LEONEN:
Again, can you enlighten us what is “diminishing” means, what project?
SOLICITOR GENERAL JARDELEZA:
For 2013, the DAP application was only.... in the first half of 2013, it was only 16.03 Billion, Your Honor.
JUSTICE LEONEN:
Still a large amount.
SOLICITOR GENERAL JARDELEZA:
Still a large amount but if we have given the total applications approved was a Hundred and Forty-Nine Million, Your Honor.
JUSTICE LEONEN:
Okay. The good Secretary mentioned the Disbursement Acceleration Program is more that just savings and more that just unprogrammed funds containing the GAA that it was a package of reforms meant to accelerate the spending of government so as to expand the economy by saying that the DAP is no longer there, do you mean the entire thing or only the portion that mean savings and the unprogrammed funds?
SOLICITOR GENERAL JARDELEZA:
By that we mean, Circular 51, Your Honor.
JUSTICE LEONEN:
Circular 541, therefore, is no longer existing.
SOLICITOR GENERAL JARDELEZA:
Yes, Your Honor.6chanRoblesvirtualLawlibrary
(4) Justice Abad’s questions
JUSTICE ABAD:
Yes. So, can we not presume from this, that this government know its departments and agencies whether it has capability to spend so much money before proposing it to Congress and that in five months you are going to say, “I just discovered they cannot do it and I’m going to abandon some of these projects and use the money for other things.” Is that.... that seems logical for a government that proposes budget to be spent for a specific purpose and then within five months abandon them. How can you explain that?
SOLICITOR GENERAL JARDELEZA:
Again, my explanation. Your Honor, is that logic and our wish may not be reality. The reality was: on 2010 the administration comes in, they have managers, the orders given, use it or lose it; there is slippage, there is delay. By the middle of 2013, they have gotten their act together, they are now spending to the tune, to the clip because the president wants them to do. Therefore, there is no more DAP.7chanRoblesvirtualLawlibrary
x x x x
JUSTICE ABAD:
It worked for you?
SOLICITOR GENERAL JARDELEZA:
It worked, Your Honor.
JUSTICE ABAD:
But why are you abandoning it already when....
SOLICITOR GENERAL JARDELEZA:
Because it worked, Your Honor.
JUSTICE ABAD:
...in the future such problems as calamities, etc., can take place, if it’s not an admission that something is wrong with it?
SOLICITOR GENERAL JARDELEZA:
It has stopped because it worked, Your Honor.8
1. DAP, as a program, no longer exists.Clearly, respondents’ argument of mootness on the ground that the DAP had served its purpose negates the government’s fears of the “chilling effect” of the Decision to the economy and the rest of the country. If the DAP had already achieved its goal of stimulating the economy, as respondents repeatedly and consistently argued before the Court, then no adverse economic effects could possibly result in the declaration of unconstitutionality of the DAP and the practices undertaken under the DAP.
82. As respondents manifested before this Honorable Court during the second hearing, the DAP no longer exists. The President’s economic advisers have reported to him that the systemic issues that had slowed down public spending have been resolved, and line agencies now had normal levels of budget utilization. This is indicated by the diminishing use of DAP, which downward shift continued in 2012 and 2013, and its total disuse by the last quarter of 2013. Thus, even before the various present petitions were filed, DAP had already become operationally dead. Contrary to what some have intimated, DAP was not stopped or withdrawn because there was “something wrong with it” - rather, it became functus officio because it had already worked. Petitioners are challenging the ghost of a program.
83. The President no longer has any use for DAP in 2014 and its total disuse means that [] there is no longer an ongoing program that the Honorable Court can enjoin. This is a compelling fact that undermines the viability of the present cases, and puts in issue the necessity of deciding these cases in the first place. Moreover, the same constitutional authority used by the President to pump-prime the economy in the first half of his administration has now transitioned to providing relief and rehabilitation to areas of our country struck by destructive calamities. This only emphasizes respondents’ point that generic constitutional tools can take on different purposes depending on the exigencies of the moment.9
x x x. When the Gulf Coast of the United States was severely damaged by Hurricane Katrina on 29 August 2005, the U.S. President submitted to the U.S. Congress a request for an emergency supplemental budget on 1 September 2005. The Senate passed the request on 1 September 2005 while the House approved the bill on 2 September 2005, and the U.S. President signed it into law on the same day. It took only two days for the emergency supplemental appropriations to be approved and passed into law. There is nothing that prevents President Benigno S. Aquino III from submitting an emergency supplemental appropriation bill that could be approved on the same day by the Congress of the Philippines. x x x.IV. The earmarking of judiciary savings for the construction of the Manila Hall of Justice is not a cross-border transfer of funds.
Considering that revenue targets are determined quarterly, revenue collections are ascertained on a quarterly basis as well. Therefore, if the government determines that revenue collections for a certain quarter exceed the revenue target for the same quarter, the government can lawfully release the appropriations under the Unprogrammed Fund. In other words, the government need not wait for the end of the fiscal year to release and spend such funds if at the end of each quarter, it has already determined an excess in revenue collections.
PARTICULARS LEVELS (in billion pesos) % DISTRIBUTION Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 TotalRevenues 378.8 482.2 434.2 450.6 1,745.9 21.7 27.6 24.9 25.8 100Disbursements 452.7 493.0 494.0 544.2 1,983.9 22.8 24.9 24.9 27.4 100Surplus/(Deficit) (73.9) (10.8) (59.8) (93.6) (238.0) 31.0 4.5 25.1 39.3 100
Endnotes:
1 Other terms in the Constitution that are defined or to be defined by statute or by jurisprudence:2 Motion for Reconsideration, p. 9.
- social justice (Article II, Sec. 10 and Art. XIII)
- due process and equal protection (Art. III, Sec. 1)
- taking of private property (Article III, Sec. 9)
- writ of habeas corpus (Article III, Sec. 15)
- ex-post facto law and bill of attainder (Article III, Sec. 22)
- naturalized citizen (Article IV, Sec. 1)
- martial law (Article VII, Sec. 18)
- reprieve, commutation and pardon (Article VII, Sec. 19)
- engaged in the practice of law (Article IX, Sec. 1)
- academic freedom (Article XIV, Sec. 5[2])
3 Motion for Reconsideration, p. 11.
4 TSN, 28 January 2014, p. 14.
5 TSN, 28 January 2014, p. 23.
6 TSN, 28 January 2014, pp. 81-83.
7 TSN, 28 January 2014, p. 103.
8 TSN, 28 January 2014, p. 105.
9 Memorandum, p. 30.
10 SECTION 3. The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary may not be reduced by the legislature below the amount appropriated for the previous year and, after approval, shall be automatically and regularly released.
11Rollo (G.R. No. 209287), p. 536.
12 http://www.dbm.gov.ph/wp-content/uploads/DBCC_MATTERS/Fiscal_Program/FiscalProgramOfNGFy_2013.pdf (visited on 20 January 2015).
13League of Cities of the Philippines v. Commission on Elections, G.R. Nos. 176951, et al., 24 August 2010, 628 SCRA 819.
14Chavez v. Judicial and Bar Council, G.R. No. 202242, 16 April 2013, 696 SCRA 496, 516.
15 Id.
16League of Cities of the Philippines v. Commission on Elections, G.R. Nos. 176951, et al., 24 August 2010, 628 SCRA 819, 832; Commissioner of Internal Revenue v. San Roque Power Corporation, G.R. No. 187485, 8 October 2013, 707 SCRA 66.
17Chemplex (Phils.), Inc. v. Pamatian, 156 Phil. 408 (1974); Spouses Alvendia v. Intermediate Appellate Court, 260 Phil. 265 (1990).
18Arcenas v. Cinco, 165 Phil. 741 (1976).
BRION, J.:
I write this SEPARATE OPINION (Qualified Concurrence) to express my qualified agreement with the ponencia’s DENIAL WITH FINALITY of the parties’ respective motions for reconsideration of the Court’s Decision in these consolidated cases, promulgated on July 1, 2014.(1) | The General Appropriation Acts (GAAs) of 2011 and 2012 lacked the appropriate provisions authorizing the transfer of funds. Contrary to the constitutional provision limiting the transfer of savings within a single branch of government, the GAAs authorized the “cross-border” transfer of savings from appropriations in one branch of government to other branches; |
(2) | Some of the funds used to finance DAP projects were not sourced from savings. Savings could be generated only when the purpose of the appropriation has been fulfilled, or when the need for the appropriation no longer exists. Under these standards, the unobligated allotments and unreleased appropriations, which the Executive used to fund the DAP, were not savings. |
(3) | Some of the projects funded through the DAP do not have items in the GAA; hence, the Executive – in violation of the Constitution – usurped the Legislative’s power of the purse by effectively allocating and spending funds on its own authority. |
(4) | Funds that the DAP sourced from the Executive had been used to augment items in other branches of the government, thus violating the rule against the transfer of funds from one branch of government to another. |
(5) | The DAP unlawfully released and allowed the use of unprogrammed funds,3 without complying with the prior requisite that the original revenue targets must have first been exceeded. |
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.A textual examination of the definition of judicial power shows that two distinct and separate powers are involved over distinct and separate matters.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
I note that aside from newspaper clippings showing the antecedents surrounding the DAP, the petitions are filled with quotations from the respondents themselves, either through press releases to the general public or as published in government websites. In fact, the petitions – quoting the press release published in the respondents’ website – enumerated disbursements released through the DAP; it also included admissions from no less than Secretary Abad regarding the use of funds from the DAP to fund projects identified by legislators on top of their regular PDAF allocations.I see no reason to change these views and observations.
Additionally, the respondents, in the course of the oral arguments, submitted details of the programs funded by the DAP, and admitted in Court that the funding of Congress’ e-library and certain projects in the COA came from the DAP. They likewise stated in their submitted memorandum that the President “made available” to the Commission on Elections (COMELEC) the “savings” of his department upon request for fund.
All of these cumulatively and sufficiently lead to a prima facie case of grave abuse of discretion by the Executive in the handling of public funds. In other words, these admitted pieces of evidence, taken together, support the petitioners’ allegations and establish sufficient basic premises for the Court’s action on the merits. While the Court, unlike the trial courts, does not conduct proceedings to receive evidence, it must recognize as established the facts admitted or undisputedly represented by the parties themselves.
