1

REPUBLIC OF THE PHILIPPINES

SUPREME COURT
MANILA


EN BANC

GRECO ANTONIOUS BEDA B. BELGICA,
et al.,
Petitioners,

- versus - G.R. No. 209442
(Consolidated with G.R. No. 209287
and others)

PRESIDENT BENIGNO SIMEON C. AQUINO III,
et al.,
Respondents.
x ------------------------------------------------------- x


MOTION FOR PARTIAL RECONSIDERATION


Traffic lights are mere suggestions
Especially when there are no collisions
But if you are caught for the violation
Plead color blindness for exemption


Petitioners, by counsel, respectfully move for partial reconsideration of
the Decision of the Honorable Court dated 1 July 2014 (a copy of which was
received by Petitioners on 4 July 2014) insofar as the Honorable Court:

Failed to declare as UNCONSTITUTIONAL and
ILLEGAL all moneys under the Disbursement Acceleration
Program (DAP) used for alleged augmentation of appropriation
items that DID NOT HAVE ACTUAL DEFICIENCIES.

Preliminary Matters

It does not help good fiscal management for the Honorable Court to
treat the budgetary process as mere suggestions and not a set of rules
governing the conduct of budgetary officials. And good faith as a defense by
sophisticated and knowledgeable officials with access to the whole legal
arsenal of the government is a step back from the ideals of justice and
democracy under the Constitution.

2

Budget Process Not Merely Descriptive
but Mandated By Law

The Decision of the Honorable Court on the substantive issues start
with a discussion on the Budget System of the Philippines characterized as
descriptive, not normative by Justice Leonen. The Honorable Courts
description and such characterization by Justice Leonen, it is respectfully
submitted, do not reflect the legal significance of the process described and
serve to mislead the public that the budget process has no legal basis and not
ordained by law.

It is unfortunate that the Honorable Court cited authors and
government internet sites but not the applicable law. While the Decision cited
some provisions of Presidential Decree No. 1177, it did not, in its entire
discussion on the budget process, cite even a single provision of the
Administrative Code of 1987.

As early as 1991, the four phases of the budget process enumerated in
the Decision was cited approvingly by the Honorable Court in the case of
Guingona vs. Carague
1
, as follows:

The Government budgetary process has been graphically
described to consist of four major phases as aptly discussed by
the Solicitor General:

The Government budgeting process consists of four
major phases:

1. Budget preparation. The first step is essentially tasked
upon the Executive Branch and covers the estimation of
government revenues, the determination of budgetary
priorities and activities within the constraints imposed
by available revenues and by borrowing limits, and the
translation of desired priorities and activities into
expenditure levels.

Budget preparation starts with the budget call issued
by the Department of Budget and Management. Each
agency is required to submit agency budget estimates in
line with the requirements consistent with the general
ceilings set by the Development Budget Coordinating
Council (DBCC).
With regard to debt servicing, the DBCC staff,
based on the macro-economic projections of interest rates
(e.g. LIBOR rate) and estimated sources of domestic and

1
G.R. No. 94571; 22 April 1991.
3
foreign financing, estimates debt service levels. Upon
issuance of budget call, the Bureau of Treasury computes
for the interest and principal payments for the year for all
direct national government borrowings and other liabilities
assumed by the same.

2. Legislative authorization. At this stage, Congress
enters the picture and deliberates or acts on the budget
proposals of the President, and Congress in the exercise of
its own judgment and wisdomformulates an appropriation
act precisely following the process established by the
Constitution, which specifies that no money may be paid
from the Treasury except in accordance with an
appropriation made by law.

Debt service is not included in the General
Appropriation Act, since authorization therefor already
exists under RA No. 4860 and 245, as amended and PD
1967. Precisely in the fight of this subsisting authorization
as embodied in said Republic Acts and PD for debt
service, Congress does not concern itself with details for
implementation by the Executive, but largely with
annual levels and approval thereof upon due
deliberations as part of the whole obligation program for
the year. Upon such approval, Congress has spoken and
cannot be said to have delegated its wisdom to the
Executive, on whose part lies
the implementation or execution of the legislative
wisdom.

3. Budget Execution. Tasked on the Executive, the third
phase of the budget process covers the
various operational aspects of budgeting. The
establishment of obligation authority ceilings, the
evaluation of work and financial plans for individual
activities, the continuing review of government fiscal
position, the regulation of funds releases, the
implementation of cash payment schedules, and other
related activities comprise this phase of the budget cycle.
Release from the debt service fired is triggered by a
request of the Bureau of the Treasury for allotments from
the Department of Budget and Management, one quarter
in advance of payment schedule, to ensure prompt
payments. The Bureau of Treasury, upon receiving official
billings from the creditors, remits payments to creditors
through the Central Bank or to the Sinking Fund
established for government security issues (Annex F).

4
4. Budget accountability. The fourth phase refers to the
evaluation of actual performance and initially approved
work targets, obligations incurred, personnel hired and
work accomplished are compared with the targets set at
the time the agency budgets were approved.

There being no undue delegation of legislative
power as clearly above shown, petitioners insist
nevertheless that subject presidential decrees constitute
undue delegation of legislative power to the executive on
the alleged ground that the appropriations therein are
not exact, certain or definite,invoking in support therefor
the Constitution of Nebraska, the constitution under
which the case of State v. Moore, 69 NW 974, cited by
petitioners, was decided. Unlike the Constitution of
Nebraska, however, our Constitution does not require
a definite, certain, exact or "specific appropriation made
by law." Section 29, Article VI of our 1987 Constitution
omits any of these words and simply states:

Section 29(l). No money shall be paid out of the
treasury except in pursuance of an appropriation
made by law.

