EN BANC
G.R. No. 210503, October 08, 2019
GRECO ANTONIOUS BEDA B. BELGICA, PETITIONER, v. THE HONORABLE EXECUTIVE SECRETARY, THE HONORABLE SECRETARY OF BUDGET, AND THE PHILIPPINE CONGRESS, AS REPRESENTED BY THE HONORABLE SENATE PRESIDENT AND THE HONORABLE SPEAKER OF THE HOUSE OF REPRESENTATIVES, RESPONDENTS.
D E C I S I O N
PER CURIAM:
WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in this Decision, the Court hereby declares as UNCONSTITUTIONAL: (a)the entire 2013 Priority Development Assistance Fund [(PDAF)] Article; (b) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and [Countrywide Development Fund (CDF)] Articles and the various Congressional Insertions, which authorize/d legislators - whether individually or collectively organized into committees - to intervene, assume or participate in any of the various post-enactment stages of the budget execution, such as but not limited to the areas of project identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of congressional oversight; (c) all legal provisions of past and present Congressional Pork Barrel Laws, such as the preyious PDAF and CDF Articles and the various Congressional Insertions, which confer/red personal, lump-sum allocations to legislators from which they are able to fund specific projects which they themselves determine; (d) all informal practices of similar import and effect, which the Court similarly deems to be acts of grave abuse of discretion amounting to lack or excess of jurisdiction; and (e) the phrases (1) "and for such other purposes as may be hereafter directed by the President" under Section 8 of Presidential Decree No. 910 and (2) "to finance the priority infrastructure development projects" under Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, for both failing the sufficient standard test in violation of the principle of non-delegability of legislative power.3In fine, the Court's Decision in the 2013 Belgica case abolished the "pork barrel system" in its latest iteration as the Priority Development Assistance Fund (PDAF) Article in the 2013 GAA, and similar informal practices that allowed individual legislators to participate in the execution of the budget through post-enactment measures of identification of projects, for violation of the separation of powers - by impinging on the authority of the Executive to implement the national budget.
Finally, the application of the fourth exception is called for by the recognition that the preparation and passage of the national budget is, by constitutional imprimatur, an affair of annual occurrence. The relevance of the issues before the Court does not cease with the passage of a "PDAF-free budget for 2014." The evolution of the "Pork Barrel System," by its multifarious iterations throughout the course of history, lends a semblance of truth to petitioners' claim that "the same dog will just resurface wearing a different collar." In Sanlakas v. Executive Secretary, the government had already backtracked on a previous course of action yet the Court used the "capable of repetition but evading review" exception in order "[t]o prevent similar I questions from re-emerging." The situation similarly holds true to these cases. Indeed, the myriad of issues underlying the manner in which certain public funds are spent, if not resolved at this most opportune time, are capable of repetition and hence, must not evade judicial review.16 (Emphasis supplied)The same reasoning applies squarely in this case. In fact, the GAAs enacted since the filing of the Petition contained appropriations for the Unprogrammed Fund, Contingent Fund, and Local Government Support Fund. Failing the formulation of controlling principles, petitions assailing these subsequent appropriations may likely be filed again.
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. Anent special purpose funds, it must be added that Section 25 (4), Article VI of the 1987 Constitution requires that the "special appropriations bill shall specify the purpose for which it is intended, and shall be supported by funds actually available as certified by the National Treasurer, or to be raised by a corresponding revenue proposal therein." Meanwhile, with respect to discretionary funds, Section 25 (6), Article VI of the 1987 Constitution requires that said funds "shall be disbursed only for public purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law."Petitioner's heavy reliance on the 2013 Belgica case as precedent to argue that lump-sum appropriations are unconstitutional per se is erroneous. The rule on singular correspondence therein distinguished what is a prohibited lump-sum. Identifying the Calamity Fund, the Contingent Fund, and the Intelligence Fund as valid appropriations, the Court explained that:
In contrast, what beckons constitutional infirmity are appropriations which merely provide for a singular lump-sum amount to be tapped as a source of funding for multiple purposes. Since such appropriation type necessitates the further determination of both the actual amount to be expended and the actual purpose of the appropriation which must still be chosen from the multiple purposes stated in the law, it cannot be said that the appropriation law already indicates a "specific appropriation of money" and hence, without a proper line-item which the President may veto. As a practical result, the President would then be faced with the predicament of either vetoing the entire appropriation if he finds some of its purposes wasteful or undesirable, or approving the entire appropriation so as not to hinder some of its legitimate purposes. Finally, it may not be amiss to state that such arrangement also raises non-delegability issues considering that the implementing authority would still have to determine, again, both the actual amount to be expended and the actual purpose of the appropriation. Since the foregoing determinations constitute the integral aspects of the power to appropriate, the implementing authority would, in effect, be exercising legislative prerogatives in violation of the principle of non-delegability.19 (Additional emphasis supplied)
x x x 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. x x x20 (Additional emphasis supplied)The requirement of singular correspondence does not mean that all lump-sum appropriations are unconstitutional per se; hence, the specifically assailed appropriations are constitutional.
Again, it should be reiterated that the Court's disquisition regarding "line-item" and "lump-sum" appropriations all hearken to compliance with the constitutional postulates:on separation of powers and Presidential item veto. Relatedly, the rule on singular correspondence, as discussed in the 2013 Belgica case, was therefore meant to subserve these principles. That being said, not all "lump-sum" amounts defy this rule should observance of these principles be preserve. It is hence, my opinion that a lump-sum amount may still be considered as a valid item subject to the President's item veto power for as long as the lump-sum amount is meant as a funding source for multiple programs, projects, or activities that may all be clearly classified as falling under one singular appropriation purpose. In this sense, the "lump-sum" effectively functions as a "line-item" that is compliant with the doctrine of singular correspondence as amply discussed in the 2013 Belgica Decision.
x x x x
At the risk of belaboring the point, a valid item is one characterized by singular correspondence - meaning, an allocation of a specified singular amount for a specified singular purpose. A lump-sum, albeit meant as a funding source for multiple programs, projects and activities, may effectively function as a proper "line-item" for as long as these multiple programs, projects or activities are clearly classified as falling under one singular appropriation purpose. This singular purpose may be as general or specific as the legislative department deems it to he, provided that such generality or specificity does not negate the President's proper exercise of his item veto power. This danger was what was clearly contemplated and showcased by the 2013 PDAF Article because the lump-sum amount of P24.79 Billion was treated as a funding source for multiple unrelated purposes such as, as noted in the case, "scholarships, medical missions, assistance to indigents, preservation of historical materials, construction of roads, flood control, etc." Worse, these multiple unrelated purposes were all made to fall under the vague and amorphous term "Priority Development Assistance Fund," which ultimately allowed those who were disbursed the funds (i.e., individual legislators) to decide whatever public purpose they deemed as a "priority." As such, this created a budgeting setup wherein there is no more discernible item left for the exercise of the President's veto power and hence, constitutionally infirm.21
Petitioner claims that the appropriation for the Unprogrammed Fund is unconstitutional because it merely provides for a lump-sum figure without any enumerated purposes for which these funds should be used.25XLVI. UNPROGRAMMED FUND
New Appropriations, by PurposeCurrent Operating Expenditures
Personnel
Services Maintenance and Other
Operating Expenses
Capital Outlays Total TOTAL NEW APPROPRIATIONS P418,800,000 P16,602,744,000 P122,882,215,000 P139,903,759,000
Special Provision(s)
1. Release of the 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 22,22 Article VII of the Constitution, 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: PROVIDED, FURTHER, That the release of Unprogrammed Fund shall be subject to Section 6323 of the General Provisions of this Act.
Implementation of this provision shall be subject to guidelines to be jointly issued by the DBM, DOF and BTr.
2. Recording of Relent Loans. The appropriations authorized under Purpose I shall be used to record the proceeds of National Government loans in the amount of Thirty Six Million Two Hundred Sixty Eight Thousand Pesos (P36,268,000) relent to GOCCs. The SARO/s to be issued shall be the basis of recording the GOCCs' loans payable to the National Government.
In addition, the amount of One Billion Pesos (P1,000,000,000) chargeable against Purpose 6 shall be used for the government's Debt Management Program that will allow access to lower cost of borrowings and better maturity structure for GOCCs: PROVIDED, That availment under this Program shall require favourable endorsement by the DOF upon evaluation of the following criteria: (i) the GOCC's capacity to service the debt to the National Government; and (ii) the GOCC's operational requirements. Implementation of this provision shall be subject to guidelines jointly issued by the DBM, DOF and BTr.
3. Risk Management Program. In order to manage the National Government's fiscal risks and enhance the country's credibility among potential Public-Private Partnership (PPP) proponents, the amount of Twenty Billion Pesos (P20,000,000,000) authorized under Purpose 7 shall be used for the government's Risk Management Program to cover commitments made by, and obligations of, the National Government in the concession agreements relative to PPP projects, subject to the pertinent provisions of laws, rules and regulations.
Implementation of this provision shall be subject to guidelines to be jointly issued by the DBM, DOF and BTr.
4. Reconstruction and Rehabilitation Program. The amount of Eighty Billion Pesos (P80,000,000,000) appropriated herein for Reconstruction and Rehabilitation Program shall be released in accordance with a rehabilitation plan and shall be subject to Section 63 of the General Provisions of this Act: PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets, proceeds from grants, loans for the repair and rehabilitation of calamity stricken areas, and subject to the approval of the President, savings generated from the programmed appropriations in this Act may be released to cover the appropriations herein provided.
5. Use of Income. In case of deficiency in the appropriations for the following business-type activities, departments, bureaus and offices 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: PROVIDED, That said income shall be deposited with the National Treasury, chargeable against Purpose 3: PROVIDED, FURTHER, That it shall be used exclusively by the agency for purposes indicated herein or such other purposes authorized by the Permanent Committee: PROVIDED, FURTHERMORE, That it shall cover only the requirements of said agency until the end of the year:
DEPARTMENT/AGENCY SOURCE OF INCOME PURPOSE ENVIRONMENT AND NATURAL RESOURCES
Proceeds from Sales of Maps
and Charts For reproduction of maps and charts and printing publications NAMRIA FINANCE BOC 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 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 licenses, plates, tags and stickers Maritime Industry
Authority Issuance of Seafarer's Identification and Record Books (SIRBs), Seafarer's Identification Booklets (SIBs) and other statutory certificates For the production of additional SIRBs, SIBs, and other statutory certificates
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, s. 1987.
Implementation of this provision shall be subject to the guidelines issued by the DBM.
[6.] 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 under 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.
[7.] Augmentation within the Unprogrammed Fund. In case the total amount appropriated under any of the Purposes in the Unprogrammed Fund has been fully utilized, the deficiency in the amount needed to cover programs, projects and activities still to be implemented under said Purpose may be augmented by the appropriations authorized for other purposes except Purpose 1 - Budgetary Support to Government-Owned and/or Controlled Corporations - and Purpose 2 - Support to Foreign Assisted Projects, subject to approval by the President of the Philippines.
[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.24
Anent the Contingent Fund, Petitioner claims that it fails as an item of appropriation because Congress failed to identify the kinds of contingencies for which the fund may be used. Petitioner also argues that there is no discernible specific purpose or guidelines for which the Contingent Fund may be used;30 thus, the President is allegedly given unbridled discretion in its disbursement.31 As well, the Contingent Fund is also assailed as violative of the President's power of item veto because the President is left only to accept the policy that funding must be provided to meet contingencies, without having the opportunity to decide which contingencies should be given funding.XXXVII. CONTINGENT FUND
New Appropriations, by PurposeCurrent Operating Expenditures
Personnel
Services Maintenance and Other
Operating
Expenses
Capital
Outlays TotalTOTAL NEW APPROPRIATIONS P740,000,000 P260,000,000 P1,000,000,000
New Appropriations, by Central/Regional AllocationCurrent Operating Expenditures
Personnel
Services Maintenance and Other
Operating
Expenses
Capital
Outlays TotalRegional Allocation P740,000,000 P260,000,000 P1,000,000,000Nationwide 740,000,000 260,000,000 1,000,000,000TOTAL NEW APPROPRIATIONS P740,000,000 P260,000,000 P1,000,000,000
Special Provision(s)
1. Administration and Use of Fund. The amount of One Billion Pesos (P1,000,000,000) appropriated herein for the Contingent Fund shall be administered by the Office of the President and shall be used exclusively to fund the requirements of new and/or urgent projects and activities that need to be implemented during the year. It may likewise be used to augment the existing appropriations for local and foreign travels of the President: PROVIDED, That in no case shall said Fund be used for the purchase of motor vehicles.
No amount under the Contingent Fund shall be released and disbursed without the prior approval of the President of the Philippines.29
x x x 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.39 (Emphasis omitted)The language of the Contingent Fund appropriation in the 2013 GAA, found by the Court as a valid line-item appropriation in the 2013 Belgica case, was adopted as the language of the Contingent Fund appropriation in the 2014 GAA.
