Republic of the Philippines Before the Court are consolidated petitions 2 taken under Rule 65 of the Rules of Court,

under Rule 65 of the Rules of Court, all of which assail the

SUPREME COURT constitutionality of the Pork Barrel System. Due to the complexity of the subject matter, the Court shall
Manila heretofore discuss the system‘s conceptual underpinnings before detailing the particulars of the constitutional
challenge.
EN BANC
The Facts
G.R. No. 208566 November 19, 2013
I. Pork Barrel: General Concept.
GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS JR. JOSE L. GONZALEZ REUBEN M. ABANTE and
QUINTIN PAREDES SAN DIEGO, Petitioners, "Pork Barrel" is political parlance of American -English origin. 3 Historically, its usage may be traced to
vs. the degrading ritual of rolling out a barrel stuffed with pork to a multitude of black slaves who would
HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA JR. SECRETARY OF BUDGET AND MANAGEMENT cast their famished bodies into the porcine feast to assuage their hunger with morsels coming from the
FLORENCIO B. ABAD, NATIONAL TREASURER ROSALIA V. DE LEON SENATE OF THE PHILIPPINES represented by generosity of their well-fed master. 4 This practice was later compared to the actions of American
FRANKLIN M. DRILON m his capacity as SENATE PRESIDENT and HOUSE OF REPRESENTATIVES represented by legislators in trying to direct federal budgets in favor of their districts. 5 While the advent of refrigeration
FELICIANO S. BELMONTE, JR. in his capacity as SPEAKER OF THE HOUSE, Respondents. has made the actual pork barrel obsolete, it persists in reference to political bills that "bring home the
bacon" to a legislator‘s district and constituents. 6 In a more technical sense, "Pork Barrel" refers to an
x-----------------------x appropriation of government spending meant for localized projects and secured solely or primarily to
bring money to a representative's district. 7Some scholars on the subject further use it to refer to
legislative control of local appropriations. 8
G.R. No. 208493

In the Philippines, "Pork Barrel" has been commonly referred to as lump-sum, discretionary funds of
SOCIAL JUSTICE SOCIETY (SJS) PRESIDENT SAMSON S. ALCANTARA, Petitioner,
Members of the Legislature,9 although, as will be later discussed, its usage would evolve in reference to
vs.
certain funds of the Executive.
HONORABLE FRANKLIN M. DRILON in his capacity as SENATE PRESIDENT and HONORABLE FELICIANO S.
BELMONTE, JR., in his capacity as SPEAKER OF THE HOUSE OF REPRESENTATIVES, Respondents.
II. History of Congressional Pork Barrel in the Philippines.
x-----------------------x
A. Pre-Martial Law Era (1922-1972).
G.R. No. 209251
Act 3044,10 or the Public Works Act of 1922, is considered 11 as the earliest form of
"Congressional Pork Barrel" in the Philippines since the utilization of the funds appropriated
PEDRITO M. NEPOMUCENO, Former Mayor-Boac, Marinduque Former Provincial Board Member -Province of
therein were subjected to post-enactment legislator approval. Particularly, in the area of fund
Marinduque, Petitioner,
release, Section 312 provides that the sums appropriated for certain public works
vs.
projects13 "shall be distributed x x x subject to the approval of a joint committee elected by
PRESIDENT BENIGNO SIMEON C. AQUINO III* and SECRETARY FLORENCIO BUTCH ABAD, DEPARTMENT OF
the Senate and the House of Representatives. "The committee from each House may also
BUDGET AND MANAGEMENT, Respondents.
authorize one of its members to approve the distribution made by the Secretary of
Commerce and Communications."14 Also, in the area of fund realignment, the same section
DECISION provides that the said secretary, "with the approval of said joint committee, or of the
authorized members thereof, may, for the purposes of said distribution, transfer unexpended
PERLAS-BERNABE, J.: portions of any item of appropriation under this Act to any other item hereunder."