More significantly, there is no provision in our
Constitution that provides or prescribes any particular
form of words or religious recitals in which an
authorization or appropriation by Congress shall be made,
except that it be "made by law," such as precisely the
authorization or appropriation under the questioned
presidential decrees. In other words, in terms of time
horizons, an appropriation may be made impliedly (as by
past but subsisting legislations) as well as expressly for the
current fiscal year (as by enactment of laws by the present
Congress), just as said appropriation may be made in
general as well as in specific terms. The Congressional
authorization may be embodied in annual laws, such as a
general appropriations act or in special provisions of laws
of general or special application which appropriate public
funds for specific public purposes, such as the questioned
decrees. An appropriation measure is sufficient if the
legislative intention clearly and certainly appears from the
language employed (In re Continuing Appropriations, 32
P. 272), whether in the past or in the present.
17


While the abovementioned case referred to the second phase of the
budget process as legislative authorization, the Decision refers to it as Budget
Legislation which pertains to one and same thing, that is, the enactment by
5
Congress of the general appropriations act based on the budget submitted by
the President.
2


Like the Decision in this case, however, the Guingona vs. Carague case,
while attributing the summation of the budgetary process to the Solicitor
General, failed to recognize the legal basis therefor.

2
Section 22, Article VII, 1987 Constitution.
6
Constitution Requires the Form, Content,
and Manner of Budget Preparation be
In accordance with Law

Section 15 (1), Article VI of the 1987 Constitution requires that the
form, content, and manner of preparation of the budget shall be prescribed
by law. Pursuant to and in accordance with the said provision, the
Administrative Code of 1987 provided for an entire book of provisions
devoted solely on the form, content, and manner of preparation of the
budget.

Book VI of the Administrative Code of 1987 is all about National
Government Budgeting. It has for its chapters, the following:

Chapter 1 General Provisions
Chapter 2 Budget Policy and Approach
Chapter 3 Budget Preparation
Chapter 4 Budget Authorization
Chapter 5 Budget Execution
Chapter 6 Budget Accountability
Chapter 7 Expenditure of Appropriated Funds

Thus, and with due respect, to characterize the budget process as
merely descriptive, not normative and to propose a different treatment of
departments and offices granted fiscal autonomy is to demean the legal
significance thereof as if the process described is merely directory and not
mandatory.

President Does Not have Free Rein on
Fiscal Planning and Budget Execution

This mischaracterization of the budget process sets the stage for the
erroneous appreciation of the DAP as a fiscal plan or a product of plain
executive policy-making to stimulate the economy by way of accelerated
spending.
3
Under the DAP and the policy of accelerated spending, the
keyword is accelerated and presupposes a faster disbursement of public
funds. However, the unarticulated object of the acceleration in spending is
entirely different from the appropriations contained in the budget as the 116
list of Projects show and as the very provisions of National Budget Circular
541 provide. Instead of accelerating the implementation of these projects
covered by appropriations in the budget and thus accelerating the spending in
those projects, the government chose instead to defund said projects and used
the money to fund projects not otherwise covered by congressional
appropriations in the budget.


3
Decision, p. 35.
7
With that scheme, the principal question that must be asked is not
whether the money was wasted or pocketed by government officials or private
individuals. What must be asked is what such a move caused to the carefully
crafted budget of the government in relation to its development goals.
Spending per se is, after all, not the purpose of the enactment of the budget.
The budget is designed as a means for government to realize the goals of
development it sought to achieve as articulated in its short, medium and long-
term development plans.

It must be emphasized that the budget as proposed and enacted is
formulated as an instrument for the attainment as part of national
development goals and as part of the planning-programming-budgeting
continuum.
4
It is required to be prepared as an integral part-of a long-term
budget picture specifically in relation to the long-term economic and physical
framework plans of government, multi-year requirements of approved
programs and projects, organizational and personnel development strategies,
and other commitments entered into or otherwise assumed by government.
5


The process starts with the submission of the request for budget
estimates/proposal which include various items providing the rationale,
background and linkages with development goals/plans
6
; it is prepared taking
into full and careful consideration the opportunities and requirements specific
to the various regions of the country and shall originate from regional offices
of the government agencies
7
; it is then evaluated using a zero-base approach
and on the basis of (1) relationship with the approved development plan, (2)
agency capability as demonstrated by past performance, (3) complemented
role with related activities of other agencies, and (4) other similar criteria
8
;
and submitted for prior approval of the Head of the Department concerned
or by the Chairman or Chief Executive Officer of a Cabinet level body
before submission to the President and Congress.
9
The President, and in no
small measure, Congress spend considerable time and government resources
in the evaluation, assessment and approval of the budget for any given fiscal
year.

With respect to budget execution, the basic rule is that All money
appropriated for functions, activities, projects and programs shall be available
solely for the specific purposes for which these are appropriated.
10


The President, though, is given authority to realign allotments (not
funds) the authority to modify or amend any allotment previously issued
and this can only be exercised in case the probable receipts from taxes or

4
Section 4, Book VI, Administrative Code of 1987.
5
Ibid., Section 7.
6
Ibid., Section 14.
7
Ibid., Section 15.
8
Ibid., Section 16.
9
Ibid., Section 22.
10
Section 32.
8
other sources of any fund will be less than 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.
11
This, in one provision of the Administrative
Code of 1987, is the subject of the long disquisition of Justice Leonen on the
subject of realignments.
12
But then again, as with the Honorable Courts
Decision, the good justice failed to cite the applicable provision of the law and
relied instead on the pronouncements of the executive and on constitutional
provisions by implication.