In arguing against the constitutionality of the E-Government Fund, Petitioner claims that instead of enumerating the strategic information and communication technology projects that would be financed, the 2014 GAA simply identifies a lump-sum amount to be allocated again depending on the whims of the executing authority.41 Furthermore, Petitioner posits that the determination of which department or agency's information and communication technology project is more important or crucial so as to merit funding is a choice that should have been afforded the President; instead he is left with a policy choice. Each project to be funded should have been specified so the President can choose which projects should proceed or should be discontinued.42XXXIX. E-GOVERNMENT FUND
New Appropriations, by PurposeCurrent Operating Expenditures
Personnel
Services Maintenance and Other
Operating
Expenses
Capital
Outlays TotalTOTAL NEW APPROPRIATIONS P1,889,204,000 P589,696,000 P2,478,900,000
New Appropriations, by Central/Regional AllocationCurrent Operating Expenditures
Personnel
Services Maintenance and Other
Operating
Expenses
Capital
Outlays TotalRegional Allocation P1,889,204,000 P589,696,000 P2,478,900,000Nationwide 1,889,204,000 589,696,000 2,478,900,000TOTAL NEW APPROPRIATIONS P1,889,204,000 P589,696,000 P2,478,900,000
Special Provision(s)
1. Strategic Information and Communication Technology Projects. The amount of Two Billion Four Hundred Seventy Eight Million Nine Hundred Thousand Pesos (P2,478,900,000) appropriated herein for strategic information and communication technology projects shall be used exclusively to finance: (i) on-going E-Government funded projects; and (ii) strategic information and communication technology projects in public financial management, basic and higher education, health, justice, peace and order, transport, land use, open government/open data, climate change, and citizen frontline delivery services: PROVIDED, That such projects strictly comply with all the criteria and guidelines jointly prescribed by the Information and Communications Technology Office, DBM and NEDA. In no case shall said amount be used for any other purpose.
Releases from said amount shall be subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292, s. 1987.
2. Appropriations for the Medium-Term Information and Communication Technology Harmonization Initiative. The amount appropriated herein for strategic information and communication technology projects includes Five Million Pesos (P5,000,000) to be used to finance the activities of the steering committee tasked to ensure the effective implementation of the Medium-Term Information and Communication Technology Harmonization Initiative, in accordance with DOST-DBM-NEDA Joint Memorandum Circular No. 2012-01 dated November 28, 2012.
GENERAL SUMMARY
E-GOVERNMENT FUNDCurrent Operating Expenditures
Personnel
Services Maintenance and Other
Operating
Expenses
Capital
Outlays Total A. E-Government Fund P1,889,204.000 P589,696,000 P2,478,900,000Total New Appropriations, E-Government Fund P1,889,204.000
P589,696,000 P2,478,900,00040
[a]dministrative agencies are clothed with rule-making powers because the lawmaking body finds it impracticable, if not impossible, to anticipate and provide for the multifarious and complex situations that may be encountered in enforcing the law. All that is required is that the regulation should be germane to the objects and purposes of the law and that it should conform to the standards that the law prescribes. x x x46Further:
[t]he grant of the rule-making power to administrative agencies is a relaxation of the principle of separation of powers and is an exception to the non-delegation of legislative powers. Administrative regulations or "subordinate legislation" calculated to promote the public interest are necessary because of the growing complexity of modern life, the multiplication of the subjects of governmental regulations, and the increased difficulty of administering the law. x x x47From its inception, the E-Government Fund has been intended as alternative funding for cross-agency information and communication technology projects. Its nature as a cross-agency fund requires that the Fund is kept lump-sum, subject to the determination by the administrative agencies of which are ongoing strategic information and communication technology projects in the priority sectors identified by the Legislature in the budget. It is noteworthy that these standards are already in place in existing executive issuances predating the contested E-Government Fund provision, which the Court must assume the Legislature is aware of at the time of budget authorization.
Petitioner brands the LGSF as a purely discretionary fund given to the President to be disbursed to LGUs without any legislative guidelines in place.50 Hence, due to the supposed unfettered discretion granted to the President in disbursing funds favor of LGUs and the purported lack of guidelines in the disbursement of such funds, Petitioner deems the LGSF contained in the 2014 GAA, constitutional.XXXVI. ALLOCATIONS TO LOCAL GOVERNMENT UNITS
x x x x
D. LOCAL GOVERNMENT SUPPORT FUND (FORMERLY FINANCIAL SUBSIDY TO LOCAL GOVERNMENT UNITS)
New Appropriations, by PurposeCurrent Operating Expenditures
Personnel
Services Maintenance and Other Operating Expenses Capital Outlays TotalTotal New Appropriations P405,000,000
P405,000,000
New Appropriations, by Central/Regional AllocationCurrent Operating Expenditures
Personnel
ServicesMaintenance and Other
Operating
Expenses
Capital
Outlays TotalRegional Allocation P405,000,000 P405,000,000Nationwide 405,000,000 405,000,000Total New Appropriations P405,000,000
P405,000,000
Special Provision(s)
1. Local Government Support Fund. The amount of Four Hundred Five Million Pesos (P405,000,000) appropriated herein for financial assistance to LGUs, including One Hundred Million Pesos (P100,000,000) for the City of Manila, Fifty Million Pesos (P50,000,000) for the City of Caloocan and Fifty Million Pesos (P50,000,000) for the Municipality of Lal-lo, Cagayan shall be used to support the various priority programs and projects of LGUs and shall be released in accordance with the guidelines issued bv the DBM. (CONDITIONAL IMPLEMENTATION-President's Veto Message, December 20, 2013, page 1109, R.A. No. 10633)48
x x x x
F. LOCAL GOVERNMENT SUPPORT FUND
The earmarking of specific appropriations for selected local government units (LGUs) under the ALGU-Local Government Support Fund, Special Provision No. 1 "Local Government Support Fund," page 850, may not be consistent with the objectives and prioritization of the Local Government Support Fund. Accordingly, I hereby direct the DBM to issue the guidelines in the equal availment of the Fund by LGUs. Indeed, National Government support ought to be responsive to the actual requirements of LGUs in the interest of genuine local development.49 (Emphasis in the original)
Sirs/Mesdames:
Please take notice that on October 8, 2019 a Decision, copy attached herewith, was rendered by the Supreme Court in the above-entitled case, the original of which was received by this Office on November 7, 2019 at 4:03 p.m.
| Very truly yours, |
(SGD) EDGAR O. ARICHETA | |
Clerk of Court |
Endnotes:
1 Republic Act No. (RA) 10633, entitled "APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND AND FOURTEEN, AND FOR OTHER PURPOSES."
2 721 Phil. 416 (2013).
3 Id. at 582.
4 INSTITUTING THE "ADMINISTRATIVE CODE OF 1987", July 25, 1987.
5 See Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v. GCC Approved Medical Centers Association, Inc., 802 Phil. 116, 149 (2016).
6 See Lawyers Against Monopoly and Poverty (LAMP) v. The Secretary of Budget and Management, 686 Phil. 357, 369 (2012).
7Samahan ng mga Progresibong Kabataan v. Quezon City, 815 Phil. 1067, 1090 (2017).
8 Id. at 1090. Emphasis and underscoring omitted.
9 See Association of Medical Clinics for Overseas Workers, Inc. v. GCC Approved Medical Centers Association, Inc., supra note 5, at 146-147.
10 Id. at 146.
11 Memorandum of Respondents, p. 18, rollo, p. 170.
12 On the issue of ripeness, see generally Lawyers Against Monopoly and Poverty (LAMP) v. Secretary of Budget and Management, supra note 6, at 370.
13Manalo v. Calderon, 562 Phil. 281, 292-293 (2007).
14 Understood in the 2013 Belgica case as appropriated funds subject to post-enactment legislator approval.
15Belgica v. Ochoa, Jr., supra note 2, at 533.
16 Id. at 524-525.
17 Petition, pp. 14-15, rollo, pp. 16-17.
18 Reply, p. 3, id. at 75.
19Belgica v. Ochoa, Jr., supra note 2, at 551-553.
20 Id. at 552.
21 J. Bernabe's Reflections; citations omitted.
22 Section 22. The President shall submit to the Congress, within thirty days from the opening of every 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.
23 Section 63 of the General Provisions states:SEC. 63. Lump-Sum Appropriations. Release of lump-sum appropriations shall be subject to Section 35, Chapter 5, Book VI of E.O. No. 292 and shall only be made upon compliance with the requirements under the applicable special provisions and submission by the agency concerned to DBM of the complete details of the programs, projects and activities covering the lump-sum appropriations, including the sub-programs/activities or sub-projects with the corresponding cost up to the lowest level, i.e., provincial, city or municipal level, as the case may be. The complete details shall include: (i) the rationale and objectives of the program, project or activity; (ii) the full components with cost estimates of the program, project or activity; (iii) the implementation strategy to be adopted; (iv) the targeted results or expected outputs; (v) the status of implementation for ongoing programs or projects; and (vi) such other information as may be required by the DBM: PROVIDED, That a copy of the abovementioned requirements, including any subsequent revisions/amendments shall likewise be submitted to the House Committee on Appropriations and the Senate Committee on Finance.24 2014 GAA, pp. 876-877.
The agency head and the agency's web administrator of his/her equivalent shall be responsible for ensuring that the said list of projects is posted in the official website of the agency/LGU concerned.
PROVIDED, FURTHER, That in the case of lump-sum appropriations covering major infrastructure programs and projects, such as irrigation projects, farm-to-market roads, airports, seaports, fish ports and other ports, health care facilities, Basic Educational Facilities, and housing projects, release of the said appropriations shall be further subject to the submission by the agency concerned to DBM of the following additional details: (i) amount allocated for each infrastructure project; (ii) location/site with covered area in square kilo meters; (iii) list of targeted beneficiaries/recipients; (iv) program of work; (v) such other information as may be required by the DBM. (2014 GAA, pp. 1095-1096)
25 Petition, p. 6, rollo, p. 8.
26 Petition, p. 17, id. at 19.
27 Petition, pp. 16-17, id. at 18-19.
28 Comment, p. 14, id. at 58.
29 2014 GAA, p. 853.
30 Petition, p. 16, rollo, p. 18.
31 Petition, p. 17, id. at 19.
32 Initial operational requirements for the implementation of Credit Surety Fund Department under the Cooperative Development Authority (RA 10744, Credit Surety Fund Cooperative Act of 2015 and the Implementing Rules and Regulations [IRR] of RA 10744, Rule 3, Sec. 6, June 20, 2017); for the initial operations of the regional government in the Autonomous Region in Muslim Mindanao under Article XIX, Section 9 of the ARMM Law (RA 6734, An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao, August; 1, 1989); for the conduct of the election and plebiscite in the Cordillera Autonomous Region under Art. XXI, Secs. 1 and 13 of RA 6766 (An Act Providing for an Organic Act for the Cordillera Autonomous Region, October 23, 1989); for the initial operation of the Governance Commission for Government-Owned or -Controlled Corporations under Chapter VI, Section 29 of RA 10149 (GOCC Governance Act of 2011, June 6, 2011); as initial operating fund for the National Anti-Poverty Commission under Rule IV, Art. 21 of the IRR of RA 8425 (Rules and Regulations Implementing the Social Reform and Poverty Alleviation Act of 1998, December 23, 1998) and under Title III,Sec. 18 of RA 8425 (Social Reform and Poverty Alleviation Act, December 11, 1997); for the initial expenses of the Legal Education Board under Sec. 13 of RA 7662 (Legal Education Reform Act of 1993, December 23, 1993); for the initial funding requirements of the Joint Enforcement and Monitoring Committee (JEMC) operational expenses of the JEMC and its Secretariat under Sec. 6 of EO 117 (Reconstituting the Joint Enforcement and Monitoring Committee to Implement the Peace Agreement between the Government of the Republic of the Philippines and the Rebolusyonaryong Partido ng Manggagawa-Pilipinas/Revolutionary Proletarian Army/Alex Boncayao Brigade, Repealing Executive Order No. 335 dated January 4, 2001 and for Other Purposes, August 20, 2002).
33 For implementation of the Labor Code, under Book Three, Rule VII, Chapter IV, Sec. 3 of the Omnibus Rules Implementing the Labor Code (May 27, 1989); for the conduct of information campaign on the Local Government Code, under Sec. 533(e) (RA 7160, Local Government Code of 1991, October 10, 1991); for the implementation of the Climate Change Act under Rule XIX, Sec. 1 of the IRR (Revised Implementing Rules and Regulations of the Climate Change Act of 2009, as Amended by RA 10174, Climate Change Commission Resolution No. 3, November 13, 2015) and under Sec. 21 of RA 9729 (Climate Change Act of 2009, October 23, 2009); Art. XVIII, Sec. 10 for the initial operation requirements of the regional government, and for the conduct of plebiscite, respectively under RA 9054 (Organic Act for the Autonomous Region of Muslim Mindanao, March 31, 2001); for the initial implementation of RA 7470 under Sec. 15 (National Economic Research and Business Assistance Center of the Philippines Act of 1992, April29, 1992) and the Operating Guidelines of the National Economic Research and Business Assistance Center (NERBAC) of the Philippines under Rule V, Section 17 (Operating Guidelines in the Implementation of RA 7470, DTI Administrative Order No. 04-09, May 11, 2009); additional funding for the implementation of RA 6939 under Sec. 16 (Cooperative Development Authority Law, March 10, 1990); for the initial implementation of The Initiative and Referendum Act under Sec. 21 (The Initiative and Referendum Act, August 4, 1989); for the implementation of the provisions of RA 6724 under Sec. 11 (Organizing a Joint Legislative-Executive Foreign Debt Council, April 17, 1989).