"Experience is the oracle of truth." 1 In 1950, it has been documented15 that post-enactment legislator participation broadened
from the areas of fund release and realignment to the area of project identification. During
-James Madison that year, the mechanics of the public works act was modified to the extent that the
discretion of choosing projects was transferred from the Secretary of Commerce and
32
 Communications to legislators. "For the first time, the law carried a list of projects selected by
Members of Congress, they ‘being the representatives of the people, either on their own
account or by consultation with local officials or civil leaders.‘" 16 During this period, the pork
barrel process commenced with local government councils, civil groups, and individuals
appealing to Congressmen or Senators for projects. Petitions that were accommodated
formed part of a legislator‘s allocation, and the amount each legislator would eventually get
is determined in a caucus convened by the majority. The amount was then integrated into the
administration bill prepared by the Department of Public Works and Communications.
Thereafter, the Senate and the House of Representatives added their own provisions to the
bill until it was signed into law by the President – the Public Works Act. 17 In the 1960‘s,
however, pork barrel legislation reportedly ceased in view of the stalemate between the
House of Representatives and the Senate.18
B. Martial Law Era (1972-1986).
While the previous" Congressional Pork Barrel" was apparently discontinued in 1972 after
Martial Law was declared, an era when "one man controlled the legislature," 19 the reprieve
was only temporary. By 1982, the Batasang Pambansa had already introduced a new item in
the General Appropriations Act (GAA) called the" Support for Local Development Projects"
(SLDP) under the article on "National Aid to Local Government Units". Based on reports, 20 it
was under the SLDP that the practice of giving lump-sum allocations to individual legislators
began, with each assemblyman receiving ₱500,000.00. Thereafter, assemblymen would
communicate their project preferences to the Ministry of Budget and Management for
approval. Then, the said ministry would release the allocation papers to the Ministry of Local
Governments, which would, in turn, issue the checks to the city or municipal treasurers in the
assemblyman‘s locality. It has been further reported that "Congressional Pork Barrel" projects
under the SLDP also began to cover not only public works projects, or so- called "hard
projects", but also "soft projects", 21 or non-public works projects such as those which would
fall under the categories of, among others, education, health and livelihood. 22
C. Post-Martial Law Era:
Corazon Cojuangco Aquino Administration (1986-1992).
After the EDSA People Power Revolution in 1986 and the restoration of Philippine democracy,
"Congressional Pork Barrel" was revived in the form of the "Mindanao Development Fund"
and the "Visayas Development Fund" which were created with lump-sum appropriations of
₱480 Million and ₱240 Million, respectively, for the funding of development projects in the
Mindanao and Visayas areas in 1989. It has been documented 23 that the clamor raised by the
Senators and the Luzon legislators for a similar funding, prompted the creation of the
"Countrywide Development Fund" (CDF) which was integrated into the 1990 GAA 24 with an
initial funding of ₱2.3 Billion to cover "small local infrastructure and other priority community
projects."
32
Under the GAAs for the years 1991 and 1992,25 CDF funds were, with the approval of the
President, to be released directly to the implementing agencies but "subject to the
submission of the required list of projects and activities."Although the GAAs from 1990 to
1992 were silent as to the amounts of allocations of the individual legislators, as well as their
participation in the identification of projects, it has been reported 26 that by 1992,
Representatives were receiving ₱12.5 Million each in CDF funds, while Senators were
receiving ₱18 Million each, without any limitation or qualification, and that they could
identify any kind of project, from hard or infrastructure projects such as roads, bridges, and
buildings to "soft projects" such as textbooks, medicines, and scholarships. 27
D. Fidel Valdez Ramos (Ramos) Administration (1992-1998).
The following year, or in 1993,28 the GAA explicitly stated that the release of CDF funds was to
be made upon the submission of the list of projects and activities identified by, among others,
individual legislators. For the first time, the 1993 CDF Article included an allocation for the
Vice-President.29 As such, Representatives were allocated ₱12.5 Million each in CDF funds,
Senators, ₱18 Million each, and the Vice-President, ₱20 Million.
In 1994,30 1995,31 and 1996,32 the GAAs contained the same provisions on project
identification and fund release as found in the 1993 CDF Article. In addition, however, the
Department of Budget and Management (DBM) was directed to submit reports to the Senate
Committee on Finance and the House Committee on Appropriations on the releases made
from the funds.33
Under the 199734 CDF Article, Members of Congress and the Vice-President, in consultation
with the implementing agency concerned, were directed to submit to the DBM the list of 50%
of projects to be funded from their respective CDF allocations which shall be duly endorsed
by (a) the Senate President and the Chairman of the Committee on Finance, in the case of the
Senate, and (b) the Speaker of the House of Representatives and the Chairman of the
Committee on Appropriations, in the case of the House of Representatives; while the list for
the remaining 50% was to be submitted within six (6) months thereafter. The same article
also stated that the project list, which would be published by the DBM, 35 "shall be the basis
for the release of funds" and that "no funds appropriated herein shall be disbursed for
projects not included in the list herein required."
The following year, or in 1998,36 the foregoing provisions regarding the required lists and
endorsements were reproduced, except that the publication of the project list was no longer
required as the list itself sufficed for the release of CDF Funds.
The CDF was not, however, the lone form of "Congressional Pork Barrel" at that time. Other
forms of "Congressional Pork Barrel" were reportedly fashioned and inserted into the GAA
(called "Congressional Insertions" or "CIs") in order to perpetuate the ad ministration‘s
political agenda.37 It has been articulated that since CIs "formed part and parcel of the
budgets of executive departments, they were not easily identifiable and were thus harder to
 monitor." Nonetheless, the lawmakers themselves as well as the finance and budget officials
of the implementing agencies, as well as the DBM, purportedly knew about the
insertions.38 Examples of these CIs are the Department of Education (DepEd) School Building
Fund, the Congressional Initiative Allocations, the Public Works Fund, the El Niño Fund, and
the Poverty Alleviation Fund.39 The allocations for the School Building Fund, particularly,
―shall be made upon prior consultation with the representative of the legislative district
concerned.”40 Similarly, the legislators had the power to direct how, where and when these
appropriations were to be spent.41
E. Joseph Ejercito Estrada (Estrada) Administration (1998-2001).
In 1999,42 the CDF was removed in the GAA and replaced by three (3) separate forms of CIs,
namely, the "Food Security Program Fund," 43 the "Lingap Para Sa Mahihirap Program
Fund,"44and the "Rural/Urban Development Infrastructure Program Fund," 45 all of which
contained a special provision requiring "prior consultation" with the Member s of Congress
for the release of the funds.
It was in the year 200046 that the "Priority Development Assistance Fund" (PDAF) appeared in
the GAA. The requirement of "prior consultation with the respective Representative of the
District" before PDAF funds were directly released to the implementing agency concerned
was explicitly stated in the 2000 PDAF Article. Moreover, realignment of funds to any expense
category was expressly allowed, with the sole condition that no amount shall be used to fund
personal services and other personnel benefits.47 The succeeding PDAF provisions remained
the same in view of the re-enactment48 of the 2000 GAA for the year 2001.
G. Present Administration (2010-Present).
F. Gloria Macapagal-Arroyo (Arroyo) Administration (2001-2010).
The 200249 PDAF Article was brief and straightforward as it merely contained a single special
provision ordering the release of the funds directly to the implementing agency or local
government unit concerned, without further qualifications. The following year, 2003, 50 the
same single provision was present, with simply an expansion of purpose and express
authority to realign. Nevertheless, the provisions in the 2003 budgets of the Department of
Public Works and Highways 51 (DPWH) and the DepEd52 required prior consultation with
Members of Congress on the aspects of implementation delegation and project list
submission, respectively. In 2004, the 2003 GAA was re-enacted. 53
In 2005,54 the PDAF Article provided that the PDAF shall be used "to fund priority programs
and projects under the ten point agenda of the national government and shall be released
directly to the implementing agencies." It also introduced the program menu
concept,55 which is essentially a list of general programs and implementing agencies from
which a particular PDAF project may be subsequently chosen by the identifying authority. The
2005 GAA was re-enacted56 in 2006 and hence, operated on the same bases. In similar regard,
the program menu concept was consistently integrated into the 2007,57 2008,58 2009,59 and
201060 GAAs.
32
Textually, the PDAF Articles from 2002 to 2010 were silent with respect to the specific
amounts allocated for the individual legislators, as well as their participation in the proposal
and identification of PDAF projects to be funded. In contrast to the PDAF Articles, however,
the provisions under the DepEd School Building Program and the DPWH budget, similar to its
predecessors, explicitly required prior consultation with the concerned Member of
Congress61anent certain aspects of project implementation.
Significantly, it was during this era that provisions which allowed formal participation of non-
governmental organizations (NGO) in the implementation of government projects were
introduced. In the Supplemental Budget for 2006, with respect to the appropriation for
school buildings, NGOs were, by law, encouraged to participate. For such purpose, the law
stated that "the amount of at least ₱250 Million of the ₱500 Million allotted for the
construction and completion of school buildings shall be made available to NGOs including
the Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc. for its
"Operation Barrio School" program, with capability and proven track records in the
construction of public school buildings x x x."62 The same allocation was made available to
NGOs in the 2007 and 2009 GAAs under the DepEd Budget. 63 Also, it was in 2007 that the
Government Procurement Policy Board64 (GPPB) issued Resolution No. 12-2007 dated June
29, 2007 (GPPB Resolution 12-2007), amending the implementing rules and regulations 65 of
RA 9184,66 the Government Procurement Reform Act, to include, as a form of negotiated
procurement,67 the procedure whereby the Procuring Entity 68(the implementing agency) may
enter into a memorandum of agreement with an NGO, provided that "an appropriation law or
ordinance earmarks an amount to be specifically contracted out to NGOs." 69
Differing from previous PDAF Articles but similar to the CDF Articles, the 2011 70 PDAF Article
included an express statement on lump-sum amounts allocated for individual legislators and
the Vice-President: Representatives were given ₱70 Million each, broken down into ₱40
Million for "hard projects" and ₱30 Million for "soft projects"; while ₱200 Million was given to
each Senator as well as the Vice-President, with a ₱100 Million allocation each for "hard" and
"soft projects." Likewise, a provision on realignment of funds was included, but with the
qualification that it may be allowed only once. The same provision also allowed the
Secretaries of Education, Health, Social Welfare and Development, Interior and Local
Government, Environment and Natural Resources, Energy, and Public Works and Highways to
realign PDAF Funds, with the further conditions that: (a) realignment is within the same
implementing unit and same project category as the original project, for infrastructure
projects; (b) allotment released has not yet been obligated for the original scope of work, and
(c) the request for realignment is with the concurrence of the legislator concerned. 71
In the 201272 and 201373 PDAF Articles, it is stated that the "identification of projects and/or
designation of beneficiaries shall conform to the priority list, standard or design prepared by
each implementing agency (priority list requirement) x x x." However, as practiced, it would
still be the individual legislator who would choose and identify the project from the said
priority list.74
 Provisions on legislator allocations 75 as well as fund realignment 76 were included in the 2012
and 2013 PDAF Articles; but the allocation for the Vice-President, which was pegged at ₱200
Million in the 2011 GAA, had been deleted. In addition, the 2013 PDAF Article now allowed
LGUs to be identified as implementing agencies if they have the technical capability to
implement the projects.77 Legislators were also allowed to identify programs/projects, except
for assistance to indigent patients and scholarships, outside of his legislative district provided
that he secures the written concurrence of the legislator of the intended outside-district,
endorsed by the Speaker of the House. 78 Finally, any realignment of PDAF funds, modification
and revision of project identification, as well as requests for release of funds, were all
required to be favorably endorsed by the House Committee on Appropriations and the
Senate Committee on Finance, as the case may be.79
III. History of Presidential Pork Barrel in the Philippines.
While the term "Pork Barrel" has been typically associated with lump-sum, discretionary funds of
Members of Congress, the present cases and the recent controversies on the matter have, however,
shown that the term‘s usage has expanded to include certain funds of the President such as the
Malampaya Funds and the Presidential Social Fund.
On the one hand, the Malampaya Funds was created as a special fund under Section 8 80 of Presidential
Decree No. (PD) 910,81 issued by then President Ferdinand E. Marcos (Marcos) on March 22, 1976. In
enacting the said law, Marcos recognized the need to set up a special fund to help intensify, strengthen,
and consolidate government efforts relating to the exploration, exploitation, and development of
indigenous energy resources vital to economic growth. 82 Due to the energy-related activities of the
government in the Malampaya natural gas field in Palawan, or the "Malampaya Deep Water Gas-to-
Power Project",83 the special fund created under PD 910 has been currently labeled as Malampaya
Funds.
On the other hand the Presidential Social Fund was created under Section 12, Title IV 84 of PD 1869,85 or
the Charter of the Philippine Amusement and Gaming Corporation (PAGCOR). PD 1869 was similarly
issued by Marcos on July 11, 1983. More than two (2) years after, he amended PD 1869 and accordingly
issued PD 1993 on October 31, 1985,86 amending Section 1287 of the former law. As it stands, the
Presidential Social Fund has been described as a special funding facility managed and administered by
the Presidential Management Staff through which the President provides direct assistance to priority
programs and projects not funded under the regular budget. It is sourced from the share of the
government in the aggregate gross earnings of PAGCOR.88
IV. Controversies in the Philippines.
Over the decades, "pork" funds in the Philippines have increased tremendously, 89 owing in no small
part to previous Presidents who reportedly used the "Pork Barrel" in order to gain congressional
support.90 It was in 1996 when the first controversy surrounding the "Pork Barrel" erupted. Former
Marikina City Representative Romeo Candazo (Candazo), then an anonymous source, "blew the lid on
the huge sums of government money that regularly went into the pockets of legislators in the form of
32
kickbacks."91 He said that "the kickbacks were ‘SOP‘ (standard operating procedure) among legislators
and ranged from a low 19 percent to a high 52 percent of the cost of each project, which could be
anything from dredging, rip rapping, sphalting, concreting, and construction of school
buildings."92 "Other sources of kickbacks that Candazo identified were public funds intended for
medicines and textbooks. A few days later, the tale of the money trail became the banner story of the
Philippine Daily Inquirer issue of August 13, 1996, accompanied by an illustration of a roasted
pig."93 "The publication of the stories, including those about congressional initiative allocations of
certain lawmakers, including ₱3.6 Billion for a Congressman, sparked public outrage." 94
Thereafter, or in 2004, several concerned citizens sought the nullification of the PDAF as enacted in the
2004 GAA for being unconstitutional. Unfortunately, for lack of "any pertinent evidentiary support that
illegal misuse of PDAF in the form of kickbacks has become a common exercise of unscrupulous
Members of Congress," the petition was dismissed.95
Recently, or in July of the present year, the National Bureau of Investigation (NBI) began its probe into
allegations that "the government has been defrauded of some ₱10 Billion over the past 10 years by a
syndicate using funds from the pork barrel of lawmakers and various government agencies for scores of
ghost projects."96 The investigation was spawned by sworn affidavits of six (6) whistle-blowers who
declared that JLN Corporation – "JLN" standing for Janet Lim Napoles (Napoles) – had swindled billions
of pesos from the public coffers for "ghost projects" using no fewer than 20 dummy NGOs for an entire
decade. While the NGOs were supposedly the ultimate recipients of PDAF funds, the whistle-blowers
declared that the money was diverted into Napoles‘ private accounts. 97 Thus, after its investigation on
the Napoles controversy, criminal complaints were filed before the Office of the Ombudsman, charging
five (5) lawmakers for Plunder, and three (3) other lawmakers for Malversation, Direct Bribery, and
Violation of the Anti-Graft and Corrupt Practices Act. Also recommended to be charged in the
complaints are some of the lawmakers‘ chiefs -of-staff or representatives, the heads and other officials
of three (3) implementing agencies, and the several presidents of the NGOs set up by Napoles. 98
On August 16, 2013, the Commission on Audit (CoA) released the results of a three-year audit
investigation99covering the use of legislators' PDAF from 2007 to 2009, or during the last three (3) years
of the Arroyo administration. The purpose of the audit was to determine the propriety of releases of
funds under PDAF and the Various Infrastructures including Local Projects (VILP) 100 by the DBM, the
application of these funds and the implementation of projects by the appropriate implementing
agencies and several government-owned-and-controlled corporations (GOCCs). 101 The total releases
covered by the audit amounted to ₱8.374 Billion in PDAF and ₱32.664 Billion in VILP, representing 58%
and 32%, respectively, of the total PDAF and VILP releases that were found to have been made
nationwide during the audit period. 102 Accordingly, the Co A‘s findings contained in its Report No. 2012-
03 (CoA Report), entitled "Priority Development Assistance Fund (PDAF) and Various Infrastructures
including Local Projects (VILP)," were made public, the highlights of which are as follows: 103
● Amounts released for projects identified by a considerable number of legislators
significantly exceeded their respective allocations.
 ● Amounts were released for projects outside of legislative districts of sponsoring members
of the Lower House.
● Total VILP releases for the period exceeded the total amount appropriated under the 2007
to 2009 GAAs.
● Infrastructure projects were constructed on private lots without these having been turned
over to the government.
● Significant amounts were released to implementing agencies without the latter‘s
endorsement and without considering their mandated functions, administrative and technical
capabilities to implement projects.
● Implementation of most livelihood projects was not undertaken by the implementing
agencies themselves but by NGOs endorsed by the proponent legislators to which the Funds
were transferred.
● The funds were transferred to the NGOs in spite of the absence of any appropriation law or
ordinance.
● Selection of the NGOs were not compliant with law and regulations.
● Eighty-Two (82) NGOs entrusted with implementation of seven hundred seventy two (772)
projects amount to ₱6.156 Billion were either found questionable, or submitted
questionable/spurious documents, or failed to liquidate in whole or in part their utilization of
the Funds.
● Procurement by the NGOs, as well as some implementing agencies, of goods and services
reportedly used in the projects were not compliant with law.
As for the "Presidential Pork Barrel", whistle-blowers alleged that" at least ₱900 Million from royalties
in the operation of the Malampaya gas project off Palawan province intended for agrarian reform
beneficiaries has gone into a dummy NGO."104 According to incumbent CoA Chairperson Maria Gracia
Pulido Tan (CoA Chairperson), the CoA is, as of this writing, in the process of preparing "one
consolidated report" on the Malampaya Funds. 105
V. The Procedural Antecedents.
Spurred in large part by the findings contained in the CoA Report and the Napoles controversy, several
petitions were lodged before the Court similarly seeking that the "Pork Barrel System" be declared
unconstitutional. To recount, the relevant procedural antecedents in these cases are as follows:
32
On August 28, 2013, petitioner Samson S. Alcantara (Alcantara), President of the Social Justice Society, filed a
Petition for Prohibition of even date under Rule 65 of the Rules of Court (Alcantara Petition), seeking that the
"Pork Barrel System" be declared unconstitutional, and a writ of prohibition be issued permanently restraining
respondents Franklin M. Drilon and Feliciano S. Belmonte, Jr., in their respective capacities as the incumbent
Senate President and Speaker of the House of Representatives, from further taking any steps to enact legislation
appropriating funds for the "Pork Barrel System," in whatever form and by whatever name it may be called, and
from approving further releases pursuant thereto. 106 The Alcantara Petition was docketed as G.R. No. 208493.
On September 3, 2013, petitioners Greco Antonious Beda B. Belgica, Jose L. Gonzalez, Reuben M. Abante, Quintin
Paredes San Diego (Belgica, et al.), and Jose M. Villegas, Jr. (Villegas) filed an Urgent Petition For Certiorari and
Prohibition With Prayer For The Immediate Issuance of Temporary Restraining Order (TRO) and/or Writ of
Preliminary Injunction dated August 27, 2013 under Rule 65 of the Rules of Court (Belgica Petition), seeking that
the annual "Pork Barrel System," presently embodied in the provisions of the GAA of 2013 which provided for the
2013 PDAF, and the Executive‘s lump-sum, discretionary funds, such as the Malampaya Funds and the
Presidential Social Fund,107 be declared unconstitutional and null and void for being acts constituting grave abuse
of discretion. Also, they pray that the Court issue a TRO against respondents Paquito N. Ochoa, Jr., Florencio B.
Abad (Secretary Abad) and Rosalia V. De Leon, in their respective capacities as the incumbent Executive Secretary,
Secretary of the Department of Budget and Management (DBM), and National Treasurer, or their agents, for
them to immediately cease any expenditure under the aforesaid funds. Further, they pray that the Court order
the foregoing respondents to release to the CoA and to the public: (a) "the complete schedule/list of legislators
who have availed of their PDAF and VILP from the years 2003 to 2013, specifying the use of the funds, the project
or activity and the recipient entities or individuals, and all pertinent data thereto"; and (b) "the use of the
Executive‘s lump-sum, discretionary funds, including the proceeds from the x x x Malampaya Funds and
remittances from the PAGCOR x x x from 2003 to 2013, specifying the x x x project or activity and the recipient
entities or individuals, and all pertinent data thereto." 108 Also, they pray for the "inclusion in budgetary
deliberations with the Congress of all presently off-budget, lump-sum, discretionary funds including, but not
limited to, proceeds from the Malampaya Funds and remittances from the PAGCOR." 109 The Belgica Petition was
docketed as G.R. No. 208566.110
Lastly, on September 5, 2013, petitioner Pedrito M. Nepomuceno (Nepomuceno), filed a Petition dated August
23, 2012 (Nepomuceno Petition), seeking that the PDAF be declared unconstitutional, and a cease and desist
order be issued restraining President Benigno Simeon S. Aquino III (President Aquino) and Secretary Abad from
releasing such funds to Members of Congress and, instead, allow their release to fund priority projects identified
and approved by the Local Development Councils in consultation with the executive departments, such as the
DPWH, the Department of Tourism, the Department of Health, the Department of Transportation, and
Communication and the National Economic Development Authority. 111 The Nepomuceno Petition was docketed
as UDK-14951.112
On September 10, 2013, the Court issued a Resolution of even date (a) consolidating all cases; (b) requiring public
respondents to comment on the consolidated petitions; (c) issuing a TRO (September 10, 2013 TRO) enjoining the
DBM, National Treasurer, the Executive Secretary, or any of the persons acting under their authority from
releasing (1) the remaining PDAF allocated to Members of Congress under the GAA of 2013, and (2) Malampaya
Funds under the phrase "for such other purposes as may be hereafter directed by the President" pursuant to
Section 8 of PD 910 but not for the purpose of "financing energy resource development and exploitation
programs and projects of the government‖ under the same provision; and (d) setting the consolidated cases for
Oral Arguments on October 8, 2013.
On September 23, 2013, the Office of the Solicitor General (OSG) filed a Consolidated Comment (Comment) of
even date before the Court, seeking the lifting, or in the alternative, the partial lifting with respect to educational
and medical assistance purposes, of the Court‘s September 10, 2013 TRO, and that the consolidated petitions be
dismissed for lack of merit.113
On September 24, 2013, the Court issued a Resolution of even date directing petitioners to reply to the
Comment.
Petitioners, with the exception of Nepomuceno, filed their respective replies to the Comment: (a) on September
30, 2013, Villegas filed a separate Reply dated September 27, 2013 (Villegas Reply); (b) on October 1, 2013,
Belgica, et al. filed a Reply dated September 30, 2013 (Belgica Reply); and (c) on October 2, 2013, Alcantara filed
a Reply dated October 1, 2013.
On October 1, 2013, the Court issued an Advisory providing for the guidelines to be observed by the parties for
the Oral Arguments scheduled on October 8, 2013. In view of the technicality of the issues material to the
present cases, incumbent Solicitor General Francis H. Jardeleza (Solicitor General) was directed to bring with him
during the Oral Arguments representative/s from the DBM and Congress who would be able to competently and
completely answer questions related to, among others, the budgeting process and its implementation. Further,
the CoA Chairperson was appointed as amicus curiae and thereby requested to appear before the Court during
the Oral Arguments.