DAPs Disregard of the Budget Process
Wasted Government Time and Resources
and Damaged Developmental Goals

It is under such a framework that the success of the DAP as evaluated
by the Honorable Court should be viewed. When the DAP disregarded the
appropriations under the relevant laws by the withdrawal of unobligated
allotments for projects duly approved by the government agencies, the
President and Congress, the President disregarded such well-tailored
planning-programming-budgeting and approval process. The President wasted
not just the time of government personnel involved in the proposal,
formulation and approval of the budget but likewise wasted the financial
resources spent for the conduct of such elaborate approval process required
by law. On this very point alone, it cannot be said that the DAP has not done
any damage to the government.

More importantly, when the President, through the DAP, withdrew the
unobligated allotments earmarked for the appropriations items approved by
Congress, the President deprived the recipients or beneficiaries of such
appropriations items to the extent of the withdrawn unobligated allotments, if
not the entire appropriations themselves.

Thus, in the Memorandum to the President dated 12 October 2011
13
,
the P30 Billion in Unreleased Personnel Services constitutes a
corresponding deprivation of the public of government services by
government personnel who could otherwise have provided the required
service if they were only hired by the government. In this case, to be true to its
nomenclature, the Disbursement Acceleration Program should have required
the concerned government agencies to fast track the hiring of personnel so as
to meet the requirements of public service. To the extent that the proposed
hiring was not done, to such extent is the damage caused to the public. And it
is damage worth P30 Billion. This figure is just a portion of the total funds
taken from Unreleased Personnel Services disclosed by the government in its
Consolidated Comment filed with the Honorable Court. The amount for

11
Section 33 (6).
12
See Concurring Opinion, pp. 7-12.
13
See Decision, pp. 37-40.
9
2012, of the total P59,882,977,000 in augmentations, P42,426,362,000 came
from appropriation balances from Personnel Services.
14


To give a more concrete picture of the effect of such deprivation of
government service to the public, a simple comparison of the P42.4 Billion
unreleased budget for personnel services under the given example is almost
equivalent to the combined/total 2013 budget for personnel services, capital
outlay and maintenance and other operating expenses of all the other
departments of the government, to wit:

1. Congress - P10 Billion;
2. Judiciary - P17 Billion;
3. Commission on Elections - P8.2 Billion;
4. Civil Service Commission - P935 Million;
5. Commission on Audit - P7.6 Billion;
6. Office of the Ombudsman - P1 Billion;
7. CHR - P298 Million;
---------------------------- ____________
TOTAL - P45.0 Billion

Imagine if the foregoing departments and constitutional commissions
were not funded the effect on the services of the government could be
anything but horrendous. The extent of lost opportunity or more accurately,
the deprivation of public service because of the present administrations
failure to employ P42 BILLION for personnel services is incalculable. How
this affects the development goals that the government set for itself is quite
unclear.

With respect to the second item in the memorandum where P482
Million came from Unreleased appropriations (slow moving projects and
programs for discontinuance), there were certainly corresponding projects
totaling the same amount that were not implemented. To such an extent, it
can be said that the public was deprived of the projects otherwise provided for
by law. Again, if accelerated spending is the aim of the fiscal policy, the
required action is to prompt the agencies concerned to expedite in
accordance with law, the procurement for such project and not use the money
for altogether different projects.

Overall, the concept of DAP as a stimulus package does not simply
hold water. This is so because in public finance, a stimulus package requires
congressional enactment over and above the regular budget of the
government. It requires Congressional approval and cannot be done solely by
the executive considering that No money shall be paid out of the Treasury
except in pursuance of an appropriation made by law.
15
This is because there
was nothing in DAP that authorized the use of money over and above the
appropriations authorized under the relevant General Appropriations Acts

14
Par. 38.
15
Section 29 (1), Article Vi, 1987 Constitution.
10
(GAA). To the extent that unobligated allotments for certain projects,
activities or programs (PAP) were withdrawn under cover of savings, it is only
to such an extent that the country was benefitted, if at all, by the DAP. It is a
case of transferring money from one pocket to the other, from one
appropriation item to other new projects in either case, there was no
increase of the money from the original amount.

In other words, if only the present administration stuck to the
implementation of the GAAs, the same total amount stated in the budget
would have been expended and all the elaborate and complicated planning,
budgeting and approval process would not have been put to naught and
government would have ensured that spending was in line with approved long-
term development goals.

With all due respect, Justice Leonens invocation of the Presidents
power of control over the executive department to justify what he suggests as
realignments or savings due to final discontinuance can just as well be
applied for accelerating the implementation of the PAPs as provided for in
the relevant GAAs. The reasoning seems to be that with respect to the
implementation of the slow-moving projects, the President can use another
hat aside from his exclusive control of the executive department to justify final
discontinuance or withdrawal of unobligated allotments, but claim credit for
fast tracking DAP PAPs funded by the withdrawn allotments. It is like saying
that if the Presidents right hand is lazy, wounded or what have you and
cannot therefore fire a pistol, he is justified in using his left hand to fire an
automatic rifle forgetting that in both cases, he is the only actor.

There is simply no amount of ratiocination based on the Presidents
power of control of the executive department that can justify taking funds
from slow-moving projects and using the same to fund his pet projects,
especially considering that the original projects were products of carefully
crafted joint executive and legislative efforts while the DAP projects were not
even provided for under the general appropriations law.

Transfer of Appropriations versus
Transfer of Funds

This brings the matter to the seeming confusion over terminologies,
specifically the use of the phrase transfer of funds as a term equivalent to the
concept of transfer of appropriations.
16
Petitioners respectfully submit that
the two terms are not the same.