34 Sec. 32 of RA 8436, December 22, 1997.
35 Under Sec. 6 of RA 6714 (Merger, Division and/or Revival of Different Barangays in Caloocan City, February 28, 1989); Sec. 6 of RA 7155 (Creation of the Municipality of Tulay-na-Lupa, Camarines Norte, September 6, 1991); Sec. 5 of RA 6851 (Creation of the Municipality of Kalawit in Zamboanga del Norte, February 10, 1990); Sec. 3 of RA 6842 (Creation of the Municipality of San Jose in Tarlac, January 5, 1990).
36 Under Sec. 13 of RA 8747 (An Act Requiring Disclosure of Year 2000 Statements and Readiness of Computer-Based Systems and Products, Providing Funds Therefor and for Other Purposes, June 1, 1999).
37 Sec. 12 of Administrative Order No. 36 (Creating the National Organizing Council for the Philippine Hosting of the 2015 APEC Meetings, November 28, 2012).
38 Sec. 25 of RA 8046 (An Act Authorizing the Commission on Elections to Conduct a Nationwide Demonstration of a Computerized Election System and Pilot-Test it in the March 1996 Elections in the Autonomous Region in Muslim Mindanao (ARMM) and for Other Purposes, June 7, 1995).
39Belgica v. Ochoa, Jr., supra note 2, at 552.
40 2014 GAA, pp. 858-859.
41 Petition, p. 6, rollo, p. 8.
42 Petition, p. 18, id. at 20.
43 CREATING THE COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY, January 12, 2004.
44 ABOLISHING THE INFORMATION TECHNOLOGY AND ELECTRONIC COMMERCE COUNCIL AND TRANSFERRING ITS BUDGET, ASSETS, PERSONNEL, PROGRAMS AND PROJECTS TO THE COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY, July 20, 2004.
45 REORGANIZING, RENAMING AND TRANSFERRING THE COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY AND ITS ATTACHED AGENCIES TO THE DEPARTMENT OF SCIENCE AND TECHNOLOGY, DIRECTING THE IMPLEMENTATION THEREOF AND FOR OTHER PURPOSES, June 23, 2011.
46People v. Maceren, 169 Phil. 437, 447 (1977), citing Director of Forestry v. Muñoz, 132 Phil. 637, 653-654 (1968); Geukeko v. Araneta, 102 Phil. 706, 712-713 (1957), and People v. Exconde, 101 Phil. 1125, 1129 (1957).
47 Id. at 447, citing Calalang v. Williams, 70 Phil. 726, 732 (1940); People v. Rosenthal and Osmeña, 68 Phil. 328, 343 (1939).
48 2014 GAA, p. 850.
49 President's Veto Message, December 20, 2013, 2014 GAA, p. 1109.
50 Petition, p. 6, rollo, p. 8.
51ABAKADA GURO Party List (formerly AASJS) v. Purisima, 584 Phil. 246, 272 (2008); citations omitted.
52 See id. at 275, citing Equi-Asia Placement, Inc. v. Department of Foreign Affairs, 533 Phil. 590, 609 (2006). See also Eastern Shipping Lines, Inc. v. Philippine Overseas Employment Administration, 248 Phil. 762, 774 (1988).
53 GUIDELINES ON THE RELEASE AND UTILIZATION OF FUNDS CHARGEABLE AGAINST THE LOCAL GOVERNMENT SUPPORT FUND FOR FY 2014, March 7, 2014.
54 AMENDING LOCAL BUDGE CIRCULAR (LBC) NO. 104 DATED MARCH 7, 2014, ENTITLED, "GUIDELINES ON THE RELEASE AND UTILIZATION OF FUNDS CHARGEABLE AGAINST THE LOCAL GOVERNMENT SUPPORT FUND FOR FY 2014," October 29, 2014.
55Angara v. Electoral Commission, 63 Phil. 139, 177 (1936).
CARPIO, J.:
I vote to dismiss the petition on the ground that the assailed appropriations in the 2014 General Appropriations Act (GAA) are not the lump-sum appropriations for multiple purposes prohibited in the landmark Belgica v. Executive Secretary Ochoa, Jr.1 (Belgica I), an En Banc decision of this Court.
In Belgica I, decided on 19 November 2013, this Court struck down the entire Priority Development Assistance Fund (PDAF) article in the 2013 GAA and in effect abolished the "pork barrel system" for being unconstitutional. Belgica I held that lump-sum appropriations with multiple purposes are unconstitutional because they deprive the President of his veto power.
In Belgica I, the Court, speaking through Justice Estela Perlas-Bernabe, defined the "pork barrel system" as follows:
x x x the Court defines the Pork Barrel System as the collective body of rules and practices that govern the manner by which lump-sum, discretionary funds, primarily intended for local projects, are utilized through the respective participations of the Legislative and Executive branches of government, including its members. The Pork Barrel System involves two (2) kinds of lump-sum discretionary funds:Given this definition, the Court ruled that the Pork Barrel System is unconstitutional because it "allowed legislators to wield, in varying gradations, non-oversight, post-enactment authority in vital areas of budget execution," violating the principle of separation of powers. The principle of non-delegability of legislative, power was also violated since the system "conferred unto legislators the power of appropriation by giving them personal, discretionary funds from which they are able to fund specific projects which they themselves determine."3 Considering that the items in the budget are not textualized into the appropriations bill, the system denied the President the power to veto items.
First, there is the Congressional Pork Barrel which is herein defined as a kind of lump-sum, discretionary fund wherein legislators, either individually or collectively organized into committees, are able to effectively control certain aspects of the fund's utilization through various post-enactment measures and/or practices. In particular, petitioners consider the PDAF, as it appears under the 2013 GAA, as Congressional Pork Barrel since it is, inter alia, a post-enactment measure that allows individual legislators to wield a collective power; and
Second, there is the Presidential Pork Barrel which is herein defined as a kind of lump-sum, discretionary fund which allows the President to determine the manner of its utilization. For reasons earlier stated, the Court shall delimit the use of such term to refer only to the Malampaya Funds and the Presidential Social Fund.2 (Emphasis supplied)
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.The Court pointed 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 line-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."5
Section 27, Article VI of the Constitution provides for the presentment clause and the President's veto power:The power of the purse belongs exclusively to Congress. The power of Congress to appropriate means that Congress alone determines the specific amount and the specific purpose of the appropriation. The President cannot usurp the legislative power of the purse, and Congress cannot share this exclusive power to appropriate with the President. Corollarily, Congress cannot abdicate this power by allowing the President to cherry pick the purpose or purposes of the appropriation among a myriad of purposes, and to determine the amount to be spent for that purpose. To allow the President, in a lump-sum-appropriation with multiple purposes, to determine what amount to allocate for a particular purpose, and to determine what purposes shall not be allocated any funding, would be an abdication by Congress of its power to appropriate.Section 27. (1) Every bill passed by the Congress shall, before it becomes a law, be presented to the President. If he approves the same, he shall sign it; otherwise, he shall veto it and return the same with his objections to the House where it originated, which shall enter the objections at large in its Journal and proceed to reconsider it. If, after such reconsideration, two-thirds of all the Members of such House shall agree to pass the bill, it shall be sent, together with the objections, to the other House by which it shall likewise be reconsidered, and if approved by two-thirds of all the Members of that House, it shall become a law. In all such cases, the votes of each House shall be determined by yeas or nays, and the names of the Members voting for or against shall be entered in its Journal. The President shall communicate his veto of any bill to the House where it originated within thirty days after the date of receipt thereof; otherwise, it shall become a law as if he had signed it.In Gonzales v. Macaraig, Jr., the Court explained the President's veto power, thus:
(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.Paragraph (1) refers to the general veto power of the President and if exercised would result in the veto of the entire bill, as a general rule. Paragraph (2) is what is referred to as the item-veto power or the line-veto power. It allows the exercise of the veto over a particular item or items in an appropriation, revenue or tariff bill. As specified, the President may not veto less than all of an item of an Appropriations Bill. In other words, the power given the executive to disapprove any item or items in an Appropriations Bill does not grant the authority to veto a part of an item and to approve the remaining portion of the same item.In Gonzales, the Court defined the term "item" as used in appropriation laws as "an indivisible sum of money dedicated to a stated purpose." The amount in an item is "indivisible" because the amount cannot be divided for any purpose other than the specific purpose stated in the item. The item must be for a specific purpose so that the President can determine whether the specific purpose is wasteful or not. This is the "item" that can be the subject of the President's line-item veto power. Any other kind of item will circumvent or frustrate the President's line-item veto power in violation of the Constitution.
In contrast, a lump-sum appropriation is a single but divisible sum of money which is the source to fund several purposes in the same appropriation. For example, the 20113 PDAF provision appropriates a single amount - P24.79 billion - to be divided to fund several purposes of appropriation, like scholarships, roads, bridges, school buildings, medicines, livelihood training and equipment, police surveillance and communication equipment, flood control, school fences and stages, and a variety of other purposes.
x x x x
For the President to exercise his constitutional power to veto a particular item of appropriation, the GAA must provide line-item, instead of lump-sum appropriations. This means Congress has the constitutional duty to present to the President a GAA containing items, instead of lump sums, stating in detail the specific purpose for each amount of appropriation, precisely to enable the President to exercise his line-item veto power. Otherwise, the President's line-item veto power is negated by Congress in violation of the Constitution.
The President's line-item veto in appropriation laws is intended to eliminate "wasteful parochial spending," primarily the pork-barrel. Historically, the pork-barrel meant "appropriation yielding rich patronage benefits." In the Philippines, the pork-barrel has degenerated further as shown in the COA Audit Report on the 2007-2009 PDAF. The pork-barrel is mischievously included in lump-sum appropriations that fund much needed projects. The President is faced with the difficult decision of either vetoing the lump-sum appropriation that includes beneficial programs or approving the same appropriation that includes the wasteful pork-barrel. To banish the evil of the pork-barrel, the Constitution vests the President with the line-item veto power, which for its necessary and proper exercise requires the President to propose, and Congress to enact, only line-item appropriations.
The President should not frustrate his own constitutional line-item veto power by proposing to Congress lump-sum expenditures in the NEP. Congress should not also negate the President's constitutional line-item veto power by enacting lump-sum appropriations in the GAA. When the President submits lump-sum appropriations in the NEP, and Congress enacts lump-sum appropriations in the GAA, both in effect connive to violate the Constitution. This wreaks havoc on the check-and-balance system between the Executive and Legislature with respect to appropriations. While Congress has the power to appropriate, that power should always be subject to the President's line-item veto power. If the President exercises his line-item veto power unreasonably, Congress can override such veto by two-thirds vote of the House of Representatives and the Senate voting separately. This constitutional check-and-balance should at all times be maintained to avoid wastage of taxpayers' money.
The President has taken a constitutionally prescribed oath to "preserve and defend" the Constitution. Thus, the President has a constitutional duty to preserve and defend his constitutional line-item veto power by submitting to Congress only a line-item NEP without lump-sum expenditures, and then by demanding that Congress approve only a line-item GAA without lump-sum appropriations. Congress violates the Constitution if it circumvents the President's line-item veto power by enacting lump-sum appropriations in the GAA. To repeat, the President has a constitutional duty to submit to Congress only a line-item NEP without lump-sum expenditures, while Congress has a constitutional duty to enact only a line-item GAA without lump-sum appropriations.8 (Emphasis supplied)
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.These Constitutional provisions on fiscal autonomy ensure and safeguard the independence of the Judiciary and other constitutional bodies. The framers of the Constitution emphasized the importance of fiscal autonomy of the Judiciary, thus:
SECTION 5. The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released.
MR. SUAREZ: Thank you, Madam President.In Bengzon v. Drilon,12 the Court defined the scope and extent of fiscal autonomy in this wise:
When Chief Justice Claudio Teehankee and former Chief Justice Felix Makasiar discussed this matter with the Committee on the Judiciary, both of them strongly recommended that in order to maintain the independence of the Judiciary, the annual budget allocated for it should be determined and fixed and should be automatically released regularly without the necessity of the chief magistracy of the land lobbying in the executive and in the legislative departments, which is not only demeaning to the Chief Justice of the Supreme Court but violative of the principle of independence of the three departments. (Boldfacing and italicization supplied)
As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman 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.Clearly, the Judiciary enjoys fiscal autonomy as an important aspect of its independence. Fiscal autonomy means, among others, that the budget of the Judiciary must be released "automatically" after the General Appropriations Act becomes law. The President cannot reduce, withhold, delay, or in any manner tinker with, in the guise of budget execution, the appropriations for the Judiciary and the Constitutional Commissions. The President cannot amend, change, supplant, deduct, diminish or add to the budget of the Judiciary and Constitutional Commissions as approved in the General Appropriations Act. The President cannot decide, as part of "budget execution," what purposes to fund, and by how much, after the General Appropriations Act becomes a law. To rule otherwise will compel the Chief Justice to lobby with the President to allocate specific amounts for specific purposes - the very evil that the fiscal autonomy provisions of the Judiciary, and of the Constitutional Commissions, were designed to prevent to preserve the very independence of the Judiciary and of the Constitutional Commissions. This very evil that the fiscal autonomy provisions were designed to outlaw was clearly explained in the deliberations of the framers of the Constitution.