First, the existence of the DAP itself, the justification for its creation, the respondent’s legal characterization of the source of DAP funds (i.e., unobligated allotments and unreleased appropriations for slow moving projects) and the various purposes for which the DAP funds would be used (i.e., for PDAF augmentation and for “aiding” other branches of government and other constitutional bodies) are clearly and indisputably shown.
Second, the respondents’ undisputed realignment of funds from one point to another inevitably raised questions that, as discussed above, are ripe for constitutional scrutiny. (Citations omitted)22
Actual savings is a sine qua non to a valid transfer of funds from one government agency to another. The word “actual” denotes that something is real or substantial, or exists presently in fact as opposed to something which is merely theoretical, possible, potential or hypothetical.27This jurisprudential interpretation of “actual savings” may not be violated by Congress in defining what constitutes “savings” in its yearly GAA; neither may Congress, in defining “savings”, contravene the text and purpose of Section 25 (5), Article VI.
Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws mean, and this is the reason why under Article 8 of the New Civil Code, “Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system . . .” The interpretation upon a law by this Court constitutes, in a way, a part of the law as of the date that law was originally passed, since this Court's construction merely establishes the contemporaneous legislative intent that the law thus construed intends to effectuate. The settled rule supported by numerous authorities is a restatement of the legal maxim “legis interpretation legis vim obtinet” — the interpretation placed upon the written law by a competent court has the force of law. The doctrine laid down in Lucero and Macarandang was part of the jurisprudence, hence, of the law, of the land, at the time appellant was found in possession of the firearm in question and where he was arraigned by the trial court. It is true that the doctrine was overruled in the Mapa case in 1967, but when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply to parties who had relied on, the old doctrine and acted on the faith thereof. This is especially true in the construction and application of criminal laws, where it is necessary that the punishment of an act be reasonably foreseen for the guidance of society.42The prospective application of a statutory interpretation, however, does not extend to its application to the case in which the pronouncement or new interpretation was made. For this reason, we affirmed Mapa’s conviction for illegal possession of firearms.43chanRoblesvirtualLawlibrary
Since Congress did not provide anything for personnel services and capital outlays under the appropriation “Generation of new knowledge and technologies and research capability building in priority areas identified as strategic to National Development,” then these cannot be funded in the guise of a valid transfer of savings and augmentation of appropriations.59I made this conclusion bearing in mind that the jurisprudential standards apply to an allotment class, and with due consideration as well of the complexity and dynamism of the budgetary process.
Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized in this Act.61Thus, a PAP that has no deficiency could not be augmented. Augmenting an otherwise sufficiently-funded PAP violates the constitutional command that public money should be spent only through an appropriation made by law; too, if committed during the implementation of the 2011 and 2012 GAA, it also contravenes the definition of augmentation found therein.
Given the jurisprudential meaning of the operative fact doctrine, a first consideration to be made under the circumstances of this case is the application of the doctrine: (1) to the programs, works and projects the DAP funded in relying on its validity; (2) to the officials who undertook the programs, works and projects; and (3) to the public officials responsible for the establishment and implementation of the DAP.B. The application of the operative fact doctrine to the PAPs that relied on the DAP and to the DAP’s authors, proponents and implementors, is not obiter dictum
With respect to the programs, works and projects, I fully agree with J. Bersamin that the DAP-funded programs, works and projects can no longer be undone; practicality and equity demand that they be left alone as they were undertaken relying on the validity of the DAP funds at the time these programs, works and projects were undertaken.
The persons and officials, on the other hand, who merely received or utilized the budgetary funds in the regular course and without knowledge of the DAP’s invalidity, would suffer prejudice if the invalidity of the DAP would affect them. Thus, they should not incur any liability for utilizing DAP funds, unless they committed criminal acts in the course of their actions other than the use of the funds in good faith.
The doctrine, on the other hand, cannot simply and generally be extended to the officials who never relied on the DAP’s validity and who are merely linked to the DAP because they were its authors and implementors. A case in point is the case of the DBM Secretary who formulated and sought the approval of NBC No. 541 and who, as author, cannot be said to have relied on it in the course of its operation. Since he did not rely on the DAP, no occasion exists to apply the operative fact doctrine to him and there is no reason to consider his “good or bad faith” under this doctrine.
This conclusion should apply to all others whose only link to the DAP is as its authors, implementors or proponents. If these parties, for their own reasons, would claim the benefit of the doctrine, then the burden is on them to prove that they fall under the coverage of the doctrine. As claimants seeking protection, they must actively show their good faith reliance; good faith cannot rise on its own and self-levitate from a law or measure that has fallen due to its unconstitutionality. Upon failure to discharge the burden, then the general rule should apply – the DAP is a void measure which is deemed never to have existed at all.
The good faith under this doctrine should be distinguished from the good faith considered from the perspective of liability. It will be recalled from our above finding that the respondents, through grave abuse of discretion, committed a constitutional violation by withdrawing funds that are not considered savings, pooling them together, and using them to finance projects outside of the Executive branch and to support even the PDAF allocations of legislators.
When transgressions such as these occur, the possibility for liability for the transgressions committed inevitably arises. It is a basic rule under the law on public officers that public accountability potentially imposes a three-fold liability – criminal, civil and administrative against a public officer. A ruling of this kind can only come from a tribunal with direct or original jurisdiction over the issue of liability and where the good or bad faith in the performance of duty is a material issue. This Court is not that kind of tribunal in these proceedings as we merely decide the question of the DAP’s constitutionality. If we rule beyond pure constitutionality at all, it is only to expound on the question of the consequences of our declaration of unconstitutionality, in the manner that we do when we define the application of the operative fact doctrine. Hence, any ruling we make implying the existence of the presumption of good faith or negating it, is only for the purpose of the question before us – the constitutionality of the DAP and other related issuances.
To go back to the case of Secretary Abad as an example, we cannot make any finding on good faith or bad faith from the perspective of the operative fact doctrine since, as author and implementor, he did not rely in good faith on the DAP.
Neither can we make any pronouncement on his criminal, civil or administrative liability, i.e., based on his performance of duty, since we do not have the jurisdiction to make this kind of ruling and we cannot do so without violating his due process rights. In the same manner, given our findings in this case, we should not identify this Court with a ruling that seemingly clears the respondents from liabilities for the transgressions we found in the DBM Secretary’s performance of duties when the evidence before us, at the very least, shows that his actions negate the presumption of good faith that he would otherwise enjoy in an assessment of his performance of duty.
To be specific about this disclaimer, aside from the many admissions outlined elsewhere in the Opinion, there are indicators showing that the DBM Secretary might have established the DAP knowingly aware that it is tainted with unconstitutionality.70
(1) | That the following acts and practices under the Disbursement Acceleration Program, National Budget Circular No. 541 and related executive issuances are unconstitutional for violating Section 25(5), Article VI, of the 1987 Constitution and the doctrine of separation of powers, namely: | |
(a) | The withdrawal of unobligated allotments from the implementing agencies, and the declaration of withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriations Acts; and | |
(b) | The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the Executive. | |
(2) | That the use of unprogrammed funds despite the absence of a certification by the National Treasurer that the revenue collections exceeded the revenue targets is VOID and ILLEGAL for non-compliance with the conditions provided in the relevant General Appropriations Acts. |
Endnotes:
1 No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.
2 Department of Budget and Management, The Disbursement Acceleration Program: What You Need to Know About DAP, http://www.gov.ph/featured/dap/.
3 Unprogrammed Funds are standby appropriations authorized by Congress in the annual general appropriations act. Department of Budget and Management, A Brief on the Special Purpose Funds in the National Budget (Oct. 5, 2013), available at http://www.dbm.gov.ph/wp-content/uploads/DAP/Note%20on%20the%20Special%20Purpose%20Funds%20_Released%20-%20Oct%202013_.pdf. Note, however, that this definition had been abbreviated to accommodate special provisions that may be required by Congress prior to the release of unprogrammed funds.
4 The term ab initio doctrine was first used in the case Norton v. Shelby Conty, 118 US 425, 6 S. Ct. 1121, 30 L. Ed. 178 (1886).
5 See the ponencia in the main decision in Araullo v. Aquino, G.R. No. 209287, July 1, 2014, pp. 85 – 90, Brion, J.’s Separate Concurring Opinon, pp. 52 – 62.
6See, for instance, Sections 24, 25, 27 (2), 29, Article VI of the 1987 Constitution.
7 The Constitution, in specifying the process for and providing checks and balances in the formulation, enactment, implementation and audit of the national budget seeks to ensure that public funds shall be spent only for a public purpose, determined by Congress through a law.
8The interpretation of an administrative government agency xxx which is tasked to implement a statute, is accorded great respect and ordinarily controls the construction of the courts. A long line of cases establish the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies. xxx
“The rationale for this rule relates not only to the emergence of the multifarious needs of a modern or modernizing society and the establishment of diverse administrative agencies for addressing and satisfying those needs; it also relates to the accumulation of experience and growth of specialized capabilities by the administrative agency charged with implementing a particular statute. In Asturias Sugar Central, Inc. v. Commissioner of Customs, the Court stressed that executive officials are presumed to have familiarized themselves with all the considerations pertinent to the meaning and purpose of the law, and to have formed an independent, conscientious and competent expert opinion thereon. The courts give much weight to the government agency or officials charged with the implementation of the law, their competence, expertness, experience and informed judgment, and the fact that they frequently are drafters of the law they interpret.”
As a general rule, contemporaneous construction is resorted to for certainty and predictability in the laws, especially those involving specific terms having technical meanings.
However, courts will not hesitate to set aside such executive interpretation when it is clearly erroneous, or when there is no ambiguity in the rule, or when the language or words used are clear and plain or readily understandable to any ordinary reader.