The term appropriation has been defined by law as referring to an
authorization made by law or other legislative enactment, directing payment
out of government funds under specified conditions or for specified

16
Decision, pp. 49-55.
11
purposes.
17
Such definition is substantially the same as those cited
18
by the
Honorable Court in its Decision as follows:

Indeed, appropriation was the act by which Congress
designates a particular fund, or sets apart a specified portion of
the public revenue or of the money in the public treasury, to be
applied to some general object of government expenditure, or to
some individual purchase or expense. As pointed out in
Gonzales v. Raquiza: 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.

When there is an appropriation or appropriations law, it does not
mean that there exist automatically, actual government funds to back it. In
fact, upon enactment of an appropriations law such as the GAAs (unless it is a
case of a special appropriations with existing funding), the money to fund the
appropriations still have to be sourced from the revenues of the government.
The concept of appropriation is therefore separate from that of funds
consisting of the money that pays for the appropriation.

What the Constitution prohibits is the transfer of appropriations and
not the mere transfer of funds and this is clear from Section 25 (5), Article VI
of the 1987 Constitution which reads:

5) No law shall be passed authorizing any transfer of
appropriations; however, the President, the President of the
Senate, the Speaker of the House of Representatives, the Chief
Justice of the Supreme Court, and the heads of Constitutional
Commissions may, by law, be authorized to augment any item in
the general appropriations law for their respective offices from
savings in other items of their respective appropriations.
(Emphasis supplied)

On the other hand, there are few constitutional provisions that deal
with or entail the transfer of fund but not transfer of appropriations. These
are:


17
Section 2 (1), Chapter 1, Book VI, Administrative Code of 1987.
18
As is the case with the budgetary process, it is disturbing that the Honorable Court failed
to cite the relevant provision of the law and presented the definition in the dictionary and
in case law when it is the law that requires or demands compliance, not court decisions.
The primacy of the law is paramount and the role of case law is secondary, used only as an
aid in the understanding of the law.
12
Section 29. (1) No money shall be paid out of the
Treasury except in pursuance of an appropriation made by law.
xxx
(3) All money collected on any tax levied for a special
purpose shall be treated as a special fund and paid out for such
purpose only. If the purpose for which a special fund was created
has been fulfilled or abandoned, the balance, if any, shall be
transferred to the general funds of the Government. (Emphasis
supplied)

From the foregoing provisions, it is clear that transfer of funds, per se
as in paying money out from the Treasury to cover for an appropriation or
simply the release of funds, or transferring a special fund to the General fund
after the fulfillment or abandonment of the purpose of the special fund are
allowed.

Aside from the foregoing provisions of the Constitution, the
Administrative Code of 1987 provide for the reversion of funds or
unexpended balances of appropriations and continuing appropriations
19
as
well as provisions on the expenditure of funds or fund release.
20


What then constitutes transfer of appropriations? Or more accurately,
when and how does a transfer of appropriation take place? In the
determination of this issue, the exposition by the Honorable Court of the
budget execution stage would be of invaluable help, to wit:

c.3. Budget Execution

With the GAA now in full force and effect, the next step is
the implementation of the budget. The Budget Execution Phase
is primarily the function of the DBM, which is tasked to perform
the following procedures, namely: (1) to issue the programs and
guidelines for the release of funds; (2) to prepare an Allotment
and Cash Release Program; (3) to release allotments; and (4) to
issue disbursement authorities.

The implementation of the GAA is directed by the
guidelines issued by the DBM. Prior to this, the various
departments and agencies are required to submit Budget
Execution Documents (BED) to outline their plans and
performance targets by laying down the physical and financial
plan, the monthly cash program, the estimate of monthly
income, and the list of obligations that are not yet due and
demandable.


19
Section 28.
20
Section 34.
13
Thereafter, the DBM prepares an Allotment Release
Program (ARP) and a Cash Release Program (CRP). The ARP
sets a limit for allotments issued in general and to a specific
agency. The CRP fixes the monthly, quarterly and annual
disbursement levels.

Allotments, which authorize an agency to enter into
obligations, are issued by the DBM. Allotments are lesser in
scope than appropriations, in that the latter embrace the general
legislative authority to spend. Allotments may be released in two
forms through a comprehensive Agency Budget Matrix
(ABM), or, individually, by SARO.

Armed with either the ABM or the SARO, agencies
become authorized to incur obligations on behalf of the
Government in order to implement their PAPs. Obligations may
be incurred in various ways, like hiring of personnel, entering
into contracts for the supply of goods and services, and using
utilities.

In order to settle the obligations incurred by the agencies,
the DBM issues a disbursement authority so that cash may be
allocated in payment of the obligations. A cash or disbursement
authority that is periodically issued is referred to as a Notice of
Cash Allocation (NCA), which issuance is based upon an
agencys submission of its Monthly Cash Program and other
required documents. The NCA specifies the maximum amount
of cash that can be withdrawn from a government servicing bank
for the period indicated. Apart from the NCA, the DBM may
issue a Non-Cash Availment Authority (NCAA) to authorize
non-cash disbursements, or a Cash Disbursement Ceiling (CDC)
for departments with overseas operations to allow the use of
income collected by their foreign posts for their operating
requirements.

Actual disbursement or spending of government funds
terminates the Budget Execution Phase and is usually
accomplished through the Modified Disbursement Scheme
under wehich disbursements chargeable against the National
Treasury are coursed through the government servicing banks.

Given the foregoing process in the allotment, obligation and releases of
appropriation, what is the reasonable interpretation of when there merely a
transfer of funds and when there is a transfer of appropriation? What
interpretation will give effect to the prohibition against transfer of
appropriation but will not unduly stifle the Presidents power and discretion
on realignment of allotment and transfer of funds?