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. In the interest of comity and cooperation, the Supreme Court, Constitutional Commissions, and the Ombudsman have so far limited their objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision. (Emphasis supplied)
Clearly, the Unprogrammed Fund in Annex "A" of the 2014 GAA is not a singular lump-sum amount to fund multiple purposes, but consists of specific projects or purposes corresponding to specific amounts, contrary to petitioner's claims. Each item of appropriation in the Unprogrammed Fund is characterized by singular correspondence of a specific amount, which means that there is an allocation of a specified singular amount for a specified singular public purpose.
LVI. UNPROGRAMMED APPROPRIATIONS For fund requirements in accordance with the purposes indicated hereunder .... P139,903,759,000New Appropriations, by Purpose Current Operating Expenditures
Personnel Services Maintenance and Other Operating Expenses Capital Outlays ----------------------- ----------------------- -----------------------PURPOSE(S) 1. Budgetary Support to Government-Owned and/or Controlled Corporations P P3,000,000,000 P36,268,0000002. Support to Foreign-Assisted Projects 800,000 3,091,244,000 3,032,447,0003. General Fund Adjustments 175,000,000 511,500,000 313,500,0004. Support for Infrastructure
Projects and Social Programs 20,000,000,0005. AFP Modernization
Program 5,000,000,0006. Debt Management Program 1,000,000,0007. Risk Management Program 20,000,000,0008. Disaster Relief and Mitigation Fund 3,000,000,000
9. Reconstruction and
Rehabilitation Program 6,500,000,000 73,500,000,00010. Total Administrative
Disability Pension 243,000,00011. People's Survival Fund 500,000,000 ----------------------- -----------------------TOTAL NEW APPROPRIATIONS P418,800,000,000 P16,602,744,000 P122,882,215,000New Appropriations, by Object of Expenditures (In Thousand Pesos) Current Operating Expenditures Personnel Services Civilian Personnel Other Compensation for Specific Groups Lump-sum for Compensation Adjustments 75,000Lump-sum for Personnel Services 100,800Total Other Compensation for Specific Groups 175,800Other Personnel Benefits 243,000Pension, Veterans Total Other Personnel Benefits 243,000 ==============TOTAL PERSONNEL BENEFITS 418,800 ==============Maintenance and Other Operating Expenses 16,091,244Financial Assistance/Subsidy Other Maintenance and Operating Expenses 511,500Other Maintenance and Operating Expenses TOTAL MAINTENANCE AND OTHER OPERATING EXPENSES 16,602,744 ==============TOTAL CURRENT OPERATING EXPENDITURES 17,021,544 ============== 17,021,544Capital Outlays Investment Outlay 20,000,000Loans Receivable Accounts Outlay 36,268
Loans Receivable Accounts Outlay 21,000,000Property Plant and Equipment Outlay Infrastructure Outlay 35,500,000Buildings and Other Structures 38,313,500Machinery and Equipment Outlay 8,032,447TOTAL CAPITAL OUTLAYS 122,882,215GRAND TOTAL 139,903,759 ==============GENERAL SUMMARY UNPROGRAMMED FUND Current Operating
ExpendituresPersonnel Services
Maintenance and Other
Operating Expenses Capital Outlays ----------------------- ----------------------- -----------------------A. UNPROGRAMMED FUND P418,800,000 P16,602,744,000 P122,882,25,000TOTAL NEW
APPROPRIATIONS,
UNPROGRAMMED FUND P418,800,000 P16,602,744,000 P122,882,25,000 ============== ============== ==============
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 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.Thus, appropriations for personal services need not be further itemized or broken down in the GAA as the purpose for such appropriation is sufficiently specific satisfying the constitutional requirement for a valid appropriation. The constitutional test for validity is not how itemized the appropriation is down to the project level but whether the purpose of the appropriation is specific enough to allow the President to exercise his line-item veto power. Section 23, Chapter 4, Book VI of the Administrative Code provides a stricter requirement by mandating that there must be a corresponding appropriation for each program and for each project. A project is a component of a program which may have several projects. A program is equivalent to the specific purpose of an appropriation. An item of appropriation for school-building is a program, while the specific schools to be built, being the identifiable outputs of the program, are the projects. The Constitution only requires a corresponding appropriation for a specific purpose or program, not for the sub-set of projects or activities.
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.
Endnotes:
1 721 Phil. 416 (2013).
2 Id. at 533.
3 Id. at 580-581.
4 299 U.S. 410 (1937).
5Belgica v. Ochoa, Jr., supra note 1, at 551-552.
6Per Curiam, p. 3.
7 Supra note 1, at 551.
8 Supra note 1, at 637-640.
9 Justice Caguioa's Separate Concurring Opinion, pp. 28-29.
10 https://www.dbm.gov.ph/index.php/dbm-publications/national-expenditure-program (visited 1 October 2019).
11 Section 25(5), Article VI, 1987 Constitution.
12 284 Phil. 245, 268-269 (1992).
13 Annex "A", Volume I, pp. 755-757.
Section 95 of the General Provisions of the 2014 GAA provides:
Sec. 95. Effectivity. The provisions detailed in this Act, including the Details of the FY 2014 Budget appended as Annex A (Volumes 1 and 2) hereof shall take effect on January one, two thousand and fourteen, unless otherwise provided herein.
14 https://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2015/GLOSSARY.pdf (visited 1 October 2019).
15 Supra note 1, at 642.
16 Supra note 1, at 552.
17 https://www.dbm.gov.ph/wp-content/uploads/2012/03/PGB-B4.pdf (visited 1 October 2019).
PERLAS-BERNABE, J.:
I concur. Based on the reasons herein discussed, the present petition assailing the constitutionality of the 2014 General Appropriations Act (GAA) provisions on the Unprogrammed Fund, the Contingent Fund, the E-Government Fund, and the Local Government Support Fund1 should be dismissed for lack of merit.
Petitioner Greco Antonious Beda B. Belgica (petitioner) mainly asserts that all lump-sum discretionary funds - including the foregoing appropriations as provided for under the 2014 GAA - are unconstitutional on the basis of certain pronouncements made in the Court's Decision dated November 19, 2013 in Belgica v. Ochoa2 (2013 Belgica).
Petitioner's reliance on the 2013 Belgica Decision is misplaced.
To recount, in the 2013 Belgica case, the 2013 Priority Development Assistance Fund (PDAF) Article, together with all the legal provisions that "authorize/d legislators - whether individually or collectively organized into committees - to intervene, assume or participate in any of the various post-enactment stages of the budget execution," as well as those that "conferred personal, lump-sum allocations to legislators from which they are able to fund specific projects which they themselves determine,"3 were declared unconstitutional. For its proper context, the pertinent arguments of the parties therein were as follows:
b. Application.As it turned out, the Court agreed with the position of therein petitioners, essentially holding that the P24.79 Billion appropriation in the 2013 PDAF Article was nothing more than a "collective allocation limit" which amount would be later "divided among individual legislators who would then receive personal lump-sum allocations and could, after the GAA is passed, effectively appropriate PDAF funds based on their own discretion. As these intermediate appropriations are made by the legislators only after the GAA is passed and hence, outside of the law, it necessarily means that the actual items of PDAF appropriation would not have been written into the General Appropriations Bill, and thus, effectuated without veto consideration."5 Accordingly, the 2013 PDAF Article was characterized by the Court as a "lump-sum/post-enactment legislative identification budgeting system x x x which subverts the prescribed procedure of presentment and consequently impairs the President's power of item veto x x x[,]"6 such that he would be forced "to decide between (a) accepting the entire P24.79 Billion PDAF allocation without knowing the specific projects of the legislators, which may or may not be consistent with his national agenda[;] and (b) rejecting the whole PDAF to the detriment of all other legislators with legitimate projects."7
In these cases, petiti ners claim that "in the current x x x system where the PDAF is a lump-sum appropriation, the legislator's identification of the projects after the passage of the GAA denies the President the chance to veto that item later on." Accordingly, they submit that the "item veto power of the President mandates that appropriations bills adopt line-item budgeting" and that "Congress cannot choose a mode of budgeting [which] effectively renders the constitutionally-given power of the President useless."
On the other hand, respondents maintain that the text of the Constitution envisions a process which is intended to meet the demands of a modernizing economy and, as such, lump-sum appropriations are essential to financially address situations which are barely foreseen when a GAA is enacted. They argue that the decision of the Congress to create some lump-sum appropriations is constitutionally allowed and textually-grounded.4 (Emphasis and underscoring supplied)
Section 23. Content of the General Appropriations Act. - The General Appropriations Act shall be presented in the form of budgetary programs and projects for each agency of the government, with the corresponding appropriations for each program and project, including statutory provisions of specific agency or general applicability. The General Appropriations Act shall not contain any itemization of personal services, which shall be prepared by the Secretary after enactment of the General Appropriations Act, for consideration and approval of the President. (Underscoring supplied)Under Section 2 of Presidential Decree No. 1177,18 "programs" are "functions and activities necessary for the performance of a major purpose for which a government entity is established,"19 while "projects" pertain to "component of a program covering a homogenous group of activities that result in the accomplishment of an identifiable output."20]
Section 68. Establishment of E-Government Fund. - The Secretary of Budget and Management is authorized to establish the E-Government Fund to finance major information and communication technology projects of the government as may be determined by the Information Technology and E-Commerce Council. Said fund may be sourced from appropriations authorized in this Act, subject to the approval of the President of the Philippines. (Emphasis and underscoring supplied)From the foregoing, it can be gathered that the projects for which the E-government Fund may be utilized will be determined by the Information and Technology and E-Commerce Council (ITECC), which has since been abolished26 and replaced by the Commission on Information and Communications Technology27 (CICT) under the Office of the President, and thereafter, reorganized and renamed as the Information and Communications Technology Office28 (ICTO) and transferred to the Department of Science and Technology (DOST). The annual allocation of the E-government Fund was increased from P1,000,000,000.00 to P2,478,900,000.00 in the 2014 GAA "for strategic [(ICT)] projects in public financial management, basic and higher education, health, justice, peace and order, transport, land use, open government/open data, climate change and citizen frontline delivery services. These projects are bound to strictly comply with all the criteria and guidelines jointly prescribed by the ICTO-DOST, DBM and NEDA."29 Hence, the E Government Fund serves as a lump-sum amount for a discernibly singular purpose - that is, for funding of strategic ICT projects that may be thereafter determined as necessary, not by any individual or person, but by the appropriate government agency, i.e., the ICTO-DOST, subject to the criteria and guidelines for validity. As such, the E-Government Fund is constitutional.
Endnotes:
1 See Item XLVI (Unprogrammed Fund), Item XXXVII (Contingent Fund), Item XXXIX (E-Government Fund, and Item XXXVI (D) (Local Government Support Fund) of Republic Act No. (RA) 10633, entitled "AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND AND FOURTEEN, AND FOR OTHER PURPOSES," approved on December 20, 2013.
2 721 Phil. 416 (2013).
3 Id. at 582. The dispositive portion thereof partly reads (see id. at 582-584):"WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in this Decision, the Court hereby declares as UNCONSTITUTIONAL: (a) the entire 2013 PDAF Article; (b) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions, which authorize/d legislators - whether individually or collectively organized into committees - to intervene, assume or participate in any of the various post-enactment stages of the budget execution, such as but not limited to the areas of project identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of congressional oversight; (c) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions, which confer/red persdnal, lump-sum allocations to legislators from which they are able to fund specific projects which they themselves determine; (d) all informal practices of similar import and effect, which the Court similarly deems to be acts of grave abuse of discretion amounting to lack or excess of jurisdiction; and (e) the phrases (1) "and for such other purposes as may be hereafter directed by the President" under Section 8 of Presidential Decree No. 910 and (2) "to finance the priority infrastructure development projects" under Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, for both failing the sufficient standard test in violation of the principle of non-delegability of legislative power.4 Id. at 553.
x x x x
SO ORDERED. (Emphases in the original)
5 Id. at 554.
6 Id.; emphasis and underscoring supplied.
7 Id.
8 Id.; emphases and underscoring supplied.
9 Id. at 551-552; emphasis and underscoring supplied.
10 Id. at 552-553; emphasis and underscoring supplied.
11 Id. at 554.
12 Id. at 552; emphasis supplied.
13 Id.
14 Id.; emphasis supplied.
15 Id.; emphasis supplied.
16 Id.; emphasis supplied.
17 Executive Order No. 292, entitled "INSTITUTING THE 'ADMINISTRATIVE CODE OF 1987,'" approved on July 25, 1987.
18 Entitled "REVISING THE BUDGET PROCESS IN ORDER TO INSTITUTIONALIZE THE BUDGETARY INNOVATIONS OF THE NEW SOCIETY," otherwise known as the "BUDGET REFORM DECREE OF 1977" (July 30, 1977).
19 Presidential Decree No. 1177, Section 2 (l).
20 Presidential Decree No. 1177, Section 2 (m).
21 62 Phil. 912 (1936).
22 Id. at 916.
232013 Belgica, supra note 3, at 554.
24 "Information and Communications Technology."
25 See Section 68 of Republic Act No. 9206, entitled "AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND THREE, AND FOR OTHER PURPOSES," otherwise known as the "GENERAL APPROPRIATIONS ACT OF 2003" (January 1, 2003). See also Department of Information and Communications Technology website, <https://dict.gov.ph/e-government/> (last visited October 7, 2019).
26 Per Executive Order No. 334, entitled "ABOLISHING THE INFORMATION TECHNOLOGY AND ELECTRONIC COMMERCE COUNCIL AND TRANSFERRING ITS BUDGET, ASSETS, PERSONNEL, PROGRAMS AND PROJECTS TO THE COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY" (July 20, 2004).