Stated differently, when an administrative agency renders an opinion or issues a statement of policy, it merely interprets a pre-existing law and the administrative interpretation is at best advisory for it is the courts that finally determine what the law means. Thus, an action by an administrative agency may be set aside by the judicial department if there is an error of law, abuse of power, lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of the law. Energy Regulation Board v. Court of Appeals, 409 Phil. 36, 47 – 48 (2001). citation omitted
9 Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws of the Constitution. De Agbayani v. Philippine National Bank, 148 Phil. 443, 447 (1971).
x x x administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine what the law means.' It cannot be otherwise as the Constitution limits the authority of the President, in whom all executive power resides, to take care that the laws be faithfully executed. No lesser administrative executive office or agency then can, contrary to the express language of the Constitution, assert for itself a more extensive prerogative. Bautista v. Juinio, 212 Phil. 307, 321 (1984), citing Teoxon v. Member of the Board of Administrators, L-25619, June 30, 1970, 30 SCRA 585, United States v. Barrias, 11 Phil. 327 (1908); United States v. Tupasi Molina, 29 Phil. 119 (1914); People v. Santos, 63 Phil. 300 (1936); Chinese Flour Importers Association v. Price Stabilization Board, 89 Phil. 439, Victorias Milling Co. v. Social Security Commission, 114 Phil. 555 (1962). Cf. People v. Maceren, L-32166, October 18, 1977, 79 SCRA 450 (per Aquino, J.).
10 The judiciary is the final arbiter on the question of whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction. This is not only a judicial power but a duty to pass judgment on matters of this nature. Tañada v. Angara, 338 Phil. 546, 574 – 575 (1997) former Chief Justice Roberto Concepcion’s discussion during the Constitutional Commission’s deliberations on judicial power.
11 The Constitution is a definition of the powers of government. Who is to determine the nature, scope and extent of such powers? The Constitution itself has provided for the instrumentality of the judiciary as the rational way. And when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. Angara v. Electoral Commission, 63 Phil. 139, 158 (1936).
12 Section 39. Authority to Use Savings in Appropriations to Cover Deficits. - Except as otherwise provided in the General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations Act for programs and projects of any department, office or agency, may, with the approval of the President, be used to cover a deficit in any other item of the regular appropriations: provided, that the creation of new positions or increase of salaries shall not be allowed to be funded from budgetary savings except when specifically authorized by law: provided, further, that whenever authorized positions are transferred from one program or project to another within the same department, office or agency, the corresponding amounts appropriated for personal services are also deemed transferred, without, however increasing the total outlay for personal services of the department, office or agency concerned.
13 Respondents’ Motion for Reconsideration, pp. 38 – 48.
14 Respondents’ Motion for Reconsideration, pp. 5 – 8.
15 Respondents’ Motion for Reconsideration, pp. 29 – 35.
16See the discussion of judicial supremacy in Angara v. Electoral Commission, supra, as juxtaposed with the discussion of the Court’s expanded certiorari jurisdiction in Francisco, Jr. v. The House of Representatives, 460 Phil. 830, 882 – 883, 891 (2003):
The Constitution has provided for an elaborate system of checks and balances to secure coordination in the workings of the various departments of the government. x x x And the judiciary in turn, with the Supreme Court as the final arbiter, effectively checks the other departments in the exercise of its power to determine the law, and hence to declare executive and legislative acts void if violative of the Constitution.
In the scholarly estimation of former Supreme Court Justice Florentino Feliciano, “x x x judicial review is essential for the maintenance and enforcement of the separation of powers and the balancing of powers among the three great departments of government through the definition and maintenance of the boundaries of authority and control between them.” To him, “[j]udicial review is the chief, indeed the only, medium of participation – or instrument of intervention – of the judiciary in that balancing operation.”
To ensure the potency of the power of judicial review to curb grave abuse of discretion by “any branch or instrumentalities of government,” the afore-quoted Section 1, Article VIII of the Constitution engraves, for the first time into its history, into block letter law the so-called “expanded certiorari jurisdiction” of this Court x x x.
x x x x
There is indeed a plethora of cases in which this Court exercised the power of judicial review over congressional action. Thus, in Santiago v. Guingona, Jr., this Court ruled that it is well within the power and jurisdiction of the Court to inquire whether the Senate or its officials committed a violation of the Constitution or grave abuse of discretion in the exercise of their functions and prerogatives. x x x
17Senate of the Philippines v. Ermita, G.R. No. 169777, April 20, 2006, 488 SCRA 1, 35; and Francisco v. House of Representatives, 460 Phil. 830, 842 (2003).
18See Justice Arturo D. Brion’s discussion on the requisites to trigger the Court’s expanded jurisdiction in his Separate Concurring Opinion on Imbong v. Ochoa, G.R. No. 204819, April 8, 2014.
19 By virtue of the Court’s expanded certiorari jurisdiction, judicial power had been “extended over the very powers exercised by other branches or instrumentalities of government when grave abuse of discretion is present. In other words, the expansion empowers the judiciary, as a matter of duty, to inquire into acts of lawmaking by the legislature and into law implementation by the executive when these other branches act with grave abuse of discretion.” Imbong v. Ochoa, G.R. No. 204819, April 8, 2014 (Brion, J. separate concurring).
20Araullo v. Aquino, G.R. No. 209287, July 1, 2014 (Brion J. separate concurring) pp. 2 – 4.
21 Compare with requisites for standing as a citizen and as a taxpayer:
The question in standing is whether a party has “alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.” Kilosbayan, Incorporated v. Morato, 316 Phil. 652, 696 (1995), citing Baker v. Carr, 369 U.S. 186, 7 L.Ed.2d 633 (1962).
Standing as taxpayer requires that public funds are disbursed by a political subdivision or instrumentality and in doing so, a law is violated or some irregularity is committed, and that the petitioner is directly affected by the alleged ultra vires act. Bugnay Construction & Development Corp. v. Laron, 257 Phil. 245, 256 – 257 (1989).
A citizen acquires standing only if he can establish that he has suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government; the injury is fairly traceable to the challenged action; and the injury is likely to be redressed by a favorable action. Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Commission on Elections, 352 Phil. 153, 168 (1998).
22Araullo v. Aquino, G.R. No. 209287, July 1, 2014, (J. Brion, separate concurring) pp. 21 – 22.
23See, for instance, Biraogo v. The Philippine Truth Commission of 2010, G.R. No. 192935, December 7, 2010, 637 SCRA 78; David v. Arroyo, G.R. No. 171396, May 3, 2006, 489 SCRA 160, and Kilosbayan v. Guingona, G.R. No. 113375, May 5, 1994, 232 SCRA 110.
24See Article VI, Sections 24, 25, 27 par. 2, 29, and Article IX-D, Sections 1 – 4, 1987 Constitution.
25 Under the Constitution, the spending power called by James Madison as "the power of the purse," belongs to Congress, subject only to the veto power of the President. The President may propose the budget, but still the final say on the matter of appropriations is lodged in the Congress.
The power of appropriation carries with it the power to specify the project or activity to be funded under the appropriation law. It can be as detailed and as broad as Congress wants it to be. Philippine Constitutional Association v. Enriquez, G.R. No. 113105, August 19, 1994, 235 SCRA 506, 522.
26 575 Phil. 428 (2008).
27 Id. at 454.
28 Where the subject of a bill is limited to a particular matter, the members of the legislature as well as the people should be informed of the subject of proposed legislative measures. This constitutional provision thus precludes the insertion of riders in legislation, a rider being a provision not germane to the subject matter of the bill. Lidasan v. Comelec, G.R. No. L-28089, October 25, 1967, 21 SCRA 479, 510 (Fernando, J. dissenting).
29 Section 26, Article VI of the 1987 Constitution provides:
Section 26. (1) Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof.
30 Note, too, that Congress cannot include in a general appropriations bill matters that should be more properly enacted in separate legislation, and if it does that, the inappropriate provisions inserted by it must be treated as “item”, which can be vetoed by the President in the exercise of his item-veto power. Philippine Constitutional Association v. Enriquez, G.R. No. 113105, August 19, 1994, 235 SCRA 506, 532.
31 As the Constitution is explicit that the provision which Congress can include in an appropriations bill must “relate specifically to some particular appropriation therein” and “be limited in its operation to the appropriation to which it relates,” it follows that any provision which does not relate to any particular item, or which extends in its operation beyond an item of appropriation, is considered “an inappropriate provision” which can be vetoed separately from an item. Also to be included in the category of “inappropriate provisions” are unconstitutional provisions and provisions which are intended to amend other laws, because clearly these kind of laws have no place in an appropriations bill. These are matters of general legislation more appropriately dealt with in separate enactments. Philippine Constitutional Association v. Enriquez, G.R. No. 113105, August 19, 1994, 235 SCRA 506, 534.
32 Article VI, Section 25, paragraph 2 of the 1987 Constitution requires that “No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular appropriation therein. Any such provision or enactment shall be limited in its operation to the appropriation to which it relates.”
33 Article VI, Section 29, paragraph 1 of the 1987 Constitution provides that:
29. (1) No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
34Bautista v. Juinio, G.R. No. L-50908, January 31, 1984, 127 SCRA 329, 343.
35Araullo v. Aquino, G.R. No. 209287, July 1, 2014, pp. 77 – 83.
36 Respondents’ Motion for Reconsideration, pp. 29 – 35.
37 In as early as the 2000, the General Appropriations Act require, as a condition for the release of unprogrammed funds, that revenue collections first exceed the original revenue targets, in a similar language as the provisions in the 2011 and 2012 GAA, viz:
1. Release of Fund. The amounts herein appropriated shall be released only when the revenue collections exceed the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution or when the corresponding funding or receipts for the purpose have been realized in the special cases covered by specific procedures in Special Provision Nos. 2, 3, 4, 5, 7, 8, 9, 13 and 14 herein: x x x
38See the ponencia’s discussion on pp. 18 – 21.
39See Justice Carpio’s discussion on the release of the Unprogrammed Fund in pp. 10 – 11 of his Separate Opinion.
40 154 Phil. 565 (1974).
41 127 Phil. 624 (1967).
42 154 Phil. 565, 571 (1974).
43 127 Phil. 624 (1967).