14
It is respectfully submitted that the overriding qualification is the
purpose of the movement being sought and its effect on the appropriation
item under the GAA.

A transfer of appropriations takes place anywhere between the passage
of the GAA and before the actual release of cash to pay for the expenditure
subject of the appropriation item with the appropriated funds being taken out
and used for purposes other than the one specified in the appropriation item.
The resultant effect is the actual de-funding of the appropriation item
regardless of whether the move qualifies as a declaration of savings.

On the other hand, a realignment of allotment happens only from the
approval of the Allotment Release Program (ARP) and upto the release of the
Special Appropriation Release Order (SARO) but before a Notice of Cash
Allocation (NCA) is issued. A transfer of funds may cover the whole spectrum
when there is actual movement of funds from the Treasury to the respective
accounts of the government agencies as when a release of cash or an NCA is
issued, or from the special accounts to the general fund when the purpose of
the special fund was already accomplished, or from the accounts of
government agencies to the general fund in case of reversion of balances.

Applied to the DAP, the withdrawal of unobligated allotments has for
its purpose the financing of projects other than those subject of the
appropriation items thereby resulting in the actual de-funding of the items
subject of the appropriations. This is a clear case of transfer of appropriations.
It is not merely a case of realignment of allotments as there is an actual de-
funding of the original appropriation item and the money is used for purposes
other than the one identified in the appropriations law.

Justice Leonen put this concept from the perspective of the recipient of
the transferred funds in relation to the concept of augmentation as a
permissible transfer of appropriation, to wit:

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.

While Petitioners do not agree fully with the sweeping statement that
Any expenditure beyond the maximum amount provided for in the item in
the appropriations act is an augmentation of that item, the quoted passage
nonetheless shows one example, but not the only instance, of a transfer of
appropriations. This is because a transfer of appropriations is not principally
15
defined by its effects on its recipient but on the consequence of de-funding the
original appropriation subject thereof and there is always the possibility, as in
the DAP, that the money taken out from the original appropriation is used for
purposes that have no appropriation cover.

Unconstitutional and Illegal Augmentations

Given the foregoing clarification on the concepts of transfer of
appropriations, realignment of allotments and transfer of funds, we can now
focus on the one and only instance of permissible transfer of appropriations,
that is, augmentation of appropriations.

Any discussion of augmentation with the use of savings in the sense
used in the Constitution should start with Section 29 (1), Article VI of the
Constitution on when public money can be paid out of the Treasury. The
provision reads:

Section 29. (1) No money shall be paid out of the
Treasury except in pursuance of an appropriation made by law.

Thus, the basic rule is that money can only be paid out of the Treasury
when there is an appropriation made by law.

However, the Constitution laid out limitations on the power of
Congress to enact appropriations laws. One such limitation is with respect to
the maximum amount that it can allot for a particular appropriation. The
Constitution prohibits Congress from increasing the appropriations
recommended by the President in his budget submissions. Section 25 (1),
Article VI of the Constitution states:

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. (Emphasis supplied)

Given the foregoing limitation, it is thus the President who sets the
maximum amount that may be appropriated for any item in the budget. Such
initial determination by the President is an expression of his departments
good faith assessment that the PAP subject of the appropriation would require
that amount of money for its successful implementation. However, it is
Congress that finally decides, subject to the maximum amount recommended
by the President, how much of governments money should be spent for the
PAP for the subject fiscal year.

It is under such context that the Presidents power to augment by the
use of savings should be viewed. The constitutional provision states:

16
Section 25. (5) No law shall be passed authorizing any
transfer of appropriations; however, the President, the President
of the Senate, the Speaker of the House of Representatives, the
Chief Justice of the Supreme Court, and the heads of the
Constitutional Commissions may, by law, be authorized to
augment any item in the general appropriations law for their
respective offices from savings in other items of their respective
appropriations. (Emphasis supplied)

In implementation of Sections 29 (1) in relation to the first sentence of
Section 25 (5) of Article VI of the Constitution, the Administrative Code of
1987 laid down a restrictive rule on the use of public funds thus:

Section 32. Use of Appropriated Funds. All moneys
appropriated for functions, activities, projects and programs shall
be available solely for the specific purposes for which these are
appropriated. (Emphasis supplied)

Thus, the general rule is that transfer of appropriations is prohibited
since a transfer of appropriation necessarily involves the use of the money
appropriated for purposes other than what is specified in the appropriation
item involved.

The only exception allowed under Section 25 (5), Article VI of the
Constitution that nevertheless requires an enabling law, is augmentation with
the use of savings from the same department of the government. It is worthy
to note that the said constitutional provision did not define augmentation.

Pursuant thereto, the enabling law promulgated is Section 39 of Book
VI of the Administrative Code of 1987 which states:

Section 39. Authority to Use Savings in Appropriations to
Cover Deficits. Except as otherwise provided in the General
Appropriations Act, any savings in the regular appropriations
authorized in the General Appropriations Act for programs and
projects of any department, office or agency, may, with the
approval of the President, be used to cover a deficit in any other
item of the regular appropriations; provided, that the creation of
new positions or increase of salaries shall not be allowed to be
funded from budgetary savings except when specifically
authorized by law; provided, further, that whenever authorized
positions are transferred from one program or project to another
within the same department, office or agency, the corresponding
amounts appropriated for personal services are also deemed
transferred, without, however increasing the total outlay for
personal services of the department, office or agency concerned.
(Emphasis supplied)

17
A closer examination of the provision, however, reveals that, aside from
being subject to the provisions of relevant general appropriations acts, it did
not hew closely to Section 25 (5), Article VI of the Constitution in that it gave
the President power to declare savings from appropriation involving any
department of the government (including, presumably, Congress and the
constitutional commission) and to use the same to cover a deficit in any other
item in the regular appropriations. Thus, it is covered by the constitutional
prohibition that no law shall be passed authorizing any transfer of
appropriations unless its interpretation is limited to the executive
department. The President, based on the said provision alone and without
consideration of the relevant constitutional provisions, cannot claim validity of
his actions by relying mainly on the said provision for he has likewise sworn to
uphold and defend the Constitution and not merely to execute the laws. Being
the head of state, the President is the first among Filipinos, tasked with the
observance of the provisions of the Constitution.