On October 8 and 10, 2013, the Oral Arguments were conducted. Thereafter, the Court directed the parties to
submit their respective memoranda within a period of seven (7) days, or until October 17, 2013, which the
parties subsequently did.
The Issues Before the Court
Based on the pleadings, and as refined during the Oral Arguments, the following are the main issues for the
Court‘s resolution:
I. Procedural Issues.
Whether or not (a) the issues raised in the consolidated petitions involve an actual and justiciable controversy;
(b) the issues raised in the consolidated petitions are matters of policy not subject to judicial review; (c)
petitioners have legal standing to sue; and (d) the Court‘s Decision dated August 19, 1994 in G.R. Nos. 113105,
113174, 113766, and 113888, entitled "Philippine Constitution Association v. Enriquez" 114 (Philconsa) and
Decision dated April 24, 2012 in G.R. No. 164987, entitled "Lawyers Against Monopoly and Poverty v. Secretary of
Budget and Management"115 (LAMP) bar the re-litigatio n of the issue of constitutionality of the "Pork Barrel
System" under the principles of res judicata and stare decisis.
32
II. Substantive Issues on the "Congressional Pork Barrel."
Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel Laws similar thereto are
unconstitutional considering that they violate the principles of/constitutional provisions on (a) separation of
powers; (b) non-delegability of legislative power; (c) checks and balances; (d) accountability; (e) political
dynasties; and (f) local autonomy.
III. Substantive Issues on the "Presidential Pork Barrel."
Whether or not the phrases (a) "and for such other purposes as may be hereafter directed by the President"
under Section 8 of PD 910,116 relating to the Malampaya Funds, and (b) "to finance the priority infrastructure
development projects and to finance the restoration of damaged or destroyed facilities due to calamities, as may
be directed and authorized by the Office of the President of the Philippines" under Section 12 of PD 1869, as
amended by PD 1993, relating to the Presidential Social Fund, are unconstitutional insofar as they constitute
undue delegations of legislative power.
These main issues shall be resolved in the order that they have been stated. In addition, the Court shall also
tackle certain ancillary issues as prompted by the present cases.
The Court’s Ruling
The petitions are partly granted.
I. Procedural Issues.
The prevailing rule in constitutional litigation is that no question involving the constitutionality or validity of a law
or governmental act may be heard and decided by the Court unless there is compliance with the legal requisites
for judicial inquiry,117 namely: (a) there must be an actual case or controversy calling for the exercise of judicial
power; (b) the person challenging the act must have the standing to question the validity of the subject act or
issuance; (c) the question of constitutionality must be raised at the earliest opportunity ; and (d) the issue of
constitutionality must be the very lis mota of the case.118 Of these requisites, case law states that the first two are
the most important119and, therefore, shall be discussed forthwith.
A. Existence of an Actual Case or Controversy.
By constitutional fiat, judicial power operates only when there is an actual case or controversy. 120 This is
embodied in Section 1, Article VIII of the 1987 Constitution which pertinently states that "judicial power includes
the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable x x x." Jurisprudence provides that an actual case or controversy is one which "involves a conflict of
legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a
hypothetical or abstract difference or dispute. 121 In other words, "there must be a contrariety of legal rights that
can be interpreted and enforced on the basis of existing law and jurisprudence." 122 Related to the requirement of
an actual case or controversy is the requirement of "ripeness," meaning that the questions raised for
constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when the act being
challenged has had a direct adverse effect on the individual challenging it. It is a prerequisite that something had
then been accomplished or performed by either branch before a court may come into the picture, and the
petitioner must allege the existence of an immediate or threatened injury to itself as a result of the challenged
action."123 "Withal, courts will decline to pass upon constitutional issues through advisory opinions, bereft as they
are of authority to resolve hypothetical or moot questions." 124
Based on these principles, the Court finds that there exists an actual and justiciable controversy in these cases.
The requirement of contrariety of legal rights is clearly satisfied by the antagonistic positions of the parties on the
constitutionality of the "Pork Barrel System." Also, the questions in these consolidated cases are ripe for
adjudication since the challenged funds and the provisions allowing for their utilization – such as the 2013 GAA
for the PDAF, PD 910 for the Malampaya Funds and PD 1869, as amended by PD 1993, for the Presidential Social
Fund – are currently existing and operational; hence, there exists an immediate or threatened injury to
petitioners as a result of the unconstitutional use of these public funds.
As for the PDAF, the Court must dispel the notion that the issues related thereto had been rendered moot and
academic by the reforms undertaken by respondents. A case becomes moot when there is no more actual
controversy between the parties or no useful purpose can be served in passing upon the merits. 125 Differing from
this description, the Court observes that respondents‘ proposed line-item budgeting scheme would not
terminate the controversy nor diminish the useful purpose for its resolution since said reform is geared towards
the 2014 budget, and not the 2013 PDAF Article which, being a distinct subject matter, remains legally effective
and existing. Neither will the President‘s declaration that he had already "abolished the PDAF" render the issues
on PDAF moot precisely because the Executive branch of government has no constitutional authority to nullify or
annul its legal existence. By constitutional design, the annulment or nullification of a law may be done either by
Congress, through the passage of a repealing law, or by the Court, through a declaration of unconstitutionality.
Instructive on this point is the following exchange between Associate Justice Antonio T. Carpio (Justice Carpio)
and the Solicitor General during the Oral Arguments: 126
Justice Carpio: The President has taken an oath to faithfully execute the law, 127 correct? Solicitor General
Jardeleza: Yes, Your Honor.
Justice Carpio: And so the President cannot refuse to implement the General Appropriations Act, correct?
Solicitor General Jardeleza: Well, that is our answer, Your Honor. In the case, for example of the PDAF, the
President has a duty to execute the laws but in the face of the outrage over PDAF, the President was saying, "I am
not sure that I will continue the release of the soft projects," and that started, Your Honor. Now, whether or not
that … (interrupted)
Justice Carpio: Yeah. I will grant the President if there are anomalies in the project, he has the power to stop the
releases in the meantime, to investigate, and that is Section 38 of Chapter 5 of Book 6 of the Revised
Administrative Code128 x x x. So at most the President can suspend, now if the President believes that the PDAF is
unconstitutional, can he just refuse to implement it?
32
Solicitor General Jardeleza: No, Your Honor, as we were trying to say in the specific case of the PDAF because of
the CoA Report, because of the reported irregularities and this Court can take judicial notice, even outside,
outside of the COA Report, you have the report of the whistle-blowers, the President was just exercising precisely
the duty ….
xxxx
Justice Carpio: Yes, and that is correct. You‘ve seen the CoA Report, there are anomalies, you stop and
investigate, and prosecute, he has done that. But, does that mean that PDAF has been repealed?
Solicitor General Jardeleza: No, Your Honor x x x.
xxxx
Justice Carpio: So that PDAF can be legally abolished only in two (2) cases. Congress passes a law to repeal it, or
this Court declares it unconstitutional, correct?
Solictor General Jardeleza: Yes, Your Honor.
Justice Carpio: The President has no power to legally abolish PDAF. (Emphases supplied)
Even on the assumption of mootness, jurisprudence, nevertheless, dictates that "the moot and academic‘
principle is not a magical formula that can automatically dissuade the Court in resolving a case." The Court will
decide cases, otherwise moot, if: first, there is a grave violation of the Constitution; second, the exceptional
character of the situation and the paramount public interest is involved; third, when the constitutional issue
raised requires formulation of controlling principles to guide the bench, the bar, and the public; and fourth, the
case is capable of repetition yet evading review. 129
The applicability of the first exception is clear from the fundamental posture of petitioners – they essentially
allege grave violations of the Constitution with respect to, inter alia, the principles of separation of powers, non-
delegability of legislative power, checks and balances, accountability and local autonomy.
The applicability of the second exception is also apparent from the nature of the interests involved
– the constitutionality of the very system within which significant amounts of public funds have been and
continue to be utilized and expended undoubtedly presents a situation of exceptional character as well as a
matter of paramount public interest. The present petitions, in fact, have been lodged at a time when the system‘s
flaws have never before been magnified. To the Court‘s mind, the coalescence of the CoA Report, the accounts of
numerous whistle-blowers, and the government‘s own recognition that reforms are needed "to address the
reported abuses of the PDAF"130 demonstrates a prima facie pattern of abuse which only underscores the
importance of the matter. It is also by this finding that the Court finds petitioners‘ claims as not merely theorized,
speculative or hypothetical. Of note is the weight accorded by the Court to the findings made by the CoA which is
the constitutionally-mandated audit arm of the government. In Delos Santos v. CoA, 131 a recent case wherein the
Court upheld the CoA‘s disallowance of irregularly disbursed PDAF funds, it was emphasized that:
The COA is endowed with enough latitude to determine, prevent, and disallow irregular, unnecessary, excessive,
extravagant or unconscionable expenditures of government funds. It is tasked to be vigilant and conscientious in
safeguarding the proper use of the government's, and ultimately the people's, property. The exercise of its
general audit power is among the constitutional mechanisms that gives life to the check and balance system
inherent in our form of government.
It is the general policy of the Court to sustain the decisions of administrative authorities, especially one which is
constitutionally-created, such as the CoA, not only on the basis of the doctrine of separation of powers but also
for their presumed expertise in the laws they are entrusted to enforce. Findings of administrative agencies are
accorded not only respect but also finality when the decision and order are not tainted with unfairness or
arbitrariness that would amount to grave abuse of discretion. It is only when the CoA has acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, that this Court
entertains a petition questioning its rulings. x x x. (Emphases supplied)
Thus, if only for the purpose of validating the existence of an actual and justiciable controversy in these cases, the
Court deems the findings under the CoA Report to be sufficient.
The Court also finds the third exception to be applicable largely due to the practical need for a definitive ruling on
the system‘s constitutionality. As disclosed during the Oral Arguments, the CoA Chairperson estimates that
thousands of notices of disallowances will be issued by her office in connection with the findings made in the CoA
Report. In this relation, Associate Justice Marvic Mario Victor F. Leonen (Justice Leonen) pointed out that all of
these would eventually find their way to the courts. 132 Accordingly, there is a compelling need to formulate
controlling principles relative to the issues raised herein in order to guide the bench, the bar, and the public, not
just for the expeditious resolution of the anticipated disallowance cases, but more importantly, so that the
government may be guided on how public funds should be utilized in accordance with constitutional principles.
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. 133 The relevance of the issues
before the Court does not cease with the passage of a "PDAF -free budget for 2014." 134 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." 135 In Sanlakas v. Executive
Secretary,136 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 "to prevent similar questions from re-
emerging."137 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.
B. Matters of Policy: the Political Question Doctrine.
The "limitation on the power of judicial review to actual cases and controversies‖ carries the assurance that "the
courts will not intrude into areas committed to the other branches of government." 138 Essentially, the foregoing
32
limitation is a restatement of the political question doctrine which, under the classic formulation of Baker v.
Carr,139applies when there is found, among others, "a textually demonstrable constitutional commitment of the
issue to a coordinate political department," "a lack of judicially discoverable and manageable standards for
resolving it" or "the impossibility of deciding without an initial policy determination of a kind clearly for non-
judicial discretion." Cast against this light, respondents submit that the "the political branches are in the best
position not only to perform budget-related reforms but also to do them in response to the specific demands of
their constituents" and, as such, "urge the Court not to impose a solution at this stage." 140
The Court must deny respondents‘ submission.
Suffice it to state that the issues raised before the Court do not present political but legal questions which are
within its province to resolve. A political question refers to "those questions which, under the Constitution, are to
be decided by the people in their sovereign capacity, or in regard to which full discretionary authority has been
delegated to the Legislature or executive branch of the Government. It is concerned with issues dependent upon
the wisdom, not legality, of a particular measure." 141 The intrinsic constitutionality of the "Pork Barrel System" is
not an issue dependent upon the wisdom of the political branches of government but rather a legal one which
the Constitution itself has commanded the Court to act upon. Scrutinizing the contours of the system along
constitutional lines is a task that the political branches of government are incapable of rendering precisely
because it is an exercise of judicial power. More importantly, the present Constitution has not only vested the
Judiciary the right to exercise judicial power but essentially makes it a duty to proceed therewith. Section 1,
Article VIII of the 1987 Constitution cannot be any clearer: "The judicial power shall be vested in one Supreme
Court and in such lower courts as may be established by law. It includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." In Estrada v. Desierto, 142 the expanded concept of judicial power
under the 1987 Constitution and its effect on the political question doctrine was explained as follows: 143
To a great degree, the 1987 Constitution has narrowed the reach of the political question doctrine when it
expanded the power of judicial review of this court not only to settle actual controversies involving rights which
are legally demandable and enforceable but also to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of government.
Heretofore, the judiciary has focused on the "thou shalt not's" of the Constitution directed against the exercise of
its jurisdiction. With the new provision, however, courts are given a greater prerogative to determine what it can
do to prevent grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of government. Clearly, the new provision did not just grant the Court power of doing nothing. x x
x (Emphases supplied)
It must also be borne in mind that ― when the judiciary mediates to allocate constitutional boundaries, it does
not assert any superiority over the other departments; does not in reality nullify or invalidate an act of the
legislature or the executive, but only asserts the solemn and sacred obligation assigned to it by the
Constitution."144 To a great extent, the Court is laudably cognizant of the reforms undertaken by its co-equal
branches of government. But it is by constitutional force that the Court must faithfully perform its duty.
Ultimately, it is the Court‘s avowed intention that a resolution of these cases would not arrest or in any manner
impede the endeavors of the two other branches but, in fact, help ensure that the pillars of change are erected
on firm constitutional grounds. After all, it is in the best interest of the people that each great branch of
government, within its own sphere, contributes its share towards achieving a holistic and genuine solution to the
problems of society. For all these reasons, the Court cannot heed respondents‘ plea for judicial restraint.
C. Locus Standi.
"The gist of the question of standing is whether a party alleges such personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the
court depends for illumination of difficult constitutional questions. Unless a person is injuriously affected in any
of his constitutional rights by the operation of statute or ordinance, he has no standing." 145
Petitioners have come before the Court in their respective capacities as citizen-taxpayers and accordingly, assert
that they "dutifully contribute to the coffers of the National Treasury." 146 Clearly, as taxpayers, they possess the
requisite standing to question the validity of the existing "Pork Barrel System" under which the taxes they pay
have been and continue to be utilized. It is undeniable that petitioners, as taxpayers, are bound to suffer from the
unconstitutional usage of public funds, if the Court so rules. Invariably, taxpayers have been allowed to sue where
there is a claim that public funds are illegally disbursed or that public money is being deflected to any improper
purpose, or that public funds are wasted through the enforcement of an invalid or unconstitutional law, 147 as in
these cases.
Moreover, as citizens, petitioners have equally fulfilled the standing requirement given that the issues they have
raised may be classified as matters "of transcendental importance, of overreaching significance to society, or of
paramount public interest."148 The CoA Chairperson‘s statement during the Oral Arguments that the present
controversy involves "not merely a systems failure" but a "complete breakdown of controls" 149 amplifies, in
addition to the matters above-discussed, the seriousness of the issues involved herein. Indeed, of greater import
than the damage caused by the illegal expenditure of public funds is the mortal wound inflicted upon the
fundamental law by the enforcement of an invalid statute. 150 All told, petitioners have sufficient locus standi to
file the instant cases.
D. Res Judicata and Stare Decisis.
Res judicata (which means a "matter adjudged") and stare decisis non quieta et movere (or simply, stare decisis
which means "follow past precedents and do not disturb what has been settled") are general procedural law
principles which both deal with the effects of previous but factually similar dispositions to subsequent cases. For
the cases at bar, the Court examines the applicability of these principles in relation to its prior rulings in Philconsa
and LAMP.
The focal point of res judicata is the judgment. The principle states that a judgment on the merits in a previous
case rendered by a court of competent jurisdiction would bind a subsequent case if, between the first and second
actions, there exists an identity of parties, of subject matter, and of causes of action. 151 This required identity is
not, however, attendant hereto since Philconsa and LAMP, respectively involved constitutional challenges against
the 1994 CDF Article and 2004 PDAF Article, whereas the cases at bar call for a broader constitutional scrutiny of
the entire "Pork Barrel System." Also, the ruling in LAMP is essentially a dismissal based on a procedural
technicality – and, thus, hardly a judgment on the merits – in that petitioners therein failed to present any
"convincing proof x x x showing that, indeed, there were direct releases of funds to the Members of Congress,
32
who actually spend them according to their sole discretion" or "pertinent evidentiary support to demonstrate the
illegal misuse of PDAF in the form of kickbacks and has become a common exercise of unscrupulous Members of
Congress." As such, the Court up held, in view of the presumption of constitutionality accorded to every law, the
2004 PDAF Article, and saw "no need to review or reverse the standing pronouncements in the said case." Hence,
for the foregoing reasons, the res judicata principle, insofar as the Philconsa and LAMP cases are concerned,
cannot apply.
On the other hand, the focal point of stare decisis is the doctrine created. The principle, entrenched under Article
8152 of the Civil Code, evokes the general rule that, for the sake of certainty, a conclusion reached in one case
should be doctrinally applied to those that follow if the facts are substantially the same, even though the parties
may be different. It proceeds from the first principle of justice that, absent any powerful countervailing
considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event
have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent
court, the rule of stare decisis is a bar to any attempt to re-litigate the same issue. 153
Philconsa was the first case where a constitutional challenge against a Pork Barrel provision, i.e., the 1994 CDF
Article, was resolved by the Court. To properly understand its context, petitioners‘ posturing was that "the power
given to the Members of Congress to propose and identify projects and activities to be funded by the CDF is an
encroachment by the legislature on executive power, since said power in an appropriation act is in
implementation of the law" and that "the proposal and identification of the projects do not involve the making of
laws or the repeal and amendment thereof, the only function given to the Congress by the Constitution." 154 In
deference to the foregoing submissions, the Court reached the following main conclusions: one, under the
Constitution, the power of appropriation, or the "power of the purse," belongs to Congress; two, the power of
appropriation carries with it the power to specify the project or activity to be funded under the appropriation law
and it can be detailed and as broad as Congress wants it to be; and, three, the proposals and identifications made
by Members of Congress are merely recommendatory. At once, it is apparent that the Philconsa resolution was a
limited response to a separation of powers problem, specifically on the propriety of conferring post-enactment
identification authority to Members of Congress. On the contrary, the present cases call for a more holistic
examination of (a) the inter-relation between the CDF and PDAF Articles with each other, formative as they are of
the entire "Pork Barrel System" as well as (b) the intra-relation of post-enactment measures contained within a
particular CDF or PDAF Article, including not only those related to the area of project identification but also to the
areas of fund release and realignment. The complexity of the issues and the broader legal analyses herein
warranted may be, therefore, considered as a powerful countervailing reason against a wholesale application of
the stare decisis principle.
In addition, the Court observes that the Philconsa ruling was actually riddled with inherent constitutional
inconsistencies which similarly countervail against a full resort to stare decisis. As may be deduced from the main
conclusions of the case, Philconsa‘s fundamental premise in allowing Members of Congress to propose and
identify of projects would be that the said identification authority is but an aspect of the power of appropriation
which has been constitutionally lodged in Congress. From this premise, the contradictions may be easily seen. If
the authority to identify projects is an aspect of appropriation and the power of appropriation is a form of
legislative power thereby lodged in Congress, then it follows that: (a) it is Congress which should exercise such
authority, and not its individual Members; (b) such authority must be exercised within the prescribed procedure
of law passage and, hence, should not be exercised after the GAA has already been passed; and (c) such
authority, as embodied in the GAA, has the force of law and, hence, cannot be merely recommendatory. Justice
Vitug‘s Concurring Opinion in the same case sums up the Philconsa quandary in this wise: "Neither would it be
objectionable for Congress, by law, to appropriate funds for such specific projects as it may be minded; to give
that authority, however, to the individual members of Congress in whatever guise, I am afraid, would be
constitutionally impermissible." As the Court now largely benefits from hindsight and current findings on the
matter, among others, the CoA Report, the Court must partially abandon its previous ruling in Philconsa insofar as
it validated the post-enactment identification authority of Members of Congress on the guise that the same was
merely recommendatory. This postulate raises serious constitutional inconsistencies which cannot be simply
excused on the ground that such mechanism is "imaginative as it is innovative." Moreover, it must be pointed out
that the recent case of Abakada Guro Party List v. Purisima155(Abakada) has effectively overturned Philconsa‘s
allowance of post-enactment legislator participation in view of the separation of powers principle. These
constitutional inconsistencies and the Abakada rule will be discussed in greater detail in the ensuing section of
this Decision.
As for LAMP, suffice it to restate that the said case was dismissed on a procedural technicality and, hence, has not
set any controlling doctrine susceptible of current application to the substantive issues in these cases. In fine,
stare decisis would not apply.
II. Substantive Issues.
A. Definition of Terms.
Before the Court proceeds to resolve the substantive issues of these cases, it must first define the terms "Pork
Barrel System," "Congressional Pork Barrel," and "Presidential Pork Barrel" as they are essential to the ensuing
discourse.
Petitioners define the term "Pork Barrel System" as the "collusion between the Legislative and Executive
branches of government to accumulate lump-sum public funds in their offices with unchecked discretionary
powers to determine its distribution as political largesse." 156 They assert that the following elements make up the
Pork Barrel System: (a) lump-sum funds are allocated through the appropriations process to an individual officer;
(b) the officer is given sole and broad discretion in determining how the funds will be used or expended; (c) the
guidelines on how to spend or use the funds in the appropriation are either vague, overbroad or inexistent; and
(d) projects funded are intended to benefit a definite constituency in a particular part of the country and to help
the political careers of the disbursing official by yielding rich patronage benefits. 157 They further state that the
Pork Barrel System is comprised of two (2) kinds of discretionary public funds: first, the Congressional (or
Legislative) Pork Barrel, currently known as the PDAF; 158 and, second, the Presidential (or Executive) Pork Barrel,
specifically, the Malampaya Funds under PD 910 and the Presidential Social Fund under PD 1869, as amended by