44See for instance, the following cases: (1) People v. Maceren, No. L-32166, October 18, 1977, 79 SCRA 450 where the Court acquitted Maceren, who was then charged with the violation of the Fisheries Administrative Order No. 84 for engaging in electro fishing. The AO No. 84 sought to implement the Fisheries Law, which prohibited "the use of any obnoxious or poisonous substance" in fishing. In acquitting Maceren, the Court held that AO no. 84 exceeded the prohibited acts in the Fisheries Law, and hence should not penalize electro-fishing. (2) Conte v. Commission on Audit, G.R. No. 116422, November 4, 1996, 264 SCRA 19 where the Court, in interpreting that SSS Resolution No. 56 is illegal for contravening Republic Act No. 660, and thus refused to reverse the Commission on Audit’s disallowance of the petitioners’ benefits under SSS Resolution No. 56. (3) Insular Bank of Asia and Americas Employees Union v. Inciong, 217 Phil 629 (1984), where the Court nullified Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy instruction No. 9 for unduly enlarging the exclusions for holiday pay in the Labor Code, and thus ordered its payment to the petitioner; and (4) Philippine Apparel Workers Union vs. National Labor Relations Commission, G.R. No. L-50320, July 31, 1981, 106 SCRA 444 where the Court held that the implementing rules issued by the Secretary of Labor exceeded the authority it was granted under Presidential Decree No. 1123, and thus ordered the respondent employer company to pay its union the emergency cost of living allowance that PD No. 1123 requires.
45 Ninety-six percent or P69.3 billion of the P72.11 billion Disbursement Acceleration Plan (DAP) has successfully been released to agencies and government-owned or -controlled corporations (GOCCs) as of end-December 2011. Department of Budget and Management, 96% of P72.11-B disbursement acceleration already released, 77.5% disbursed (Jan. 9, 2012), available at http://www.gov.ph/2012/01/09/96-of-p72-11-b-disbursement-acceleration-already-released-77-5 disbursed/.
46 Article IX-D, Section 2, paragraph 1 provides:
(1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post- audit basis:
(a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity. However, where the internal control system of the audited agencies is inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep the general accounts of the Government and, for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto.
47 Pursuant to its mandate as the guardian of public funds, the COA is vested with broad powers over all accounts pertaining to government revenue and expenditures and the uses of public funds and property. This includes the exclusive authority to define the scope of its audit and examination, establish the techniques and methods for such review, and promulgate accounting and auditing rules and regulations. The COA is endowed with enough latitude to determine, prevent and disallow irregular, unnecessary, excessive, extravagant or unconscionable expenditures of government funds. It is tasked to be vigilant and conscientious in safeguarding the proper use of the government's, and ultimately the people's, property. The exercise of its general audit power is among the constitutional mechanisms that gives life to the check and balance system inherent in our form of government. Veloso v. Commission on Audit, G.R. No. 193677, September 6, 2011, 656 SCRA 767, 776.
48See Blaquera v. Alcala, 356 Phil. 678 (1998); Casal v. Commission on Audit, 538 Phil. 634 (2006).
49 Article VI, Section 29, paragraph 1, 1987 Constitution.
50 Article VI, Section 27, paragraph 2, 1987 Constitution.
51Bengzon v. Secretary of Justice, 62 Phil. 912, 916 (1936).
52 Id.
53Bengzon v. Drilon, G.R. No. 103524, April 15, 1992, 208 SCRA 133.
54 Id. at 144.
55 G.R. No. 208566, November 19, 2013.
56 Id.
57 G.R. No. 188635, January 29, 2013 689 SCRA 385.
58 Id. at 405.
59Araullo v. Aquino, G.R. No. 209287, July 1, 2014 (Brion, J., separate) p. 49.
60 Article VI, Section 25, paragraph 1 of the 1987 Constitution, JOAQUIN G. BERNAS, S.J. THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A COMMENTARY, 779 (2009).
61 Section 60 of the General Provisions of Rep. Act No. 10147 (General Appropriations Act of 2011) and Section 54 of the General Provisions of Rep. Act No. 10155 (General Appropriations Act of 2012).
62 The same query applies to the DAP’s augmentation of the Commission on Audit’s appropriation for “A1.a1. General Administration and Support”, and the Philippine Airforce’s appropriations for “A.II.a.2 Service Support Activities, A.III.a.1 Air and Ground Combat Services, A.III.a.3 Combat Support Services and A.III.b.1 Territorial Defense Activities”
The DAP, in order to finance the “IT Infrastructure Program and hiring of additional expenses” of the Commission on Audit in 2011 increased the latter’s appropriation for General Administration and Support. DAP increased the appropriation by adding P5.8 million for MOOE and P137.9 million for CO. The COA’s appropriation for General Administration and Support, during the GAA of 2011, however, does not contain any item for CO.
In order to finance the Philippine Airforce’s “On-Base Housing Facilities and Communication Equipment,” the DAP augmented several appropriations of the Philippine Airforce with capital outlay totaling to Php29.8 million. None of these appropriations had an item for CO. (Respondents’ Seventh Evidence Packet)
63Supra note 9.
64 Section 16 of the General Provisions of Rep. Act No. 6831 (the General Appropriations Act of 1990) provides:
Section 16. Use of Savings. - The President of the Philippines, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions under Article IX of the Constitution, and the Ombudsman are hereby authorized to augment any item in this Act for their respective offices from savings in other items of their respective appropriations: provided, that no item of appropriation recommended by the President in the budget submitted to Congress pursuant to Article VII, Section 22 of the Constitution which has been disapproved or reduced by Congress shall be restored or increased by the use of appropriations authorized for other purposes in this Act by augmentation. Any item of appropriation for any purpose recommended by the President in the budget shall be deemed to have been disapproved by Congress if no corresponding appropriation for the specific purpose is provided in this Act.
65See Municipality of Malabang, Lanao del Sur v. Benito, 137 Phil. 360 (1969), Serrano de Agbayani v. Philippine National Bank, 148 Phil. 443, 447 - 448 (1971)., Planters Products, Inc. v. Fertiphil Corporation, G.R. No. 166006, March 14, 2008, 548 SCRA 485.
66 Respondents’ Motion for Reconsideration, p. 36.
67See Kristin Grenfell, California Coastal Commission: Retroactivity of a Judicial Ruling of Unconstitutionality, 14 Duke Envtl. L & Policy F. 245 (Fall 2003).
68See Araullo v. Aquino, G.R. No. 209287, July 1, 2014 (Brion, J., separate) pp. 55 – 58.
69Araullo v. Aquino, G.R. No. 209287, July 1, 2014 (Brion, J., separate) p. 58.
70Araullo v. Aquino, G.R. No. 209287, July 1, 2014 (Brion, J., separate) pp. 56 – 58.
71 This is otherwise known as the void ab initio doctrine, first used in the case of Norton v. Shelby County, 118 US 425, 6 S. Ct. 1121, 30 L. Ed. 178 (1886).
DEL CASTILLO, J.:
[T]he view has been expressed that the DAP was used to authorize the augmentations of items in the GAA many times over their original appropriations. While the magnitude of these supposed augmentations are, indeed, considerable, it must be recalled that Article VI, Section 25(5) of the Constitution purposely did not set a limit, in terms of percentage, on the power to augment of the heads of offices:ChanRoblesVirtualawlibraryConsequently, even if Congress appropriated only one peso for a particular PAP in the appropriations of the Executive Department, and the Executive Department, thereafter, generated savings in the amount of P1B, it is, theoretically, possible to augment the aforesaid one peso PAP appropriation with P1B. The intent to give considerable leeway to the heads of offices in the exercise of their power to augment allows this result.MR. SARMIENTO. I have one last question. Section 25, paragraph (5) authorizes the Chief Justice of the Supreme Court, the Speaker of the House of Representatives, the President, the President of the Senate to augment any item in the General Appropriations Law. Do we have a limit in terms of percentage as to how much they should augment any item in the General Appropriations Law?
MR. AZCUNA. The limit is not in percentage but “from savings.” So it is only to the extent of their savings.
[T]he third requisite of the first type of “savings” in the GAA deserves further elaboration. Note that the law contemplates, among others, the final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized. Implicit in this provision is the recognition of the possibility that the work, activity or purpose may be finally discontinued or abandoned. The law, however, does not state (1) who possesses the power to finally discontinue or abandon the work, activity or purpose, (2) how such power shall be exercised, and (3) when or under what circumstances such power shall or may be exercised.In sum, I maintain that Sections 5.4, 5.5 and 5.7 of NBC 541 are only partially unconstitutional and illegal insofar as they (1) allowed the withdrawal of unobligated allotments from slow-moving projects, which were not finally discontinued or abandoned, and (2) authorized the use of such withdrawn unobligated allotments as “savings.”
Under the doctrine of necessary implication, it is reasonable to presume that the power to finally discontinue or abandon the work, activity or purpose is vested in the person given the duty to implement the appropriation (i.e., the heads of offices), like the President with respect to the budget of the Executive Department.
As to the manner it shall be exercised, the silence of the law, as presently worded, allows the exercise of such power to be express or implied. Since there appears to be no particular form or procedure to be followed in giving notice that such power has been exercised, the Court must look into the particular circumstances of a case which tend to show, whether expressly or impliedly, that the work, activity or purpose has been finally abandoned or discontinued in determining whether the first type of “savings” arose in a given case.
This lack of form, procedure or notice requirement is, concededly, a weak point of this law because (1) it creates ambiguity when a work, activity or purpose has been finally discontinued or abandoned, and (2) it prevents interested parties from looking into the government’s justification in finally discontinuing or abandoning a work, activity or purpose. Indubitably, it opens the doors to abuse of the power to finally discontinue or abandon which may lead to the generation of illegal “savings.” Be that as it may, the Court cannot remedy the perceived weakness of the law in this regard for this properly belongs to Congress to remedy or correct. The particular circumstances of a case must, thus, be looked into in order to determine if, indeed, the power to finally discontinue or abandon the work, activity or purpose was validly effected.
I do not subscribe to the view that the provisions in the GAAs giving the appropriations on Maintenance and Other Operating Expenses (MOOE) and Capital Outlays (CO) a life-span of two years prohibit the President from withdrawing the unobligated allotments covering such items.
The availability for release of the appropriations for the MOOE and CO for a period of two years simply means that the work or activity may be pursued within the aforesaid period. It does not follow that the aforesaid provision prevents the President from finally discontinuing or abandoning such work, activity or purpose, through the exercise of the power to permanently stop further expenditure, if public interest so requires, under the second phrase of Section 38 of the Administrative Code.