It has to be emphasized at this point that Section 39 requires that
savings may only be used to cover a deficit in an appropriation. Although
the provision did not define what constitutes a deficit, there is no
controversy as regards its ordinary signification. Blacks Law Dictionary
21

defines deficit as follows:

Deficit. An excess of expenditures over revenues. Excess
of liabilities and debts over income and assets. A negative
balance in the earnings and profits account. Financial loss in
operation of business. Something wanting, generally in the
accounts of one intrusted with money, or in the money received
by him. The term is broad enough to cover defalcation,
misappropriation, shrinkage, or costs, and, in its popular
meaning, signifies deficiency from any cause.
In accounting, opposite of surplus on the balance sheet.
May represent accumulated losses. A negative balance in the
earnings and profits account.

More importantly, however, the applicable general appropriations acts
in this case defined what constitutes augmentation. By the very terms of
Section 39 Book VI of the Administrative Code of 1987, the provision was
rendered inoperative by the enactment of the GAAs with provisions on
augmentation with the use of savings. The GAAs for 2011, 2012 and 2013 all
provide the following permissible transfers of appropriation, to wit:

A. General Provisions on the Use of Savings, R.A. 10147 (GAA FY
2011)

Sec. 59. Use of Savings. The President of the Philippines, the Senate
President, the Speaker of the House of Representatives, the Chief Justice of
the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal
autonomy, and the Ombudsman are hereby authorized to augment any item

21
Sixth Edition, @1990 at p. 422.
18
in this Act from savings in other items of their respective appropriations.
Sec. 60. Meaning of Savings and Augmentation. Savings refer to portions
or balances of any programmed appropriation in this Act free from any
obligation or encumbrance which are: (i) still available after the completion
or final discontinuance or abandonment of the work, activity or purpose for
which the appropriation is authorized; (ii) from appropriations balances
arising from unpaid compensation and related costs pertaining to vacant
positions and leaves of absence without pay; and (iii) from appropriations
balances realized from the implementation of measures resulting in
improved systems and efficiencies and thus enabled agencies to meet and
deliver the required or planned targets, programs and services approved in
this Act at a lesser cost.
Augmentation implies the existence in this Act of a program, activity, or
project with an appropriation, which upon implementation, or subsequent
evaluation of needed resources, is determined to be deficient. In no case
shall a non-existent program, activity, or project, be funded by augmentation
from savings or by the use of appropriations otherwise authorized in this
Act.
Sec. 61. Priority in the Use of Savings. In the use of savings, priority shall
be given to the augmentation of the amounts set aside for compensation,
year-end bonus and cash gift, retirement gratuity, terminal leave benefits,
old-age pension of veterans and other personnel benefits authorized by law,
and those expenditure items authorized in agency special provisions, in
Section 16 and in other sections of the General Provisions of this Act.


B. General Provisions on the Use of Savings, RA 10155 (FY2012 GAA)

Sec. 53. Use of Savings. The President of the Philippines, the Senate
President, the Speaker of the House of Representatives, the Chief Justice of
the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal
autonomy, and the Ombudsman are hereby authorized to augment any item
in this Act from savings in other items of their respective appropriations.
Sec. 54. Meaning of Savings and Augmentation. Savings refer to portions
or balances of any programmed appropriation in this Act free from any
obligation or encumbrance which are: (i) still available after the completion
or final discontinuance or abandonment of the work, activity or purpose for
which the appropriation is authorized; (ii) from appropriations balances
arising from unpaid compensation and related costs pertaining to vacant
positions and leaves of absence without pay; and (iii) from appropriations
balances realized from the implementation of measures resulting in
improved systems and efficiencies and thus enabled agencies to meet and
deliver the required or planned targets, programs and services approved in
this Act at a lesser cost.
Augmentation implies the existence in this Act of a program, activity, or
project with an appropriation, which upon implementation or subsequent
evaluation of needed resources, is determined to be deficient. In no case
shall a non-existent program, activity, or project, be funded by augmentation
from savings or by the use of appropriations otherwise authorized in this
Act.
Sec. 55. Priority in the Use of Savings. In the use of savings, priority shall
be given to the augmentation of the amounts set aside for compensation,
year-end bonus and cash gift, retirement gratuity, terminal leave benefits,
old-age pension of veterans and other personnel benefits authorized by law,
and those expenditure items authorized in agency special provisions and in
other sections of the General Provisions of this Act.