PD 1993.159
Considering petitioners‘ submission and in reference to its local concept and legal history, 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:
32
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; 160 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, 161 the Court shall
delimit the use of such term to refer only to the Malampaya Funds and the Presidential Social Fund.
With these definitions in mind, the Court shall now proceed to discuss the substantive issues of these cases.
B. Substantive Issues on the Congressional Pork Barrel.
1. Separation of Powers.
a. Statement of Principle.
The principle of separation of powers refers to the constitutional demarcation of the three fundamental powers
of government. In the celebrated words of Justice Laurel in Angara v. Electoral Commission, 162 it means that the
"Constitution has blocked out with deft strokes and in bold lines, allotment of power to the executive, the
legislative and the judicial departments of the government." 163 To the legislative branch of government, through
Congress,164belongs the power to make laws; to the executive branch of government, through the
President,165 belongs the power to enforce laws; and to the judicial branch of government, through the
Court,166 belongs the power to interpret laws. Because the three great powers have been, by constitutional
design, ordained in this respect, "each department of the government has exclusive cognizance of matters within
its jurisdiction, and is supreme within its own sphere." 167 Thus, "the legislature has no authority to execute or
construe the law, the executive has no authority to make or construe the law, and the judiciary has no power to
make or execute the law."168 The principle of separation of powers and its concepts of autonomy and
independence stem from the notion that the powers of government must be divided to avoid concentration of
these powers in any one branch; the division, it is hoped, would avoid any single branch from lording its power
over the other branches or the citizenry. 169 To achieve this purpose, the divided power must be wielded by co-
equal branches of government that are equally capable of independent action in exercising their respective
mandates. Lack of independence would result in the inability of one branch of government to check the arbitrary
or self-interest assertions of another or others. 170
Broadly speaking, there is a violation of the separation of powers principle when one branch of government
unduly encroaches on the domain of another. US Supreme Court decisions instruct that the principle of
separation of powers may be violated in two (2) ways: firstly, "one branch may interfere impermissibly with the
other’s performance of its constitutionally assigned function"; 171 and "alternatively, the doctrine may be violated
when one branch assumes a function that more properly is entrusted to another." 172 In other words, there is a
violation of the principle when there is impermissible (a) interference with and/or (b) assumption of another
department‘s functions.
The enforcement of the national budget, as primarily contained in the GAA, is indisputably a function both
constitutionally assigned and properly entrusted to the Executive branch of government. In Guingona, Jr. v. Hon.
Carague173 (Guingona, Jr.), the Court explained that the phase of budget execution "covers the various operational
aspects of budgeting" and accordingly includes "the evaluation of work and financial plans for individual
activities," the "regulation and release of funds" as well as all "other related activities" that comprise the budget
execution cycle.174 This is rooted in the principle that the allocation of power in the three principal branches of
government is a grant of all powers inherent in them. 175 Thus, unless the Constitution provides otherwise, the
Executive department should exclusively exercise all roles and prerogatives which go into the implementation of
the national budget as provided under the GAA as well as any other appropriation law.
In view of the foregoing, the Legislative branch of government, much more any of its members, should not cross
over the field of implementing the national budget since, as earlier stated, the same is properly the domain of
the Executive. Again, in Guingona, Jr., the Court stated that "Congress enters the picture when it deliberates or
acts on the budget proposals of the President. Thereafter, Congress, "in the exercise of its own judgment and
wisdom, formulates 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." Upon approval and passage of the GAA, Congress‘ law -making role necessarily comes to an end and from
there the Executive‘s role of implementing the national budget begins. So as not to blur the constitutional
boundaries between them, Congress must "not concern it self with details for implementation by the
Executive."176
The foregoing cardinal postulates were definitively enunciated in Abakada where the Court held that "from the
moment the law becomes effective, any provision of law that empowers Congress or any of its members to play
any role in the implementation or enforcement of the law violates the principle of separation of powers and is
thus unconstitutional."177 It must be clarified, however, that since the restriction only pertains to "any role in the
implementation or enforcement of the law," Congress may still exercise its oversight function which is a
mechanism of checks and balances that the Constitution itself allows. But it must be made clear that Congress‘
role must be confined to mere oversight. Any post-enactment-measure allowing legislator participation beyond
oversight is bereft of any constitutional basis and hence, tantamount to impermissible interference and/or
assumption of executive functions. As the Court ruled in Abakada: 178
Any post-enactment congressional measure x x x should be limited to scrutiny and investigation.1âwphi1 In
particular, congressional oversight must be confined to the following:
(1) scrutiny based primarily on Congress‘ power of appropriation and the budget hearings conducted in
connection with it, its power to ask heads of departments to appear before and be heard by either of
its Houses on any matter pertaining to their departments and its power of confirmation; and
(2) investigation and monitoring of the implementation of laws pursuant to the power of Congress to
conduct inquiries in aid of legislation.
Any action or step beyond that will undermine the separation of powers guaranteed by the Constitution.
(Emphases supplied)
32
b. Application.
In these cases, petitioners submit that the Congressional Pork Barrel – among others, the 2013 PDAF Article –
"wrecks the assignment of responsibilities between the political branches" as it is designed to allow individual
legislators to interfere "way past the time it should have ceased" or, particularly, "after the GAA is
passed."179 They state that the findings and recommendations in the CoA Report provide "an illustration of how
absolute and definitive the power of legislators wield over project implementation in complete violation of the
constitutional principle of separation of powers." 180 Further, they point out that the Court in the Philconsa case
only allowed the CDF to exist on the condition that individual legislators limited their role to recommending
projects and not if they actually dictate their implementation. 181
For their part, respondents counter that the separations of powers principle has not been violated since the
President maintains "ultimate authority to control the execution of the GAA‖ and that he "retains the final
discretion to reject" the legislators‘ proposals. 182 They maintain that the Court, in Philconsa, "upheld the
constitutionality of the power of members of Congress to propose and identify projects so long as such proposal
and identification are recommendatory."183 As such, they claim that "everything in the Special Provisions [of the
2013 PDAF Article follows the Philconsa framework, and hence, remains constitutional." 184
The Court rules in favor of petitioners.
As may be observed from its legal history, the defining feature of all forms of Congressional Pork Barrel would be
the authority of legislators to participate in the post-enactment phases of project implementation.
At its core, legislators – may it be through project lists, 185 prior consultations186 or program menus187 – have been
consistently accorded post-enactment authority to identify the projects they desire to be funded through various
Congressional Pork Barrel allocations. Under the 2013 PDAF Article, the statutory authority of legislators to
identify projects post-GAA may be construed from the import of Special Provisions 1 to 3 as well as the second
paragraph of Special Provision 4. To elucidate, Special Provision 1 embodies the program menu feature which, as
evinced from past PDAF Articles, allows individual legislators to identify PDAF projects for as long as the identified
project falls under a general program listed in the said menu. Relatedly, Special Provision 2 provides that the
implementing agencies shall, within 90 days from the GAA is passed, submit to Congress a more detailed priority
list, standard or design prepared and submitted by implementing agencies from which the legislator may make
his choice. The same provision further authorizes legislators to identify PDAF projects outside his district for as
long as the representative of the district concerned concurs in writing. Meanwhile, Special Provision 3 clarifies
that PDAF projects refer to "projects to be identified by legislators" 188 and thereunder provides the allocation
limit for the total amount of projects identified by each legislator. Finally, paragraph 2 of Special Provision 4
requires that any modification and revision of the project identification "shall be submitted to the House
Committee on Appropriations and the Senate Committee on Finance for favorable endorsement to the DBM or
the implementing agency, as the case may be." From the foregoing special provisions, it cannot be seriously
doubted that legislators have been accorded post-enactment authority to identify PDAF projects.
Aside from the area of project identification, legislators have also been accorded post-enactment authority in the
areas of fund release and realignment. Under the 2013 PDAF Article, the statutory authority of legislators to
participate in the area of fund release through congressional committees is contained in Special Provision 5 which
explicitly states that "all request for release of funds shall be supported by the documents prescribed under
Special Provision No. 1 and favorably endorsed by House Committee on Appropriations and the Senate
Committee on Finance, as the case may be"; while their statutory authority to participate in the area of fund
realignment is contained in: first , paragraph 2, Special Provision 4 189 which explicitly state s, among others, that
"any realignment of funds shall be submitted to the House Committee on Appropriations and the Senate
Committee on Finance for favorable endorsement to the DBM or the implementing agency, as the case may be‖ ;
and, second , paragraph 1, also of Special Provision 4 which authorizes the "Secretaries of Agriculture, Education,
Energy, Interior and Local Government, Labor and Employment, Public Works and Highways, Social Welfare and
Development and Trade and Industry 190 x x x to approve realignment from one project/scope to another within
the allotment received from this Fund, subject to among others (iii) the request is with the concurrence of the
legislator concerned."
Clearly, these post-enactment measures which govern the areas of project identification, fund release and fund
realignment are not related to functions of congressional oversight and, hence, allow legislators to intervene
and/or assume duties that properly belong to the sphere of budget execution. Indeed, by virtue of the foregoing,
legislators have been, in one form or another, authorized to participate in – as Guingona, Jr. puts it – "the various
operational aspects of budgeting," including "the evaluation of work and financial plans for individual activities"
and the "regulation and release of funds" in violation of the separation of powers principle. The fundamental
rule, as categorically articulated in Abakada, cannot be overstated – from the moment the law becomes effective,
any provision of law that empowers Congress or any of its members to play any role in the implementation or
enforcement of the law violates the principle of separation of powers and is thus unconstitutional. 191 That the
said authority is treated as merely recommendatory in nature does not alter its unconstitutional tenor since the
prohibition, to repeat, covers any role in the implementation or enforcement of the law. Towards this end, the
Court must therefore abandon its ruling in Philconsa which sanctioned the conduct of legislator identification on
the guise that the same is merely recommendatory and, as such, respondents‘ reliance on the same falters
altogether.
Besides, it must be pointed out that respondents have nonetheless failed to substantiate their position that the
identification authority of legislators is only of recommendatory import. Quite the contrary, respondents –
through the statements of the Solicitor General during the Oral Arguments – have admitted that the
identification of the legislator constitutes a mandatory requirement before his PDAF can be tapped as a funding
source, thereby highlighting the indispensability of the said act to the entire budget execution process: 192
Justice Bernabe: Now, without the individual legislator’s identification of the project, can the PDAF of the
legislator be utilized?
Solicitor General Jardeleza: No, Your Honor.
Justice Bernabe: It cannot?
Solicitor General Jardeleza: It cannot… (interrupted)
Justice Bernabe: So meaning you should have the identification of the project by the individual legislator?
32
Solicitor General Jardeleza: Yes, Your Honor.
xxxx
Justice Bernabe: In short, the act of identification is mandatory?
Solictor General Jardeleza: Yes, Your Honor. In the sense that if it is not done and then there is no identification.
xxxx
Justice Bernabe: Now, would you know of specific instances when a project was implemented without the
identification by the individual legislator?
Solicitor General Jardeleza: I do not know, Your Honor; I do not think so but I have no specific examples. I would
doubt very much, Your Honor, because to implement, there is a need for a SARO and the NCA. And the SARO and
the NCA are triggered by an identification from the legislator.
xxxx
Solictor General Jardeleza: What we mean by mandatory, Your Honor, is we were replying to a question, "How
can a legislator make sure that he is able to get PDAF Funds?" It is mandatory in the sense that he must identify,
in that sense, Your Honor. Otherwise, if he does not identify, he cannot avail of the PDAF Funds and his district
would not be able to have PDAF Funds, only in that sense, Your Honor. (Emphases supplied)
Thus, for all the foregoing reasons, the Court hereby declares the 2013 PDAF Article as well as all other provisions
of law which similarly allow legislators to wield any form of post-enactment authority in the implementation or
enforcement of the budget, unrelated to congressional oversight, as violative of the separation of powers
principle and thus unconstitutional. Corollary thereto, informal practices, through which legislators have
effectively intruded into the proper phases of budget execution, must be deemed as acts of grave abuse of
discretion amounting to lack or excess of jurisdiction and, hence, accorded the same unconstitutional treatment.
That such informal practices do exist and have, in fact, been constantly observed throughout the years has not
been substantially disputed here. As pointed out by Chief Justice Maria Lourdes P.A. Sereno (Chief Justice Sereno)
during the Oral Arguments of these cases:193
Chief Justice Sereno:
Now, from the responses of the representative of both, the DBM and two (2) Houses of Congress, if we enforces
the initial thought that I have, after I had seen the extent of this research made by my staff, that neither the
Executive nor Congress frontally faced the question of constitutional compatibility of how they were engineering
the budget process. In fact, the words you have been using, as the three lawyers of the DBM, and both Houses of
Congress has also been using is surprise; surprised that all of these things are now surfacing. In fact, I thought
that what the 2013 PDAF provisions did was to codify in one section all the past practice that had been done
since 1991. In a certain sense, we should be thankful that they are all now in the PDAF Special Provisions. x x x
(Emphasis and underscoring supplied)
Ultimately, legislators cannot exercise powers which they do not have, whether through formal measures written
into the law or informal practices institutionalized in government agencies, else the Executive department be
deprived of what the Constitution has vested as its own.
2. Non-delegability of Legislative Power.
a. Statement of Principle.
As an adjunct to the separation of powers principle, 194 legislative power shall be exclusively exercised by the body
to which the Constitution has conferred the same. In particular, Section 1, Article VI of the 1987 Constitution
states that such power shall be vested in the Congress of the Philippines which shall consist of a Senate and a
House of Representatives, except to the extent reserved to the people by the provision on initiative and
referendum.195 Based on this provision, it is clear that only Congress, acting as a bicameral body, and the people,
through the process of initiative and referendum, may constitutionally wield legislative power and no other. This
premise embodies the principle of non-delegability of legislative power, and the only recognized exceptions
thereto would be: (a) delegated legislative power to local governments which, by immemorial practice, are
allowed to legislate on purely local matters; 196 and (b) constitutionally-grafted exceptions such as the authority of
the President to, by law, exercise powers necessary and proper to carry out a declared national policy in times of
war or other national emergency,197or fix within specified limits, and subject to such limitations and restrictions as
Congress may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or
imposts within the framework of the national development program of the Government. 198
Notably, the principle of non-delegability should not be confused as a restriction to delegate rule-making
authority to implementing agencies for the limited purpose of either filling up the details of the law for its
enforcement (supplementary rule-making) or ascertaining facts to bring the law into actual operation (contingent
rule-making).199The conceptual treatment and limitations of delegated rule-making were explained in the case of
People v. Maceren200 as follows:
The 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 nondelegation 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."
xxxx
Nevertheless, it must be emphasized that the rule-making power must be confined to details for regulating the
mode or proceeding to carry into effect the law as it has been enacted. The power cannot be extended to
amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that
subvert the statute cannot be sanctioned. (Emphases supplied)
b. Application.
32
In the cases at bar, the Court observes that the 2013 PDAF Article, insofar as it confers post-enactment
identification authority to individual legislators, violates the principle of non-delegability since said legislators are
effectively allowed to individually exercise the power of appropriation, which – as settled in Philconsa – is lodged
in Congress. 201 That the power to appropriate must be exercised only through legislation is clear from Section
29(1), Article VI of the 1987 Constitution which states that: "No money shall be paid out of the Treasury except in
pursuance of an appropriation made by law." To understand what constitutes an act of appropriation, the Court,
in Bengzon v. Secretary of Justice and Insular Auditor202 (Bengzon), held that the power of appropriation involves
(a) the setting apart by law of a certain sum from the public revenue for (b) a specified purpose. Essentially,
under the 2013 PDAF Article, individual legislators are given a personal lump-sum fund from which they are able
to dictate (a) how much from such fund would go to (b) a specific project or beneficiary that they themselves also
determine. As these two (2) acts comprise the exercise of the power of appropriation as described in Bengzon,
and given that the 2013 PDAF Article authorizes individual legislators to perform the same, undoubtedly, said
legislators have been conferred the power to legislate which the Constitution does not, however, allow. Thus,
keeping with the principle of non-delegability of legislative power, the Court hereby declares the 2013 PDAF
Article, as well as all other forms of Congressional Pork Barrel which contain the similar legislative identification
feature as herein discussed, as unconstitutional.
3. Checks and Balances.
a. Statement of Principle; Item-Veto Power.
The fact that the three great powers of government are intended to be kept separate and distinct does not mean
that they are absolutely unrestrained and independent of each other. The Constitution has also provided for an
elaborate system of checks and balances to secure coordination in the workings of the various departments of
the government. 203
A prime example of a constitutional check and balance would be the President’s power to veto an item written
into an appropriation, revenue or tariff bill submitted to him by Congress for approval through a process known
as "bill presentment." The President‘s item-veto power is found in Section 27(2), Article VI of the 1987
Constitution which reads as follows:
Sec. 27. x x x.
xxxx
(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.
The presentment of appropriation, revenue or tariff bills to the President, wherein he may exercise his power of
item-veto, forms part of the "single, finely wrought and exhaustively considered, procedures" for law-passage as
specified under the Constitution.204 As stated in Abakada, the final step in the law-making process is the
"submission of the bill to the President for approval. Once approved, it takes effect as law after the required
publication."205
Elaborating on the President‘s item-veto power and its relevance as a check on the legislature, the Court, in be validly apportioned into component percentages or values; however, it is crucial that each percentage or value
Bengzon, explained that:206 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
The former Organic Act and the present Constitution of the Philippines make the Chief Executive an integral part that are by accounting and budgeting practice considered as one purpose, e.g., MOOE (maintenance and other
of the law-making power. His disapproval of a bill, commonly known as a veto, is essentially a legislative act. The operating expenses), in which case the related purposes shall be deemed sufficiently specific for the exercise of
questions presented to the mind of the Chief Executive are precisely the same as those the legislature must the President‘s item veto power. Finally, special purpose funds and discretionary funds would equally square with
determine in passing a bill, except that his will be a broader point of view. 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
The Constitution is a limitation upon the power of the legislative department of the government, but in this
shall be supported by funds actually available as certified by the National Treasurer, or t o be raised by a
respect it is a grant of power to the executive department. The Legislature has the affirmative power to enact
corresponding revenue proposal therein." Meanwhile, with respect to discretionary funds, Section 2 5(6), Article
laws; the Chief Executive has the negative power by the constitutional exercise of which he may defeat the will of
VI of the 1987 Constitution requires that said funds "shall be disbursed only for public purposes to be supported
the Legislature. It follows that the Chief Executive must find his authority in the Constitution. But in exercising
by appropriate vouchers and subject to such guidelines as may be prescribed by law."
that authority he may not be confined to rules of strict construction or hampered by the unwise interference of
the judiciary. The courts will indulge every intendment in favor of the constitutionality of a veto in the same
manner as they will presume the constitutionality of an act as originally passed by the Legislature. (Emphases In contrast, what beckons constitutional infirmity are appropriations which merely provide for a singular lump-
supplied) 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
The justification for the President‘s item-veto power rests on a variety of policy goals such as to prevent log-
appropriation law already indicates a "specific appropriation of money‖ and hence, without a proper line-item
rolling legislation,207 impose fiscal restrictions on the legislature, as well as to fortify the executive branch‘s role in
which the President may veto. As a practical result, the President would then be faced with the predicament of
the budgetary process.208 In Immigration and Naturalization Service v. Chadha, the US Supreme Court
either vetoing the entire appropriation if he finds some of its purposes wasteful or undesirable, or approving the
characterized the President‘s item-power as "a salutary check upon the legislative body, calculated to guard the
entire appropriation so as not to hinder some of its legitimate purposes. Finally, it may not be amiss to state that
community against the effects of factions, precipitancy, or of any impulse unfriendly to the public good, which
such arrangement also raises non-delegability issues considering that the implementing authority would still have
may happen to influence a majority of that body"; phrased differently, it is meant to "increase the chances in
to determine, again, both the actual amount to be expended and the actual purpose of the appropriation. Since
favor of the community against the passing of bad laws, through haste, inadvertence, or design." 209
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.
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
b. Application.
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,210 the US Supreme Court characterized an item of appropriation as follows:
In these cases, petitioners 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
An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation of money, not
that item later on."212 Accordingly, they submit that the "item veto power of the President mandates that
some general provision of law which happens to be put into an appropriation bill. (Emphases supplied)
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." 213
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
On the other hand, respondents maintain that the text of the Constitution envisions a process which is intended
provisions" which provide for parameters of appropriation.
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
Further, it is significant to point out that an item of appropriation must be an item characterized by singular the Congress to create some lump-sum appropriations is constitutionally allowed and textually-grounded. 214
correspondence – meaning an allocation of a specified singular amount for a specified singular purpose,
otherwise known as a "line-item."211 This treatment not only allows the item to be consistent with its definition as
The Court agrees with petitioners.
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" Under the 2013 PDAF Article, the amount of ₱24.79 Billion only appears as a collective allocation limit since the
appropriations which are rightfully subject to item veto. Likewise, it must be observed that an appropriation may said amount would be further divided among individual legislators who would then receive personal lump-sum