It should be emphasized that Section 38 requires that the power of the President to suspend or to permanently stop expenditure must be expressly abrogated by a specific provision in the GAA in order to prevent the President from stopping a specific expenditure:ChanRoblesVirtualawlibrarySECTION 38. Suspension of Expenditure of Appropriations. – Except as otherwise provided in the General Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services appropriations used for permanent officials and employees. (Emphasis supplied)This is the clear import and meaning of the phrase “except as otherwise provided in the General Appropriations Act.” Plainly, there is nothing in the afore-quoted GAA provision on the availability for release of the appropriations for the MOOE and CO for a period of two years which expressly provides that the President cannot exercise the power to suspend or to permanently stop expenditure under Section 38 relative to such items.
That the funds should be made available for two years does not mean that the expenditure cannot be permanently stopped prior to the lapse of this period, if public interest so requires. For if this was the intention, the legislature should have so stated in more clear and categorical terms given the proviso (i.e., “except as otherwise provided in the General Appropriations Act”) in Section 38 which requires that the power to suspend or to permanently stop expenditure must be expressly abrogated by a provision in the GAA. In other words, we cannot imply from the wording of the GAA provision, on the availability for release of appropriations for the MOOE and CO for a period of two years, that the power of the President under Section 38 to suspend or to permanently stop expenditure is specifically withheld. A more express and clear provision must so provide. The legislature must be presumed to know the wording of the proviso in Section 38 which requires an express abrogation of such power.
It should also be noted that the power to suspend or to permanently stop expenditure under Section 38 is not qualified by any timeframe for good reason. Fraud or other exceptional circumstances or exigencies are no respecters of time; they can happen in the early period of the implementation of the GAA which may justify the exercise of the President’s power to suspend or to permanently stop expenditure under Section 38. As a result, such power can be exercised at any time even a few days, weeks or months from the enactment of the GAA, when public interest so requires. Otherwise, this means that the release of the funds and the implementation of the MOOE and CO must continue until the lapse of the two-year period even if, for example, prior thereto, grave anomalies have already been uncovered relative to the execution of these items or their execution have become impossible.
An illustration may better highlight the point. Suppose Congress appropriates funds to build a bridge between island A and island B in the Philippine archipelago. A few days before the start of the project, when no portion of the allotment has yet to be obligated, the water level rises due to global warming. As a result, islands A and B are completely submerged. If the two-year period is not qualified by Section 38, then the President cannot order the permanent stoppage of the expenditure, through the withdrawal of the unobligated allotment relative to this project, until after the lapse of the two-year period. Rather, the President must continue to make available and authorize the release of the funds for this project despite the impossibility of its accomplishment. Again, the law could not have intended such an absurdity.
In sum, the GAA provision on the availability for release and obligation of the appropriations relative to the MOOE and CO for a period of two years is not a ground to declare the DAP invalid because the power of the President to permanently stop expenditure under Section 38 is not expressly abrogated by this provision. Hence, the President’s order to withdraw the unobligated allotments of slow-moving projects, pursuant to NBC 541 in conjunction with Section 38, did not violate the aforesaid GAA provision considering that, as previously discussed, the power to permanently stop expenditure was validly exercised in furtherance of public interest, absent sufficient proof to the contrary.
[T]he Solicitor General impliedly argues that, despite the defective wording of Section 5.7.3 of NBC 541, no non-existent program or project was ever funded through the DAP. Whether that claim is true necessarily involves factual matters that are not proper for adjudication before this Court. In any event, petitioners may bring suit at the proper time and place should they establish that non-existent programs or projects were funded through the DAP by virtue of Section 5.7.3 of NBC 541.
[T]he principal motivation for the inclusion of the subject provision in the Constitution was to prevent the President from consolidating power by transferring appropriations to the other branches of government and constitutional bodies in exchange for undue or unwarranted favors from the latter. Thus, the subject provision is an integral component of the system of checks and balances under our plan of government. It should be noted though, based on the broad language of the subject provision, that the check is not only on the President, even though the bulk of the budget is necessarily appropriated to the Executive Department, because the other branches and constitutional bodies can very well commit the afore-described transgression although to a much lesser degree. (Emphasis supplied)The prohibition on cross-border transfer of savings applies to all the branches of government and constitutional bodies, including the Court. If the Solicitor General thinks that the aforesaid transfer of funds involving the Court violates the subject constitutional provision, then the proper recourse is to have them declared unconstitutional, as was done in this case. But, certainly, it cannot change the clear and unequivocal language of the constitutional prohibition on cross-border transfer of savings.
87. The Honorable Court ruled that revenue collections must exceed the total of the revenue targets stated in the Budget for Expenditures and Sources of Financing (BESF) before expenditures under the Unprogrammed Fund can be made. This is incorrect not only because this is not what those who wrote the item—the DBM—intended, which intention was ratified by Congress over the years, but also because such interpretation defeats the purpose of creating the Unprogrammed Fund.The point is well-taken.
88. This interpretation is incorrect, for a simple reason: everybody knows that the government’s total revenue collections have never exceeded the total original revenue targets. Certainly, the government—the Executive and the Legislature—would never have created the Unprogrammed Fund as a revenue source if, apart from newly-approved loans for foreign-assisted project, it would have never been available for use. The effect of the Honorable Court’s interpretation is to effectively nullify the Unprogrammed Fund for the years 2011 to 2013. Certainly, the Executive would not have proposed billions of pesos under the Unprogrammed Fund in the NEP, and Congress would not have provided for said appropriation in the GAA, with the intention that it can never be implemented.
89. Because we are not interpreting the Constitution with respect to the meaning of the Unprogrammed Fund, with respect, it is incorrect for the Honorable Court to reject the interpretation placed by those who actually wrote the item for the Unprogrammed Fund. What is the purpose to be served in nullifying the intention of the authors of the Unprogrammed Fund, which intention was effectively ratified by Congress over the course of several years? In the absence of a violation of the Constitution, this Honorable Court should not reject the Executive department’s reading of the provisions of the Unprogrammed Fund which it co-authored with Congress.
90. The text is clear: excess revenue collections refer to the excess of actual revenue collections over estimated revenue targets, not the difference between revenue collections and expenditures. The 2011, 2012 and 2013 GAAs only require that revenue collections from each source of revenue enumerated in the budget proposal must exceed the corresponding revenue target.
91. To illustrate, under the 2011 BESF, the estimated revenues to be collected from dividends from shares of stock in government-owned and controlled corporations is P5.5 billion. By 31 January 2011, the National Government had already collected dividend income in the amount of P23.8 billion. In such case, the difference between the revenues collected (P23.8 billion) and the revenue target (P5.5) becomes excess revenue which can be used to fund the purposes under the Unprogrammed Fund.
x x x x
93. Apart from the fact that the Honorable Court’s interpretation would render much of the Unprogrammed Fund useless, the text of the special provision referring to the Unprogrammed Fund supports the government’s intention and interpretation: (1) if the provision was meant to refer to aggregate amounts, it would have used the word “total” or the phrase “only when the revenue collection exceeds the original revenue target;” (2) the phrase “original revenue targets” clearly indicates a plurality of revenue targets with which the revenue collections must be matched.7 (Emphasis supplied; italics in the original)
The Unprogrammed Fund provisions under the 2011, 2012 and 2013 GAAs, respectively, state:If, indeed, a surplus budget policy is the overriding principle governing the Unprogrammed Fund, then Congress would not have authorized the release of the Unprogrammed Fund from (1) collections arising from sources not considered in the original revenue targets, (2) newly approved loans for foreign-assisted projects, and (3) savings from programmed appropriations subject to certain conditions insofar as the 2011 GAA, instead, Congress should have specifically provided that the aforesaid sources of funds should be first used to cover any deficit in the entire budget before being utilized for unprogrammed appropriations.
2011 GAA (Article XLV):
1. Release of Fund. The amounts authorized herein shall be released only when the revenue collections exceed the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution, including savings generated from programmed appropriations for the year: PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets may be used to cover releases from appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds: PROVIDED, FURTHERMORE, That if there are savings generated from the programmed appropriations for the first two quarters of the year, the DBM may, subject to the approval of the President release the pertinent appropriations under the Unprogrammed Fund corresponding to only fifty percent (50%) of the said savings net of revenue shortfall: PROVIDED, FINALLY, That the release of the balance of the total savings from programmed appropriations for the year shall be subject to fiscal programming and approval of the President.
2012 GAA (Article XLVI)
1. Release of Fund. The amounts authorized herein shall be released only when the revenue collections exceed the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution: PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets may be used to cover releases from appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds.
2013 GAA (Article XLV)
1. Release of Fund. The amounts authorized herein shall be released only when the revenue collections exceed the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution, including collections arising from sources not considered in the original revenue targets, as certified by the Btr: PROVIDED, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds. (Emphasis supplied)
As may be gleaned from the afore-quoted provisions, in the 2011 GAA, there are three provisos, to wit:ChanRoblesVirtualawlibrary1. PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets may be used to cover releases from appropriations in this Fund,In the 2012 GAA, there are two provisos, to wit:ChanRoblesVirtualawlibrary
2. PROVIDED, FURTHER, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds,
3. PROVIDED, FURTHERMORE, That if there are savings generated from the programmed appropriations for the first two quarters of the year, the DBM may, subject to the approval of the President, release the pertinent appropriations under the Unprogrammed Fund corresponding to only fifty percent (50%) of the said savings net of revenue shortfall: PROVIDED, FINALLY, That the release of the balance of the total savings from programmed appropriations for the year shall be subject to fiscal programming and approval of the President.1. PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets may be used to cover releases from appropriations in this Fund,And, in the 2013 GAA, there is one proviso, to wit:ChanRoblesVirtualawlibrary
2. PROVIDED, FURTHER, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds.1. PROVIDED, That in case of newly approved loans for foreign assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds.
Use of Excess Income. Agencies collecting fees and charges as shown in the FY [2011, 2012 or 2013] Budget of Expenditures and Sources of Financing (BESF) may be allowed to use their income realized and deposited with the National Treasury, in excess of the collection targets presented in the BESF, chargeable against Purpose [4, 3 or 3] - General Fund Adjustments, to augment their respective current appropriations, subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292: PROVIDED, That said income shall not be used to augment Personal Services appropriations including payment of discretionary and representation expenses.The same reasoning may be applied to the above-quoted provision. Again, if a surplus budget policy was clearly and absolutely intended by Congress, then it would not have authorized the release of excess income, by the concerned agencies, for the purpose of “General Fund Adjustments” under the Unprogrammed Fund without specifically providing that such excess income be first utilized to cover any deficit in the entire budget before applying the same to the unprogrammed appropriations.
