Civil Service Commission vs.

Department of Budget and Management[GR 158791, 22 July 2005]En

Banc, Carpio Morales (J): 14 concur
Facts: By the Civil Service Commission (CSC)s claim, the amount of P215,270,000.00 was appropriated
for its Central Office by the General Appropriations Act (GAA) of 2002, while the total allocations for the
same Office, if all sources of funds are considered, amount to P285,660,790.44. It complains, however,
that the total fund releases by Department of Budget and Management (DBM) to its Central Office during
the fiscal year 2002 was only P279,853,398.14, thereby leaving an unreleased balance of P5,807,392.30.
To the CSC, this balance was intentionally withheld by the DBM on the basis of its no report, no release
policy whereby allocations for agencies are withheld pending their submission of the documents mentioned
in Sections 3.8 to 3.10 and Section 7.0 of National Budget Circular 478 on Guidelines on the Release of the
FY 2002 Funds, which documents are: (1) Annual Cash Program (ACP); (2) Requests for the Release of
Special Allotment Release Order (SARO) and Notice of Cash Allocation (NCA); (3) Summary List of Checks
Issued and Cancelled; (4) Statement of Allotment, Obligations and Balances; (5) Monthly Statement of
Charges to Accounts Payable; (6) Quarterly Report of Actual Income; (7) Quarterly Financial Report of
Operations; (8) Quarterly Physical Report of Operations; (9) FY 2001 Preliminary and Final Trial Balance;
and (10) Statement of Accounts Payable. The CSC contends that the application of the no report, no
release policy upon independent constitutional bodies of which it is one is a violation of the principle of
fiscal autonomy and, therefore, unconstitutional. Thus, the Civil Service Commission via the present
petition for mandamus seeks to compel the Department of Budget and Management (the DBM) to release
the balance of its budget for fiscal year 2002. At the same time, it seeks a determination by this Court of
the extent of the constitutional concept of fiscal autonomy. The DBM, at the outset, opposes the petition on
procedural grounds. It contends that first, the CSC did not exhaust administrative remedies as it could
have sought clarification from the DBMs Secretary regarding the extent of fiscal autonomy before resorting
to the Supreme Court. Second, even assuming that administrative remedies were exhausted, there are no
exceptional and compelling reasons to justify the direct filing of the petition with the Supreme Court
instead of the trial court, thus violating the hierarchy of courts.
Issue [1]: Whether the rules on exhaustion of administrative remedies and heirarchy of courts should be
followed prior to filing of the present action.
Held [1]: The rule on exhaustion of administrative remedies invoked by the DBM applies only where there
is an express legal provision requiring such administrative step as a condition precedent to taking action in
court. As the CSC is not mandated by any law to seek clarification from the Secretary of Budget and
Management prior to filing the present action, its failure to do so does not call for the application of the
rule. As for the rule on hierarchy of courts, it is not absolute. A direct invocation of this Court's original
jurisdiction may be allowed where there are special and important reasons therefor, clearly and specifically
set out in the petition. The CSC justifies its direct filing of the petition with this Court as the matter
involves the concept of fiscal autonomy granted to [it] as well as other constitutional bodies, a legal
question not heretofore determined and which only the Honorable Supreme Court can decide with authority
and finality. To the Court, such justification suffices for allowing the petition.
Issue [2]: Whether the no report, no release policy may be validly enforced against offices vested with
fiscal autonomy.
Held [2]: NO. The no report, no release policy may not be validly enforced against offices vested with
fiscal autonomy. Indeed, such policy cannot be enforced against offices possessing fiscal autonomy without
violating Article IX (A), Section 5 of the Constitution which provides that "The Commission shall enjoy
fiscal autonomy. Their approved appropriations shall be automatically and regularly released." By parity of
construction, automatic release of approved annual appropriations to the CSC, a constitutional
commission which is vested with fiscal autonomy, should thus be construed to mean that no condition to
fund releases to it may be imposed. This conclusion is consistent with the 3 June 1993 Resolution of the
Court which effectively prohibited the enforcement of a no report, no release policy against the Judiciary
which has also been granted fiscal autonomy by the Constitution. Respecting the DBMs justification for the
withholding of funds from the CSC as due to a shortfall in revenues, the same does not lie. In the first
place, the alleged shortfall is totally unsubstantiated. In the second place, even assuming that there was
indeed such a shortfall, that does not justify non-compliance with the mandate of above-quoted Article IX
(A), Section 5 of the Constitution. Asturias Sugar Central, Inc. v. Commissioner of Customs teaches that
[a]n interpretation should, if possible, be avoided under which a statute or provision being construed is
defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or
rendered insignificant, meaningless, inoperative, or nugatory. If the DBMs theory were adopted, then the