32
allocations and could, after the GAA is passed, effectively appropriate PDAF funds based on their own discretion.
As these intermediate appropriations are made by 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. This kind of lump-sum/post-
enactment legislative identification budgeting system fosters the creation of a budget within a budget" which
subverts the prescribed procedure of presentment and consequently impairs the President‘s power of item veto.
As petitioners aptly point out, the above-described system forces the President to decide between (a) accepting
the entire ₱24.79 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. 215
Moreover, even without its post-enactment legislative identification feature, the 2013 PDAF Article would remain
constitutionally flawed since it would then operate as a prohibited form of lump-sum appropriation above-
characterized. In particular, the lump-sum amount of ₱24.79 Billion would be treated as a mere funding source
allotted for multiple purposes of spending, i.e., scholarships, medical missions, assistance to indigents,
preservation of historical materials, construction of roads, flood control, etc. This setup connotes that the
appropriation law leaves the actual amounts and purposes of the appropriation for further determination and,
therefore, does not readily indicate a discernible item which may be subject to the President‘s power of item
veto.
In fact, on the accountability side, the same lump-sum budgeting scheme has, as the CoA Chairperson relays,
"limited state auditors from obtaining relevant data and information that would aid in more stringently auditing
the utilization of said Funds."216 Accordingly, she recommends the adoption of a "line by line budget or amount
per proposed program, activity or project, and per implementing agency." 217
Hence, in view of the reasons above-stated, the Court finds the 2013 PDAF Article, as well as all Congressional
Pork Barrel Laws of similar operation, to be unconstitutional. That such budgeting system provides for a greater
degree of flexibility to account for future contingencies cannot be an excuse to defeat what the Constitution
requires. Clearly, the first and essential truth of the matter is that unconstitutional means do not justify even
commendable ends.218
c. Accountability.
Petitioners further relate that the system under which various forms of Congressional Pork Barrel operate defies
public accountability as it renders Congress incapable of checking itself or its Members. In particular, they point
out that the Congressional Pork Barrel "gives each legislator a direct, financial interest in the smooth, speedy
passing of the yearly budget" which turns them "from fiscalizers" into "financially-interested partners." 219 They
also claim that the system has an effect on re- election as "the PDAF excels in self-perpetuation of elective
officials." Finally, they add that the "PDAF impairs the power of impeachment" as such "funds are indeed quite
useful, ‘to well, accelerate the decisions of senators.‘" 220
The Court agrees in part.
32
The aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that "public office is a
public trust," is an overarching reminder that every instrumentality of government should exercise their official
functions only in accordance with the principles of the Constitution which embodies the parameters of the
people‘s trust. The notion of a public trust connotes accountability, 221 hence, the various mechanisms in the
Constitution which are designed to exact accountability from public officers.
Among others, an accountability mechanism with which the proper expenditure of public funds may be checked
is the power of congressional oversight. As mentioned in Abakada, 222 congressional oversight may be performed
either through: (a) scrutiny based primarily on Congress‘ power of appropriation and the budget hearings
conducted in connection with it, its power to ask heads of departments to appear before and be heard by either
of its Houses on any matter pertaining to their departments and its power of confirmation; 223 or (b) investigation
and monitoring of the implementation of laws pursuant to the power of Congress to conduct inquiries in aid of
legislation.224
The Court agrees with petitioners that certain features embedded in some forms of Congressional Pork Barrel,
among others the 2013 PDAF Article, has an effect on congressional oversight. The fact that individual legislators
are given post-enactment roles in the implementation of the budget makes it difficult for them to become
disinterested "observers" when scrutinizing, investigating or monitoring the implementation of the appropriation
law. To a certain extent, the conduct of oversight would be tainted as said legislators, who are vested with post-
enactment authority, would, in effect, be checking on activities in which they themselves participate. Also, it
must be pointed out that this very same concept of post-enactment authorization runs afoul of Section 14, Article
VI of the 1987 Constitution which provides that:
Sec. 14. No Senator or Member of the House of Representatives may personally appear as counsel before any
court of justice or before the Electoral Tribunals, or quasi-judicial and other administrative bodies. Neither shall
he, directly or indirectly, be interested financially in any contract with, or in any franchise or special privilege
granted by the Government, or any subdivision, agency, or instrumentality thereof, including any government-
owned or controlled corporation, or its subsidiary, during his term of office. He shall not intervene in any matter
before any office of the Government for his pecuniary benefit or where he may be called upon to act on account
of his office. (Emphasis supplied)
Clearly, allowing legislators to intervene in the various phases of project implementation – a matter before
another office of government – renders them susceptible to taking undue advantage of their own office.
The Court, however, cannot completely agree that the same post-enactment authority and/or the individual
legislator‘s control of his PDAF per se would allow him to perpetuate himself in office. Indeed, while the
Congressional Pork Barrel and a legislator‘s use thereof may be linked to this area of interest, the use of his PDAF
for re-election purposes is a matter which must be analyzed based on particular facts and on a case-to-case basis.
Finally, while the Court accounts for the possibility that the close operational proximity between legislators and
the Executive department, through the former‘s post-enactment participation, may affect the process of
impeachment, this matter largely borders on the domain of politics and does not strictly concern the Pork Barrel
System‘s intrinsic constitutionality. As such, it is an improper subject of judicial assessment.
In sum, insofar as its post-enactment features dilute congressional oversight and violate Section 14, Article VI of
the 1987 Constitution, thus impairing public accountability, the 2013 PDAF Article and other forms of
Congressional Pork Barrel of similar nature are deemed as unconstitutional.
4. Political Dynasties.
One of the petitioners submits that the Pork Barrel System enables politicians who are members of political
dynasties to accumulate funds to perpetuate themselves in power, in contravention of Section 26, Article II of the
1987 Constitution225 which states that:
Sec. 26. The State shall guarantee equal access to opportunities for public service, and prohibit political dynasties
as may be defined by law. (Emphasis and underscoring supplied)
At the outset, suffice it to state that the foregoing provision is considered as not self-executing due to the
qualifying phrase "as may be defined by law." In this respect, said provision does not, by and of itself, provide a
judicially enforceable constitutional right but merely specifies guideline for legislative or executive
action.226 Therefore, since there appears to be no standing law which crystallizes the policy on political dynasties
for enforcement, the Court must defer from ruling on this issue.
In any event, the Court finds the above-stated argument on this score to be largely speculative since it has not
been properly demonstrated how the Pork Barrel System would be able to propagate political dynasties.
5. Local Autonomy.
The State‘s policy on local autonomy is principally stated in Section 25, Article II and Sections 2 and 3, Article X of
the 1987 Constitution which read as follows:
ARTICLE II
Sec. 25. The State shall ensure the autonomy of local governments.
ARTICLE X
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization with effective
mechanisms of recall, initiative, and referendum, allocate among the different local government units their
powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal,
term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization
and operation of the local units.
32
Pursuant thereto, Congress enacted RA 7160,227 otherwise known as the "Local Government Code of 1991" (LGC),
wherein the policy on local autonomy had been more specifically explicated as follows:
Sec. 2. Declaration of Policy. – (a) It is hereby declared the policy of the State that the territorial and political
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective partners in the attainment of national
goals. Toward this end, the State shall provide for a more responsive and accountable local government structure
instituted through a system of decentralization whereby local government units shall be given more powers,
authority, responsibilities, and resources. The process of decentralization shall proceed from the National
Government to the local government units.
xxxx
(c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic
consultations with appropriate local government units, nongovernmental and people‘s organizations, and other
concerned sectors of the community before any project or program is implemented in their respective
jurisdictions. (Emphases and underscoring supplied)
The above-quoted provisions of the Constitution and the LGC reveal the policy of the State to empower local
government units (LGUs) to develop and ultimately, become self-sustaining and effective contributors to the
national economy. As explained by the Court in Philippine Gamefowl Commission v. Intermediate Appellate
Court:228
This is as good an occasion as any to stress the commitment of the Constitution to the policy of local autonomy
which is intended to provide the needed impetus and encouragement to the development of our local political
subdivisions as "self - reliant communities." In the words of Jefferson, "Municipal corporations are the small
republics from which the great one derives its strength." The vitalization of local governments will enable their
inhabitants to fully exploit their resources and more important, imbue them with a deepened sense of
involvement in public affairs as members of the body politic. This objective could be blunted by undue
interference by the national government in purely local affairs which are best resolved by the officials and
inhabitants of such political units. The decision we reach today conforms not only to the letter of the pertinent
laws but also to the spirit of the Constitution. 229 (Emphases and underscoring supplied)
In the cases at bar, petitioners contend that the Congressional Pork Barrel goes against the constitutional
principles on local autonomy since it allows district representatives, who are national officers, to substitute their
judgments in utilizing public funds for local development. 230 The Court agrees with petitioners.
Philconsa described the 1994 CDF as an attempt "to make equal the unequal" and that "it is also a recognition
that individual members of Congress, far more than the President and their congressional colleagues, are likely to
be knowledgeable about the needs of their respective constituents and the priority to be given each
project."231 Drawing strength from this pronouncement, previous legislators justified its existence by stating that
"the relatively small projects implemented under the Congressional Pork Barrel complement and link the national
development goals to the countryside and grassroots as well as to depressed areas which are overlooked by
central agencies which are preoccupied with mega-projects. 232 Similarly, in his August 23, 2013 speech on the
"abolition" of PDAF and budgetary reforms, President Aquino mentioned that the Congressional Pork Barrel was
originally established for a worthy goal, which is to enable the representatives to identify projects for
communities that the LGU concerned cannot afford. 233
Notwithstanding these declarations, the Court, however, finds an inherent defect in the system which actually
belies the avowed intention of "making equal the unequal." In particular, the Court observes that the gauge of
PDAF and CDF allocation/division is based solely on the fact of office, without taking into account the specific
interests and peculiarities of the district the legislator represents. In this regard, the allocation/division limits are
clearly not based on genuine parameters of equality, wherein economic or geographic indicators have been taken
into consideration. As a result, a district representative of a highly-urbanized metropolis gets the same amount of
funding as a district representative of a far-flung rural province which would be relatively "underdeveloped"
compared to the former. To add, what rouses graver scrutiny is that even Senators and Party-List Representatives
– and in some years, even the Vice-President – who do not represent any locality, receive funding from the
Congressional Pork Barrel as well. These certainly are anathema to the Congressional Pork Barrel‘s original intent
which is "to make equal the unequal." Ultimately, the PDAF and CDF had become personal funds under the
effective control of each legislator and given unto them on the sole account of their office.
The Court also observes that this concept of legislator control underlying the CDF and PDAF conflicts with the
functions of the various Local Development Councils (LDCs) which are already legally mandated to "assist the
corresponding sanggunian in setting the direction of economic and social development, and coordinating
development efforts within its territorial jurisdiction." 234 Considering that LDCs are instrumentalities whose
functions are essentially geared towards managing local affairs, 235 their programs, policies and resolutions should
not be overridden nor duplicated by individual legislators, who are national officers that have no law-making
authority except only when acting as a body. The undermining effect on local autonomy caused by the post-
enactment authority conferred to the latter was succinctly put by petitioners in the following wise: 236
With PDAF, a Congressman can simply bypass the local development council and initiate projects on his own, and
even take sole credit for its execution. Indeed, this type of personality-driven project identification has not only
contributed little to the overall development of the district, but has even contributed to "further weakening
infrastructure planning and coordination efforts of the government."
Thus, insofar as individual legislators are authorized to intervene in purely local matters and thereby subvert
genuine local autonomy, the 2013 PDAF Article as well as all other similar forms of Congressional Pork Barrel is
deemed unconstitutional.
With this final issue on the Congressional Pork Barrel resolved, the Court now turns to the substantive issues
involving the Presidential Pork Barrel.
C. Substantive Issues on the Presidential Pork Barrel.
1. Validity of Appropriation.
Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of PD1869 (now, amended by PD 1993), which
respectively provide for the Malampaya Funds and the Presidential Social Fund, as invalid appropriations laws
32
since they do not have the "primary and specific" purpose of authorizing the release of public funds from the
National Treasury. Petitioners submit that Section 8 of PD 910 is not an appropriation law since the "primary and
specific‖ purpose of PD 910 is the creation of an Energy Development Board and Section 8 thereof only created a
Special Fund incidental thereto.237 In similar regard, petitioners argue that Section 12 of PD 1869 is neither a valid
appropriations law since the allocation of the Presidential Social Fund is merely incidental to the "primary and
specific" purpose of PD 1869 which is the amendment of the Franchise and Powers of PAGCOR. 238 In view of the
foregoing, petitioners suppose that such funds are being used without any valid law allowing for their proper
appropriation in violation of Section 29(1), Article VI of the 1987 Constitution which states that: "No money shall
be paid out of the Treasury except in pursuance of an appropriation made by law." 239
The Court disagrees.
"An appropriation made by law‖ under the contemplation of Section 29(1), Article VI of the 1987 Constitution
exists when a provision of law (a) sets apart a determinate or determinable 240 amount of money and (b) allocates
the same for a particular public purpose. These two minimum designations of amount and purpose stem from
the very definition of the word "appropriation," which means "to allot, assign, set apart or apply to a particular
use or purpose," and hence, if written into the law, demonstrate that the legislative intent to appropriate exists.
As the Constitution "does not provide or prescribe 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,‘" an appropriation law
may – according to Philconsa – be "detailed and as broad as Congress wants it to be" for as long as the intent to
appropriate may be gleaned from the same. As held in the case of Guingona, Jr.: 241
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. (Emphases and underscoring supplied)
Likewise, as ruled by the US Supreme Court in State of Nevada v. La Grave: 242
To constitute an appropriation there must be money placed in a fund applicable to the designated purpose. The
word appropriate means to allot, assign, set apart or apply to a particular use or purpose. An appropriation in the
sense of the constitution means the setting apart a portion of the public funds for a public purpose. No particular
form of words is necessary for the purpose, if the intention to appropriate is plainly manifested. (Emphases
supplied)
Thus, based on the foregoing, the Court cannot sustain the argument that the appropriation must be the
"primary and specific" purpose of the law in order for a valid appropriation law to exist. To reiterate, if a legal
provision designates a determinate or determinable amount of money and allocates the same for a particular
public purpose, then the legislative intent to appropriate becomes apparent and, hence, already sufficient to
satisfy the requirement of an "appropriation made by law" under contemplation of the Constitution.
Section 8 of PD 910 pertinently provides:
Section 8. Appropriations. x x x
All fees, revenues and receipts of the Board from any and all sources including receipts from service contracts
and agreements such as application and processing fees, signature bonus, discovery bonus, production bonus; all
money collected from concessionaires, representing unspent work obligations, fines and penalties under the
Petroleum Act of 1949; as well as the government share representing royalties, rentals, production share on
service contracts and similar payments on the exploration, development and exploitation of energy resources,
shall form part of a Special Fund to be used to finance energy resource development and exploitation programs
and projects of the government and for such other purposes as may be hereafter directed by the President.
(Emphases supplied)
Whereas Section 12 of PD 1869, as amended by PD 1993, reads:
Sec. 12. Special Condition of Franchise. — After deducting five (5%) percent as Franchise Tax, the Fifty (50%)
percent share of the Government in the aggregate gross earnings of the Corporation from this Franchise, or 60%
if the aggregate gross earnings be less than ₱150,000,000.00 shall be set aside and shall accrue to the General
Fund to finance the priority infrastructure development projects and to finance the restoration of damaged or
destroyed facilities due to calamities, as may be directed and authorized by the Office of the President of the
Philippines. (Emphases supplied)
Analyzing the legal text vis-à-vis the above-mentioned principles, it may then be concluded that (a) Section 8 of
PD 910, which creates a Special Fund comprised of "all fees, revenues, and receipts of the Energy Development
Board from any and all sources" (a determinable amount) "to be used to finance energy resource development
and exploitation programs and projects of the government and for such other purposes as may be hereafter
directed by the President" (a specified public purpose), and (b) Section 12 of PD 1869, as amended by PD 1993,
which similarly sets aside, "after deducting five (5%) percent as Franchise Tax, the Fifty (50%) percent share of the
Government in the aggregate gross earnings of PAGCOR, or 60%, if the aggregate gross earnings be less than
₱150,000,000.00" (also a determinable amount) "to finance the priority infrastructure development projects and
x x x the restoration of damaged or destroyed facilities due to calamities, as may be directed and authorized by
the Office of the President of the Philippines" (also a specified public purpose), are legal appropriations under
Section 29(1), Article VI of the 1987 Constitution.
In this relation, it is apropos to note that the 2013 PDAF Article cannot be properly deemed as a legal
appropriation under the said constitutional provision precisely because, as earlier stated, it contains post-
enactment measures which effectively create a system of intermediate appropriations. These intermediate
appropriations are the actual appropriations meant for enforcement and since they are made by individual
legislators after the GAA is passed, they occur outside the law. As such, the Court observes that the real
appropriation made under the 2013 PDAF Article is not the ₱24.79 Billion allocated for the entire PDAF, but
rather the post-enactment determinations made by the individual legislators which are, to repeat, occurrences
32
outside of the law. Irrefragably, the 2013 PDAF Article does not constitute an "appropriation made by law" since
it, in its truest sense, only authorizes individual legislators to appropriate in violation of the non-delegability
principle as afore-discussed.
2. Undue Delegation.
On a related matter, petitioners contend that Section 8 of PD 910 constitutes an undue delegation of legislative
power since the phrase "and for such other purposes as may be hereafter directed by the President" gives the
President "unbridled discretion to determine for what purpose the funds will be used." 243 Respondents, on the
other hand, urged the Court to apply the principle of ejusdem generis to the same section and thus, construe the
phrase "and for such other purposes as may be hereafter directed by the President" to refer only to other
purposes related "to energy resource development and exploitation programs and projects of the
government."244
The Court agrees with petitioners‘ submissions.
While the designation of a determinate or determinable amount for a particular public purpose is sufficient for a
legal appropriation to exist, the appropriation law must contain adequate legislative guidelines if the same law
delegates rule-making authority to the Executive245 either for the purpose of (a) filling up the details of the law for
its enforcement, known as supplementary rule-making, or (b) ascertaining facts to bring the law into actual
operation, referred to as contingent rule-making.246 There are two (2) fundamental tests to ensure that the
legislative guidelines for delegated rule-making are indeed adequate. The first test is called the "completeness
test." Case law states that a law is complete when it sets forth therein the policy to be executed, carried out, or
implemented by the delegate. On the other hand, the second test is called the "sufficient standard test."
Jurisprudence holds that a law lays down a sufficient standard when it provides adequate guidelines or
limitations in the law to map out the boundaries of the delegate‘s authority and prevent the delegation from
running riot.247 To be sufficient, the standard must specify the limits of the delegate‘s authority, announce the
legislative policy, and identify the conditions under which it is to be implemented. 248
In view of the foregoing, the Court agrees with petitioners that the phrase "and for such other purposes as may
be hereafter directed by the President" under Section 8 of PD 910 constitutes an undue delegation of legislative
power insofar as it does not lay down a sufficient standard to adequately determine the limits of the President‘s
authority with respect to the purpose for which the Malampaya Funds may be used. As it reads, the said phrase
gives the President wide latitude to use the Malampaya Funds for any other purpose he may direct and, in effect,
allows him to unilaterally appropriate public funds beyond the purview of the law. That the subject phrase may
be confined only to "energy resource development and exploitation programs and projects of the government"
under the principle of ejusdem generis, meaning that the general word or phrase is to be construed to include –
or be restricted to – things akin to, resembling, or of the same kind or class as those specifically mentioned, 249 is
belied by three (3) reasons: first, the phrase "energy resource development and exploitation programs and
projects of the government" states a singular and general class and hence, cannot be treated as a statutory
reference of specific things from which the general phrase "for such other purposes" may be limited; second, the
said phrase also exhausts the class it represents, namely energy development programs of the
government;250 and, third, the Executive department has, in fact, used the Malampaya Funds for non-energy
related purposes under the subject phrase, thereby contradicting respondents‘ own position that it is limited only
to "energy resource development and exploitation programs and projects of the government." 251 Thus, while
Section 8 of PD 910 may have passed the completeness test since the policy of energy development is clearly
deducible from its text, the phrase "and for such other purposes as may be hereafter directed by the President"
under the same provision of law should nonetheless be stricken down as unconstitutional as it lies independently
unfettered by any sufficient standard of the delegating law. This notwithstanding, it must be underscored that the
rest of Section 8, insofar as it allows for the use of the Malampaya Funds "to finance energy resource
development and exploitation programs and projects of the government," remains legally effective and
subsisting. Truth be told, the declared unconstitutionality of the aforementioned phrase is but an assurance that
the Malampaya Funds would be used – as it should be used – only in accordance with the avowed purpose and
intention of PD 910.
As for the Presidential Social Fund, the Court takes judicial notice of the fact that Section 12 of PD 1869 has
already been amended by PD 1993 which thus moots the parties‘ submissions on the same. 252 Nevertheless,
since the amendatory provision may be readily examined under the current parameters of discussion, the Court
proceeds to resolve its constitutionality.
Primarily, Section 12 of PD 1869, as amended by PD 1993, indicates that the Presidential Social Fund may be used
"to first, finance the priority infrastructure development projects and second, to finance the restoration of
damaged or destroyed facilities due to calamities, as may be directed and authorized by the Office of the
President of the Philippines." The Court finds that while the second indicated purpose adequately curtails the
authority of the President to spend the Presidential Social Fund only for restoration purposes which arise from
calamities, the first indicated purpose, however, gives him carte blanche authority to use the same fund for any
infrastructure project he may so determine as a "priority". Verily, the law does not supply a definition of "priority
in frastructure development projects" and hence, leaves the President without any guideline to construe the
same. To note, the delimitation of a project as one of "infrastructure" is too broad of a classification since the said
term could pertain to any kind of facility. This may be deduced from its lexicographic definition as follows: "the
underlying framework of a system, especially public services and facilities (such as highways, schools, bridges,
sewers, and water-systems) needed to support commerce as well as economic and residential
development."253 In fine, the phrase "to finance the priority infrastructure development projects" must be
stricken down as unconstitutional since – similar to the above-assailed provision under Section 8 of PD 910 – it
lies independently unfettered by any sufficient standard of the delegating law. As they are severable, all other
provisions of Section 12 of PD 1869, as amended by PD 1993, remains legally effective and subsisting.
D. Ancillary Prayers. 1.
Petitioners’ Prayer to be Furnished Lists and Detailed Reports.
Aside from seeking the Court to declare the Pork Barrel System unconstitutional – as the Court did so in the
context of its pronouncements made in this Decision – petitioners equally pray that the Executive Secretary
and/or the DBM be ordered to release to the CoA and to the public: (a) "the complete schedule/list of legislators
who have availed of their PDAF and VILP from the years 2003 to 2013, specifying the use of the funds, the project
or activity and the recipient entities or individuals, and all pertinent data thereto" (PDAF Use
Schedule/List);254 and (b) "the use of the Executive‘s lump-sum, discretionary funds, including the proceeds from
the x x x Malampaya Funds and remittances from the PAGCOR x x x from 2003 to 2013, specifying the x x x
32
project or activity and the recipient entities or individuals, and all pertinent data thereto" 255 (Presidential Pork
Use Report). Petitioners‘ prayer is grounded on Section 28, Article II and Section 7, Article III of the 1987
Constitution which read as follows:
ARTICLE II
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full
public disclosure of all its transactions involving public interest.
ARTICLE III Sec. 7.
The right of the people to information on matters of public concern shall be recognized. Access to official records,
and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as
may be provided by law.
The Court denies petitioners‘ submission.
Case law instructs that the proper remedy to invoke the right to information is to file a petition for mandamus. As
explained in the case of Legaspi v. Civil Service Commission: 256
While the manner of examining public records may be subject to reasonable regulation by the government
agency in custody thereof, the duty to disclose the information of public concern, and to afford access to public
records cannot be discretionary on the part of said agencies. Certainly, its performance cannot be made
contingent upon the discretion of such agencies. Otherwise, the enjoyment of the constitutional right may be
rendered nugatory by any whimsical exercise of agency discretion. The constitutional duty, not being
discretionary, its performance may be compelled by a writ of mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us, the public right to be enforced and the
concomitant duty of the State are unequivocably set forth in the Constitution.
The decisive question on the propriety of the issuance of the writ of mandamus in this case is, whether the
information sought by the petitioner is within the ambit of the constitutional guarantee. (Emphases supplied)
Corollarily, in the case of Valmonte v. Belmonte Jr. 257 (Valmonte), it has been clarified that the right to information
does not include the right to compel the preparation of "lists, abstracts, summaries and the like." In the same
case, it was stressed that it is essential that the "applicant has a well -defined, clear and certain legal right to the
thing demanded and that it is the imperative duty of defendant to perform the act required." Hence, without the
foregoing substantiations, the Court cannot grant a particular request for information. The pertinent portions of
Valmonte are hereunder quoted:258
Although citizens are afforded the right to information and, pursuant thereto, are entitled to "access to official
records," the Constitution does not accord them a right to compel custodians of official records to prepare lists,
abstracts, summaries and the like in their desire to acquire information on matters of public concern.
It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a well-defined, clear
and certain legal right to the thing demanded and that it is the imperative duty of defendant to perform the act
required. The corresponding duty of the respondent to perform the required act must be clear and specific Lemi
v. Valencia, G.R. No. L-20768, November 29,1968,126 SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27,
1976, 72 SCRA 443.
The request of the petitioners fails to meet this standard, there being no duty on the part of respondent to
prepare the list requested. (Emphases supplied)
In these cases, aside from the fact that none of the petitions are in the nature of mandamus actions, the Court
finds that petitioners have failed to establish a "a well-defined, clear and certain legal right" to be furnished by
the Executive Secretary and/or the DBM of their requested PDAF Use Schedule/List and Presidential Pork Use
Report. Neither did petitioners assert any law or administrative issuance which would form the bases of the
latter‘s duty to furnish them with the documents requested. While petitioners pray that said information be
equally released to the CoA, it must be pointed out that the CoA has not been impleaded as a party to these
cases nor has it filed any petition before the Court to be allowed access to or to compel the release of any official
document relevant to the conduct of its audit investigations. While the Court recognizes that the information
requested is a matter of significant public concern, however, if only to ensure that the parameters of disclosure
are properly foisted and so as not to unduly hamper the equally important interests of the government, it is
constrained to deny petitioners‘ prayer on this score, without prejudice to a proper mandamus case which they,
or even the CoA, may choose to pursue through a separate petition.
It bears clarification that the Court‘s denial herein should only cover petitioners‘ plea to be furnished with such
schedule/list and report and not in any way deny them, or the general public, access to official documents which
are already existing and of public record. Subject to reasonable regulation and absent any valid statutory
prohibition, access to these documents should not be proscribed. Thus, in Valmonte, while the Court denied the
application for mandamus towards the preparation of the list requested by petitioners therein, it nonetheless
allowed access to the documents sought for by the latter, subject, however, to the custodian‘s reasonable
regulations,viz.:259
In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS, subject to
reasonable regulations that the latter may promulgate relating to the manner and hours of examination, to the
end that damage to or loss of the records may be avoided, that undue interference with the duties of the
custodian of the records may be prevented and that the right of other persons entitled to inspect the records
may be insured Legaspi v. Civil Service Commission, supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387.
The petition, as to the second and third alternative acts sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by petitioners, i.e.,
32
"to furnish petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and
PDP-Laban who were able to secure clean loans immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos."
The Court, therefore, applies the same treatment here.
2. Petitioners’ Prayer to Include Matters in Congressional Deliberations.
Petitioners further seek that the Court "order the inclusion in budgetary deliberations with the Congress of all
presently, off-budget, lump sum, discretionary funds including but not limited to, proceeds from the x x x
Malampaya Fund, remittances from the PAGCOR and the PCSO or the Executive‘s Social Funds." 260
Suffice it to state that the above-stated relief sought by petitioners covers a matter which is generally left to the
prerogative of the political branches of government. Hence, lest the Court itself overreach, it must equally deny
their prayer on this score.
3. Respondents’ Prayer to Lift TRO; Consequential Effects of Decision.
The final issue to be resolved stems from the interpretation accorded by the DBM to the concept of released
funds. In response to the Court‘s September 10, 2013 TRO that enjoined the release of the remaining PDAF
allocated for the year 2013, the DBM issued Circular Letter No. 2013-8 dated September 27, 2013 (DBM Circular
2013-8) which pertinently reads as follows:
3.0 Nonetheless, PDAF projects funded under the FY 2013 GAA, where a Special Allotment Release Order (SARO)
has been issued by the DBM and such SARO has been obligated by the implementing agencies prior to the
issuance of the TRO, may continually be implemented and disbursements thereto effected by the agencies
concerned.
Based on the text of the foregoing, the DBM authorized the continued implementation and disbursement of
PDAF funds as long as they are: first, covered by a SARO; and, second, that said SARO had been obligated by the
implementing agency concerned prior to the issuance of the Court‘s September 10, 2013 TRO.
Petitioners take issue with the foregoing circular, arguing that "the issuance of the SARO does not yet involve the
release of funds under the PDAF, as release is only triggered by the issuance of a Notice of Cash Allocation
[(NCA)]."261 As such, PDAF disbursements, even if covered by an obligated SARO, should remain enjoined.
For their part, respondents espouse that the subject TRO only covers "unreleased and unobligated allotments."
They explain that once a SARO has been issued and obligated by the implementing agency concerned, the PDAF
funds covered by the same are already "beyond the reach of the TRO because they cannot be considered as
‘remaining PDAF.‘" They conclude that this is a reasonable interpretation of the TRO by the DBM. 262
The Court agrees with petitioners in part.
At the outset, it must be observed that the issue of whether or not the Court‘s September 10, 2013 TRO should
be lifted is a matter rendered moot by the present Decision. The unconstitutionality of the 2013 PDAF Article as
declared herein has the consequential effect of converting the temporary injunction into a permanent one.
Hence, from the promulgation of this Decision, the release of the remaining PDAF funds for 2013, among others,
is now permanently enjoined.
The propriety of the DBM‘s interpretation of the concept of "release" must, nevertheless, be resolved as it has a
practical impact on the execution of the current Decision. In particular, the Court must resolve the issue of
whether or not PDAF funds covered by obligated SAROs, at the time this Decision is promulgated, may still be
disbursed following the DBM‘s interpretation in DBM Circular 2013-8.
On this score, the Court agrees with petitioners‘ posturing for the fundamental reason that funds covered by an
obligated SARO are yet to be "released" under legal contemplation. A SARO, as defined by the DBM itself in its
website, is "aspecific authority issued to identified agencies to incur obligations not exceeding a given amount
during a specified period for the purpose indicated. It shall cover expenditures the release of which is subject to
compliance with specific laws or regulations, or is subject to separate approval or clearance by competent
authority."263
Based on this definition, it may be gleaned that a SARO only evinces the existence of an obligation and not the
directive to pay. Practically speaking, the SARO does not have the direct and immediate effect of placing public
funds beyond the control of the disbursing authority. In fact, a SARO may even be withdrawn under certain
circumstances which will prevent the actual release of funds. On the other hand, the actual release of funds is
brought about by the issuance of the NCA,264 which is subsequent to the issuance of a SARO. As may be
determined from the statements of the DBM representative during the Oral Arguments: 265
Justice Bernabe: Is the notice of allocation issued simultaneously with the SARO?
xxxx
Atty. Ruiz: It comes after. The SARO, Your Honor, is only the go signal for the agencies to obligate or to enter into
commitments. The NCA, Your Honor, is already the go signal to the treasury for us to be able to pay or to
liquidate the amounts obligated in the SARO; so it comes after. x x x The NCA, Your Honor, is the go signal for the
MDS for the authorized government-disbursing banks to, therefore, pay the payees depending on the projects or
projects covered by the SARO and the NCA.
Justice Bernabe: Are there instances that SAROs are cancelled or revoked?
Atty. Ruiz: Your Honor, I would like to instead submit that there are instances that the SAROs issued are
withdrawn by the DBM.
Justice Bernabe: They are withdrawn?
Atty. Ruiz: Yes, Your Honor x x x. (Emphases and underscoring supplied)
32
Thus, unless an NCA has been issued, public funds should not be treated as funds which have been "released." In
this respect, therefore, the disbursement of 2013 PDAF funds which are only covered by obligated SAROs, and
without any corresponding NCAs issued, must, at the time of this Decision’s promulgation, be enjoined and
consequently reverted to the unappropriated surplus of the general fund. Verily, in view of the declared
unconstitutionality of the 2013 PDAF Article, the funds appropriated pursuant thereto cannot be disbursed even
though already obligated, else the Court sanctions the dealing of funds coming from an unconstitutional source.
This same pronouncement must be equally applied to (a) the Malampaya Funds which have been obligated but
not released – meaning, those merely covered by a SARO – under the phrase "and for such other purposes as
may be hereafter directed by the President" pursuant to Section 8 of PD 910; and (b) funds sourced from the
Presidential Social Fund under the phrase "to finance the priority infrastructure development projects" pursuant
to Section 12 of PD 1869, as amended by PD 1993, which were altogether declared by the Court as
unconstitutional. However, these funds should not be reverted to the general fund as afore-stated but instead,
respectively remain under the Malampaya Funds and the Presidential Social Fund to be utilized for their
corresponding special purposes not otherwise declared as unconstitutional.
E. Consequential Effects of Decision.
As a final point, it must be stressed that the Court‘s pronouncement anent the unconstitutionality of (a) the 2013
PDAF Article and its Special Provisions, (b) all other Congressional Pork Barrel provisions similar thereto, and (c)
the phrases (1) "and for such other purposes as may be hereafter directed by the President" under Section 8 of
PD 910, and (2) "to finance the priority infrastructure development projects" under Section 12 of PD 1869, as
amended by PD 1993, must only be treated as prospective in effect in view of the operative fact doctrine.
To explain, the operative fact doctrine exhorts the recognition that until the judiciary, in an appropriate case,
declares the invalidity of a certain legislative or executive act, such act is presumed constitutional and thus,
entitled to obedience and respect and should be properly enforced and complied with. As explained in the recent
case of Commissioner of Internal Revenue v. San Roque Power Corporation, 266 the doctrine merely "reflects
awareness that precisely because the judiciary is the governmental organ which has the final say on whether or
not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power
of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness
and justice then, if there be no recognition of what had transpired prior to such adjudication." 267 "In the language
of an American Supreme Court decision: ‘The actual existence of a statute, prior to such a determination of
unconstitutionality, is an operative fact and may have consequences which cannot justly be ignored.‘" 268
For these reasons, this Decision should be heretofore applied prospectively.
Conclusion
The Court renders this Decision to rectify an error which has persisted in the chronicles of our history. In the final
analysis, the Court must strike down the Pork Barrel System as unconstitutional in view of the inherent defects in
the rules within which it operates. To recount, insofar as it has allowed legislators to wield, in varying gradations,
non-oversight, post-enactment authority in vital areas of budget execution, the system has violated the principle
of separation of powers; insofar as it has 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 projects" pursuant to Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993,
determine, it has similarly violated the principle of non-delegability of legislative power ; insofar as it has created which are, at the time this Decision is promulgated, not covered by Notice of Cash Allocations (NCAs) but only by
a system of budgeting wherein items are not textualized into the appropriations bill, it has flouted the prescribed Special Allotment Release Orders (SAROs), whether obligated or not, are hereby ENJOINED. The remaining PDAF
procedure of presentment and, in the process, denied the President the power to veto items ; insofar as it has funds covered by this permanent injunction shall not be disbursed/released but instead reverted to the
diluted the effectiveness of congressional oversight by giving legislators a stake in the affairs of budget execution, unappropriated surplus of the general fund, while the funds under the Malampaya Funds and the Presidential
an aspect of governance which they may be called to monitor and scrutinize, the system has equally impaired Social Fund shall remain therein to be utilized for their respective special purposes not otherwise declared as
public accountability ; insofar as it has authorized legislators, who are national officers, to intervene in affairs of unconstitutional.
purely local nature, despite the existence of capable local institutions, it has likewise subverted genuine local
autonomy ; and again, insofar as it has conferred to the President the power to appropriate funds intended by On the other hand, due to improper recourse and lack of proper substantiation, the Court hereby DENIES
law for energy-related purposes only to other purposes he may deem fit as well as other public funds under the petitioners‘ prayer seeking that the Executive Secretary and/or the Department of Budget and Management be
broad classification of "priority infrastructure development projects," it has once more transgressed the principle ordered to provide the public and the Commission on Audit complete lists/schedules or detailed reports related
of non-delegability. to the availments and utilization of the funds subject of these cases. Petitioners‘ access to official documents
already available and of public record which are related to these funds must, however, not be prohibited but
For as long as this nation adheres to the rule of law, any of the multifarious unconstitutional methods and merely subjected to the custodian‘s reasonable regulations or any valid statutory prohibition on the same. This
mechanisms the Court has herein pointed out should never again be adopted in any system of governance, by denial is without prejudice to a proper mandamus case which they or the Commission on Audit may choose to
any name or form, by any semblance or similarity, by any influence or effect. Disconcerting as it is to think that a pursue through a separate petition.
system so constitutionally unsound has monumentally endured, the Court urges the people and its co-stewards
in government to look forward with the optimism of change and the awareness of the past. At a time of great The Court also DENIES petitioners prayer to order the inclusion of the funds subject of these cases in the
civic unrest and vociferous public debate, the Court fervently hopes that its Decision today, while it may not budgetary deliberations of Congress as the same is a matter left to the prerogative of the political branches of
purge all the wrongs of society nor bring back what has been lost, guides this nation to the path forged by the government.
Constitution so that no one may heretofore detract from its cause nor stray from its course. After all, this is the
Court‘s bounden duty and no other‘s.
Finally, the Court hereby DIRECTS all prosecutorial organs of the government to, within the bounds of reasonable
dispatch, investigate and accordingly prosecute all government officials and/or private individuals for possible
WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in this criminal offenses related to the irregular, improper and/or unlawful disbursement/utilization of all funds under
Decision, the Court hereby declares as UNCONSTITUTIONAL: (a) the entire 2013 PDAF Article; (b) all legal the Pork Barrel System.
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
This Decision is immediately executory but prospective in effect.
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 SO ORDERED.
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.