27 The CICT was created under Executive Order No. 269, entitled "CREATING THE COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY" (January 12, 2004).
28 Per Executive Order No. 47, entitled "REORGANIZING, RENAMING AND TRANSFERRING THE COMMISSION ON INFORMATION AND COMMUNICATIONS TECHNOLOGY AND ITS ATTACHED AGENCIES TO THE DEPARTMENT OF SCIENCE AND TECHNOLOGY, DIRECTING THE IMPLEMENTATION THEREOF AND FOR OTHER PURPOSES," approved on June 23, 2011.
29 (last visited October 7, 2019). DBM refers to the "Department of Budget and Management," while NEDA refers to the "National Economic and Development Authority."
30 See Separate Opinion of Senior Associate Justice Antonio T. Carpio (Justice Carpio), pp. 10-12.
31 See 2013 Belgica, supra note 3, at 551-552. See also Concurring Opinion of Justice Carpio in the 2013 Belgica, id. at 645.
32 RA 10633, Item XXXVI (D) (last visited October 7, 2019).
33 Supra note 3, at 552.
LEONEN, J.:
Article VI, Section 29(1) of the 1987 Constitution mandates that "[n]o money shall be paid out of the Treasury except in pursuance of an appropriation made by law." Thus, if an item in a budget has no discemable purpose defined in the law, it is paid out to a public official and not pursuant to an appropriation. Such item, lacking a purpose, becomes invalid and subject to presidential veto.1
On the other hand, there are instances where lump sum appropriations, bounded by general purposes, are justified by constitutional or statutory fiscal autonomy. As I stated in my concurring opinion in Belgica v. Ochoa:2
In some instances, the purpose of the funding may be general because it is a requirement of either constitutional or statutory autonomy. Thus, the ideal would be that this Court would have just one item with a bulk amount with the expenditures to be determined by this Court's En Banc. State universities and colleges may have just one lump sum for their institutions because the purposes for which they have been established are already provided in their charter.Members of the constitutional fiscal autonomy group may require generality in their appropriations, in accordance with their respective levels of fiscal autonomy:
While I agree generally with the view of the ponencia that "an item of appropriation must be an item characterized by a singular correspondence - meaning an allocation of a specified singular amount for a specified singular purpose," our opinions on he generality of the stated purpose should be limited only to the Priority Development Assistance Fund as it is now in the 2013 General Appropriations Act. The agreement seems to be that the item has no discernible purpose.
There may be no need, for now, to go as detailed as to discuss the fine line between "line" and "lump sum" budgeting. A reading of the ponencia and the Concurring Opinions raises valid considerations about line and lump sum items. However, it is a discussion which should be clarified further in a more appropriate case.
Our doctrine on unlawful delegation of legislative power does not fully square in cases of appropriations. Budgets are integral parts of plans of action. There are various ways by which a plan can be generated and fully understood by those who are to implement it. There are also many requirements for those who implement such plans to adjust to given realities which are not available through foresight.
The Constitution should not be read as a shackle that bounds creativity too restrictively. Rather, it should be seen as a framework within which a lot of leeway is given to those who have to deal with the fundamental vagaries of budget implementation. What it requires is an appropriation for a discernable purpose.3 (Citations omitted)
The budget process in the ponencia is descriptive, not normative. That is, it reflects what is happening. It should not be taken as our agreement that the present process is fully compliant with the Constitution.In my view, the fiscal autonomy of those bodies granted by the Constitution or a statute may be strengthened through the use of lump sum appropriations. As budgets must remain responsive to the realities of implementing plans and programs, they must not be overly restrictive as to shackle the creativity of those who deal with the vagaries of budget implementation.
For instance, I am of the firm view that the treatment of departments and offices granted fiscal autonomy should be different. Levels of fiscal autonomy among various constitutional organs can be different.
For example, the constitutional protection granted to the judiciary is such that its budget cannot be diminished below the amount appropriated during the previous year. Yet, we submit our items for expenditure to the executive through the DBM year in and year out. This should be only for advice and accountability; not for approval.
In the proper case, we should declare that this constitutional provision on fiscal autonomy means that the budget for the judiciary should be a lump sum corresponding to the amount appropriated during the previous year. This may mean that as a proportion of the national budget and in its absolute amount, the judiciary's budget cannot be reduced. Any additional appropriation for the judiciary should cover only new items for amounts greater than what have already been constitutionally appropriated. Public accountability on our expenditures will be achieved through a resolution of the Supreme Court En Banc detailing the items for expenditure corresponding to that amount.
The ponencia may inadvertently marginalize this possible view of how the Constitution requires the judiciary's budget to be prepared. It will also make it difficult fori us to further define fiscal autonomy as constitutionally or legally mandated for the other constitutional offices.
With respect to the discretions in relation to budget execution: The legislature has the power to authorize a maximum amount to spend per item, and the executive has the power to spend for the item up to the amount limited in the appropriations act. The metaphor that Congress has "the power of the purse" does not fully capture this distinction. It only captures part of the dynamic between the executive and the legislature.
Any expenditure beyond the maximum amount provided for the item in the appropriations act is an augmentation of that item. It amounts to a transfer of appropriation. This is generally prohibited except for instances when "upon implementation or subsequent evaluation of needed resources, [the appropriation for a program, activity or project existing in the General Appropriations Act] is determined to be deficient." In which case, all the conditions provided in Article VI, Section 25 (5) of the Constitution must first be met.
The limits defined in this case only pertain to the power of the President - and by implication, other constitutional offices - to augment items of appropriation. There is also the power of the President to realign allocations of funds to another item - without augmenting that item - whenever revenues are insufficient in order to meet the priorities of government.4 (Citations omitted)
Endnotes:
1Belgica v. Ochoa, 721 Phil. 416 (2013) [J. Perlas-Bernabe, En Banc].
2 Id.
3 Id. at 700-701.
4 Concurring Opinion of J. Leonen, Araullo v. Aquino, 737 Phil. 457, 755-757 (2014) [Per J. Bersamin, En Banc].
CAGUIOA, J.:
I concur.
The Court has decided to limit the disposition with respect to the specifically assailed appropriations, namely, the Unprogrammed Fund, the Contingent Fund, the E-Government Fund (E-Gov Fund), and the Local Government Support Fund (LGSF) (collectively, the specifically assailed lump-sum appropriations). I agree that these lump-sum funds are constitutional.
I nonetheless register my opinion on the arguments presented in the case which had not been touched upon by the majority decision.
To recall, on November 19, 2013, the Court issued its Decision in Belgica v. Ochoa, Jr.1 (2013 Belgica case), declaring certain provisions of the 2013 GAA unconstitutional. The dispositive portion reads:
WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in this Decision, the Court hereby declares as UNCONSTITUTIONAL: (a) the entire 2013 [Priority Development Assistance Fund (PDAF)] Article; (b) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and [Countrywide Development Fund (CDF)] Articles and the various Congressional Insertions, which authorize/d legislators-whether individually or collectively organized into committees - to intervene, assume or participate in any of the various post-enactment stages of the budget execution, such as but not limited to the areas of project identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of congressional oversight; (c) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions, which confer/red personal, lump-sum allocations to legislators from which they are able to fund specific projects which they themselves determine; (d) all informal practices of similar import and effect, which the Court similarly deems to be acts of grave abuse of discretion amounting to lack or excess of jurisdiction; and (e) the phrases (1) "and for such other purposes as may be hereafter directed by the President" under Section 8 of Presidential Decree No. 910 and (2) "to finance the priority infrastructure development projects" under Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, for both failing the sufficient standard test in violation of the principle of non-delegability of legislative power.Petitioner anchors the present challenge on a reading of the 2013 Belgica Decision as invalidating lump-sum appropriations that he characterizes as "Presidential pork barrel." In particular, Petitioner asserts that the lump-sum discretionary funds in the 2014 GAA were passed in violation of the Constitution, since these funds are of the same character as the pork barrel funds which were declared unconstitutional in the 2013 Belgica case, and should thus be prohibited.
Accordingly, the Court's temporary injunction dated September 10, 2013 is hereby declared to be PERMANENT. Thus, the disbursement/release of the remaining PDAF funds allocated for the year 2013, as well as for all previous years, and the funds sourced from (1) the Malampaya Funds under the phrase "and for such other purposes as may be hereafter directed by the President" pursuant to Section 8 of Presidential Decree No. 910, and (2) the Presidential Social Fund under the phrase "to finance the priority infrastructure development projects" pursuant to Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, which are, at the time this Decision is promulgated, not covered by Notice of Cash Allocations (NCAs) but only by Special Allotment Release Orders (SAROs), whether obligated or not, are hereby ENJOINED. The remaining PDAF funds covered by this permanent injunction shall not be disbursed/released but instead reverted to the unappropriated surplus of the general fund, while the funds under the Malampaya Funds and the Presidential Social Fund shall remain therein to be utilized for their respective special purposes not otherwise declared as unconstitutional.2 (Additional emphasis supplied)
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 thdt 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. Anent special purpose funds, it must be added that Section 25 (4), Article VI of the 1987 Constitution requires that the "special appropriations bill shall specify the purpose for which it is intended, and shall be supported by funds actually available as certified by the National Treasurer, or to be raised by a corresponding revenue proposal therein." Meanwhile, with respect to discretionary funds, Section 25 (6), Article VI of the 1987 Constitution requires that said funds "shall be disbursed only for public purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law."Prohibited lump-sums in the 2013 Belgica case - appropriations that violate separation of powers
In contrast, what beckons constitutional infirmity are appropriations which merely provide for a singular lump-sum amount to be tapped as a source of funding for multiple purposes. Since such appropriation type necessitates the further determination of both the actual amount to be expended and the actual purpose of the appropriation which must still be chosen from the multiple purposes stated in the law, it cannot be said that the appropriation law already indicates a "specific appropriation of money" and hence, without a proper line-item which the President may veto. As a practical result, the President would then be faced with the predicament of either vetoing the entire appropriation if he finds some of its purposes wasteful or undesirable, or approving the entire appropriation so as not to hinder some of its legitimate purposes. Finally, it may not be amiss to state that such arrangement also raises non-delegability issues considering that the implementing authority would still have to determine, again, both the actual amount to be expended and the actual purpose of the appropriation. Since the foregoing determinations constitute the integral aspects of the power to appropriate, the implementing authority would, in effect, be exercising legislative prerogatives in violation of the principle of non-delegability.3 (Additional emphasis supplied)
x x x 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. x x x4 (Additional emphasis supplied)This implied dichotomy between allowable and prohibited lump-sums in the Decision is further reinforced by no less than three Justices in their separate opinions in the 2013 Belgica case. These separate opinions sought to make clear that the level of specificity of an appropriation as a test for its constitutionality and the ruling on the constitutionality of lump-sum appropriations per se did not form part of the disposition in the said case.
Lest this conclusion be misunderstood, I do not per se take the position that all lump sum appropriations should be disallowed as this would be an extreme position that disregards the realities of national life. But the use of lump sums, to be allowed, should be within reason acceptable under the processes of the Constitution, respectful of the constitutional safeguards that are now in place, and understandable to the people based on their secular understanding of what is happening in government.5 (Emphasis supplied)As for Justice Maria Lourdes P. A. Sereno, she opined:
As it stands now, the conceptual formulations on lump-sums, while not pronouncing doctrine could be premature and confusing. This is evidenced by the fact that different opinions had different definitions of lump-sum appropriations. Justice Carpio cites Sections 35 and 23 of the Administrative Code to say that the law does not authorize lump-sum appropriations in the GAA. But Section 35 itself talks of how to deal with lump-sum appropriations. Justice Brion made no attempt to define the term. Justice Leonen recognized the fact that such discussion needs to be initiated by a proper case.Finally, Justice Marvic Mario Victor F. Leonen elucidated:
Even the ponencia itself stated that Article XIV of the 2013 GAA is unconstitutional for being, among others, a "prohibited form of lump-sum," which implies that there are allowable forms of lump-sum. This begs the question: what are allowable forms of lump-sum? In the first place, what are lump-sums? Administrative practice and congressional categories have always been liberal about the definition of lump-sums. Has this Court not neglected to accomplish its preliminary task, by first and foremost agreeing on the definition of a lump-sum?
Both Justice Brion and Justice Leonen warned against the possibility of the Court exceeding the bounds set by the actual case and controversy before us. That a total condemnation of lump-sum funding is an "extreme position that disregards the realities of national life," as Justice Brion stated, and that it is by no means doctrinal and "should be clarified further in a more appropriate case," as discussed by Justice Leonen, are correct. In the same spirit, I separately clarify the import of our decision, so that no unnecessary inferences are made.
As worded in the dispositive portion, the following are unconstitutional: first, the entire 2013 PDAF Article; second, all legal provisions, of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions; and third, all informal practices of similar import and effect. The extent of their unconstitutionality has been defined as follows: (1) these authorize/d legislators - whether individually or collectively organized into committees - to intervene, assume or participate in any of the various post-enactment stages of the identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of congressional oversight; (2) these confer/red personal, lump-sum allocations from which they are able to fund specific projects which they themselves determine.