constitutional mandate to automatically and regularly release approved appropriations would be suspended
every year, or even every month that there is a shortfall in revenues, thereby emasculating to a significant
degree, if not rendering insignificant altogether, such mandate. Furthermore, the Constitution grants the
enjoyment of fiscal autonomy only to the Judiciary, the Constitutional Commissions of which the CSC is
one, and the Ombudsman. To hold that the CSC may be subjected to withholding or reduction of funds in
the event of a revenue shortfall would, to that extent, place the CSC and the other entities vested with
fiscal autonomy on equal footing with all others which are not granted the same autonomy, thereby
reducing to naught the distinction established by the Constitution. The agencies which the Constitution has
vested with fiscal autonomy should thus be given priority in the release of their approved appropriations
over all other agencies not similarly vested when there is a revenue shortfall. Significantly, the Year 2002
GAA itself distinguished between two types of public institutions in the matter of fund releases. Clearly,
while the retention or reduction of appropriations for an office is generally allowed when there is an
unmanageable budget deficit, the Year 2002 GAA, in conformity with the Constitution, excepted from such
rule the appropriations for entities vested with fiscal autonomy. Thus, even assuming that there was a
revenue shortfall as the DBM claimed, it could not withhold full release of the CSCs funds without violating
not only the Constitution but also Section 64 of the General Provisions of the Year 2002 GAA.
Issue [3]: Whether the present rule "that the funds of entities vested with fiscal autonomy should be
automatically and regularly released" contradicts the court's 3 June 1993 resolution which stated as a
guiding principle on the Constitutional Mandate on the Judiciarys Fiscal Autonomy that"After approval by
Congress, the appropriations for the Judiciary shall be automatically and regularly released subject to
availability of funds."
Held [3]: NO. This phrase subject to availability of funds does not contradict the present ruling that the
funds of entities vested with fiscal autonomy should be automatically and regularly released, a shortfall in
revenues notwithstanding. What is contemplated in the said quoted phrase is a situation where total
revenue collections are so low that they are not sufficient to cover the total appropriations for all entities
vested with fiscal autonomy. In such event, it would be practically impossible to fully release the Judiciarys
appropriations or any of the entities also vested with fiscal autonomy for that matter, without violating the
right of such other entities to an automatic release of their own appropriations. It is under that situation
that a relaxation of the constitutional mandate to automatically and regularly release appropriations is
allowed. Considering that the budget for agencies enjoying fiscal autonomy is only a small portion of the
total national budget, only in the most extreme circumstances will the total revenue collections fall short of
the requirements of such agencies.
Issue [4]: Whether the CSC's claim that its budget may not be reduced by Congress lower than that of
the previous fiscal year can be sustained.
Held [4]: NO. The CSCs claim that its budget may not be reduced by Congress lower than that of the
previous fiscal year, as is the case of the Judiciary, must be rejected. For with respect to the Judiciary, Art.
VIII, Section 3 of the Constitution explicitly provides that "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." On the other hand, in
the parallel provision granting fiscal autonomy to Constitutional Commissions, a similar proscription against
the reduction of appropriations below the amount for the previous year is clearly absent. Article IX (A),
Section 5 merely states that "The Commission shall enjoy fiscal autonomy. Their approved annual
appropriations shall be automatically and regularly released." The plain implication of the omission of the
provision proscribing such reduction of appropriations below that for the previous year is that Congress is
not prohibited from reducing the appropriations of Constitutional Commissions below the amount
appropriated for them for the previous year.
Euro-med Laboratories Phil, Inc. vs The Province of Batangas
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Euro-med filed a complaint for sum of money against the province of Batangas. Batangas bought
various intravenous fluids from Euro-med with an unpaid balance of P487,662 as of Feb 1998.
Batangas filed a motion to dismiss, on the ground that the primary jurisdiction over the money
claim was with the Commission on Audit. Batangas pointed out that Euro-meds claim, arising from
a series of procurement transactions with the province, was governed by the Local Gov Code
provisions and COA rules and regulations on supply and property management in local
governments, and therefore this fell within the exclusive domain of COA to determine.