Implementation of this section shall be subject to guidelines jointly issued by the DBM and DOF. (Emphasis supplied)
The President shall submit to the Congress within thirty days from the opening of the regular session, as the basis of the general appropriations bill, a budget of expenditures and sources of financing, including receipts from existing and proposed revenue measures. (Emphasis supplied)The law is clear. The basis of the “original revenue targets” under the Unprogrammed Fund is the budget of expenditures and sources of financing submitted by the President to Congress. This is commonly known as the Budget for Expenditures and Sources of Financing (BESF).
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative fact does not always apply, and is not always the consequence of every declaration of constitutional validity. It can be invoked only in situations where the nullification of the effects of what used to be a valid law would result in inequity and injustice; but where no such result would ensue, the general rule that an unconstitutional law is totally ineffective should apply.In response to this statement, and those in the other separate opinions in this case, relative to this issue, I stated that—
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the PAPs that can no longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities.” (Emphasis supplied)
Because of the various views expressed relative to the impact of the operative fact doctrine on the potential administrative, civil and/or criminal liability of those involved in the implementation of the DAP, I additionally state that any discussion or ruling on the aforesaid liability of the persons who authorized and the persons who received the funds from the aforementioned unconstitutional cross-border transfers of savings, is premature. The doctrine of operative fact is limited to the effects of the declaration of unconstitutionality on the executive or legislative act that is declared unconstitutional. Thus, it is improper for this Court to discuss or rule on matters not squarely at issue or decisive in this case which affect or may affect their alleged liabilities without giving them an opportunity to be heard and to raise such defenses that the law allows them in a proper case where their liabilities are properly at issue. Due process is the bedrock principle of our democracy. Again, we cannot run roughshod over fundamental rights.The majority now clarifies that its statement that “the doctrine of operative fact x x x cannot apply to the authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities” does not do away with the presumption of good faith, the presumption of innocence and the presumption of regularity in the performance of official duties.
Endnotes:
1 Citations omitted.
2 SECTION 38. Suspension of Expenditure of Appropriations. — Except as otherwise provided in the General Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services appropriations used for permanent officials and employees. (Emphasis supplied)
3 [S]avings refer to portions or balances of any programmed appropriation in this Act free from any obligation or encumbrances which are: (i) still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from appropriations balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled agencies to meet and deliver the required or planned targets, programs and services approved in this Act at a lesser cost. (Emphasis supplied) [See Sections 60, 54 and 52 of the 2011, 2012 and 2013 GAAs, respectively]
4 Section 29. (1) No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
5 Section 54. x x x
Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized by this Act. (Emphasis supplied)
6 No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of the Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.
7 Motion for Reconsideration, pp. 29-31.
8 Emphasis supplied.
9 http://www/dbm/gov.ph/wp-content/uploads/DBCC_MATTERS/Fiscal_Program/FiscalProgramOfNG Fy_2013.pdf (last visited February 2, 2015)
10 http://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2013/C1.pdf (last visited February 2, 2015)
LEONEN, J.:
Savings refer to portions or balances of any programmed appropriation in this Act free from any obligation or encumbrance which are: (i) still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from appropriations balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled agencies to meet and deliver the required or planned targets, programs and services approved in this Act at a lesser cost.Currently, the definition of savings in the General Appropriations Act of 201424 is as follows:ChanRoblesVirtualawlibrary
Sec. 68. Meaning of Savings and Augmentation. Savings refer to portions or balances of any programmed appropriation in this Act free from any obligation or encumbrance which are: (i) still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from appropriation balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriation balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled agencies to meet and deliver the required or planned targets, programs and services approved in this Act at a lesser cost.Definitely, the difference between the actual expenditure and the authorized amount appropriated by law as a result of the completion of a project is already savings that can be used to augment other appropriations items within the same department.
Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized in this Act.
Sec. 162. Irregular expenditures.- The term “irregular expenditure” signifies an expenditure incurred without adhering to established rules, regulations, procedural guidelines, policies, principles or practices that have gained recognition in law. Irregular expenditures are incurred without conforming with prescribed usages and rules of discipline. There is no observance of an established pattern, course, mode of action, behavior, or conduct in the incurrence of an irregular expenditure. A transaction conducted in a manner that deviates or departs from, or which does not comply with standards set, is deemed irregular. An anomalous transaction which fails to follow or violate appropriate rules of procedure is likewise irregular. Irregular expenditures are different from illegal expenditures since the latter would pertain to expenses incurred in violation of the law whereas the former in violation of applicable rules and regulations other than the law.The President’s power to suspend a project in order to declare savings for purposes of augmentation may be statutorily granted in Section 38 of the Revised Administrative Code, but it cannot be constitutional unless such grounds for suspension are reasonable and such reasonable grounds are statutorily provided. Under the present state of our laws, it will be reasonable when read in relation to the GAAM. As I explained in my Concurring Opinion27 to the main Decision:ChanRoblesVirtualawlibrary
Sec. 163. Unnecessary expenditures.- The term “unnecessary expenditures” pertains to expenditures which could not pass the test of prudence or the obligation of a good father of a family, thereby non-responsiveness to the exigencies of the service. Unnecessary expenditures are those not supportive of the implementation of the objectives and mission of the agency relative to the nature of its operation. This could also include incurrence of expenditure not dictated by the demands of good government, and those the utility of which cannot be ascertained at a specific time. An expenditure that is not essential or that which can be dispensed with without loss or damage to property is considered unnecessary. The mission and thrusts of the agency incurring the expenditure must be considered in determining whether or not the expenditure is necessary.
Sec. 164. Excessive expenditures.- The term “excessive expenditures” signifies unreasonable expense or expenses incurred at an immoderate quantity or exorbitant price. It also includes expenses which exceed what is usual or proper as well as expenses which are unreasonably high, and beyond just measure or amount. They also include expenses in excess of reasonable limits.
Sec. 165. Extravagant expenditures.- The term “extravagant expenditures” signifies those incurred without restraint, judiciousness and economy. Extravagant expenditures exceed the bounds of propriety. These expenditures are immoderate, prodigal, lavish, luxurious, wasteful, grossly excessive, and injudicious.
Sec. 166. Unconscionable expenditures.- The term “unconscionable expenditures” signifies expenses without a knowledge or sense of what is right, reasonable and just and not guided or restrained by conscience. These are unreasonable and immoderate expenses incurred in violation of ethics and morality by one who does not have any feeling of guilt for the violation.
Of course, there are instances when the President must mandatorily withhold allocations and even suspend expenditure in an obligated item. This is in accordance with the concept of “fiscal responsibility”: a duty imposed on heads of agencies and other government officials with authority over the finances of their respective agencies.
Section 25 (1) of Presidential Decree No. 1445, which defines the powers of the Commission on Audit, states:
Section 25. Statement of Objectives. –. . . .This was reiterated in Volume I, Book 1, Chapter 2, Section 13 of the Government Accounting and Auditing Manual, which states:ChanRoblesVirtualawlibrary
(1) To determine whether or not the fiscal responsibility that rests directly with the head of the government agency has been properly and effectively discharged;
. . . .Section 13. The Commission and the fiscal responsibility of agency heads. – One primary objective of the Commission is to determine whether or not the fiscal responsibility that rests directly with the head of the government agency has been properly and effectively discharged.Included in fiscal responsibility is the duty to prevent irregular, unnecessary, excessive, or extravagant expenses. Thus:ChanRoblesVirtualawlibrary
The head of an agency and all those who exercise authority over the financial affairs, transaction, and operations of the agency, shall take care of the management and utilization of government resources in accordance with law and regulations, and safeguarded against loss or wastage to ensure efficient, economical, and effect operations of the government.Section 33. Prevention of irregular, unnecessary, excessive, or extravagant expenditures of funds or uses of property; power to disallow such expenditures. The Commission shall promulgate such auditing and accounting rules and regulations as shall prevent irregular, unnecessary, excessive, or extravagant expenditures or uses of government funds or property.The provision authorizes the Commission on Audit to promulgate rules and regulations. But, this provision also guides all other government agencies not to make any expenditure that is “irregular, unnecessary, excessive, or extravagant.” The President should be able to prevent unconstitutional or illegal expenditure based on any allocation or obligation of government funds.
. . . .
The President can withhold allocations from items that he deems will be “irregular, unnecessary, excessive or extravagant.” Viewed in another way, should the President be confronted with an expenditure that is clearly “irregular, unnecessary, excessive or extravagant,” it may be an abuse of discretion for him not to withdraw the allotment or withhold or suspend the expenditure
For purposes of augmenting items — as opposed to realigning funds — the President should be able to treat such amounts resulting from otherwise “irregular, unnecessary, excessive or extravagant” expenditures as savings.28 (Emphasis in the original, citations omitted)
77. This understanding of the Constitution is not exclusive to the political branches of government. Documentary evidence exists to show that the Supreme Court itself has (1) approved the allocation of amounts from its savings to augment an item within the Executive and (2) sought funds from the Executive for transfer to the Judiciary. These practices validate respondents’ theory of benign and necessary interdepartmental augmentations.I concur with Justice Carpio’s observations in his Separate Opinion resolving the present Motions for Reconsideration. Earmarking savings for a particular purpose without necessarily spending it is not augmentation.39 It is a prerogative that can be exercised within the judiciary’s prerogative of fiscal autonomy. With respect to the alleged request to allocate funds from the Department of Justice for the judiciary’s construction of the Malabon Halls of Justice, suffice it to say that this resolution was not implemented. The Chief Justice withdrew the request seasonably. This withdrawal was confirmed by a Resolution issued by this court. Decisions of this court En Banc are subject to limited reconsideration. Reconsideration presupposes that this court also has the ability to correct itself in a timely fashion.
78. On 17 July 2012, when Justice Antonio T. Carpio was Acting Chief Justice, the Supreme Court en banc issued a Resolution in A.M. No. 12-7-14-SC, which reads:ChanRoblesVirtualawlibraryThe Court Resolved to APPROVE the allocation, from existing savings of the Court, of the following amounts for the construction of courthouses:79. As can be gleaned from the above Resolution, the Supreme Court earmarked its existing savings of P1.865 billion to augment the P100 million budget for the Manila Hall of Justice, which is an item (B.I.d.—“Civil Works and Construction Design for the Manila Hall of Justice”) in the 2012 budget of the Department of Justice-Office of the Secretary, which is within the Executive Department. This is an example of the benign and necessary interaction between interdependent departments. Obviously, the Supreme Court has an interest in the construction of Halls of Justice, and no one can say that this cross-border augmentation was a means by which the judiciary tried to co-opt the Executive.