Given the circumscribed parameters of our decision, it is clear that this Court made no doctrinal pronouncement that all lump-sum appropriations per se are unconstitutional.6 (Additional emphasis and underscoring supplied)
In some instances, the purpose of the funding may be general because it is a requirement of either constitutional or statutory autonomy. Thus, the ideal would be that this Court would have just one item with a bulk amount with the expenditures to be determined by this Court's En Banc. State universities and colleges may have just one lump sum for their institutions because the purposes for which they have been established are already provided in their charter.To my mind, based on its ratio and fallo (save the rule on singular correspondence which I will discuss later), the decision to strike down the 2013 PDAF Article in the 2013 Belgica case was primarily because the participation of individual legislators in the identification of projects post-enactment, contrary to the well-defined roles of the political branches in the different stages of the budget cycle, violated the principle of separation of powers.
While I agree generally with the view of the ponencia that "an item of appropriation must be an item characterized by a singular correspondence - meaning an allocation of a specified singular amount for a specified singular purpose," our opinions on the generality of the stated purpose should be limited only to the [PDAF] as it is now in the [2013 GAA]. The agreement seems to be that the item has no discernible purpose.
There may be no need, for now, to go as detailed as to discuss the fine line between "line" and "lump sum" budgeting. A reading of the ponencia and the Concurring Opinions raises valid considerations about line and lump sum items. However, it is a discussion which should be clarified further in a more appropriate case.
Our doctrine on unlawful delegation of legislative power does not fully square in cases of appropriations. Budgets are integral parts of plans of action. There are various Ways by which a plan can be generated and fully understood by those who I are to implement it. There are also many requirements for those who implement such plans to adjust to given realities which are not available through foresight.
The Constitution should not be read as a shackle that bounds creativity too restrictively. Rather, it should be seen as a framework within which a lot of leeway is given to those who have to deal with the fundamental vagaries of budget implementation. What it requires is an appropriation for a discernable purpose. x x x7 (Emphasis supplied)
In a strict sense, appropriation has been defined "as nothing more than the legislative authorization prescribed by the Constitution that money may be paid out of the Treasury", while appropriation made by law refers to "the act of the legislature setting apart or assigning to a particular use a certain sum to be used in the payment of debt or dues from the State to its creditors."14Inasmuch as the Constitution adopts the United States (U.S.) budget framework, the definition of appropriation in this jurisdiction remains consistent with that recognized under the U.S. Constitution: Section 9, Article I, Clause 7 of the U.S. Constitution, otherwise referred to as the "Appropriations Clause."15 The U.S. budget authorities take the foregoing clause to mean "that it is up to Congress to decide whether or not to provide funds for a particular program or activity and to fix the level of that funding."16 The clause has been characterized as "the most important single curb in the [U.S.] Constitution on Presidential power."17
SECTION 40. 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 of 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 the 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.This provision on the use of lump-sum appropriations in the budget was reiterated in Section 35 in Title II, Book VI, Chapter 5 of the Administrative Code.
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. (Emphasis supplied)
A lump-sum appropriation is one that is made to cover a number of specific programs, projects, or items. (The number may be as small as two.) In contrast, a line-item appropriation is available only for the specific object described.23It is well-settled that the contemporaneous interpretation of administrative officials with respect to a law they are duty bound to enforce or implement deserves great weight.24 The contemporaneous interpretation of the Department of Budget and Management (DBM) and the GAO, being the administrative bodies tasked to implement and interpret the budgetary laws of the Philippines and the U.S., respectively, command great weight in the determination of what constitutes a valid appropriation as contemplated inthe Constitution, considering the American origins of the Philippines' budget framework.
SEC. 23. Content of the General Appropriations Act. - The General Appropriations Act shall be presented in the form of budgetary programs and projects for each agency of the government, with the corresponding appropriations for each program and project, including statutory provisions of specific agency or general applicability. The General Appropriations Act shall not contain any itemization of personal services, which shall be prepared by the Secretary after enactment of the General Appropriations Act, for consideration and approval of the President.Verily, Section 23 makes mention of "budgetary programs and projects x x x with the corresponding appropriations for each program and project."
x x x An appropriation is the setting apart by law of a certain sum from the public revenue for a specified purpose. An item is the particulars, the details, the distinct and severable parts of the appropriation or of the bill. No set fonn of words is needed to make out an appropriation or an item.31 (Citations omitted.)This was again defined in the case of Bengzon v. Drilon,32 thus:
The Constitution provides that only a particular item or items may be vetoed. The power to disapprove any item or items in an appropriate bill does not grant the authority to veto a part of an item and to approve the remaining portion of the same item. (Gonzales v. Macaraig, Jr., 191 SCRA 452, 464 [1990]).The definition of an item - the particulars, the details, the distinct and severable parts of the appropriation or of the bill - was again brought to the fore as one of the issues decided by the Court in the Araullo v. Aquino III34 (Araullo) cases.
We distinguish an item from a provision in the following manner:"The terms item and provision in budgetary legislations and practice are concededly different. An item in a bill refers to the particulars, the details, the distinct and severable parts x x x of the bill (Bengzon, supra, at 916). It is an indivisible sum of money dedicated to a stated purpose (Commonwealth v. Dodson, 11 S.E., 2d 120, 124, 125, etc., 176 Va. 281). The United States Supreme Court, in the case of Bengzon v. Secretary of Justice (299 U.S. 410, 414, 57 Ct 252, 81 L. Ed., 312) declared 'that 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." (id. at pake 465).33
Aside from this transfer under the DAP to the DREAM project exceeding by almost 300% the appropriation by Congress for the program Generation of new knowledge and technologies and research capability building in priority areas identified as strategic to National Development, the Executive allotted funds for personnel services and capital outlays. The Executive thereby substituted its will to that of Congress. Worse, the Executive had not earlier proposed any amount for personnel services and capital outlays in the NEP tliat became the basis of the 2011 GAA.Thus, the Court held in its dispositive portion that "[t]he funding of projects, activities and programs that were not covered by any appropriation in the General Appropriations Act" as one of the "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."37
It is worth stressing in this connection that the failure of the GAAs to set aside any amounts for an expense category sufficiently indicated that Congress purposely did not see fit to fund, much less implement, the PAP concerned. This indication becomes clearer when even the President himself did not recommend in the NEP to fund the PAP. The consequence was that any PAP requiring expenditure that did not receive any appropriation under the GAAs could only be a new PAP, any funding for which would go beyond the authority laid down by Congress in enacting the GAAs. x x x36 (Emphasis and underscoring supplied; italics omitted)
After a careful reexamination of existing laws and jurisprudence, we find merit in the respondents' argument.The Araullo Resolution therefore ruled that an "item" that can be subject of augmentation under Section 25(5) does not mean allotment class or expense category - Personal Services (PS), Maintenance and Other Operating Expenses (MOOE), and Capital Outlay (CO), meaning these are not the constitutional conception of an "item" - but the program, activity or project (PAP) to which these allotment classes pertain. So again, this shows that for the purpose of determ ning the constitutional specificity of an item, either by compliance with standards of non-delegability or item veto power; the Court has recognized the interpretation of the administrative agency responsible for executing the budget - that the item is the PAP for line-items or the Fund or one of the component purposes with a specific amount in case of lump-sum appropriations.
Indeed, Section 25(5) of the 1987 Constitution mentions of the term item that may be the object of augmentation by the President, the Senate President, the Speaker of the House, the Chief Justice, and the heads of the Constitutional Commissions. In Belgica v. Ochoa, we said that an item that is the distinct and several part of the appropriation bill, in line with the itemveto power of the President, must contain "specific appropriations of money" and not be only general provisions, thus: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:Accordingly, 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 categoy belongs to.39 (Citations omitted;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 appmiioned 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 and underscoring supplied)
This textual commitment of the budgetary operations for the government to the political branches translates to broad constitutional authority, subject only to the standards set by the Constitution. Therefore, the formulation of the national budget through the balancing of competing demands for public funds in the operation of the government is a political question, subject only to judicial review to test for grave abuse of discretion (i.e., violations of the Constitution).Article VI
Section 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills oflocal application, and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.
Section 25. (1) The Congress may not increase the appropriations recommended by the President for the operation of the Government as specified in the budget. The form, content, and manner of preparation of the budget shall be prescribed by law.
x x x x
Section 27. x x x
(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.
Section 29. (1) No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
x x x xArticle VII
Section 22. The President shall submit to the Congress within thirty days from the opening of every 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.
SEC. 13. Budget Levels. - The ordinary income of government shall be used primarily to provide appropriations for current operations, except in case of a national emergency or serious financial stress, the existence of which has been duly proclaimed by the President.This requirement of a correspondence between spending and source of revenue has been imposed as early as the Budget Act.46 Verily, it is contrary to the prevailing balanced budget policy to program appropriations without a corresponding source of revenue to fund the same. Hence, the creation of the Unprogrammed Fund as a standby appropriation and the identification of the programs to be funded by it constitute a prior determination on the part of the Executive (in their inclusion in the NEP) and the Legislature (in the retention of the identification in the enacted GAA) to allot unexpected, excess, or windfall revenue for the specific programs identified thereunder. Therefore, the provision for the Unprogrammed Fund is consistent with the national budget policy and cannot therefore be characterized as avoiding the appropriation procedure.
The level of aggregate revenue expenditure and debt shall be jointly recommended to the President by the Department of Budget and Management, the Department of Finance, the National Economic and Development Authority and the Central Bank of the Philippines, acting within the Development Budget Coordination Committee of the National Economic and Development Authority.
No appropriations for current operations and capital outlays of the Government shall be proposed unless the amount involved is covered by the ordinary income, or unless it is supported by a proposal creating additional sources of funds or revenue, including those generated from domestic and foreign borrowings, sufficient to cover the same. Likewise, no appropriation for any expenditure, the amount of which is not covered by the estimated income from the existing sources of revenue or available current surplus, may be proposed, unless it is supported by a proposal creating an additional source of funds sufficient to cover the same.
Proposals creating additional sources of funds shall be prepared in the form of revenue bills.
The provisions of this section shall not be construed as impairing in any way the power of the Congress to enact revenue and appropriation bills, nor the authority of the President to propose special revenue and appropriation bills after the submission of the budget. (Emphasis supplied)
We begin this dissection by reiterating that Congress cannot anticipate all issues and needs that may come into play once the budget reaches its execution stage. Executive discretion is necessary at that stage to achieve a sound fiscal administration and assure effective budget implementation. The heads lof offices, particularly the President, require flexibility in their operations urider performance budgeting to enable them to make whatever adjustments are needed to meet established work goals under changing conditions. In particular, the power to transfer funds can give the President the flexibility to meet unforeseen events that may otherwise impede the efficient implementation of the [programs, activities or projects] set by Congress in the GAA.Contrary to Petitioner's assertion, allowance for executive discretion does not per se constitute a violation of the principle of separation of powers in the context of the budget process if: (1) the function entrusted by the Legislative to the Executive requires it to exercise such acts which fall within the sphere of powers properly allocated to it under the Constitution; and (2) such acts are accordingly exercised during the proper phase of the budget process.
Congress has traditionally allowed much flexibility to the President in allocating funds pursuant to the GAAs, particularly when the funds are grouped to form lump sum accounts. It is assumed that the agencies of the Government enjoy more flexibility when the GAAs provide broader appropriation items. This flexibility comes in the form of policies that the Executive may adopt during the budget execution phase. The [Disbursement Acceleration Program] - as a strategy to improve the country's economic position - was one policy that the President decided to carry out in order to fulfill his mandate under the GAAs.
Denying to the Executive flexibility in the expenditure process would be counterproductive. In Presidential Spending Power, Prof. Louis Fisher, an American constitutional scholar whose specialties have included budget policy, has justified extending discretionary authority to the Executive thusly:[T]he impulse to deny discretionary authority altogether should be resisted. There are many number of reasons why obligations and outlays by administrators may have to differ from appropriations by legislators. Appropriations are made many months, and sometimes years, in advance of expenditures. Congress acts with imperfect knowledge in trying to legislate in fields that are highly technical and constantly undergoing change. New circumstances will develop to make obsolete and mistaken the decisions reached by Congress at the appropriation stage. It is not practicable for Congress to adjust to each new development by passing separate supplemental appropriation bills. Were Congress to control expenditures by confining administrators to narrow statutory details, it would perhaps protect its power of the purse but it would not protect the purse itself. The realities and complexities of public policy require executive discretion for the sound management of public funds.x x x The expenditure process, by its very nature, requires substantial discretion for administrators. They need to exercise judgment and take responsibility for their actions, but those actions ought to be directed toward executing congressional, not administrative policy. Let there be discretion, but channel it and use it to satisfy the programs and priorities established by Congress.50 (Emphasis supplied)
x x x x
SECTION 3. Declaration of Policy. - It is hereby declared the policy of the State to formulate and implement a National Budget that is an instrument of national development, reflective of national objectives, strategies and plans. The budget shall be supportive of and consistent with the socio-economic development plan and shall be oriented towards the achievement of explicit objectives and expected results, to ensure that funds are utilized and operations are conducted effectively, economically and efficiently. The national budget shall be formulated within the context of a regionalized government structure and of the totality of revenues and other receipts, expenditures and borrowings of all levels of government and of the government-owned or controlled corporations. The budget shall likewise be prepared within the context of the national longterm plan and of a long-term budget program. (Emphasis supplied)This was largely retained and reenacted in the Administrative Code:
SECTION 1. Declaration of Policy. - The national budget shall be formulated and implemented as an instrument of national development, reflective of national objectives and plans, supportive of and consistent with the socio-economic development plans and oriented towards the achievement of explicit objectives and expected results, to ensure that the utilization of funds and operations df government entities are conducted effectively; formulated within the cohtext of a regionalized governmental structure and within the totality of revenues and other receipts, expenditures and borrowings of all levels of government and of govermnent-owned or controlled corporations; and prepared within the context of the national long-term plans and budget programs of the Government.52Finally, as to the form of the budget, the Budget Act, as reenacted in PD 1177 and the Administrative Code, provides:
SEC. 3. Form of the Budget. - The Budget, which shall be prepared and submitted to the National Assembly in accordance with the provisions of section 19 Article VI of the Constitution, shall comprise the general fund and all classes of special and trust funds under the care and control of the different branches or offices of the National Government.Even assuming that the power to apportion or allocate is not inherently executive as a facet of budget execution, and only a product of delegation by the legislative, the mere nature of an appropriation as lump-sum does not automatically constitute undue delegation.