The RTC dismissed the complaint without prejudice to the filing of the proper money claim with
COA. The RTC also denied Euro-meds petition for reconsideration. Hence, this petition.

Issue: Whether it is the COA or the RTC which has primary jurisdiction to pass upon the money claim of
Euro-med against the province of Batangas.
Held: COA.
-

Euro-med was seeking the enforcement of a claim for a certain amount of money against a local
government unit. This brought the case within the COAs domain to pass upon money claims against
the government or any subdivision thereof under Section 26 of the Government Auditing Code of
the Philippines: The authority and powers of the Commission [on Audit] shall extend to and
comprehend all matters relating to x x x x the examination, audit, and settlement of all debts and
claims of any sort due from or owing to the Government or any of its subdivisions, agencies, and
instrumentalities.
The scope of the COAs authority to take cognizance of claims is circumscribed, however, by an
unbroken line of cases holding statutes of similar import to mean only liquidated claims, or those
determined or readily determinable from vouchers, invoices, and such other papers within reach of
accounting officers.15 Euro-meds claim was for a fixed amount and although respondent took issue
with the accuracy of petitioners summation of its accountabilities, the amount thereof was readily
determinable from the receipts, invoices and other documents. Thus, the claim was well within the
COAs jurisdiction under the Government Auditing Code of the Philippines.
Second, petitioners money claim was founded on a series of purchases for the medical supplies of
respondents public hospitals. Both parties agreed that these transactions were governed by the
Local Government Code provisions on supply and property management and their implementing
rules and regulations promulgated by the COA pursuant to Section 383 of said Code. Euro-meds
claim therefore involved compliance with applicable auditing laws and rules on procurement. Such
matters are not within the usual area of knowledge, experience and expertise of most judges but
within the special competence of COA auditors and accountants.

Aruelo, Jr. v CA (Constitution)

Aruelo, Jr. v CA
GR No. 107852 October 20, 1993
Section 5. The Supreme Court shall have the following powers:chanrobles virtual law library
1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over
petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:chanroblesvirtuallawlibrary
(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.
(b) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed in relation
thereto.
(c) All cases in which the jurisdiction of any lower court is in issue.
(d) All criminal cases in which the penalty imposed is reclusion perpetua or higher.
(e) All cases in which only an error or question of law is involved.
(3) Assign temporarily judges of lower courts to other stations as public interest may require. Such temporary
assignment shall not exceed six months without the consent of the judge concerned.
(4) Order a change of venue or place of trial to avoid a miscarriage of justice.
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and
procedure in all courts, the admission to the practice of law, the integrated bar, and legal assistance to the
under- privileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive
rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved
by the Supreme Court.
(6) Appoint all officials and employees of the Judiciary in accordance with the Civil Service Law.

FACTS:
(1) Aruelo and Gatchalian were rival candidates in the May 11, 1992 elections for the office of the Vice- Mayor of
the Municipality of Balagtas, Province of Bulacan. Gatchalian won over Aruelo by a margin of four votes, such
that on May 13, 1992, the Municipal Board of Canvassers proclaimed him as the duly elected Vice-Mayor of
Balagtas, Bulacan.
(2) On May 22, 1992, Aruelo filed with the Commission on Elections (COMELEC) a petition docketed as SPC
No. 92-130, seeking to annul Gatchalian's proclamation on the ground of "fraudulent alteration and tampering"
of votes in the tally sheets and the election returns.
ISSUE:
Whether or not the CA committed grave abuse of discretion by declaring that Gatchalians answer with counterprotest and counterclaim was timely filed
HELD:
We find no grave abuse of discretion on the part of the Court of Appeals. WHEREFORE, the petition is hereby
DISMISSED.
RATIO:
An election protest does not merely concern the personal interests of rival candidates for an office. Over and
above the desire of the candidates to win, is the deep public interest to determine the true choice of the people.
For this reason, it is a well-established principle that laws governing election protests must be liberally
construed to the end that the popular will, ex pressed in the election of public officers, will not, by purely
technical reasons, be defeated (Unda v. Commission on Elections, 190 SCRA 827[1990]; De Leon v. Guadiz , J
r., 104 SCRA591 [1981]; Macasundig v. Macalangan, 13 SCRA 577[1965]; Corocoro v. Bascara,9 SCRA 519
[1963]).