1.Manila Hall of Justice (120 courts) P1,865,000,000.002. Cebu Court of Appeals Building 266,950,000.003. Cagayan de Oro Court of Appeals Building 251,270,000.00TOTAL P2,383,220,000.00
The foregoing amounts are hereby set aside and earmarked for the construction costs of the said buildings.
80. Moreover, on 05 March 2013, the Supreme Court en banc issued a Resolution in A.M. No. 13-1-4-SC, the dispositive portion of which reads:ChanRoblesVirtualawlibraryWHEREFORE, the Court hereby requests the Department of Budget and Management to approve the transfer of the amount of One Hundred Million Pesos (P100,000,000.00) which was included in the DOJ-JUSIP budget for Fiscal Year 2012 for the Manila Hall of Justice to the budget of the Judiciary, subject to existing budget policies and procedures, to be used for the construction of the Malabon Hall of Justice.81. In the above Resolution, the Supreme Court requested the DBM to transfer the P100 million in the budget of the DOJ for the Manila Hall of Justice to the Judiciary, which it intended to utilize to fund the construction of the Malabon Hall of Justice. This means that the P100 million allocation will be taken away from the Manila Hall of Justice, which has an item in the 2012 GAA under the Executive, and used instead to fund the construction of the Malabon Hall of Justice, which has no item in the 2012 or the 2013 GAA.
82. When the petitions were filed and while they were being heard, Chief Justice Sereno, in a letter dated 23 December 2013, informed the DBM that the Supreme Court was withdrawing its request to realign the P100 million intended for the Manila Hall of Justice to the budget of the Judiciary. These two instances show both cross-border transfers on the part of the Supreme Court—(a) the augmentation of an item in the Executive from funds in the Judiciary; and (b) the “transfer” of funds from the Executive to the Supreme Court, whether or not for purposes of augmentation.
83. With all due respect, this is by no means a disapprobation of the Honorable Court. But it does serve to highlight the fact that the Honorable Court’s practice was based on an understanding of the constitutional provision that coincides with the government’s.38 (Citations omitted)
[R]evenue collections must exceed the total of the revenue targets stated in the Budget for Expenditures and Sources of Financing (BESF) before expenditures under the Unprogrammed Fund can be made.43 (Citation omitted)The Office of the Solicitor General argues that in reality, “the government’s total revenue collections have never exceeded the total original revenue targets”44 and that the proper interpretation is:ChanRoblesVirtualawlibrary
[E]xcess revenue collections refer to the excess of actual revenue collections over estimated revenue targets, not the difference between revenue collections and expenditures.45In my Concurring Opinion to the July 1, 2014 Decision, I initially agreed with the majority decision that “[s]ourcing the DAP from unprogrammed funds despite the original revenue targets not having been exceeded was invalid”46 referred to total revenue targets, not revenue target per income class.
1. Release of Fund. The amounts authorized herein shall be released only when the revenue collections exceed the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution, including savings generated from programmed appropriations for the year: PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets may be used to cover releases from appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds: PROVIDED, FURTHERMORE, That if there are savings generated from the programmed appropriations for the first two quarters of the year, the DBM may, subject to the approval of the President, release thepertinent [sic] appropriations under the Unprogrammed Fund corresponding to only fifty percent (50%) of the said savings net of revenue shortfall: PROVIDED, FINALLY, That the release of the balance of the total savings from programmed appropriations for the year shall be subject to fiscal programming and approval of the President.47However, this is not the only special provision for this appropriations item.cralawred
1. Budgetary Support to Government-Owned and/or –Controlled CorporationsStarting FY 2012, therefore, expenditures from the purposes enumerated in Unprogrammed Funds using “savings” from programmed appropriations would be void for lack of statutory authority to spend for such purposes in such manner.
2. Strategic Government Reforms
3. Support to Foreign-Assisted Projects
4. General Fund Adjustments
5. Support for Infrastructure Projects and Social Programs
6. Support for Pre-School Education
7. Collective Negotiation Agreement
8. Payment of Total Administrative Disability Pension48
(1) No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.Thus, apart from the first special provision, the ninth provision states:ChanRoblesVirtualawlibrary
9. Use of Income. In case of deficiency in the appropriations for the following business-type activities, departments, bureaus, offices and agencies enumerated hereunder and other agencies as may be determined by the Permanent Committee are hereby authorized to use their respective income collected during the year. Said income shall be deposited with the National Treasury, chargeable against Purpose 4 - General Fund Adjustments, to be used exclusively for the purposes indicated herein or such other purposes authorized by the Permanent Committee, as may be required until the end of the year, subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292, s. 1987:The deficiency referred to in this special provision refers to the inadequacy of the amount already appropriated. The purpose of addressing the deficiency is to ensure that the income generating activities of the offices and agencies continue. It grants flexibility in as much as the actual demand for the government services enumerated might not be exactly as predicted. To achieve this flexibility, this special provision does not require that there be a showing that total collected revenue for all sources of funds exceed total targeted revenue.
DEPARTMENT / AGENCY SOURCE OF INCOME PURPOSEENVIRONMENT AND NATURAL RESOURCES National Mapping and Resource Information Authority Proceeds from Sales of Maps and Charts For reproduction of maps and charts and printing publications FINANCE Bureau of Customs Sale of Accountable Forms For the printing of accountable forms FOREIGN AFFAIRS Office of the Secretary Issuance of Passport Booklets For the procurement of additional passport booklets JUSTICE National Bureau of Investigation Urine Drug Testing and DNA Analysis For the purchase of reagents, drug testing kits and other consumables Issuance of Clearance For the procurement of additional materials and payment of rentals for the laser photo system used in the issuance of NBI clearance TRANSPORTATION AND COMMUNICATIONS Land Transportation Office Issuance of Driver’s License, Plates, Tags and Stickers For the production of additional driver’s license, plates, tags and stickers49
10. Use of Excess Income. Agencies collecting fees and charges as shown in the FY 2011 Budget of Expenditures and Sources of Financing (BESF) may be allowed to use their income realized and deposited with the National Treasury, in excess of the collection targets presented in the BESF, chargeable against Purpose 4 - General Fund Adjustments, to augment their respective current appropriations, subject to the submission of a Special Budget pursuant to section 35, Chapter 5, Book VI of E.O. No. 292: PROVIDED, That said income shall not be used to augment Personal Services appropriations including payment of discretionary and representation expenses.50This special provision specifically authorizes the use of the excess in collected revenue over targeted revenue for the collecting agency. This flexibility in the budget allows government to continually ensure that income-generating activities of government do not come to a standstill for lack of funds. More than an expense, this funding can be seen as an investment into the operations of these special offices and agencies.
Our power to strike down an act of co-equal constitutional organs is not unlimited. When we nullify a governmental act, we are required “to determine whether there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.”When judicial review is being applied to check on the powers of other constitutional departments or organs, it should require deference as a constitutional duty. This proceeds from the idea that the Constitution, as a fundamental legal document, contains norms that should also be interpreted by other public officers as they discharge their functions within the framework of their constitutional powers.
No less than three constitutional organs have interpreted the law and the relevant provision of the Constitution. I am of the view that our power to strike down that interpretation should not be on the basis of the interpretation we prefer. Rather, Governor Umali should bear the burden of proving that the interpretation of the law and the Constitution in the actual controversy it presents is not unreasonable and not attended by any proven clear and convincing democratic deficit. We should wield the awesome power of judicial review awash with respectful deference that the other constitutional organs are equally conscious of the mandate of our people through our Constitution.53 (Emphasis and citation omitted)
11. Reportorial Requirement. The DBM shall submit to the House Committee on Appropriations and the Senate Committee on Finance separate quarterly reports stating the releases from the Unprogrammed Fund, the amounts released and purposes thereof, and the recipient departments, bureaus, agencies or offices, GOCCs and GFIs, including the authority under which the funds are released under Special Provision No. 1 of the Unprogrammed Fund.54I agree that this special provision debunks the Solicitor General’s argument that Unprogrammed Funds using the interpretation of this court’s original majority opinion will never be used because it can only be assessed the following year. The provision clearly allows use of the funds within the year because it contemplates quarterly reports, which it requires to be made with Congress.
(a) | to DENY the Motions for Reconsideration of petitioners for lack of merit; |
(b) | to PARTIALLY GRANT the Motion for Reconsideration of respondents in relation to the concept of expense classes as opposed to appropriation items; and |
(c) | with respect to Unprogrammed Funds, to DECLARE that the use of Unprogrammed Funds to augment programmed appropriations is VOID unless consistent with the special provisions. However, this interpretation on the use of Unprogrammed Funds should be applied prospectively. |
Endnotes:
1 CONST., art. VI, sec. 29(1).
2 CONST., art. VI, sec. 29(1).
3 CONST., art. VII, sec. 22; Exec. Order No. 292 (1987), book I, ch. 3, sec. 11; Exec. Order No. 292 (1987), book VI, ch. 2, sec. 3; Exec. Order No. 292 (1987), book VI, ch. 1, sec. 2(3).
4 CONST., art. VI, secs. 24 and 26.
5 CONST., art. VI, sec. 25(5).
6 Rep. Act No. 10155, GAA Fiscal Year 2012, General Provisions, sec. 54; Rep. Act No. 10352, GAA Fiscal Year 2013, General Provisions, sec. 53; Rep. Act No. 10147, GAA Fiscal Year 2011, General Provisions, sec. 60.
7See also 1 GOVERNMENT ACCOUNTING AND AUDITING MANUAL Book III, Title 3, art. 2, secs. 162–166.
8 CONST., art. VII, sec. 17.
9 CONST., art. VII, sec. 1.
10 CONST., art. VII, sec. 5.
11Angara v. Electoral Commission, 63 Phil. 139, 158 (1936) [Per J. Laurel, En Banc].