The receipts accruing to any fund and the expenditures therefrom shall be shown in detail in conformity with the classification of accounts prescribed by the Auditor General, segregated into ordinary and extraordinary income and expenditures.
The appropriations for salaries and wages shall specify the positions, the number of each class, the respective designations, the salary rates authorized for the current year and those proposed for the ensuing year, and the items shall be grouped by bureaus and offices. The items of appropriations for each class of sundry expenses, furniture and equipment, and those for special purposes for the different bureaus and offices shall be consolidated for each corresponding department. Together with the proposed appropriations for each department, there shall be shown the amount of the actual expenditures for the preceding year and the estimated expenditures for the current and ensuing years from appropriations that are authorized by existing laws and from the special and trust funds.53
x x x x
SECTION 8. Form and content. - The Budget shall consist of two parts - (1) the current operating expenditures, and (2) the capital outlays. - Each part of the Budget shall comprise the general fund and all classes of special, operating trust funds, and bond funds under the care and control of the different departments and agencies. The Budget shall embody as appendices the ptoposed General Appropriation Act, the Public Works Act, and other appropriation Acts to cover the budget proposals.
The Budget shall also contain:
(a) a budgetary message setting forth in brief the significance of the appropriations proposed; (b) a brief summary of the functions and activities of the Government; and (c) summary of financial statements setting forth: (1) the estimated expenditures and proposed appropriations necessary for the support of the Government for the ensuing fiscal year; (2) the estimated receipts during the ensuing fiscal year under laws existing at the time the Budget is transmitted, and under the revenue proposals, if any, contained in the Budget; (3) the actual appropriations, expenditures, and receipts during the last completed fiscal year; (4) the estimated expenditures and receipts and actual or proposed appropriations during the fiscal year in progress; (5) balanced statements of the condition of the National Treasury at the end of the last completed fiscal year, the estimated condition of the Treasury at the end of the fiscal year in progress, and the estimated condition of the Treasury at the end of the ensuing fiscal year, if the financial proposals contained in the Budget are adopted, showing, at the same time, the unencumbered and unobligated cash resources; (6) all essential facts regarding the bonded and other long-term obligations and indebtedness of the Government; and (7) such other financial statements and data as are deemed necessary or desirable in order to make known in all practicable detail the financial conditions of the Government.54 x x x x
SECTION 15. Allotment of appropriations. - To prevent the incurrence of deficits, authorized appropriations shall be allotted in accordance with the procedure outlined hereunder:
(a) No appropriation authorized for any department and agency of the Government shall be available for expenditure until the head of each department or agency shall have submitted to the Budget Commissioner a request for allotment of funds showing the estimated amounts needed for each function, activity, or purpose for which the funds are to be expended during the applicable allotment period and until the request shall have been approved by the Commissioner as hereinafter provided. The form of the request for allotment shall be prescribed by the Commissioner and shall be submitted to him at least twenty-five days prior to the beginning of the fiscal year showing the proposed quarterly allotments of the whole authorized appropriation for the department or agency. (b) For purposes of the administration of the allotment system herein provided, each fiscal year shall be divided into four quarterly allotment periods beginning, respectively, on the first day of July, October, January, and April: Provided, That in any case where the quarterly allotment period is found to be impracticable, the Commissioner may prescribe a different period suited to the circumstances but not extending beyond the end of the fiscal year. (c) Each request for allotment shall be reviewed by the Budget Commissioner and the respective amounts therein shall be allotted for expenditures, provided the estimate therein is within the terms of the appropriations as to amount and purposes, having due regard for the probable future needs of the bureau, office or agency for the remainder of the fiscal year or other term for which the appropriation was made, and provided the bureau, office or agency contemplates expenditure of the allotment during the period. Otherwise, the said Budget Commissioner shall modify the estimate so as to conform with the terms of the appropriation and the prospective needs of the bureau, office or agency, and shall reduce the amount to be allotted accordingly. The Budget Commissioner shall act promptly upon all requests for allotment and shall notify every bureau, office or agency of its allotments at least five days before the beginning of each allotment period. The total amount allotted to any bureau, office or agency for the fiscal year or other term for which the appropriation was made shall not exceed the amount appropriated for said year or term. The notification, which will be sufficient authority for the Chief Accountant to enter the allotment in the books, shall include an explanation for any decrease or increase in the request of the head of the department or agency. (d) At the end of each quarter, each department or agency must report to the Commissioner the current status of its appropriations, the cumulative allotments, obligations, expenditures, and unliquidated obligations and unobligated and unexpected balances; and the results of expended appropriations. Such department or agency may, at any time, initiate or request for a change in allotments in order to adopt its functions or activities to altered conditions. (e) The Commissioner shall have authority also at any time to modify or amend any allotment previously made by him. In case he shall find at any time that the probable receipts from taxes or other sources for any fund will be less than were anticipated and that as a consequence the amount available for the remainder of the term of the appropriations, or for any allotment period will be less than the amount estimated or allotted therefor, he shall with the approval of the President, and after notice to the department or agkncy concerned, reduce the amount or amounts to be allotted so as to prevent deficits. (f) The Commissioner shall promptly transmit records and modifications thereof to the Auditor General, the Chairman of the Committee on Finance of the Senate and the Chairman of the Committee on Appropriations and Chairman of the Committee on Ways and Means of the House of Representatives and the Secretary of Finance. (g) The Commissioner shall maintain control records showing quarterly by funds, accounts, and other pertinent classifications, the amounts appropriated, the estimated revenues, the actual revenues or receipts, the amounts allotted and available for expenditures, the unliquidated obligations, actual balances on hand, and the unencumbered balances of the allotments for each agency of the Government.55 (Emphasis supplied)
x x x An apportionment divides amounts available for obligation by specific time periods (usually quarters), activities, projects, objects, or a combination thereof. The amounts so apportioned limit the amount of obligations that may be incurred. An apportionment may be further subdivided by an agency into allotments, suballotments, and allocations. x x xPetitioner decries this executive exercise of apportionment within appropriations as "Presidential pork" which he asks the Court to declare as unconstitutional for constituting "[an] informal [practice] of similar import and effect, which the Court similarly deems to be acts of grave abuse of discretion amounting to lack or excess of jurisdiction" in the 2013 Belgica case.66Contrary to his claims, however, this practice of apportionment rests on solid constitutional and statutory grounds.
The apportionment process is intended to (1) prevent the obligation of amounts available within an appropriation or fund account in a manner that would require deficiency or supplemental appropriations and (2) achieve the most effective and economical use of amounts made available for obligation. x x x65
SECTION 53. Administration of Lump-Sum Funds. - The Budget Commission shall administer the Lump-Sum Funds appropriated in the General Appropriations Act, except as otherwise specified therein, including the issuance of Treasury Warrants covering payments to implementing agencies or other creditors, as may be authorized by the President.In 1978, the Budget Commission was converted into the Ministry of Budget through PD 1405,69 and later, the Office of Budget and Management by virtue of Executive Order No. 71170 in 1981. Finally, the Office of Budget and Management was renamed as the DBM through the Administrative Code. Despite these changes in nomenclature, however, the DBM's powers and functions, including the power to administer lump-sum funds, have remained intact.71
The allocation of funds from a lump-sum appropriation is another administrative decision traditionally regarded as committed to agency discretion. After all, the very point of a lump-sum appropriation is to give an agency the capacity to adapt to changing circumstances and meet its statutory responsibilities in what it sees as the most effective or desirable way. See International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Donovan, 241 U.S. App. D. C. 122, 128, 746 F. 2d 855, 861 (1984) (Scalia, J.) ("A lump-sum appropriation leaves it to the recipient agency (as a matter of law, at least) to distribute the funds among some or all of the permissible objects as it sees fit") (footnote omitted), cert. denied sub nom. Automobile Workers v. Brock, 474 U. S. 825 (1985); 2 United States General Accounting Office, Principles of Federal Appropriations Law, p. 6-159 (2d ed. 1992). For this reason, a fundamental principle of appropriations law is that where "Congress merely appropriates lump-sum amounts without statutorily restricting what can be done with those funds, a clear inference arises that it does not intend to impose legally binding restrictions, and indicia in committee reports and other legislative history as to how the funds should or are expected to be spent do not establish any legal requirements on" the agency. LTV Aerospace Corp., 55 Compo Gen. 307, 319 (1975); cf. American Hospital Assn. v. NLRB, 499 U.S. 606, 616 (1991) (statements in committee reports do not have the force of law); TVA v. Hill, 437 U. S. 153, 191 (1978) ("Expressions of committees dealing with requests for appropriations cannot be equated with statutes enacted by Congress"). Put another way, a lump-sum appropriation reflects a congressional recognition that an agency must be allowed "flexibility to shift x x x funds within a particular x x x appropriation account so that" the agency can make necessary adjustments for "unforeseen developments" and "'changing requirements.'" LTV Aerospace Corp., supra, at 318 (citation omitted).Therefore, by no stretch of imagination may it be considered that the President therefore colludes with the Congress, when it submits a NEP with lump-sum appropriations and the Congress on the other hand passes the appropriation law retaining these lump-sum appropriations.
Like the decision against instituting enforcement proceedings, then, an agency's allocation of funds from a lump-sum appropriation requires "a complicated balancing of a number of factors which are peculiarly within its expertise": whether its "resources are best spent" on one program or another; whether it "is likely to succeed" in fulfilling its statutory mandate; whether a particular program "best fits the agency's overall policies"; and, "indeed, whether the agency has enough resources" to fund a program "at all." Heckler, 470 U. S., at 831. As in Heckler, so here, the "agency is far better equipped than the courts to deal with the many variables involved in the proper ordering of its priorities." Id., at 831-832. Of course, an agency is not free simply to disregard statutory responsibilities: Congress may always circumscribe agency discretion to allocate resources by putting restrictions in the operative statutes (though not, as we have seen, just in the legislative history). See id., at 833. And, of course, we hardly need to note that an agency's decision to ignore congressional expectations may expose it to grave political consequences. But as long as the agency allocates funds from a lump-sum appropriation to meet permissible statutory objectives, §701(a)(2) gives the courts no leave to intrude. "[T]o [that] extent," the decision to allocate funds "is committed to agency discretion by law." §701(a)(2).73
As to what is subject to the President's item veto power, we look again to jurisprudence as to the constitutional concept of an "item." Again, in the Araullo Resolution, the Court had occasion to clarify the constitutional concept of an "item" for purposes of the power to augment, thus:SECTION 19 - Procedure for Law-Making
x x x x
(b) The veto on appropriations. - The Governor-General shall have the power to veto any particular item or items of an appropriation bill, but the veto shall not affect the item or items to which he does not object. The item or items objected to shall not take effect except in the manner heretofore provided in this section as to bills and joint resolutions returned to the Legislature without his approval.
Accordingly, 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.79With respect to the claim that there must be a proper "item" which may be the object of the veto, Gonzales v. Macaraig, Jr.80 must be understood in the context of distinguishing an item in an appropriation bill from a provision or rider, which is a provision that does not appropriate funds for a specific purpose. This case, interpreted together with the requirement of singular correspondence in the 2013 Belgica case, can hardly now be support to say that lump-sum appropriations cannot be subject of a Presidential item veto.
x x x 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" ppropriations which are rightfully subject to item veto. Likewise, it must be observed that an appropriation may be validly apportioned into cmhponent percentages or values; however, it is crucial that each percentae or value must be allocated for its own corresponding purpose for such component to be considered as a proper line-item. x x x81 (Emphasis omitted)In practice and interpretation already recognized by the Court,82 the President is empowered and has exercised his power of item veto not merely on singular line-item appropriations, but also on lump-sum appropriations and had historically subjected special provisions that earmark certain amounts for specific purposes for conditional implementation.83 This must be so, because there is nothing in the Constitution or in urisprudence that limits the exercise of the Presidential power of item veto to the class of line-item appropriations only.84
Endnotes:
1 721 Phil. 416 (2013).
2 Id. at 582-583.
3 Id. at 551-553.
4 Id. at 552.
5 Id. at 728.
6 Id. at 586-588. Citations omitted.
7 Id. at 700-701. Citations omitted.
8 Section 29. (1) No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
9 Section 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.
10 Section 22. The President shall submit to the Congress within thirty days from the opening of every 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.