C. General Provisions on the Use of Savings, RA 10352 (FY2013 GAA)

19
Sec. 52. Use of Savings. The President of the Philippines, the Senate
President, the Speaker of the House of Representatives, the Chief Justice of
the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal
autonomy and the Ombudsman are hereby authorized to use savings in the
their respective appropriations to augment actual deficiencies incurred for
the current year in any item of their respective appropriations.
Sec. 53. Meaning of Savings and Augmentation. Savings refer to portions
or balances of any programmed appropriation in this Act free from any
obligation or encumbrance which are: (i) still available after the completion
or final discontinuance or abandonment of the work, activity or purpose for
which the appropriation is authorized; (ii) from appropriations balances
arising from unpaid compensation and related costs pertaining to vacant
positions and leaves of absence without pay; and (iii) from appropriations
balances realized from the implementation of measures resulting in
improved systems and efficiencies and thus enabled agencies to meet and
deliver the required or planned targets, programs and services approved in
this Act at a lesser cost.
Augmentation implies the existence in this Act of a program, activity, or
project with an appropriation, which upon implementation or subsequent
evaluation of needed resources, is determined to be deficient. In no case
shall a non-existent program, activity, or project, be funded by augmentation
from savings or by the use of appropriations otherwise authorized in this
Act.
Sec. 56. Priority in the Use of Savings. In the use of savings, priority shall
be given to the augmentation of the amounts set aside for compensation,
year-end bonus and cash gift, retirement gratuity, terminal leave benefits,
old-age pension of veterans and other personnel benefits authorized by law,
and those expenditure items authorized in agency special provisions and in
other sections of the General Provisions of this Act.

Augmentation, therefore, has a clear legal meaning under the statutes
and presupposes a deficiency in an existing appropriation before an
augmentation can be made. More specifically, the law uses the term
deficient determined after implementation or subsequent evaluation of
needed resources.

Under the context where the President determines and sets the
maximum amount of money for any given appropriation item, coupled with
the prohibition against Congress increasing the appropriation amount
recommended by the President, there exists a clear constitutional policy
against expenditure of public money over and beyond that recommended by
the President.

To allow otherwise would be to sanction fiscal irresponsibility on the
part of the President. To do so would mean giving the President more money
for a project that he failed to properly assess and evaluate how much it would
cost to implement. To allow him to use more money than he initially
determined would be required for a certain project would be to disregard the
process of budgeting required to be observed under the law.

More importantly, allowing such a prerogative on the part of the
President would defeat entirely the concept of checks and balances in the
preparation and enactment of the budget. The Congress limited power to
decrease or delete any appropriation item would be put to naught by the
20
Presidents power to augment by latching on an existing appropriation cover
however tenuous its terms may be on the pretext that it is deficient.

Applied to the legislative department, the judiciary and other
constitutional commissions especially those with fiscal autonomy whose
budgets are released to them in full, the concept of deficiency in
appropriation would be a near impossibility and augmentation can only mean
giving money over and above the amounts appropriated under the law.

Put another way, considering that appropriations for these offices are
fully funded, any savings generated would fund no deficiency and its
expenditure would be over and above that provided by law.

A good illustration of this point would be in case of a hypothetical re-
construction of the Supreme Courts building with an appropriation of say, P2
Billion for 2015. In the event the Honorable Court saves about P200 Million
from the total cost of the building, the savings of P200 Million would be over
and above all the other appropriations for the entire judiciary considering its
fiscal autonomy. And with a loose definition of deficiency, deficient or
deficit in relation to the term augmentation proposed as Any expenditure
beyond the maximum amount provided for the item in the appropriation
act,
22
any expenditure of such savings to other appropriation items would be
more than the maximum amount recommended by the President in his
budget submissions to Congress.

The glaring effect of such statutory and constitutional interpretation in
such an example would be best illustrated for the next succeeding fiscal year
(2016) wherein the President and Congress would then be prohibited, by
virtue of fiscal autonomy, from decreasing the budget of the Judiciary. What
then would be the character of the P2 Billion once appropriated for the SC
building after its construction is already completed? Would it be considered
savings available for augmentation of other items in the budget of the judiciary
which are already fully funded? Would it mean that from thereon, the
Judiciary would have an additional P2 Billion that it can treat as its own
version of the DAP?

As regards the DAP augmentations, examples that really challenge
ones understanding of the concept of deficiency have already been cited by
Petitioners as follows:

35. To illustrate, Respondents Table to has for its first
item the DREAM Project of the Department of Science and
Technology under the 2011 budget (R.A. No. 10147) with an
augmentation of One Billion Six Hundred Million Pesos
(P1,600,000,000.00).
23
A check with Republic Act No. 10147
disclosed that the project referred to by Respondents had only a

22
Leonen, Dissenting Opinion, p. 7.
23
Consolidated Comment, par. 33.
21
total appropriation of Five Hundred Thirty Seven Million, Nine
Hundred Ten Thousand Pesos (P537,910,000.00) under the
category of Maintenance and Other Operating Expenses
(MOOE). How could a P537,910,000.00 appropriation be
augmented by almost three times such amount, that is, P1.6
Billion for a total expenditure of P2.137 Billion?

36. The same thing is true with respect to the second item
wherein the total appropriation under R.A. No. 10147, p. 711,
under Section A.II.a is P8,003,000.00 comprising of
P5,975,000.00 for Personal Services and P2,028,000.00 for
MOOE. Yet, this was augmented by P300 Million, an amount
more than twenty six (26) times the original appropriation.

37. Item 3 of Respondents Table 2 pertains to the
Repair/Rehabilitation of the PNP Crime Laboratory under R.A.
No. 10147, p. 502 under Section A.III.a.1.a on Conduct of
operation and other related confidential activities against
dissidents, subversives, lawless elements and organized crime
syndicates and campaign against kidnapping, trafficking of
women and minors, smuggling, carnapping, gunrunning, illegal
fishing and trafficking of illegal drugs. Clearly, the activity to be
funded is a operational activity and not a capital outlay. However,
the augmentation expense of P3,255,837,000.00 is one for
capital outlay for the Repair/Rehabilitation of the PNP Crime
Laboratory. What is worse is that out of the
P48,152,488,000.00 total appropriation for the item under Sec.
A.III.a.1.a, P47,476,814,000.00 was for Personal Services while
only P675,674,000.00 was for MOOE. There is no
appropriation for capital outlay. Thus, there existed no
appropriation that Respondent could latch on to for this
particular augmentation.

