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Guingona, Jr. vs. Carague (G.R. No.

94571, April 22, 1991)

Petitioners: Teofisto G. Guingona, Jr. Aquilino Q. Pimentel

Respondents: Hon. Guillermo Carague (Secretary, Department of
Budget and Management), Hon. Rozalina S. Cajucom (National
Treasurer), Commission on Audit
Ponente: Gancayco, J.

Petition to Review the Decision of the Commission on Audit

The 1990 budget consists of P98.4 Billion in automatic
appropriation (with P86.8 Billion for debt service) and P155.3 Billion
appropriated under R.A. No. 6831 (General Appropriations Act), or a
total of P 233.5 Billion. Appropriations for the Department of Education,
Culture and Sports amounted to P27, 017, 813.00. The P86.6 Billion
automatic appropriation for debt service is authorized by Presidential
Decree No. 81, entitled Amending Certain Provisions of Republic Act
Numbered Four Thousand Eight Hundred Sixty As Amended (Re:
Foreign Borrowing Act), by Presidential Decree No. 1177 entitled
Revising the Budget Process In Order To Institutionalize the Budgetary
Innovations of the New Society and Presidential Decree Numbered
1967, entitled An Act Strengthening the Guarantee ad Payment
Positions of the Republic of the Philippines on Its Contingent Liabilities
Arising out of Recent and Guaranteed Loans by Appropriating Funds for
the Purpose.

The petition seeks the declaration of the unconstitutionality of

P.D. no. 81, Section 31 of P.D. no. 1177, and P.D. no. 1967. The petition
also seeks to restrain the disbursement for debt service under the
1990 Budget pursuant to said decrees. These are based in the fact that
budget allocation for debt services far outweighs the budget allocation
for education which according to Section 5, Article XII of the
Constitution, must be given the highest priority in General

Whether or not P.D. no. 81, P.D. no 1177, and P.D. no. 1967
constitute an undue delegation of legislative power to the President of
the Philippines

Ruling: The Court dismissed the petition.

Petitioners contended that the assailed decrees were

inconsistent with Section 24, Article VI of the Constitution
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.
whereby bills have to be approved by the President, then a law must
be passed by Congress to authorize said automatic appropriation.

Petitioners also say that the decrees violate Section 29(1), Article
VI of the Constitution, which provides that no money shall be paid out
of the treasury except in pursuance of an appropriation made by law.
They assert that there must be definiteness, certainty, and exactness
in an appropriation, otherwise it becomes an undue delegation of
legislative power to the President who determines in advance the
amount to be appropriated for the debt service.

The court argues that no separate legislation is needed in

appropriating funds for debt services. The automatic appropriation for
debt services exists precisely because the periods and necessities of
debt are incapable of determination in advance. The automatic
appropriation provides the flexibility for the effective execution of debt
management policies.

There are two tests to know if there is an undue delegation of

legislative power. The first test is the completeness test, which
necessitates that the law must be complete in all its essential terms
and conditions when it leaves the legislature so that there will be
nothing left for the delegate to do when it reaches him except to
enforce it. The second test is the sufficient standard test, which gives
scope, limitations and boundaries to the powers to be exercised by the
delegate. In the case at bar, the legislative intent is to enable the
government to make prompt payments and/or advances for all loans to
protect and maintain the credit standing of the country. Although no
specific amount to be automatically appropriated is provided in the
law, the amounts nevertheless are made certain by the legislative
parameters provided in the decrees. The executive is not of unlimited
discretion as to the amounts to be disbursed for debt servicing since
legislation gives the scope and boundaries to be taken by the delegate
(i.e. Executive). No uncertainty arises in executive implementation as
the limit will be the exact amounts as shown by the books of the
treasury. The interest protected is non other than the national interest
specifically the credit standing of the country.

The court finds that R.A. no. 6480, as amended by P.D. no. 81,
Section 31 of P.D. no. 1177, and P.D. no. 1967 constitute lawful
authorizations or appropriations, unless they are repealed or otherwise
amended by Congress. With regard to automatic appropriations, the
Executive was thus merely complying with the duty to implement the