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 Republic of the Philippines
purposes as may be hereafter directed by the President" pursuant to Section 8 of Presidential Decree No. 910, SUPREME COURT
and (2) the Presidential Social Fund under the phrase "to finance the priority infrastructure development Manila

32
 EN BANC
G.R. No. 119976 September 18, 1995
IMELDA ROMUALDEZ-MARCOS, petitioner,
vs.
COMMISSION ON ELECTIONS and CIRILO ROY MONTEJO, respondents.
KAPUNAN, J.:
A constitutional provision should be construed as to give it effective operation and suppress the mischief at which
it is aimed.1 The 1987 Constitution mandates that an aspirant for election to the House of Representatives be "a
registered voter in the district in which he shall be elected, and a resident thereof for a period of not less than
one year immediately preceding the election." 2 The mischief which this provision — reproduced verbatim from
the 1973 Constitution — seeks to prevent is the possibility of a "stranger or newcomer unacquainted with the
conditions and needs of a community and not identified with the latter, from an elective office to serve that
community."3
Petitioner Imelda Romualdez-Marcos filed her Certificate of Candidacy for the position of Representative of the
First District of Leyte with the Provincial Election Supervisor on March 8, 1995, providing the following
information in item no. 8:4
RESIDENCE IN THE CONSTITUENCY WHERE I SEEK TO BE ELECTED IMMEDIATELY PRECEDING
THE ELECTION: __________ Years and seven Months.
On March 23, 1995, private respondent Cirilo Roy Montejo, the incumbent Representative of the First District of
Leyte and a candidate for the same position, filed a "Petition for Cancellation and Disqualification" 5 with the
Commission on Elections alleging that petitioner did not meet the constitutional requirement for residency. In his
petition, private respondent contended that Mrs. Marcos lacked the Constitution's one year residency
requirement for candidates for the House of Representatives on the evidence of declarations made by her in
Voter Registration Record 94-No. 33497726 and in her Certificate of Candidacy. He prayed that "an order be
issued declaring (petitioner) disqualified and canceling the certificate of candidacy." 7
On March 29, 1995, petitioner filed an Amended/Corrected Certificate of Candidacy, changing the entry "seven"
months to "since childhood" in item no. 8 of the amended certificate. 8 On the same day, the Provincial Election
Supervisor of Leyte informed petitioner that:
[T]his office cannot receive or accept the aforementioned Certificate of Candidacy on the
ground that it is filed out of time, the deadline for the filing of the same having already lapsed
32
on March 20, 1995. The Corrected/Amended Certificate of Candidacy should have been filed
on or before the March 20, 1995 deadline.9
Consequently, petitioner filed the Amended/Corrected Certificate of Candidacy with the COMELEC's Head Office
in Intramuros, Manila on
March 31, 1995. Her Answer to private respondent's petition in SPA No. 95-009 was likewise filed with the head
office on the same day. In said Answer, petitioner averred that the entry of the word "seven" in her original
Certificate of Candidacy was the result of an "honest misinterpretation" 10 which she sought to rectify by adding
the words "since childhood" in her Amended/Corrected Certificate of Candidacy and that "she has always
maintained Tacloban City as her domicile or residence. 11 Impugning respondent's motive in filing the petition
seeking her disqualification, she noted that:
When respondent (petitioner herein) announced that she was intending to register as a voter
in Tacloban City and run for Congress in the First District of Leyte, petitioner immediately
opposed her intended registration by writing a letter stating that "she is not a resident of said
city but of Barangay Olot, Tolosa, Leyte. After respondent had registered as a voter in Tolosa
following completion of her six month actual residence therein, petitioner filed a petition
with the COMELEC to transfer the town of Tolosa from the First District to the Second District
and pursued such a move up to the Supreme Court, his purpose being to remove respondent
as petitioner's opponent in the congressional election in the First District. He also filed a bill,
along with other Leyte Congressmen, seeking the creation of another legislative district to
remove the town of Tolosa out of the First District, to achieve his purpose. However, such bill
did not pass the Senate. Having failed on such moves, petitioner now filed the instant petition
for the same objective, as it is obvious that he is afraid to submit along with respondent for
the judgment and verdict of the electorate of the First District of Leyte in an honest, orderly,
peaceful, free and clean elections on May 8, 1995. 12
On April 24, 1995, the Second Division of the Commission on Elections (COMELEC), by a vote of 2 to 1, 13 came up
with a Resolution 1) finding private respondent's Petition for Disqualification in SPA 95-009 meritorious; 2)
striking off petitioner's Corrected/Amended Certificate of Candidacy of March 31, 1995; and 3) canceling her
original Certificate of Candidacy. 14 Dealing with two primary issues, namely, the validity of amending the original
Certificate of Candidacy after the lapse of the deadline for filing certificates of candidacy, and petitioner's
compliance with the one year residency requirement, the Second Division held:
Respondent raised the affirmative defense in her Answer that the printed word "Seven"
(months) was a result of an "honest misinterpretation or honest mistake" on her part and,
therefore, an amendment should subsequently be allowed. She averred that she thought that
what was asked was her "actual and physical" presence in Tolosa and not residence of origin
or domicile in the First Legislative District, to which she could have responded "since
childhood." In an accompanying affidavit, she stated that her domicile is Tacloban City, a
component of the First District, to which she always intended to return whenever absent and
which she has never abandoned. Furthermore, in her memorandum, she tried to discredit
petitioner's theory of disqualification by alleging that she has been a resident of the First
Legislative District of Leyte since childhood, although she only became a resident of the
Municipality of Tolosa for seven months. She asserts that she has always been a resident of
Tacloban City, a component of the First District, before coming to the Municipality of Tolosa.
Along this point, it is interesting to note that prior to her registration in Tolosa, respondent
announced that she would be registering in Tacloban City so that she can be a candidate for
the District. However, this intention was rebuffed when petitioner wrote the Election Officer
of Tacloban not to allow respondent since she is a resident of Tolosa and not Tacloban. She
never disputed this claim and instead implicitly acceded to it by registering in Tolosa.
This incident belies respondent's claim of "honest misinterpretation or honest mistake."
Besides, the Certificate of Candidacy only asks for RESIDENCE. Since on the basis of her
Answer, she was quite aware of "residence of origin" which she interprets to be Tacloban City,
it is curious why she did not cite Tacloban City in her Certificate of Candidacy. Her explanation
that she thought what was asked was her actual and physical presence in Tolosa is not easy to
believe because there is none in the question that insinuates about Tolosa. In fact, item no. 8
in the Certificate of Candidacy speaks clearly of "Residency in the CONSTITUENCY where I
seek to be elected immediately preceding the election." Thus, the explanation of respondent
fails to be persuasive.
From the foregoing, respondent's defense of an honest mistake or misinterpretation,
therefore, is devoid of merit.
To further buttress respondent's contention that an amendment may be made, she cited the
case of Alialy v. COMELEC (2 SCRA 957). The reliance of respondent on the case of Alialy is
misplaced. The case only applies to the "inconsequential deviations which cannot affect the
result of the election, or deviations from provisions intended primarily to secure timely and
orderly conduct of elections." The Supreme Court in that case considered the amendment
only as a matter of form. But in the instant case, the amendment cannot be considered as a
matter of form or an inconsequential deviation. The change in the number of years of
residence in the place where respondent seeks to be elected is a substantial matter which
determines her qualification as a candidacy, specially those intended to suppress, accurate
material representation in the original certificate which adversely affects the filer. To admit
the amended certificate is to condone the evils brought by the shifting minds of manipulating
candidate, of the detriment of the integrity of the election.
Moreover, to allow respondent to change the seven (7) month period of her residency in
order to prolong it by claiming it was "since childhood" is to allow an untruthfulness to be
committed before this Commission. The arithmetical accuracy of the 7 months residency the
respondent indicated in her certificate of candidacy can be gleaned from her entry in her
Voter's Registration Record accomplished on January 28, 1995 which reflects that she is a
resident of Brgy. Olot, Tolosa, Leyte for 6 months at the time of the said registration (Annex A,
Petition). Said accuracy is further buttressed by her letter to the election officer of San Juan,
Metro Manila, dated August 24, 1994, requesting for the cancellation of her registration in
the Permanent List of Voters thereat so that she can be re-registered or transferred to Brgy.
32
Olot, Tolosa, Leyte. The dates of these three (3) different documents show the respondent's
consistent conviction that she has transferred her residence to Olot, Tolosa, Leyte from Metro
Manila only for such limited period of time, starting in the last week of August 1994 which on
March 8, 1995 will only sum up to 7 months. The Commission, therefore, cannot be
persuaded to believe in the respondent's contention that it was an error.
xxx xxx xxx
Based on these reasons the Amended/Corrected Certificate of Candidacy cannot be admitted
by this Commission.
xxx xxx xxx
Anent the second issue, and based on the foregoing discussion, it is clear that respondent has
not complied with the one year residency requirement of the Constitution.
In election cases, the term "residence" has always been considered as synonymous with
"domicile" which imports not only the intention to reside in a fixed place but also personal
presence in-that place, coupled with conduct indicative of such intention. Domicile denotes a
fixed permanent residence to which when absent for business or pleasure, or for like reasons,
one intends to return. (Perfecto Faypon vs. Eliseo Quirino, 96 Phil 294; Romualdez vs. RTC-
Tacloban, 226 SCRA 408). In respondent's case, when she returned to the Philippines in 1991,
the residence she chose was not Tacloban but San Juan, Metro Manila. Thus, her animus
revertendi is pointed to Metro Manila and not Tacloban.
This Division is aware that her claim that she has been a resident of the First District since
childhood is nothing more than to give her a color of qualification where she is otherwise
constitutionally disqualified. It cannot hold ground in the face of the facts admitted by the
respondent in her affidavit. Except for the time that she studied and worked for some years
after graduation in Tacloban City, she continuously lived in Manila. In 1959, after her husband
was elected Senator, she lived and resided in San Juan, Metro Manila where she was a
registered voter. In 1965, she lived in San Miguel, Manila where she was again a registered
voter. In 1978, she served as member of the Batasang Pambansa as the representative of the
City of Manila and later on served as the Governor of Metro Manila. She could not have
served these positions if she had not been a resident of the City of Manila. Furthermore,
when she filed her certificate of candidacy for the office of the President in 1992, she claimed
to be a resident of San Juan, Metro Manila. As a matter of fact on August 24, 1994,
respondent wrote a letter with the election officer of San Juan, Metro Manila requesting for
the cancellation of her registration in the permanent list of voters that she may be re-
registered or transferred to Barangay Olot, Tolosa, Leyte. These facts manifest that she could
not have been a resident of Tacloban City since childhood up to the time she filed her
certificate of candidacy because she became a resident of many places, including Metro
Manila. This debunks her claim that prior to her residence in Tolosa, Leyte, she was a resident
of the First Legislative District of Leyte since childhood.
 In this case, respondent's conduct reveals her lack of intention to make Tacloban her
domicile. She registered as a voter in different places and on several occasions declared that
she was a resident of Manila. Although she spent her school days in Tacloban, she is
considered to have abandoned such place when she chose to stay and reside in other
different places. In the case of Romualdez vs. RTC (226 SCRA 408) the Court explained how
one acquires a new domicile by choice. There must concur: (1) residence or bodily presence
in the new locality; (2) intention to remain there; and (3) intention to abandon the old
domicile. In other words there must basically be animus manendi with animus non
revertendi. When respondent chose to stay in Ilocos and later on in Manila, coupled with her
intention to stay there by registering as a voter there and expressly declaring that she is a
resident of that place, she is deemed to have abandoned Tacloban City, where she spent her
childhood and school days, as her place of domicile.
Pure intention to reside in that place is not sufficient, there must likewise be conduct
indicative of such intention. Respondent's statements to the effect that she has always
intended to return to Tacloban, without the accompanying conduct to prove that intention, is
not conclusive of her choice of residence. Respondent has not presented any evidence to
show that her conduct, one year prior the election, showed intention to reside in Tacloban.
Worse, what was evident was that prior to her residence in Tolosa, she had been a resident of
Manila.
It is evident from these circumstances that she was not a resident of the First District of Leyte
"since childhood."
To further support the assertion that she could have not been a resident of the First District
of Leyte for more than one year, petitioner correctly pointed out that on January 28, 1995
respondent registered as a voter at precinct No. 18-A of Olot, Tolosa, Leyte. In doing so, she
placed in her Voter Registration Record that she resided in the municipality of Tolosa for a
period of six months. This may be inconsequential as argued by the respondent since it refers
only to her residence in Tolosa, Leyte. But her failure to prove that she was a resident of the
First District of Leyte prior to her residence in Tolosa leaves nothing but a convincing proof
that she had been a resident of the district for six months only. 15
In a Resolution promulgated a day before the May 8, 1995 elections, the COMELEC en banc denied petitioner's
Motion for Reconsideration 16 of the April 24, 1995 Resolution declaring her not qualified to run for the position
of Member of the House of Representatives for the First Legislative District of Leyte. 17 The Resolution tersely
stated:
After deliberating on the Motion for Reconsideration, the Commission RESOLVED to DENY it,
no new substantial matters having been raised therein to warrant re-examination of the
resolution granting the petition for disqualification. 18
On May 11, 1995, the COMELEC issued a Resolution allowing petitioner's proclamation should the results of the
canvass show that she obtained the highest number of votes in the congressional elections in the First District of
32
Leyte. On the same day, however, the COMELEC reversed itself and issued a second Resolution directing that the
proclamation of petitioner be suspended in the event that she obtains the highest number of votes. 19
In a Supplemental Petition dated 25 May 1995, petitioner averred that she was the overwhelming winner of the
elections for the congressional seat in the First District of Leyte held May 8, 1995 based on the canvass
completed by the Provincial Board of Canvassers on May 14, 1995. Petitioner alleged that the canvass showed
that she obtained a total of 70,471 votes compared to the 36,833 votes received by Respondent Montejo. A copy
of said Certificate of Canvass was annexed to the Supplemental Petition.
On account of the Resolutions disqualifying petitioner from running for the congressional seat of the First District
of Leyte and the public respondent's Resolution suspending her proclamation, petitioner comes to this court for
relief.
Petitioner raises several issues in her Original and Supplemental Petitions. The principal issues may be classified
into two general areas:
I. The issue of Petitioner's qualifications
Whether or not petitioner was a resident, for election purposes, of the First District of Leyte
for a period of one year at the time of the May 9, 1995 elections.
II. The Jurisdictional Issue
a) Prior to the elections
Whether or not the COMELEC properly exercised its jurisdiction in disqualifying petitioner
outside the period mandated by the Omnibus Election Code for disqualification cases under
Article 78 of the said Code.
b) After the Elections
Whether or not the House of Representatives Electoral Tribunal assumed exclusive
jurisdiction over the question of petitioner's qualifications after the May 8, 1995 elections.
I. Petitioner's qualification
A perusal of the Resolution of the COMELEC's Second Division reveals a startling confusion in the application of
settled concepts of "Domicile" and "Residence" in election law. While the COMELEC seems to be in agreement
with the general proposition that for the purposes of election law, residence is synonymous with domicile, the
Resolution reveals a tendency to substitute or mistake the concept of domicile for actual residence, a conception
not intended for the purpose of determining a candidate's qualifications for election to the House of
Representatives as required by the 1987 Constitution. As it were, residence, for the purpose of meeting the
qualification for an elective position, has a settled meaning in our jurisdiction.
Article 50 of the Civil Code decrees that "[f]or the exercise of civil rights and the fulfillment of civil obligations, the
domicile of natural persons is their place of habitual residence." In Ong vs. Republic 20 this court took the concept
of domicile to mean an individual's "permanent home", "a place to which, whenever absent for business or for
pleasure, one intends to return, and depends on facts and circumstances in the sense that they disclose
intent." 21Based on the foregoing, domicile includes the twin elements of "the fact of residing or physical
presence in a fixed place" and animus manendi, or the intention of returning there permanently.
Residence, in its ordinary conception, implies the factual relationship of an individual to a certain place. It is the
physical presence of a person in a given area, community or country. The essential distinction between residence
and domicile in law is that residence involves the intent to leave when the purpose for which the resident has
taken up his abode ends. One may seek a place for purposes such as pleasure, business, or health. If a person's
intent be to remain, it becomes his domicile; if his intent is to leave as soon as his purpose is established it is
residence. 22 It is thus, quite perfectly normal for an individual to have different residences in various places.
However, a person can only have a single domicile, unless, for various reasons, he successfully abandons his
domicile in favor of another domicile of choice. In Uytengsu vs. Republic, 23 we laid this distinction quite clearly:
There is a difference between domicile and residence. "Residence" is used to indicate a place
of abode, whether permanent or temporary; "domicile" denotes a fixed permanent residence
to which, when absent, one has the intention of returning. A man may have a residence in
one place and a domicile in another. Residence is not domicile, but domicile is residence
coupled with the intention to remain for an unlimited time. A man can have but one domicile
for the same purpose at any time, but he may have numerous places of residence. His place
of residence is generally his place of domicile, but it is not by any means necessarily so since
no length of residence without intention of remaining will constitute domicile.
For political purposes the concepts of residence and domicile are dictated by the peculiar criteria of political laws.
As these concepts have evolved in our election law, what has clearly and unequivocally emerged is the fact that
residence for election purposes is used synonymously with domicile.
In Nuval vs. Guray, 24 the Court held that "the term residence. . . is synonymous with domicile which imports not
only intention to reside in a fixed place, but also personal presence in that place, coupled with conduct indicative
of such intention." 25 Larena vs. Teves 26 reiterated the same doctrine in a case involving the qualifications of the
respondent therein to the post of Municipal President of Dumaguete, Negros Oriental. Faypon vs. Quirino, 27 held
that the absence from residence to pursue studies or practice a profession or registration as a voter other than in
the place where one is elected does not constitute loss of residence. 28 So settled is the concept (of domicile) in
our election law that in these and other election law cases, this Court has stated that the mere absence of an
individual from his permanent residence without the intention to abandon it does not result in a loss or change
of domicile.
The deliberations of the 1987 Constitution on the residence qualification for certain elective positions have
placed beyond doubt the principle that when the Constitution speaks of "residence" in election law, it actually
means only "domicile" to wit:
32
Mr. Nolledo: With respect to Section 5, I remember that in the 1971 Constitutional
Convention, there was an attempt to require residence in the place not less than one year
immediately preceding the day of the elections. So my question is: What is the Committee's
concept of residence of a candidate for the legislature? Is it actual residence or is it the
concept of domicile or constructive residence?
Mr. Davide: Madame President, insofar as the regular members of the National Assembly are
concerned, the proposed section merely provides, among others, "and a resident thereof",
that is, in the district for a period of not less than one year preceding the day of the election.
This was in effect lifted from the 1973 Constitution, the interpretation given to it was
domicile. 29
xxx xxx xxx
Mrs. Rosario Braid: The next question is on Section 7, page 2. I think Commissioner Nolledo
has raised the same point that "resident" has been interpreted at times as a matter of
intention rather than actual residence.
Mr. De los Reyes: Domicile.
Ms. Rosario Braid: Yes, So, would the gentleman consider at the proper time to go back to
actual residence rather than mere intention to reside?
Mr. De los Reyes: But we might encounter some difficulty especially considering that a
provision in the Constitution in the Article on Suffrage says that Filipinos living abroad may
vote as enacted by law. So, we have to stick to the original concept that it should be by
domicile and not physical residence. 30
In Co vs. Electoral Tribunal of the House of Representatives, 31 this Court concluded that the framers of the 1987
Constitution obviously adhered to the definition given to the term residence in election law, regarding it as having
the same meaning as domicile. 32
In the light of the principles just discussed, has petitioner Imelda Romualdez Marcos satisfied the residency
requirement mandated by Article VI, Sec. 6 of the 1987 Constitution? Of what significance is the questioned entry
in petitioner's Certificate of Candidacy stating her residence in the First Legislative District of Leyte as seven (7)
months?
It is the fact of residence, not a statement in a certificate of candidacy which ought to be decisive in determining
whether or not and individual has satisfied the constitution's residency qualification requirement. The said
statement becomes material only when there is or appears to be a deliberate attempt to mislead, misinform, or
hide a fact which would otherwise render a candidate ineligible. It would be plainly ridiculous for a candidate to
deliberately and knowingly make a statement in a certificate of candidacy which would lead to his or her
disqualification.
It stands to reason therefore, that petitioner merely committed an honest mistake in jotting the word "seven" in
the space provided for the residency qualification requirement. The circumstances leading to her filing the
questioned entry obviously resulted in the subsequent confusion which prompted petitioner to write down the
period of her actual stay in Tolosa, Leyte instead of her period of residence in the First district, which was "since
childhood" in the space provided. These circumstances and events are amply detailed in the COMELEC's Second
Division's questioned resolution, albeit with a different interpretation. For instance, when herein petitioner
announced that she would be registering in Tacloban City to make her eligible to run in the First District, private
respondent Montejo opposed the same, claiming that petitioner was a resident of Tolosa, not Tacloban City.
Petitioner then registered in her place of actual residence in the First District, which is Tolosa, Leyte, a fact which
she subsequently noted down in her Certificate of Candidacy. A close look at said certificate would reveal the
possible source of the confusion: the entry for residence (Item No. 7) is followed immediately by the entry for
residence in the constituency where a candidate seeks election thus:
7. RESIDENCE (complete Address): Brgy. Olot, Tolosa, Leyte
POST OFFICE ADDRESS FOR ELECTION PURPOSES: Brgy. Olot, Tolosa, Leyte
8. RESIDENCE IN THE CONSTITUENCY WHERE I SEEK TO
BE ELECTED IMMEDIATELY PRECEDING THE ELECTION:_________ Years and Seven Months.
Having been forced by private respondent to register in her place of actual residence in Leyte instead of
petitioner's claimed domicile, it appears that petitioner had jotted down her period of stay in her legal residence
or domicile. The juxtaposition of entries in Item 7 and Item 8 — the first requiring actual residence and the
second requiring domicile — coupled with the circumstances surrounding petitioner's registration as a voter in
Tolosa obviously led to her writing down an unintended entry for which she could be disqualified. This honest
mistake should not, however, be allowed to negate the fact of residence in the First District if such fact were
established by means more convincing than a mere entry on a piece of paper.
We now proceed to the matter of petitioner's domicile.
In support of its asseveration that petitioner's domicile could not possibly be in the First District of Leyte, the
Second Division of the COMELEC, in its assailed Resolution of April 24,1995 maintains that "except for the time
when (petitioner) studied and worked for some years after graduation in Tacloban City, she continuously lived in
Manila." The Resolution additionally cites certain facts as indicative of the fact that petitioner's domicile ought to
be any place where she lived in the last few decades except Tacloban, Leyte. First, according to the Resolution,
petitioner, in 1959, resided in San Juan, Metro Manila where she was also registered voter. Then, in 1965,
following the election of her husband to the Philippine presidency, she lived in San Miguel, Manila where she as a
voter. In 1978 and thereafter, she served as a member of the Batasang Pambansa and Governor of Metro Manila.
"She could not, have served these positions if she had not been a resident of Metro Manila," the COMELEC
stressed. Here is where the confusion lies.
We have stated, many times in the past, that an individual does not lose his domicile even if he has lived and
maintained residences in different places. Residence, it bears repeating, implies a factual relationship to a given
place for various purposes. The absence from legal residence or domicile to pursue a profession, to study or to do
32
other things of a temporary or semi-permanent nature does not constitute loss of residence. Thus, the assertion
by the COMELEC that "she could not have been a resident of Tacloban City since childhood up to the time she
filed her certificate of candidacy because she became a resident of many places" flies in the face of settled
jurisprudence in which this Court carefully made distinctions between (actual) residence and domicile for
election law purposes. In Larena vs. Teves, 33 supra, we stressed:
[T]his court is of the opinion and so holds that a person who has his own house wherein he
lives with his family in a municipality without having ever had the intention of abandoning it,
and without having lived either alone or with his family in another municipality, has his
residence in the former municipality, notwithstanding his having registered as an elector in
the other municipality in question and having been a candidate for various insular and
provincial positions, stating every time that he is a resident of the latter municipality.
More significantly, in Faypon vs. Quirino, 34 We explained that:
A citizen may leave the place of his birth to look for "greener pastures," as the saying goes, to
improve his lot, and that, of course includes study in other places, practice of his avocation,
or engaging in business. When an election is to be held, the citizen who left his birthplace to
improve his lot may desire to return to his native town to cast his ballot but for professional
or business reasons, or for any other reason, he may not absent himself from his professional
or business activities; so there he registers himself as voter as he has the qualifications to be
one and is not willing to give up or lose the opportunity to choose the officials who are to run
the government especially in national elections. Despite such registration, the animus
revertendi to his home, to his domicile or residence of origin has not forsaken him. This may
be the explanation why the registration of a voter in a place other than his residence of origin
has not been deemed sufficient to constitute abandonment or loss of such residence. It finds
justification in the natural desire and longing of every person to return to his place of birth.
This strong feeling of attachment to the place of one's birth must be overcome by positive
proof of abandonment for another.
From the foregoing, it can be concluded that in its above-cited statements supporting its proposition that
petitioner was ineligible to run for the position of Representative of the First District of Leyte, the COMELEC was
obviously referring to petitioner's various places of (actual) residence, not her domicile. In doing so, it not only
ignored settled jurisprudence on residence in election law and the deliberations of the constitutional commission
but also the provisions of the Omnibus Election Code (B.P. 881). 35
What is undeniable, however, are the following set of facts which establish the fact of petitioner's domicile,
which we lift verbatim from the COMELEC's Second Division's assailed Resolution: 36
In or about 1938 when respondent was a little over 8 years old, she established her domicile
in Tacloban, Leyte (Tacloban City). She studied in the Holy Infant Academy in Tacloban from
1938 to 1949 when she graduated from high school. She pursued her college studies in St.
Paul's College, now Divine Word University in Tacloban, where she earned her degree in
Education. Thereafter, she taught in the Leyte Chinese School, still in Tacloban City. In 1952
 she went to Manila to work with her cousin, the late speaker Daniel Z. Romualdez in his office
in the House of Representatives. In 1954, she married ex-President Ferdinand E. Marcos when
he was still a congressman of Ilocos Norte and registered there as a voter. When her husband
was elected Senator of the Republic in 1959, she and her husband lived together in San Juan,
Rizal where she registered as a voter. In 1965, when her husband was elected President of the
Republic of the Philippines, she lived with him in Malacanang Palace and registered as a voter
in San Miguel, Manila.
[I]n February 1986 (she claimed that) she and her family were abducted and kidnapped to
Honolulu, Hawaii. In November 1991, she came home to Manila. In 1992, respondent ran for
election as President of the Philippines and filed her Certificate of Candidacy wherein she
indicated that she is a resident and registered voter of San Juan, Metro Manila.
Applying the principles discussed to the facts found by COMELEC, what is inescapable is that petitioner held
various residences for different purposes during the last four decades. None of these purposes unequivocally
point to an intention to abandon her domicile of origin in Tacloban, Leyte. Moreover, while petitioner was born in
Manila, as a minor she naturally followed the domicile of her parents. She grew up in Tacloban, reached her
adulthood there and eventually established residence in different parts of the country for various reasons. Even
during her husband's presidency, at the height of the Marcos Regime's powers, petitioner kept her close ties to
her domicile of origin by establishing residences in Tacloban, celebrating her birthdays and other important
personal milestones in her home province, instituting well-publicized projects for the benefit of her province and
hometown, and establishing a political power base where her siblings and close relatives held positions of power
either through the ballot or by appointment, always with either her influence or consent. These well-publicized
ties to her domicile of origin are part of the history and lore of the quarter century of Marcos power in our
country. Either they were entirely ignored in the COMELEC'S Resolutions, or the majority of the COMELEC did not
know what the rest of the country always knew: the fact of petitioner's domicile in Tacloban, Leyte.
Private respondent in his Comment, contends that Tacloban was not petitioner's domicile of origin because she
did not live there until she was eight years old. He avers that after leaving the place in 1952, she "abandoned her
residency (sic) therein for many years and . . . (could not) re-establish her domicile in said place by merely
expressing her intention to live there again." We do not agree.
First, minor follows the domicile of his parents. As domicile, once acquired is retained until a new one is gained, it
follows that in spite of the fact of petitioner's being born in Manila, Tacloban, Leyte was her domicile of origin by
operation of law. This domicile was not established only when her father brought his family back to Leyte
contrary to private respondent's averments.
Second, domicile of origin is not easily lost. To successfully effect a change of domicile, one must demonstrate: 37
1. An actual removal or an actual change of domicile;
2. A bona fide intention of abandoning the former place of residence and establishing a new
one; and
32
3. Acts which correspond with the purpose.
In the absence of clear and positive proof based on these criteria, the residence of origin should be deemed to
continue. Only with evidence showing concurrence of all three requirements can the presumption of continuity
or residence be rebutted, for a change of residence requires an actual and deliberate abandonment, and one
cannot have two legal residences at the same time. 38 In the case at bench, the evidence adduced by private
respondent plainly lacks the degree of persuasiveness required to convince this court that an abandonment of
domicile of origin in favor of a domicile of choice indeed occurred. To effect an abandonment requires the
voluntary act of relinquishing petitioner's former domicile with an intent to supplant the former domicile with
one of her own choosing (domicilium voluntarium).
In this connection, it cannot be correctly argued that petitioner lost her domicile of origin by operation of law as
a result of her marriage to the late President Ferdinand E. Marcos in 1952. For there is a clearly established
distinction between the Civil Code concepts of "domicile" and "residence." 39 The presumption that the wife
automatically gains the husband's domicile by operation of law upon marriage cannot be inferred from the use of
the term "residence" in Article 110 of the Civil Code because the Civil Code is one area where the two concepts
are well delineated. Dr. Arturo Tolentino, writing on this specific area explains:
In the Civil Code, there is an obvious difference between domicile and residence. Both terms
imply relations between a person and a place; but in residence, the relation is one of fact
while in domicile it is legal or juridical, independent of the necessity of physical presence. 40
Article 110 of the Civil Code provides:
Art. 110. — The husband shall fix the residence of the family. But the court may exempt the
wife from living with the husband if he should live abroad unless in the service of the
Republic.
A survey of jurisprudence relating to Article 110 or to the concepts of domicile or residence as they affect the
female spouse upon marriage yields nothing which would suggest that the female spouse automatically loses her
domicile of origin in favor of the husband's choice of residence upon marriage.
Article 110 is a virtual restatement of Article 58 of the Spanish Civil Code of 1889 which states:
La mujer esta obligada a seguir a su marido donde quiera que fije su residencia. Los
Tribunales, sin embargo, podran con justa causa eximirla de esta obligacion cuando el marido
transende su residencia a ultramar o' a pais extranjero.
Note the use of the phrase "donde quiera su fije de residencia" in the aforequoted article, which means wherever
(the husband) wishes to establish residence. This part of the article clearly contemplates only actual residence
because it refers to a positive act of fixing a family home or residence. Moreover, this interpretation is further
strengthened by the phrase "cuando el marido translade su residencia" in the same provision which means,
"when the husband shall transfer his residence," referring to another positive act of relocating the family to
another home or place of actual residence. The article obviously cannot be understood to refer to domicile which
is a fixed,
fairly-permanent concept when it plainly connotes the possibility of transferring from one place to another not
only once, but as often as the husband may deem fit to move his family, a circumstance more consistent with the
concept of actual residence.
The right of the husband to fix the actual residence is in harmony with the intention of the law to strengthen and
unify the family, recognizing the fact that the husband and the wife bring into the marriage different domiciles (of
origin). This difference could, for the sake of family unity, be reconciled only by allowing the husband to fix a
single place of actual residence.
Very significantly, Article 110 of the Civil Code is found under Title V under the heading: RIGHTS AND
OBLIGATIONS BETWEEN HUSBAND AND WIFE. Immediately preceding Article 110 is Article 109 which obliges the
husband and wife to live together, thus:
Art. 109. — The husband and wife are obligated to live together, observe mutual respect and
fidelity and render mutual help and support.
The duty to live together can only be fulfilled if the husband and wife are physically together. This takes into
account the situations where the couple has many residences (as in the case of the petitioner). If the husband
has to stay in or transfer to any one of their residences, the wife should necessarily be with him in order that they
may "live together." Hence, it is illogical to conclude that Art. 110 refers to "domicile" and not to "residence."
Otherwise, we shall be faced with a situation where the wife is left in the domicile while the husband, for
professional or other reasons, stays in one of their (various) residences. As Dr. Tolentino further explains:
Residence and Domicile — Whether the word "residence" as used with reference to
particular matters is synonymous with "domicile" is a question of some difficulty, and the
ultimate decision must be made from a consideration of the purpose and intent with which
the word is used. Sometimes they are used synonymously, at other times they are
distinguished from one another.
xxx xxx xxx
Residence in the civil law is a material fact, referring to the physical presence of a person in a
place. A person can have two or more residences, such as a country residence and a city
residence. Residence is acquired by living in place; on the other hand, domicile can exist
without actually living in the place. The important thing for domicile is that, once residence
has been established in one place, there be an intention to stay there permanently, even if
residence is also established in some other
place. 41
In fact, even the matter of a common residence between the husband and the wife during the marriage is not an
iron-clad principle; In cases applying the Civil Code on the question of a common matrimonial residence, our
jurisprudence has recognized certain situations 42 where the spouses could not be compelled to live with each
32
other such that the wife is either allowed to maintain a residence different from that of her husband or, for
obviously practical reasons, revert to her original domicile (apart from being allowed to opt for a new one). In De
la Vina vs.Villareal 43 this Court held that "[a] married woman may acquire a residence or domicile separate from
that of her husband during the existence of the marriage where the husband has given cause for divorce." 44 Note
that the Court allowed the wife either to obtain new residence or to choose a new domicile in such an event. In
instances where the wife actually opts, .under the Civil Code, to live separately from her husband either by taking
new residence or reverting to her domicile of origin, the Court has held that the wife could not be compelled to
live with her husband on pain of contempt. In Arroyo vs. Vasques de Arroyo 45 the Court held that:
Upon examination of the authorities, we are convinced that it is not within the province of
the courts of this country to attempt to compel one of the spouses to cohabit with, and
render conjugal rights to, the other. Of course where the property rights of one of the pair are
invaded, an action for restitution of such rights can be maintained. But we are disinclined to
sanction the doctrine that an order, enforcible (sic) by process of contempt, may be entered
to compel the restitution of the purely personal right of consortium. At best such an order
can be effective for no other purpose than to compel the spouses to live under the same
roof; and he experience of those countries where the courts of justice have assumed to
compel the cohabitation of married people shows that the policy of the practice is extremely
questionable. Thus in England, formerly the Ecclesiastical Court entertained suits for the
restitution of conjugal rights at the instance of either husband or wife; and if the facts were
found to warrant it, that court would make a mandatory decree, enforceable by process of
contempt in case of disobedience, requiring the delinquent party to live with the other and
render conjugal rights. Yet this practice was sometimes criticized even by the judges who felt
bound to enforce such orders, and in Weldon v. Weldon (9 P.D. 52), decided in 1883, Sir James
Hannen, President in the Probate, Divorce and Admiralty Division of the High Court of Justice,
expressed his regret that the English law on the subject was not the same as that which
prevailed in Scotland, where a decree of adherence, equivalent to the decree for the
restitution of conjugal rights in England, could be obtained by the injured spouse, but could
not be enforced by imprisonment. Accordingly, in obedience to the growing sentiment
against the practice, the Matrimonial Causes Act (1884) abolished the remedy of
imprisonment; though a decree for the restitution of conjugal rights can still be procured, and
in case of disobedience may serve in appropriate cases as the basis of an order for the
periodical payment of a stipend in the character of alimony.
In the voluminous jurisprudence of the United States, only one court, so far as we can
discover, has ever attempted to make a preemptory order requiring one of the spouses to live
with the other; and that was in a case where a wife was ordered to follow and live with her
husband, who had changed his domicile to the City of New Orleans. The decision referred to
(Bahn v. Darby, 36 La. Ann., 70) was based on a provision of the Civil Code of Louisiana similar
to article 56 of the Spanish Civil Code. It was decided many years ago, and the doctrine
evidently has not been fruitful even in the State of Louisiana. In other states of the American
Union the idea of enforcing cohabitation by process of contempt is rejected. (21 Cyc., 1148).
In a decision of January 2, 1909, the Supreme Court of Spain appears to have affirmed an
order of the Audiencia Territorial de Valladolid requiring a wife to return to the marital
 domicile, and in the alternative, upon her failure to do so, to make a particular disposition of
certain money and effects then in her possession and to deliver to her husband, as
administrator of the ganancial property, all income, rents, and interest which might accrue to
her from the property which she had brought to the marriage. (113 Jur. Civ., pp. 1, 11) But it
does not appear that this order for the return of the wife to the marital domicile was
sanctioned by any other penalty than the consequences that would be visited upon her in
respect to the use and control of her property; and it does not appear that her disobedience
to that order would necessarily have been followed by imprisonment for contempt.
domicile upon the death of her husband absent a positive act of selecting a new one where situations exist
within the subsistence of the marriage itself where the wife gains a domicile different from her husband.
In the light of all the principles relating to residence and domicile enunciated by this court up to this point, we are
persuaded that the facts established by the parties weigh heavily in favor of a conclusion supporting petitioner's
claim of legal residence or domicile in the First District of Leyte.
II. The jurisdictional issue