11 See CONSTITUTION, Art. VI, Sec. 29(1).
12 See ADMINISTRATIVE CODE OF 1987, Book VI, Chapter 1, Sec. 2(1); see also Section 2(i) of Presidential Decree No. (PD) 1177 or the BUDGET REFORM DECREE OF 1977, July 30, 1977.
13 259 Phil. 736 (1989).
14 Id. at 743, citing Martin, "New Constitution of the Philippines", p. 399, 1987 edition.
15 U.S. CONSTITUTION, art. I,§ 9, cl. 7. "No Money shall be drawn from the Treasury, but in consequence of Appropriations made by Law x x x"; see also U.S. CONST., art. I,§ 29.
16 GAO-04-261SP Appropriations Law-Vol. I, p. 1-5.
17 Id. at 1-4.
18 AN ACT PRESCRIBING THE FORM OF THE BUDGET AND REGULATING THE EXPENDITURE OF AUTHORIZED APPROPRIATIONS, December 17, 1937.
19 SECTION 7. Provisions Governing the Expenditure of Authorized Appropriations. - Unless otherwise expressly provided in the law authorizing an appropriation, the following general and special provisions shall govern the expenditure of appropriations authorized by any annual General Appropriation Act and other acts:I. General Provisions
x x x x
(4) Allotment of lump-sum appropriations and special and other funds; plantilla of personnel. - The provisions of any law to the contrary notwithstanding, expenditures from lump-sum appropriations authorized for any executive department in any annual General Appropriation Act or other act and from all special, bond, trust, and other funds shall be made in accordance with a budget to be approved by the President, which shall include the plantilla of personnel, showing the number of each kind of positions, the designations, the salary proposed for the fiscal year for which the appropriation is intended and the salary actually received. 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 the cost of special services to be rendered to private parties.
Except when stipulated otherwise as a condition for the expenditure of an aid or donation, and in the case of officers and employees receiving higher rates at the time of the approval of this Act, no officer or employee whose salary, not being fixed by law, is paid from any lump-sum appropriation or from any special, bond, trust, revolving, or other fund, shall receive a compensation of more than twelve pesos per day or more than three hundred pesos per month. This limitation shall not apply to the appropriations for "expert and technical personnel" under the Office of the President and the various executive departments.
In the case of any lump-sum appropriation for salaries and wages of temporary laborers and employees provided in any General Appropriation Act or other act, the expenditure of such appropriation shall be limited to the employment of laborers paid by the month, by the day, or by the hour, and of emergency employees other than laborers, the office of the President, the Bureau of Health, the craftsman, helpers, and other employees of the Bureau of Printing, the justices of the peace, the officers and employees of the Bureau of Public Works whose salaries and wages are payable from appropriations for projects authorized in any act, and the officers and employees of the Bureau of Quarantine Service, shall, in no case, be paid a salary in excess of forty pesos per month, nor shall their employment continue for more than six months. (Emphasis supplied)
20 Part I, Chapter I, Article VI (5). The following agencies shall be independent and autonomous: (a) Central Bank; (b) National Economic Development Authority; (c) Economic Development Council; and (d) Office of the Citizen's Counselor. The budgets of these independent agencies shall be in the form of lump sum appropriations and shall not be subject to the usual review and release by the Budget Commission. (Integrated Reorganization Plan, [1972]); See Part VI, Chapter I, Article III (11) and Part XIII, Chapter I, Article II (15) of the Integrated Reorganization Plan.
21 REVISING THE BUDGET PROCESS IN ORDER TO INSTITUTIONALIZE THE BUDGETARY INNOVATIONS OF THE NEW SOCIETY, June 30, 1977.
22 PD 1177, Sec. 21 provides:
SECTION 21. Coordinating Bodies. - The budgets of coordinating agencies, councils, task forces, authorities, committees, or other similar bodies shall be limited to and used to fund only such planning, coordinating and monitoring functions as are assigned to it. Funds for implementation shall be budgeted and released to the line implementing agencies concerned: provided, that the budgets of coordinating bodies may include a lump-sum for purposes related to their assigned functions, which lump-sum shall be sub-allotted to implemepting agencies and not used by the agency for its own operations: provided, further, that funds budgeted for a given agency falling within the jurisdiction of a coordinating body, may be subject to release upon approval by the coordinating agency of such release or of the agency's work program.
ADMINISTRATIVE CODE, Book VI, Chapter 3 provides:
SECTION 18. Coordinating Bodies. - The budgets of coordinating agencies, councils, task forces, authorities, committees, or other similar bodies shall be limited to and used to fund only such planning, coordinating and monitoring functions as are assigned to it. Funds for implementation shall be budgeted and released to the line implementing agencies concemed: Provided, That the budgets of coordinating bodies may include a lump-sum for purposes related to their assigned functions, which lump-sum shall be sub-allotted to implementing agencies and not used by the agency for its own operations: Provided, further, That funds budgeted for a given agency falling within the jurisdiction of a coordinating body, may be subject to release upon approval by the coordinating agency of such release or of the agency's work program.
23 GAO-06-382SP Appropriations Law-Vol. II, pp. 6-5
24Pascual v. Director of Lands, 119 Phi1. 623, 627 (1964), citing Madrigal v. Rafferty, 38 Phil. 414, 423 (1918) and Government of the P.I. v. Municipality of Binalonan, 32 Phil. 634 (1915).
25Alternative Center for Organizational Reforms and Dev't., Inc. (ACORD) v. Zamora, 498 Phil. 615, 635 (2005).
26Tañada v. Cuenco, 103 Phil. 1051, 1075-1076 (1957).
27 ADMINISTRATIVE CODE, Book VI, Chapter 1, Sec. 2(12)
28 Id., Sec. 2(13).
29 Contemporaneous interpretation of the term program as now understood by the executive agencies responsible for setting and implementing the fiscal and development policies of the government (i.e., DBM, DOF and NEDA) further subdivides a program into sub-programs that may in itself have its own projects and activities nestled within them.
30Bengzon v. Secretary of Justice, 62 Phil. 912 (1936).
31 Id. at 916.
32 284 Phil. 245 (1992).
33 Id. at 261-262.
34Araullo Decision, 737 Phil. 457 (2014); Araullo Resolution, 752 Phil. 716 (2015).
35 737 Phil. 457 (2014).
36 Id. at 599.
37 Id. at 625, 626.
38 752 Phil. 716 (2015).
39 Id. at 769-771.
40Object of Expenditures. Refers to a classification under an allotment class, based on type of goods or services consistent with COA Government Accounting Manual (GAM) and Unified Accounts Code Structure UACS) Manual Available at <https://www.dbm.gov.ph/wpcontent/uploads/BESF/BESF2019/GLOSSARY.pdf>.
41 Supra note 30.
42 Separate Concurring Opinion of Justice Bernabe, p. 4; emphasis omitted.
43 Separate Opinion of Justice Carpio, p. 4.
44 369 U.S. 186 (1962).
45 Id. at 217.
46 COM. ACT No. 246, Sec. 5 provides:SECTION 5. Budget to be Balanced. - The ordinary income shall be used primarily to provide for the ordinary operating expenses of the Government. Except in case of a national emergency or serious financial stress, the existence of which has been duly proclaimed by the President, the total authorized appropriations for the ordinary expenditures shall not exceed the ordinary income; and, unless extraordinary circumstances justify it, the total estimated ordinary income shall not only cover the total estimated ordinary expenditures, but it shall leave a reasonable surplus besides. No appropriations for the ordinary operating expenses of the Government may be proposed, unless the amount thereof is covered by the ordinary income, and, likewise, no appropriation for any extraordinary expenditure, the amount of which is not covered by the estimated income from the existing sources of revenues or available current surplus, may be proposed, unless it be supported by a proposal creating an additional source of fund sufficient to cover the same.Sec. 13 of Republic Act No. (RA) 992 (AN ACT TO PROVIDE FOR A BUDGET SYSTEM FOR THE NATIONAL GOVERNMENT, otherwise known as "THE REVISED BUDGET ACT," June 4, 1954) provides:SECTION 13. Balanced Budget. - The ordinary income shall be used primarily to provide for the current operation of thel Government. Except in case of a national emergency or serious financial stress, the existence of which has been duly proclaimed by the President, the total authorized appropriations for the current operations shall not exceed the ordinary income; and, unless extraordinary circumstances justify it, the total estimated ordinary income shall not only cover the total estimated appropriations for current operations and capital outlays but it shall leave a reasonable surplus besides.47 CONSTITUTION, Article VII, Sec. 22 provides:
No appropriations for the current operations and capital outlays of the Government shall be proposed, unless the amount involved is covered by the ordinary income, or unless it be supported by a proposal creating an additional source of funds or revenue, sufficient to cover the same. Likewise, no appropriation for any other expenditures, the amount of which is not covered by the estimated income from the existing sources of revenues or available current surplus, may be proposed unless it be supported by a proposal creating an additional source of fund sufficient to cover the same.
The proposals creating additional sources of funds shall be prepared in the form of revenue bills which shall be appended to the Budget.
The provisions of this section shall not be constituted as impairing in any way the power of Congress to enact revenue and appropriation bills, nor the authority of the President to propose special revenue and appropriation bills after the submission of the budget.SECTION 22. The President shall submit to the Congress, within thirty days from the opening of every 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.48 See Annex "D" of the National Budget Memorandum No. 115, December 28, 2012.
49 See ADMINISTRATIVE CODE, Chapter V, Book 6, Sec. 38.
50Araullo Decision, supra note 34, at 572-574.
51 See CONSTITUTION, Art. VII, Sec. 17.
52 ADMINISTRATIVE CODE, Book IV, Title XVII, Chapter 1.
53 COM. ACT NO. 246, December 17, 1937.
54 RA 992, June 4, 1954.
55 Id.
56Belgica, supra note 1, at 568.
57 Id.
58 Id.
59 See RA 10633, p. 1125.
60 ADMINISTRATIVE CODE, Book VI, Chapter 4 provides:SEC. 26. Automatic Appropriations. - All expenditures for (1) personnel retirement premiums, government service insurance, and other similar fixed expenditures, (2) principal and interest on public debt, (3) national government guarantees of obligations which are drawn upon, are automatically appropriated: Provided, That no obligations shall be incurred or payments made from funds thus automatically appropriated except as issued in the fonn of regular budgetary allotments.61 See ADMINISTRATIVE CODE, Book V, Subtitle B, Chapter 8, Sec. 47; PD 1445, Sec. 86.
62 See also the treatment of lump-sum appropriations in the budgets of coordinating bodies and implementing agencies in supra note 22.
63 See RA 992, Sec. 15; PD 1177, Sec. 38 and ADMINISTRATIVE CODE, Sec. 33.
64 GAO-05-734SP Budget Glossary, p. 12.
65 Id. at 12-13.
66 See Belgica, supra note 1, at 582.
67 CONSTITUTION, Art. VII, Sec. 17.
68 PD 899, REORGANIZING THE BUDGET COMMISSION, March 3, 1976, Sec. 1.
69 CONVERTING THE BUDGET COMMISSION AND THE NATIONAL SCIENCE DEVELOPMENT BOARD INTO MINISTRIES, June 11, 1978.
70 RECLASSIFYING CERTAIN AGENCIES OF THE GOVERNMENT, July 28, 1981.
71 PD 1177, Sec. 53 was reenacted as Section 47 of Book VI, Chapter 5 of the ADMINISTRATIVE CODE.
72 508 U.S. 182 (1993).
73 Id. at 192-193.
74 Reply, p. 16; rollo, p. 88.
75 A BRIEF ON THE SPECIAL PURPOSE FUNDS IN THE NATIONAL BUDGET. Notes by the Department of Budget and Management. Published on October 2013, available at <https://www.dbm.gov.ph/wpcontent/uploads/DAP/Note%20on%20the%20Special%20Purpose%20Funds%20_Released%20-%20Oct%202013_.pdf>
76 Sec Art. VIII, Sec. 3 for the Judiciary, Art. IX, Sec. 5, Common Provisions for the Civil Service Commission, Commission on Elections, and the Commission on Audit, Art. XI, Sec. 14 for the Office of the Ombudsman, Art. XIII, Sec. 17(4) for the Commission on Human Rights; see also Art. X, Sec. 6 requiring the automatic release of the just share of local government units in the national taxes.
77 Section 27. (1) x x x
(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.
78 J. Sereno, Concurring Opinion, Belgica, supra note 1, at 606.
79 Araullo Resolution, supra note 34, at 771.
80 269 Phil. 472 (1990).
81Belgica, supra note 1, at 552.
82Araullo Decision, supra note 34.
83 Which is in fact what was done to the provisions in the 2014 Local Government Support Fund, discussed elsewhere in this Decision.
84 CONSTITUTION, Art. VI, Sec. 27 provides: Section 27. (1) x x x
(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object. (Emphasis supplied)
85Rollo, p. 18.
86 RA 10633, p. 850.
87 President's Veto Message, December 20, 2013, page 1109, R.A. No. 10633, which reads:F. LOCAL GOVERNMENT SUPPORT FUND
The earmarking of specific appropriations for selected local govermnent units (LGUs) under the ALGU-Local Government Support Fund, Special Provision No. 1 "Local Government Support Fund," page 850, may not be consistent with the objectives and prioritization of the Local Government Support Fund. Accordingly, I hereby direct the DBM to issue the guidelines in the equal availment of the Fund by LGUs. Indeed, National Government support ought to be responsive to the actual requirements of LGUs in the interest of genuine local development. (Emphasis supplied)