38. Item No. 4 has an augmentation of
P2,516,167,000.00 for a P2 Billion original appropriation under
Republic Act No. 10352.

39. For Item No. 5, the original appropriation under R.A.
No. 10147 was only for Personal Services and MOOE and
nothing for capital outlay. However, judging from the description
of the project augmented which is (PAF) On-Base Housing
Facilities and Communication Equipment, the expenditure is of
the nature of a capital outlay.
24


From the foregoing, there is an imperative need for a definitive ruling
from the Honorable Court on what constitutes augmentation of deficient

24
See Petitioners Reply.
22
appropriation items as required by law and not just the mere existence of
appropriation cover that can be augmented.

It has been proposed that the DAP expenditure by the President may
be justified under Section 49 of Book VI of the Administrative Code of 1987.
The provision reads in part thus:

Section 49. Authority to Use Savings for Certain Purposes.
Savings in the appropriations provided in the General
Appropriations Act may be used for the settlement of the
following obligations incurred during a current fiscal year or
previous fiscal years as may be approved by the Secretary in
accordance with rules and procedures as may be approved by the
President:
xxx
(9) Priority activities that will promote the economic well-
being of the entire, including food production, agrarian reform,
energy development, disaster relief, and rehabilitation;
(10) Repair, improvement and renovation of government
buildings and infrastructure and other capital assets damaged by
natural calamities;
xxx (Emphasis supplied)

Suffice it to state the very same provision requires that the obligations
being funded from savings be incurred during a current fiscal year or
previous fiscal years. Hence, it can only refer to PAPs with existing
appropriation covers and to those unpaid obligations of the previous years,
especially contingent obligations that became due and demandable only
during the current fiscal year as borne by the enumeration in the cited
provision.

Given the foregoing discussion, it is respectfully submitted that
augmentations can only be made to cover deficient appropriation items up to
the extent of the maximum recommendation of the President for the PAPs
subject of the augmentation.


PRAYER


Premises considered, Petitioners respectfully move for a Partial
Reconsideration of its Decision dated 1 July 2014 and to declare as
UNCONSTITUTIONAL and ILLEGAL expenditures from the
Disbursement Acceleration Program (DAP) used to augment appropriation
items over ans above the maximum amount recommended by the President
for the programs, activities and projects (PAPs) in the budget submitted by
him to Congress or otherwise not deemed deficient.

23
Petitioners also pray for other just and equitable relief under the
premises.

Makati City, 21 July 2014.


ROQUE & BUTUYAN LAW OFFICES
Counsel for the Petitioners
Antel Corporate Center
Unit 1904, 19
th
Floor
121 Valero Street, Salcedo Village
Makati City 1227
Email: mail@roquebutuyan.com
Tel. Nos. 887-4445; 887-3894
Fax No. 887-3893

By:



H. HARRY L. ROQUE, JR
Roll No. 36976
PTR No. 4264493/30 Jan 2014/Makati
IBP Lifetime No. 01749/PPLM
MCLE Exemption No. IV-000513/15 Feb 2013



JOEL RUIZ BUTUYAN
Roll No. 36911
PTR No. 4264495 /30 Jan 2014 Makati
IBP Lifetime No. 01742/Quezon City
MCLE Comp. No. IV-0011417/Jan 11, 2013




ROGER R. RAYEL
Roll No. 44106
PTR No. 9308264/3 Feb 2014/Quezon City
IBP Lifetime No. 02159/Quezon City
MCLE Comp. No. IV-017519/19 Apr 2013




EXPLANATION

24
The foregoing pleading was served and filed by registered mail due to
time, distance and manpower constraints.



ROGER R. RAYEL

Copy furnished:

OFFICE OF THE SOLICITOR GENERAL
134 Amorsolo Street, Legaspi Village
Makati City

ATTY. VICENTE V. MENDOZA
3 Aster Street, Fairview
Quezon City

AUGUSTO L. SYJUCO
No. 4 Rodriguez St., Sta. Barbara
Iloilo City

ATTY. WANDA M. TALOSIG
No. 321 FEMII Bldg., (Annex )
A. Soriano, Jr. Ave.
Intramuros, Manila

ATTY. MANUELITO LUNA
No. 412 FEMII Bldg., (Annex )
A. Soriano, Jr. Ave.
Intramuros, Manila

ATTYS. PARSIFAL FORTUN & MARIA
ROMINA M. DALAGAN
137 CRM Avenue cor. CRM Marina
BF Homes Almanza, Las Pinas City


ATTY. MANUEL LAZARO
Chatham House Bldg., Valero cor. Rufino Sts.
Salcedo Village, Makati City

ATTYS. FROILAN BACUNGAN, ET AL.
2
ND
Floor, Philtrust Building
Remedios cor. M.H. Del Pilar Streets
Malate, Manila


ATTY. PACIFICO A. AGABIN
25
26
th
Floor, Pacific Star Building
Gil Puyat cor. Makati Avenue
Makati City

ATTYS. JOVENCIO H. EVANGELISTA, ET AL.
No. 45 K-7
th
St., Brgy. West Kamias
Quezon City

ATTYS. REMIGIO D. SALADERO, ET AL.
Pro-Labor Assistance Center
No. 33-B E. Rodriguez Sr. Avenue
Quezon City
DAP Belgica Partial Reconsideration/