12 Id.
13 CONST., art. VI, sec. 24.
14 As discussed in my concurring opinion to the main decision, “The president’s power or discretion to spend up to the limits provided by law is inherent in executive power.” J. Leonen, concurring opinion in Araullo v. Aquino, G.R. No. 209287, July 1, 20147 [Per J. Bersamin, En Banc]. See also CONST., art. VII, sec. 17.
15See for example Rep. Act No. 9184 (2003).
16 CONST., art. VI, sec. 29(1).
17 CONST., art. VI, sec. 25(5).
18 CONST., art. VI, sec. 25(1).
19 CONST., art. VI, sec. 25(5).
20See CONST., art. VI, sec. 25(5).
21 Rep. Act No. 10147, GAA Fiscal Year 2011, General Provisions, sec. 60.
22 Rep. Act No. 10155, GAA Fiscal Year 2012, General Provisions, sec. 54.
23 Rep. Act No. 10352, GAA Fiscal Year 2013, General Provisions, sec. 53.
24 Rep. Act No. 10633, GAA Fiscal Year 2014, General Provisions, sec. 68.
25 See the definition of savings under the general provisions of the General Appropriations Act in a given year.
26 The Government Accounting and Auditing Manual (GAAM) was issued pursuant to Commission on Audit Circular No. 91-368 dated December 19, 1991. The GAAM is composed of three volumes: Volume I – Government Auditing Rules and Regulations; Volume II – Government Accounting; and Volume III – Government Auditing Standards and Principles and Internal Control System. In 2002, Volume II of the GAAM was replaced by the New Government Accounting System as per Commission on Audit Circular No. 2002-002 dated June 18, 2002.
27 J. Leonen, concurring opinion in Araullo v. Aquino, G.R. No. 209287, July 1, 2014[Per J. Bersamin, En Banc].
28 J. Leonen, concurring opinion in Araullo v. Aquino, G.R. No. 209287, July 1, 2014 < http://sc.judiciary.gov.ph/jurisprudence/2014/july2014/209287_leonen.pdf> 15–18 [Per J. Bersamin, En Banc].
29 CONST., art. VI, sec. 25(5).
30 CONST., art. VI, sec. 25(5).
31 CONST., art. VI, sec. 25(5).
32 Rep. Act No. 10155, GAA Fiscal Year 2012, General Provisions, sec. 54. See also Rep. Act No. 10352, GAA Fiscal Year 2013, General Provisions, sec. 53 and Rep. Act No. 10147, GAA Fiscal Year 2011, General Provisions, sec. 60.
33See also 1 GOVERNMENT ACCOUNTING AND AUDITING MANUAL Book III, Title 3, art. 2, secs. 162–166; Exec. Order No. 292, book VI, ch. 5, sec. 38.
34 CONST., art. VI, sec. 25(5).
35 CONST., art. VI, sec. 25(5).
36 Respondents’ Motion for Reconsideration, pp. 25–29.
37 Id. at 26.
38 Id. at 26–28.
39See J. Carpio, separate opinion, pp. 9–10.
40 CONST., art. VII, sec. 17.
41The City of Manila v. Entote, 156 Phil. 498, 510–511 (1974) [Per J. Muñoz Palma, First Division], citing Morales v. Paredes, 55 Phil. 565, 567 [Per J. Ostrand, En Banc], states: “A remark made, or opinion expressed, by a judge, in his decision upon a cause, incidentally or collaterally, and not directly upon the question before him, or upon a point not necessarily involved in the determination of the cause, is an obiter dictum and as such it lacks the force of an adjudication and is not to be regarded as such.”
42 (a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriations Acts;
(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the Executive; and
(c) The funding of projects, activities and programs that were not covered by any appropriation in the General Appropriations Act.
43 Respondent’s Motion for Reconsideration, p. 29.
44 Id.
45 Id. at 29–30.
46Araullo v. Aquino, G.R. No. 209287, July 1, 2014 77 [Per J. Bersamin, En Banc].
47 Rep. Act No. 10147, GAA Fiscal Year 2011, art. XLV. Similar provisions are found in art. XLVI of Rep. Act No. 10155, GAA Fiscal Year 2012 and art. XLV of Rep. Act No. 10352, GAA Fiscal Year 2013. In the 2014 GAA, the purposes and specific allocations are found in art. [X]LVI, Annex A and the special provisions are in art. XLVI of Rep. Act No. 10633, GAA Fiscal Year 2014. For FY 2011, total Unprogrammed Funds authorized was P66.9 B; in 2012, P152.8 B; in 2013, P117.6 B; and in 2014, P139.9.
48 In the 2012 GAA, only four (4) of the eight (8) purposes enumerated in the 2011 GAA were retained. The 2012 GAA also introduced two (2) purposes not contemplated in the 2011 GAA. The authorized purposes in the 2012 GAA were:ChanRoblesVirtualawlibrary1. Budgetary Support to Government-Owned and/or –Controlled CorporationsThe 2013 GAA retained the four (4) purposes retained by the 2012 GAA from the 2011 GAA and reinstated a fifth purpose from the 2011 GAA. It retained one (1) of the two (2) purposes introduced by the 2012 GAA and introduced two new purposes. The authorized purposes in the 2013 GAA were:ChanRoblesVirtualawlibrary
2. Support to Foreign-Assisted Projects
3. General Fund Adjustments
4. Support for Infrastructure Projects and Social Programs
5. Disaster Risk Reduction and Management
6. Debt Management Program1. Budgetary Support to Government-Owned and/or –Controlled CorporationsThe 2014 GAA retained all the purposes indicated in the 2013 GAA and added three (3) others. The authorized purposes in the 2014 GAA were:ChanRoblesVirtualawlibrary
2. Support to Foreign-Assisted Projects
3. General Fund Adjustments
4. Support for Infrastructure Projects and Social Programs
5. AFP Modernization Program
6. Debt Management Program
7. Payment of Total Administrative Disability Pension
8. People’s Survival Fund1. Budgetary Support to Government-Owned and/or –Controlled Corporations49 Rep. Act No. 10147, GAA Fiscal Year 2011, art. XLV, Unprogrammed Fund, Special Provision(s) (compare with provisions in the rest of the GAAs). Exec. Order No. 292 (1987), book VI, ch. 5, sec. 35, contains the procedure for expenditures from Lump Sum Appropriations, thus:
2. Support to Foreign-Assisted Projects
3. General Fund Adjustments
4. Support for Infrastructure Projects and Social Programs
5. AFP Modernization Program
6. Debt Management Program
7. Risk Management Program
8. Disaster Relief and Mitigation Fund
9. Reconstruction and Rehabilitation Program
10. Total Administrative Disability Pension
11. People’s Survival Fund
SECTION 35. Special Budgets for Lump-Sum Appropriations.—Expenditures from lump-sum appropriations authorized for any purpose or for any department, office or agency in any annual General Appropriations Act or other Act and from any fund of the National Government, shall be made in accordance with a special budget to be approved by the President, which shall include but shall not be limited to the number of each kind of position, the designations, and the annual salary proposed for which an appropriation is intended. This provision shall be applicable to all revolving funds, receipts which are automatically made available for expenditure for certain specific purposes, aids and donations for carrying out certain activities, or deposits made to cover to cost of special services to be rendered to private parties. Unless otherwise expressly provided by law, when any Board, head of department, chief of bureau or office, or any other official, is authorized to appropriate, allot, distribute or spend any lump-sum appropriation or special, bond, trust, and other funds, such authority shall be subject to the provisions of this section.
In case of any lump-sum appropriation for salaries and wages of temporary and emergency laborers and employees, including contractual personnel, provided in any General Appropriation Act or other Acts, the expenditure of such appropriation shall be limited to the employment of persons paid by the month, by the day, or by the hour.
50 Rep. Act No. 10147, GAA Fiscal Year 2011, art. XLV (compare with similar provisions in GAAs for 2012, 2013, 2014).
The counterpart provision in the 2012 GAA reads:
4. Use of Excess Income. Agencies collecting fees and charges as shown in the FY 2012 Budget of Expenditures and Sources of Financing (BESF) may be allowed to use their income realized and deposited with the National Treasury, in excess of the collection targets presented in the BESF, chargeable against Purpose 3 – General Fund Adjustments, to augment their respective current appropriations, subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292; PROVIDED, That said income shall not be used to augment Personal Services appropriations including payment of discretionary and representation expenses.
Implementation of this section shall be subject to guidelines issued by the DBM.
The counterpart provision in the 2013 GAA reads:
4. Use of Excess Income. Departments, bureaus and offices authorized to collect fees and charges as shown in the FY 2013 BESF may be allowed to use their income realized and deposited with the National Treasury, in excess of the collection targets presented in the BESF, chargeable against Purpose 3-General Fund Adjustments, to augment their respective current appropriations, subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292: PROVIDED, That said income shall not be used to augment Personal Services appropriations including payment of discretionary and representation expenses.
Implementation of this provision shall be subject to the guidelines issued by the DBM.
The counterpart provision in the 2014 GAA reads:
5. Use of Excess Income. Departments, bureaus and offices authorized to collect fees and charges as shown in the FY 2014 BESF may be allowed to use their income realized and deposited with the National Treasury: PROVIDED, That said income shall be in excess of the collection targets presented in the BESF: PROVIDED, FURTHER, That it shall be chargeable against Purpose 3: PROVIDED, FURTHERMORE, That it shall only be used to augment their respective current appropriations during the year: PROVIDED, FINALLY, That said income shall not be used to augment Personnel Services appropriations including payment of discretionary and representation expenses.
Releases from said income shall be subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292.
Implementation of this provision shall be subject to the guidelines issued by the DBM.
51 Rep. Act No. 10147, GAA Fiscal Year 2011, art. XLV, Special Provision(s)(1).
52 G.R. No. 203974, April 22, 2014 [Per J. Velasco, Jr., En Banc].
53 J. Leonen, dissenting opinion in Umali v. Commission on Elections, G.R. No. 203974, April 22, 2014 8 [Per J. Velasco, Jr., En Banc].
54 Rep. Act No. 10147, GAA Fiscal Year 2011, art. XLV, Special Provision(s)(11). Similar provisions are found in art. XLVI of Rep. Act No. 10155, GAA Fiscal Year 2012, art. XLV of Rep. Act No. 10352, GAA Fiscal Year 2013, and art. XLVI of Rep. Act No. 10633, GAA Fiscal Year 2014.