Parenthetically when Petitioner was married to then Congressman Marcos, in 1954, petitioner was obliged — by
Petitioner alleges that the jurisdiction of the COMELEC had already lapsed considering that the assailed
virtue of Article 110 of the Civil Code — to follow her husband's actual place of residence fixed by him. The
resolutions were rendered on April 24, 1995, fourteen (14) days before the election in violation of Section 78 of
problem here is that at that time, Mr. Marcos had several places of residence, among which were San Juan, Rizal
the Omnibus Election Code. 48 Moreover, petitioner contends that it is the House of Representatives Electoral
and Batac, Ilocos Norte. There is no showing which of these places Mr. Marcos did fix as his family's residence.
Tribunal and not the COMELEC which has jurisdiction over the election of members of the House of
But assuming that Mr. Marcos had fixed any of these places as the conjugal residence, what petitioner gained
Representatives in accordance with Article VI Sec. 17 of the Constitution. This is untenable.
upon marriage was actual residence. She did not lose her domicile of origin.

On the other hand, the common law concept of "matrimonial domicile" appears to have been incorporated, as a
result of our jurisprudential experiences after the drafting of the Civil Code of 1950, into the New Family Code. To
underscore the difference between the intentions of the Civil Code and the Family Code drafters, the term
residence has been supplanted by the term domicile in an entirely new provision (Art. 69) distinctly different in
meaning and spirit from that found in Article 110. The provision recognizes revolutionary changes in the concept
of women's rights in the intervening years by making the choice of domicile a product of mutual agreement
between the spouses. 46
Without as much belaboring the point, the term residence may mean one thing in civil law (or under the Civil
Code) and quite another thing in political law. What stands clear is that insofar as the Civil Code is concerned-
affecting the rights and obligations of husband and wife — the term residence should only be interpreted to
mean "actual residence." The inescapable conclusion derived from this unambiguous civil law delineation
therefore, is that when petitioner married the former President in 1954, she kept her domicile of origin and
merely gained a new home, not a domicilium necessarium.
Even assuming for the sake of argument that petitioner gained a new "domicile" after her marriage and only
acquired a right to choose a new one after her husband died, petitioner's acts following her return to the country
clearly indicate that she not only impliedly but expressly chose her domicile of origin (assuming this was lost by
operation of law) as her domicile. This "choice" was unequivocally expressed in her letters to the Chairman of the
PCGG when petitioner sought the PCGG's permission to "rehabilitate (our) ancestral house in Tacloban and Farm
in Olot, Leyte. . . to make them livable for the Marcos family to have a home in our homeland." 47 Furthermore,
petitioner obtained her residence certificate in 1992 in Tacloban, Leyte, while living in her brother's house, an act
which supports the domiciliary intention clearly manifested in her letters to the PCGG Chairman. She could not
have gone straight to her home in San Juan, as it was in a state of disrepair, having been previously looted by
vandals. Her "homes" and "residences" following her arrival in various parts of Metro Manila merely qualified as
temporary or "actual residences," not domicile. Moreover, and proceeding from our discussion pointing out
specific situations where the female spouse either reverts to her domicile of origin or chooses a new one during
the subsistence of the marriage, it would be highly illogical for us to assume that she cannot regain her original
It is a settled doctrine that a statute requiring rendition of judgment within a specified time is generally construed
to be merely directory, 49 "so that non-compliance with them does not invalidate the judgment on the theory that
if the statute had intended such result it would have clearly indicated it." 50 The difference between a mandatory
and a directory provision is often made on grounds of necessity. Adopting the same view held by several
American authorities, this court in Marcelino vs. Cruz held that: 51
The difference between a mandatory and directory provision is often determined on grounds
of expediency, the reason being that less injury results to the general public by disregarding
than enforcing the letter of the law.
In Trapp v. Mc Cormick, a case calling for the interpretation of a statute containing a
limitation of thirty (30) days within which a decree may be entered without the consent of
counsel, it was held that "the statutory provisions which may be thus departed from with
impunity, without affecting the validity of statutory proceedings, are usually those which
relate to the mode or time of doing that which is essential to effect the aim and purpose of
the Legislature or some incident of the essential act." Thus, in said case, the statute under
examination was construed merely to be directory.
The mischief in petitioner's contending that the COMELEC should have abstained from rendering a decision after
the period stated in the Omnibus Election Code because it lacked jurisdiction, lies in the fact that our courts and
other quasi-judicial bodies would then refuse to render judgments merely on the ground of having failed to reach
a decision within a given or prescribed period.
In any event, with the enactment of Sections 6 and 7 of R.A. 6646 in relation to Section 78 of B.P. 881, 52 it is
evident that the respondent Commission does not lose jurisdiction to hear and decide a pending disqualification
case under Section 78 of B.P. 881 even after the elections.

32
As to the House of Representatives Electoral Tribunal's supposed assumption of jurisdiction over the issue of
petitioner's qualifications after the May 8, 1995 elections, suffice it to say that HRET's jurisdiction as the sole
judge of all contests relating to the elections, returns and qualifications of members of Congress begins only after
a candidate has become a member of the House of Representatives. 53 Petitioner not being a member of the
House of Representatives, it is obvious that the HRET at this point has no jurisdiction over the question.

It would be an abdication of many of the ideals enshrined in the 1987 Constitution for us to either to ignore or
deliberately make distinctions in law solely on the basis of the personality of a petitioner in a case. Obviously a
distinction was made on such a ground here. Surely, many established principles of law, even of election laws
were flouted for the sake perpetuating power during the pre-EDSA regime. We renege on these sacred ideals,
including the meaning and spirit of EDSA ourselves bending established principles of principles of law to deny an
individual what he or she justly deserves in law. Moreover, in doing so, we condemn ourselves to repeat the
mistakes of the past.

WHEREFORE, having determined that petitioner possesses the necessary residence qualifications to run for a seat
in the House of Representatives in the First District of Leyte, the COMELEC's questioned Resolutions dated April
24, May 7, May 11, and May 25, 1995 are hereby SET ASIDE. Respondent COMELEC is hereby directed to order
the Provincial Board of Canvassers to proclaim petitioner as the duly elected Representative of the First District of
Leyte.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 189793 April 7, 2010

SENATOR BENIGNO SIMEON C. AQUINO III and MAYOR JESSE ROBREDO, Petitioners,
vs.
COMMISSION ON ELECTIONS represented by its Chairman JOSE A.R. MELO and its Commissioners, RENE V.

32
SARMIENTO, NICODEMO T. FERRER, LUCENITO N. TAGLE, ARMANDO VELASCO, ELIAS R. YUSOPH AND Baao Bula
GREGORIO LARRAZABAL, Respondents. Balatan Nabua
Bato
DECISION

Following the enactment of Republic Act No. 9716, the first and second districts of Camarines Sur were
PEREZ, J.: reconfigured in order to create an additional legislative district for the province. Hence, the first district
municipalities of Libmanan, Minalabac, Pamplona, Pasacao, and San Fernando were combined with the second
This case comes before this Court by way of a Petition for Certiorari and Prohibition under Rule 65 of the Rules of district municipalities of Milaor and Gainza to form a new second legislative district. The following
Court. In this original action, petitioners Senator Benigno Simeon C. Aquino III and Mayor Jesse Robredo, as table3 illustrates the reapportionment made by Republic Act No. 9716:
public officers, taxpayers and citizens, seek the nullification as unconstitutional of Republic Act No. 9716, entitled
"An Act Reapportioning the Composition of the First (1st) and Second (2nd) Legislative Districts in the Province of
Camarines Sur and Thereby Creating a New Legislative District From Such Reapportionment." Petitioners District Municipalities/Cities Population
consequently pray that the respondent Commission on Elections be restrained from making any issuances and
1st District Del Gallego 176,383
from taking any steps relative to the implementation of Republic Act No. 9716.
Ragay
Lupi
Republic Act No. 9716 originated from House Bill No. 4264, and was signed into law by President Gloria Sipocot
Macapagal Arroyo on 12 October 2009. It took effect on 31 October 2009, or fifteen (15) days following its Cabusao
publication in the Manila Standard, a newspaper of general circulation. 1 In substance, the said law created an
additional legislative district for the Province of Camarines Sur by reconfiguring the existing first and second 2nd District Libmanan San Fernando 276,777
legislative districts of the province. Minalabac Gainza
Pamplona Milaor
Pasacao
Prior to Republic Act No. 9716, the Province of Camarines Sur was estimated to have a population of
1,693,821,2distributed among four (4) legislative districts in this wise: 3rd District (formerly 2nd District) Naga Camaligan 439,043
Pili Magarao
District Municipalities/Cities Population Ocampo Bombon
Canaman Calabanga
1st District Del Gallego Libmanan 417,304
Ragay Minalabac 4th District (formerly 3rd District) Caramoan Sangay 372,548
Lupi Pamplona Garchitorena San Jose
Sipocot Pasacao Goa Tigaon
Cabusao San Fernando Lagonoy Tinamba
Presentacion Siruma
2nd District Gainza Canaman 474,899
Milaor Camaligan 5th District (formerly 4th District) Iriga Buhi 429,070
Naga Magarao Baao Bula
Pili Bombon Balatan Nabua
Ocampo Calabanga Bato

3rd District Caramoan Sangay 372,548

Republic Act No. 9716 is a well-milled legislation. The factual recitals by both parties of the origins of the bill that
Garchitorena San Jose
became the law show that, from the filing of House Bill No. 4264 until its approval by the Senate on a vote of
Goa Tigaon
thirteen (13) in favor and two (2) against, the process progressed step by step, marked by public hearings on the
Lagonoy Tinamba
sentiments and position of the local officials of Camarines Sur on the creation of a new congressional district, as
Presentacion Siruma
well as argumentation and debate on the issue, now before us, concerning the stand of the oppositors of the bill
4th District Iriga Buhi 429,070 that a population of at least 250,000 is required by the Constitution for such new district. 4

32
Petitioner Aquino III was one of two senators who voted against the approval of the Bill by the Senate. His co-
petitioner, Robredo, is the Mayor of Naga City, which was a part of the former second district from which the
municipalities of Gainza and Milaor were taken for inclusion in the new second district. No other local executive
joined the two; neither did the representatives of the former third and fourth districts of the province.
Petitioners contend that the reapportionment introduced by Republic Act No. 9716, runs afoul of the explicit
constitutional standard that requires a minimum population of two hundred fifty thousand (250,000) for the
creation of a legislative district.5 The petitioners claim that the reconfiguration by Republic Act No. 9716 of the
first and second districts of Camarines Sur is unconstitutional, because the proposed first district will end up with
a population of less than 250,000 or only 176,383.
Petitioners rely on Section 5(3), Article VI of the 1987 Constitution as basis for the cited 250,000 minimum
population standard. 6 The provision reads:
Article VI
Section 5. (1) x x x x
(2) x x x x
(3) Each legislative district shall comprise, as far as practicable, contiguous, compact, and adjacent
territory. Each city with a population of at least two hundred fifty thousand, or each province, shall
have at least one representative.
(4) x x x x (Emphasis supplied).
The petitioners posit that the 250,000 figure appearing in the above-cited provision is the minimum population
requirement for the creation of a legislative district. 7 The petitioners theorize that, save in the case of a newly
created province, each legislative district created by Congress must be supported by a minimum population of at
least 250,000 in order to be valid.8 Under this view, existing legislative districts may be reapportioned and
severed to form new districts, provided each resulting district will represent a population of at least 250,000. On
the other hand, if the reapportionment would result in the creation of a legislative seat representing a populace
of less than 250,000 inhabitants, the reapportionment must be stricken down as invalid for non-compliance with
the minimum population requirement.
In support of their theory, the petitioners point to what they claim is the intent of the framers of the 1987
Constitution to adopt a population minimum of 250,000 in the creation of additional legislative seats. 9 The
petitioners argue that when the Constitutional Commission fixed the original number of district seats in the
House of Representatives to two hundred (200), they took into account the projected national population of fifty
five million (55,000,000) for the year 1986. 10 According to the petitioners, 55 million people represented by 200
district representatives translates to roughly 250,000 people for every one (1) representative. 11 Thus, the 250,000
population requirement found in Section 5(3), Article VI of the 1987 Constitution is actually based on the
population constant used by the Constitutional Commission in distributing the initial 200 legislative seats.
32
Thus did the petitioners claim that in reapportioning legislative districts independently from the creation of a
province, Congress is bound to observe a 250,000 population threshold, in the same manner that the
Constitutional Commission did in the original apportionment.
Verbatim, the submission is that:
1. Republic Act 9716 is unconstitutional because the newly apportioned first district of Camarines Sur
failed to meet the population requirement for the creation of the legislative district as explicitly
provided in Article VI, Section 5, Paragraphs (1) and (3) of the Constitution and Section 3 of the
Ordinance appended thereto; and
2. Republic Act 9716 violates the principle of proportional representation as provided in Article VI,
Section 5 paragraphs (1), (3) and (4) of the Constitution. 12
The provision subject of this case states:
Article VI
Section 5. (1) The House of Representatives shall be composed of not more than two hundred and fifty members,
unless otherwise fixed by law, who shall be elected from legislative districts apportioned among the provinces,
cities and the Metropolitan Manila area in accordance with the number of their respective inhabitants, and on
the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected through a party-
list system of registered national, regional and sectoral parties or organizations.
(2) x x x x
(3) Each legislative district shall comprise, as far as practicable, contiguous, compact, and adjacent
territory. Each city with a population of at least two hundred fifty thousand, or each province, shall
have at least one representative.
(4) Within three years following the return of every census, the Congress shall make a reapportionment
of legislative districts based on the standards provided in this section.
On the other hand, the respondents, through the Office of the Solicitor General, seek the dismissal of the present
petition based on procedural and substantive grounds.
On procedural matters, the respondents argue that the petitioners are guilty of two (2) fatal technical defects:
first, petitioners committed an error in choosing to assail the constitutionality of Republic Act No. 9716 via the
remedy of Certiorari and Prohibition under Rule 65 of the Rules of Court; and second, the petitioners have no
locus standi to question the constitutionality of Republic Act No. 9716.
On substantive matters, the respondents call attention to an apparent distinction between cities and provinces
drawn by Section 5(3), Article VI of the 1987 Constitution. The respondents concede the existence of a 250,000
population condition, but argue that a plain and simple reading of the questioned provision will show that the
same has no application with respect to the creation of legislative districts in provinces. 13 Rather, the 250,000
minimum population is only a requirement for the creation of a legislative district in a city.
In sum, the respondents deny the existence of a fixed population requirement for the reapportionment of
districts in provinces. Therefore, Republic Act No. 9716, which only creates an additional legislative district within
the province of Camarines Sur, should be sustained as a perfectly valid reapportionment law.
We first pass upon the threshold issues.
The respondents assert that by choosing to avail themselves of the remedies of Certiorari and Prohibition, the
petitioners have committed a fatal procedural lapse. The respondents cite the following reasons:
1. The instant petition is bereft of any allegation that the respondents had acted without or in excess of
jurisdiction, or with grave abuse of discretion.1avvphi1
2. The remedy of Certiorari and Prohibition must be directed against a tribunal, board, officer or
person, whether exercising judicial, quasi-judicial, or ministerial functions. Respondents maintain that
in implementing Republic Act No. 9716, they were not acting as a judicial or quasi-judicial body, nor
were they engaging in the performance of a ministerial act.
3. The petitioners could have availed themselves of another plain, speedy and adequate remedy in the
ordinary course of law. Considering that the main thrust of the instant petition is the declaration of
unconstitutionality of Republic Act No. 9716, the same could have been ventilated through a petition
for declaratory relief, over which the Supreme Court has only appellate, not original jurisdiction.
The respondents likewise allege that the petitioners had failed to show that they had sustained, or is in danger of
sustaining any substantial injury as a result of the implementation of Republic Act No. 9716. The respondents,
therefore, conclude that the petitioners lack the required legal standing to question the constitutionality of
Republic Act No. 9716.
This Court has paved the way away from procedural debates when confronted with issues that, by reason of
constitutional importance, need a direct focus of the arguments on their content and substance.
The Supreme Court has, on more than one occasion, tempered the application of procedural rules, 14 as well as
relaxed the requirement of locus standi whenever confronted with an important issue of overreaching
significance to society.15
Hence, in Del Mar v. Philippine Amusement and Gaming Corporation (PAGCOR) 16 and Jaworski v. PAGCOR,17 this
Court sanctioned momentary deviation from the principle of the hierarchy of courts, and took original cognizance
of cases raising issues of paramount public importance. The Jaworski case ratiocinates:
32
Granting arguendo that the present action cannot be properly treated as a petition for prohibition, the
transcendental importance of the issues involved in this case warrants that we set aside the technical defects and
take primary jurisdiction over the petition at bar. One cannot deny that the issues raised herein have potentially
pervasive influence on the social and moral well being of this nation, specially the youth; hence, their proper and
just determination is an imperative need. This is in accordance with the well-entrenched principle that rules of
procedure are not inflexible tools designed to hinder or delay, but to facilitate and promote the administration of
justice. Their strict and rigid application, which would result in technicalities that tend to frustrate, rather than
promote substantial justice, must always be eschewed. (Emphasis supplied)
Anent the locus standi requirement, this Court has already uniformly ruled in Kilosbayan v. Guingona, 18 Tatad v.
Executive Secretary,19 Chavez v. Public Estates Authority 20 and Bagong Alyansang Makabayan v. Zamora,21 just to
name a few, that absence of direct injury on the part of the party seeking judicial review may be excused when
the latter is able to craft an issue of transcendental importance. In Lim v. Executive Secretary, 22 this Court held
that in cases of transcendental importance, the cases must be settled promptly and definitely, and so, the
standing requirements may be relaxed. This liberal stance has been echoed in the more recent decision on
Chavez v. Gonzales.23
Given the weight of the issue raised in the instant petition, the foregoing principles must apply. The beaten path
must be taken. We go directly to the determination of whether or not a population of 250,000 is an indispensable
constitutional requirement for the creation of a new legislative district in a province.
We deny the petition.
We start with the basics. Any law duly enacted by Congress carries with it the presumption of
constitutionality.24Before a law may be declared unconstitutional by this Court, there must be a clear showing
that a specific provision of the fundamental law has been violated or transgressed. When there is neither a
violation of a specific provision of the Constitution nor any proof showing that there is such a violation, the
presumption of constitutionality will prevail and the law must be upheld. To doubt is to sustain. 25
There is no specific provision in the Constitution that fixes a 250,000 minimum population that must compose a
legislative district.
As already mentioned, the petitioners rely on the second sentence of Section 5(3), Article VI of the 1987
Constitution, coupled with what they perceive to be the intent of the framers of the Constitution to adopt a
minimum population of 250,000 for each legislative district.
The second sentence of Section 5(3), Article VI of the Constitution, succinctly provides: "Each city with a
population of at least two hundred fifty thousand, or each province, shall have at least one representative."
The provision draws a plain and clear distinction between the entitlement of a city to a district on one hand, and
the entitlement of a province to a district on the other. For while a province is entitled to at least a
representative, with nothing mentioned about population, a city must first meet a population minimum of
250,000 in order to be similarly entitled.
The use by the subject provision of a comma to separate the phrase "each city with a population of at least two
hundred fifty thousand" from the phrase "or each province" point to no other conclusion than that the 250,000
minimum population is only required for a city, but not for a province. 26
Plainly read, Section 5(3) of the Constitution requires a 250,000 minimum population only for a city to be entitled
to a representative, but not so for a province.
The 250,000 minimum population requirement for legislative districts in cities was, in turn, the subject of
interpretation by this Court in Mariano, Jr. v. COMELEC. 27
In Mariano, the issue presented was the constitutionality of Republic Act No. 7854, which was the law that
converted the Municipality of Makati into a Highly Urbanized City. As it happened, Republic Act No. 7854 created
an additional legislative district for Makati, which at that time was a lone district. The petitioners in that case
argued that the creation of an additional district would violate Section 5(3), Article VI of the Constitution,
because the resulting districts would be supported by a population of less than 250,000, considering that Makati
had a total population of only 450,000. The Supreme Court sustained the constitutionality of the law and the
validity of the newly created district, explaining the operation of the Constitutional phrase "each city with a
population of at least two hundred fifty thousand," to wit:
Petitioners cannot insist that the addition of another legislative district in Makati is not in accord with section
5(3), Article VI of the Constitution for as of the latest survey (1990 census), the population of Makati stands at
only four hundred fifty thousand (450,000). Said section provides, inter alia, that a city with a population of at
least two hundred fifty thousand (250,000) shall have at least one representative. Even granting that the
population of Makati as of the 1990 census stood at four hundred fifty thousand (450,000), its legislative district
may still be increased since it has met the minimum population requirement of two hundred fifty thousand
(250,000). In fact, Section 3 of the Ordinance appended to the Constitution provides that a city whose population
has increased to more than two hundred fifty thousand (250,000) shall be entitled to at least one congressional
representative.28 (Emphasis supplied)
The Mariano case limited the application of the 250,000 minimum population requirement for cities only to its
initial legislative district. In other words, while Section 5(3), Article VI of the Constitution requires a city to have a
minimum population of 250,000 to be entitled to a representative, it does not have to increase its population by
another 250,000 to be entitled to an additional district.
There is no reason why the Mariano case, which involves the creation of an additional district within a city,
should not be applied to additional districts in provinces. Indeed, if an additional legislative district created within
a city is not required to represent a population of at least 250,000 in order to be valid, neither should such be
needed for an additional district in a province, considering moreover that a province is entitled to an initial seat
by the mere fact of its creation and regardless of its population.
Apropos for discussion is the provision of the Local Government Code on the creation of a province which, by
virtue of and upon creation, is entitled to at least a legislative district. Thus, Section 461 of the Local Government
Code states:
32
Requisites for Creation. – (a) A province may be created if it has an average annual income, as certified by the
Department of Finance, of not less than Twenty million pesos (P20,000,000.00) based on 1991 constant prices
and either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the Lands
Management Bureau; or
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as certified by the
National Statistics Office.
Notably, the requirement of population is not an indispensable requirement, but is merely an alternative addition
to the indispensable income requirement.
Mariano, it would turn out, is but a reflection of the pertinent ideas that ran through the deliberations on the
words and meaning of Section 5 of Article VI.
The whats, whys, and wherefores of the population requirement of "at least two hundred fifty thousand" may be
gleaned from the records of the Constitutional Commission which, upon framing the provisions of Section 5 of
Article VI, proceeded to form an ordinance that would be appended to the final document. The Ordinance is
captioned "APPORTIONING THE SEATS OF THE HOUSE OF REPRESENTATIVES OF THE CONGRESS OF THE
PHILIPPINES TO THE DIFFERENT LEGISLATIVE DISTRICTS IN PROVINCES AND CITIES AND THE METROPOLITAN
MANILA AREA." Such records would show that the 250,000 population benchmark was used for the 1986
nationwide apportionment of legislative districts among provinces, cities and Metropolitan Manila. Simply put,
the population figure was used to determine how many districts a province, city, or Metropolitan Manila should
have. Simply discernible too is the fact that, for the purpose, population had to be the determinant. Even then,
the requirement of 250,000 inhabitants was not taken as an absolute minimum for one legislative district. And,
closer to the point herein at issue, in the determination of the precise district within the province to which,
through the use of the population benchmark, so many districts have been apportioned, population as a factor
was not the sole, though it was among, several determinants.
From its journal,29 we can see that the Constitutional Commission originally divided the entire country into two
hundred (200) districts, which corresponded to the original number of district representatives. The 200 seats
were distributed by the Constitutional Commission in this manner: first, one (1) seat each was given to the
seventy-three (73) provinces and the ten (10) cities with a population of at least 250,000; 30 second, the remaining
seats were then redistributed among the provinces, cities and the Metropolitan Area "in accordance with the
number of their inhabitants on the basis of a uniform and progressive ratio." 31 Commissioner Davide, who later
became a Member and then Chief Justice of the Court, explained this in his sponsorship remark 32 for the
Ordinance to be appended to the 1987 Constitution:
Commissioner Davide: The ordinance fixes at 200 the number of legislative seats which are, in turn, apportioned
among provinces and cities with a population of at least 250, 000 and the Metropolitan Area in accordance with
the number of their respective inhabitants on the basis of a uniform and progressive ratio. The population is
based on the 1986 projection, with the 1980 official enumeration as the point of reckoning. This projection
indicates that our population is more or less 56 million. Taking into account the mandate that each city with at
least 250, 000 inhabitants and each province shall have at least one representative, we first allotted one seat for
each of the 73 provinces, and each one for all cities with a population of at least 250, 000, which are the Cities of
Manila, Quezon, Pasay, Caloocan, Cebu, Iloilo, Bacolod, Cagayan de Oro, Davao and Zamboanga. Thereafter, we
then proceed[ed] to increase whenever appropriate the number of seats for the provinces and cities in
accordance with the number of their inhabitants on the basis of a uniform and progressive ratio. (Emphasis
supplied).
Thus was the number of seats computed for each province and city. Differentiated from this, the determination
of the districts within the province had to consider "all protests and complaints formally received" which, the
records show, dealt with determinants other than population as already mentioned.
Palawan is a case in point. Journal No. 107 of the Constitutional Commission narrates:
INTERPELLATION OF MR. NOLLEDO:
Mr. Nolledo inquired on the reason for including Puerto Princesa in the northern towns when it was more affinity
with the southern town of Aborlan, Batarasa, Brooke’s Point, Narra, Quezon and Marcos. He stated that the First
District has a greater area than the Second District. He then queried whether population was the only factor
considered by the Committee in redistricting.
Replying thereto, Mr. Davide explained that the Committee took into account the standards set in Section 5 of
the Article on the Legislative Department, namely: 1) the legislative seats should be apportioned among the
provinces and cities and the Metropolitan Manila area in accordance with their inhabitants on the basis of a
uniform and progressive ratio; and 2) the legislative district must be compact, adjacent and contiguous.
On the districting of Palawan, Mr. Nolledo pointed out that it was explained in the interpellations that District I
has a total population of 265,358 including the City of Puerto Princesa, while the Second District has a total
population of 186,733. He proposed, however, that Puerto Princesa be included in the Second District in order to
satisfy the contiguity requirement in the Constitution considering that said City is nearer the southern towns
comprising the Second District.
In reply to Mr. Monsod’s query, Mr. Nolledo explained that with the proposed transfer of Puerto Princesa City to
the Second District, the First District would only have a total population of 190,000 while the Second District
would have 262,213, and there would be no substantial changes.
Mr. Davide accepted Mr. Nolledo’s proposal to insert Puerto Princesa City before the Municipality of Aborlan.
There being no objection on the part of the Members the same was approved by the Body.
APPROVAL OF THE APPORTIONMENT AND DISTRICTING OF PALAWAN
There being no other amendment, on motion of Mr. Davide, there being no objection, the apportionment and
districting for the province of Palawan was approved by the Body. 34
The districting of Palawan disregarded the 250,000 population figure. It was decided by the importance of the
towns and the city that eventually composed the districts.
Benguet and Baguio are another reference point. The Journal further narrates:

At this juncture, Mr. Davide informed the Body that Mr. Regalado made a reservation with the Committee for the
Mr. Nolledo pointed out that the last factor was not met when Puerto Princesa was included with the northern
possible reopening of the approval of Region I with respect to Benguet and Baguio City.
towns. He then inquired what is the distance between Puerto Princesa from San Vicente.

REMARKS OF MR. REGALADO

xxxx

Mr. Regalado stated that in the formulation of the Committee, Baguio City and Tuba are placed in one district. He
Thereupon, Mr. Nolledo stated that Puerto Princesa has a population of 75,480 and based on the apportionment,
stated that he was toying with the idea that, perhaps as a special consideration for Baguio because it is the
its inclusion with the northern towns would result in a combined population of 265,000 as against only 186,000
summer capital of the Philippines, Tuba could be divorced from Baguio City so that it could, by itself, have its own
for the south. He added that Cuyo and Coron are very important towns in the northern part of Palawan and, in
constituency and Tuba could be transferred to the Second District together with Itogon. Mr. Davide, however,
fact, Cuyo was the capital of Palawan before its transfer to Puerto Princesa. He also pointed out that there are
pointed out that the population of Baguio City is only 141,149.
more potential candidates in the north and therefore if Puerto Princesa City and the towns of Cuyo and Coron are
lumped together, there would be less candidates in the south, most of whose inhabitants are not interested in
politics. He then suggested that Puerto Princesa be included in the south or the Second District. Mr. Regalado admitted that the regular population of Baguio may be lower during certain times of the year, but
the transient population would increase the population substantially and, therefore, for purposes of business and
professional transactions, it is beyond question that population-wise, Baguio would more than qualify, not to
Mr. Davide stated that the proposal would be considered during the period of amendments. He requested that
speak of the official business matters, transactions and offices that are also there.
the COMELEC staff study said proposal. 33

Mr. Davide adverted to Director de Lima’s statement that unless Tuba and Baguio City are united, Tuba will be
"PROPOSED AMENDMENT OF MR. NOLLEDO
isolated from the rest of Benguet as the place can only be reached by passing through Baguio City. He stated that
the Committee would submit the matter to the Body.
32
Upon inquiry of the Chair whether he is insisting on his amendment, Mr. Regalado stated that the Body should
have a say on the matter and that the considerations he had given are not on the demographic aspects but on
the fact that Baguio City is the summer capital, the venue and situs of many government offices and functions.
On motion of Mr. Davide, there being no objection, the Body approved the reconsideration of the earlier
approval of the apportionment and districting of Region I, particularly Benguet.
Thereafter, on motion of Mr. Davide, there being no objection, the amendment of Mr. Regalado was put to a
vote. With 14 Members voting in favor and none against, the amendment was approved by the Body.
Mr. Davide informed that in view of the approval of the amendment, Benguet with Baguio City will have two
seats. The First District shall comprise of the municipalities of Mankayan, Buguias, Bakun, Kabayan, Kibungan,
Bokod, Atok, Kapangan, Tublay, La Trinidad, Sablan, Itogon and Tuba. The Second District shall comprise of Baguio
City alone.
There being no objection, the Body approved the apportionment and districting of Region I. 35
Quite emphatically, population was explicitly removed as a factor.
It may be additionally mentioned that the province of Cavite was divided into districts based on the distribution
of its three cities, with each district having a city: one district "supposed to be a fishing area; another a vegetable
and fruit area; and the third, a rice growing area," because such consideration "fosters common interests in line
with the standard of compactness."36 In the districting of Maguindanao, among the matters discussed were
"political stability and common interest among the people in the area" and the possibility of "chaos and disunity"
considering the "accepted regional, political, traditional and sectoral leaders." 37 For Laguna, it was mentioned
that municipalities in the highland should not be grouped with the towns in the lowland. For Cebu, Commissioner
Maambong proposed that they should "balance the area and population." 38
Consistent with Mariano and with the framer deliberations on district apportionment, we stated in Bagabuyo v.
COMELEC39 that:
x x x Undeniably, these figures show a disparity in the population sizes of the districts. The Constitution, however,
does not require mathematical exactitude or rigid equality as a standard in gauging equality of representation. x x
x. To ensure quality representation through commonality of interests and ease of access by the representative to
the constituents, all that the Constitution requires is that every legislative district should comprise, as far as
practicable, contiguous, compact and adjacent territory. (Emphasis supplied).
This 2008 pronouncement is fresh reasoning against the uncompromising stand of petitioner that an additional
provincial legislative district, which does not have at least a 250,000 population is not allowed by the
Constitution.
The foregoing reading and review lead to a clear lesson.
32
Neither in the text nor in the essence of Section 5, Article VI of the Constitution can, the petition find support.
And the formulation of the Ordinance in the implementation of the provision, nay, even the Ordinance itself,
refutes the contention that a population of 250,000 is a constitutional sine qua non for the formation of an
additional legislative district in a province, whose population growth has increased beyond the 1986 numbers.
Translated in the terms of the present case:
1. The Province of Camarines Sur, with an estimated population of 1,693,821 in 2007 is ─ based on the
formula and constant number of 250,000 used by the Constitutional Commission in nationally
apportioning legislative districts among provinces and cities ─ entitled to two (2) districts in addition to
the four (4) that it was given in the 1986 apportionment. Significantly, petitioner Aquino concedes this
point.40 In other words, Section 5 of Article VI as clearly written allows and does not prohibit an
additional district for the Province of Camarines Sur, such as that provided for in Republic Act No. 9786;
2. Based on the pith and pitch of the exchanges on the Ordinance on the protests and complaints
against strict conformity with the population standard, and more importantly based on the final
districting in the Ordinance on considerations other than population, the reapportionment or the
recomposition of the first and second legislative districts in the Province of Camarines Sur that resulted
in the creation of a new legislative district is valid even if the population of the new district is 176,383
and not 250,000 as insisted upon by the petitioners.
3. The factors mentioned during the deliberations on House Bill No. 4264, were:
(a) the dialects spoken in the grouped municipalities;
(b) the size of the original groupings compared to that of the regrouped municipalities;
(c) the natural division separating the municipality subject of the discussion from the
reconfigured District One; and
(d) the balancing of the areas of the three districts resulting from the redistricting of Districts
One and Two.41
Each of such factors and in relation to the others considered together, with the increased population of the
erstwhile Districts One and Two, point to the utter absence of abuse of discretion, much less grave abuse of
discretion,42 that would warrant the invalidation of Republic Act No. 9716.
To be clear about our judgment, we do not say that in the reapportionment of the first and second legislative
districts of Camarines Sur, the number of inhabitants in the resulting additional district should not be considered.
Our ruling is that population is not the only factor but is just one of several other factors in the composition of
the additional district. Such settlement is in accord with both the text of the Constitution and the spirit of the
letter, so very clearly given form in the Constitutional debates on the exact issue presented by this
petition.1avvphi1
WHEREFORE, the petition is hereby DISMISSED. Republic Act No. 9716 entitled "An Act Reapportioning the
Composition of the First (1st) and Second (2nd) Legislative Districts in the Province of Camarines Sur and Thereby
Creating a New Legislative District From Such Reapportionment" is a VALID LAW.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

A.C. No. 7399 August 25, 2009

ANTERO J. POBRE, Complainant,

vs.
Sen. MIRIAM DEFENSOR-SANTIAGO, Respondent.

DECISION

VELASCO, JR., J.:

32
In his sworn letter/complaint dated December 22, 2006, with enclosures, Antero J. Pobre invites the Court’s
attention to the following excerpts of Senator Miriam Defensor-Santiago’s speech delivered on the Senate floor:
x x x I am not angry. I am irate. I am foaming in the mouth. I am homicidal. I am suicidal. I am humiliated,
debased, degraded. And I am not only that, I feel like throwing up to be living my middle years in a country of this
nature. I am nauseated. I spit on the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme
Court, I am no longer interested in the position [of Chief Justice] if I was to be surrounded by idiots. I would
rather be in another environment but not in the Supreme Court of idiots x x x.
To Pobre, the foregoing statements reflected a total disrespect on the part of the speaker towards then Chief
Justice Artemio Panganiban and the other members of the Court and constituted direct contempt of court.
Accordingly, Pobre asks that disbarment proceedings or other disciplinary actions be taken against the lady
senator.
In her comment on the complaint dated April 25, 2007, Senator Santiago, through counsel, does not deny making
the aforequoted statements. She, however, explained that those statements were covered by the constitutional
provision on parliamentary immunity, being part of a speech she delivered in the discharge of her duty as
member of Congress or its committee. The purpose of her speech, according to her, was to bring out in the open
controversial anomalies in governance with a view to future remedial legislation. She averred that she wanted to
expose what she believed "to be an unjust act of the Judicial Bar Council [JBC]," which, after sending out public
invitations for nomination to the soon to-be vacated position of Chief Justice, would eventually inform applicants
that only incumbent justices of the Supreme Court would qualify for nomination. She felt that the JBC should
have at least given an advanced advisory that non-sitting members of the Court, like her, would not be
considered for the position of Chief Justice.
The immunity Senator Santiago claims is rooted primarily on the provision of Article VI, Section 11 of the
Constitution, which provides: "A Senator or Member of the House of Representative shall, in all offenses
punishable by not more than six years imprisonment, be privileged from arrest while the Congress is in
session. No member shall be questioned nor be held liable in any other place for any speech or debate in the
Congress or in any committee thereof." Explaining the import of the underscored portion of the provision, the
Court, in Osmeña, Jr. v. Pendatun, said:
Our Constitution enshrines parliamentary immunity which is a fundamental privilege cherished in every
legislative assembly of the democratic world. As old as the English Parliament, its purpose "is to enable and
encourage a representative of the public to discharge his public trust with firmness and success" for "it is
indispensably necessary that he should enjoy the fullest liberty of speech and that he should be protected from
resentment of every one, however, powerful, to whom the exercise of that liberty may occasion offense." 1
As American jurisprudence puts it, this legislative privilege is founded upon long experience and arises as a
means of perpetuating inviolate the functioning process of the legislative department. Without parliamentary
immunity, parliament, or its equivalent, would degenerate into a polite and ineffective debating forum.
Legislators are immune from deterrents to the uninhibited discharge of their legislative duties, not for their
private indulgence, but for the public good. The privilege would be of little value if they could be subjected to the
32
cost and inconvenience and distractions of a trial upon a conclusion of the pleader, or to the hazard of a
judgment against them based upon a judge’s speculation as to the motives. 2
This Court is aware of the need and has in fact been in the forefront in upholding the institution of parliamentary
immunity and promotion of free speech. Neither has the Court lost sight of the importance of the legislative and
oversight functions of the Congress that enable this representative body to look diligently into every affair of
government, investigate and denounce anomalies, and talk about how the country and its citizens are being
served. Courts do not interfere with the legislature or its members in the manner they perform their functions in
the legislative floor or in committee rooms. Any claim of an unworthy purpose or of the falsity and mala fides of
the statement uttered by the member of the Congress does not destroy the privilege. 3 The disciplinary authority
of the assembly4 and the voters, not the courts, can properly discourage or correct such abuses committed in the
name of parliamentary immunity.5
For the above reasons, the plea of Senator Santiago for the dismissal of the complaint for disbarment or
disciplinary action is well taken. Indeed, her privilege speech is not actionable criminally or in a disciplinary
proceeding under the Rules of Court. It is felt, however, that this could not be the last word on the matter.
The Court wishes to express its deep concern about the language Senator Santiago, a member of the Bar, used in
her speech and its effect on the administration of justice. To the Court, the lady senator has undoubtedly crossed
the limits of decency and good professional conduct. It is at once apparent that her statements in question were
intemperate and highly improper in substance. To reiterate, she was quoted as stating that she wanted "to spit on
the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme Court," and calling the Court a
"Supreme Court of idiots."
The lady senator alluded to In Re: Vicente Sotto.6 We draw her attention to the ensuing passage in Sotto that she
should have taken to heart in the first place:
x x x [I]f the people lose their confidence in the honesty and integrity of this Court and believe that they cannot
expect justice therefrom, they might be driven to take the law into their own hands, and disorder and perhaps
chaos would be the result.1avvphi1
No lawyer who has taken an oath to maintain the respect due to the courts should be allowed to erode the
people’s faith in the judiciary. In this case, the lady senator clearly violated Canon 8, Rule 8.01 and Canon 11 of
the Code of Professional Responsibility, which respectively provide:
Canon 8, Rule 8.01.––A lawyer shall not, in his professional dealings, use language which is abusive, offensive or
otherwise improper.
Canon 11.––A lawyer shall observe and maintain the respect due to the courts and to the judicial officers and
should insist on similar conduct by others.
Senator/Atty. Santiago is a cut higher than most lawyers. Her achievements speak for themselves. She was a
former Regional Trial Court judge, a law professor, an oft-cited authority on constitutional and international law,
an author of numerous law textbooks, and an elected senator of the land. Needless to stress, Senator Santiago,
as a member of the Bar and officer of the court, like any other, is duty-bound to uphold the dignity and authority
of this Court and to maintain the respect due its members. Lawyers in public service are keepers of public faith
and are burdened with the higher degree of social responsibility, perhaps higher than their brethren in private
practice.7Senator Santiago should have known, as any perceptive individual, the impact her statements would
make on the people’s faith in the integrity of the courts.
As Senator Santiago alleged, she delivered her privilege speech as a prelude to crafting remedial legislation on
the JBC. This allegation strikes the Court as an afterthought in light of the insulting tenor of what she said. We
quote the passage once more:
x x x I am not angry. I am irate. I am foaming in the mouth. I am homicidal. I am suicidal. I am humiliated,
debased, degraded. And I am not only that, I feel like throwing up to be living my middle years in a country of this
nature. I am nauseated. I spit on the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme
Court, I am no longer interested in the position [of Chief Justice] if I was to be surrounded by idiots. I would
rather be in another environment but not in the Supreme Court of idiots x x x. (Emphasis ours.)
A careful re-reading of her utterances would readily show that her statements were expressions of personal
anger and frustration at not being considered for the post of Chief Justice. In a sense, therefore, her remarks
were outside the pale of her official parliamentary functions. Even parliamentary immunity must not be allowed
to be used as a vehicle to ridicule, demean, and destroy the reputation of the Court and its magistrates, nor as
armor for personal wrath and disgust. Authorities are agreed that parliamentary immunity is not an individual
privilege accorded the individual members of the Parliament or Congress for their personal benefit, but rather a
privilege for the benefit of the people and the institution that represents them.
To be sure, Senator Santiago could have given vent to her anger without indulging in insulting rhetoric and
offensive personalities.
Lest it be overlooked, Senator Santiago’s outburst was directly traceable to what she considered as an "unjust
act" the JBC had taken in connection with her application for the position of Chief Justice. But while the JBC
functions under the Court’s supervision, its individual members, save perhaps for the Chief Justice who sits as the
JBC’s ex-officio chairperson,8 have no official duty to nominate candidates for appointment to the position of
Chief Justice. The Court is, thus, at a loss to understand Senator Santiago’s wholesale and indiscriminate assault
on the members of the Court and her choice of critical and defamatory words against all of them.
At any event, equally important as the speech and debate clause of Art. VI, Sec. 11 of the Constitution is Sec. 5(5)
of Art. VIII of the Constitution that provides:
Section 5. The Supreme Court shall have the following powers:
xxxx
32
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and
procedure in all courts, the admission to the practice of the law, the Integrated Bar, and legal assistance to the
underprivileged. (Emphasis ours.)
The Court, besides being authorized to promulgate rules concerning pleading, practice, and procedure in all
courts, exercises specific authority to promulgate rules governing the Integrated Bar with the end in view that the
integration of the Bar will, among other things:
(4) Shield the judiciary, which traditionally cannot defend itself except within its own forum, from the assaults
that politics and self interest may level at it, and assist it to maintain its integrity, impartiality and independence;
xxxx
(11) Enforce rigid ethical standards x x x.9
In Re: Letter Dated 21 February 2005 of Atty. Noel S. Sorreda, 10 we reiterated our pronouncement in Rheem of
the Philippines v. Ferrer11 that the duty of attorneys to the courts can only be maintained by rendering no service
involving any disrespect to the judicial office which they are bound to uphold. The Court wrote in Rheem of the
Philippines:
x x x As explicit is the first canon of legal ethics which pronounces that "[i]t is the duty of a lawyer to maintain
towards the Courts a respectful attitude, not for the sake of the temporary incumbent of the judicial office, but
for the maintenance of its supreme importance." That same canon, as a corollary, makes it peculiarly incumbent
upon lawyers to support the courts against "unjust criticism and clamor." And more. The attorney’s oath solemnly
binds him to a conduct that should be "with all good fidelity x x x to the courts."
Also, in Sorreda, the Court revisited its holding in Surigao Mineral Reservation Board v. Cloribel12 that:
A lawyer is an officer of the courts; he is, "like the court itself, an instrument or agency to advance the ends of
justice." His duty is to uphold the dignity and authority of the courts to which he owes fidelity, "not to promote
distrust in the administration of justice." Faith in the courts, a lawyer should seek to preserve. For, to undermine
the judicial edifice "is disastrous to the continuity of government and to the attainment of the liberties of the
people." Thus has it been said of a lawyer that "[a]s an officer of the court, it is his sworn and moral duty to help
build and not destroy unnecessarily that high esteem and regard towards the courts so essential to the proper
administration of justice."13
The lady senator belongs to the legal profession bound by the exacting injunction of a strict Code. Society has
entrusted that profession with the administration of the law and dispensation of justice. Generally speaking, a
lawyer holding a government office may not be disciplined as a member of the Bar for misconduct committed
while in the discharge of official duties, unless said misconduct also constitutes a violation of his/her oath as a
lawyer.14
Lawyers may be disciplined even for any conduct committed in their private capacity, as long as their misconduct she has unequivocally said making them as part of her privilege speech. Her implied admission is good enough
reflects their want of probity or good demeanor, 15 a good character being an essential qualification for the for the Court.
admission to the practice of law and for continuance of such privilege. When the Code of Professional
Responsibility or the Rules of Court speaks of "conduct" or "misconduct," the reference is not confined to one’s WHEREFORE, the letter-complaint of Antero J. Pobre against Senator/Atty. Miriam Defensor-Santiago is,
behavior exhibited in connection with the performance of lawyers’ professional duties, but also covers any conformably to Art. VI, Sec. 11 of the Constitution, DISMISSED.
misconduct, which––albeit unrelated to the actual practice of their profession––would show them to be unfit for
the office and unworthy of the privileges which their license and the law invest in them. 16
SO ORDERED.

This Court, in its unceasing quest to promote the people’s faith in courts and trust in the rule of law, has
PRESBITERO J. VELASCO, JR.
consistently exercised its disciplinary authority on lawyers who, for malevolent purpose or personal malice,
attempt to obstruct the orderly administration of justice, trifle with the integrity of courts, and embarrass or,
worse, malign the men and women who compose them. We have done it in the case of former Senator Vicente
Sotto in Sotto, in the case of Atty. Noel Sorreda in Sorreda, and in the case of Atty. Francisco B. Cruz in Tacordan v.
Ang17 who repeatedly insulted and threatened the Court in a most insolent manner.

The Court is not hesitant to impose some form of disciplinary sanctions on Senator/Atty. Santiago for what
otherwise would have constituted an act of utter disrespect on her part towards the Court and its members. The
factual and legal circumstances of this case, however, deter the Court from doing so, even without any sign of
remorse from her. Basic constitutional consideration dictates this kind of disposition.

We, however, would be remiss in our duty if we let the Senator’s offensive and disrespectful language that
definitely tended to denigrate the institution pass by. It is imperative on our part to re-instill in Senator/Atty.
Santiago her duty to respect courts of justice, especially this Tribunal, and remind her anew that the
parliamentary non-accountability thus granted to members of Congress is not to protect them against
prosecutions for their own benefit, but to enable them, as the people’s representatives, to perform the functions
of their office without fear of being made responsible before the courts or other forums outside the
congressional hall.18 It is intended to protect members of Congress against government pressure and intimidation
aimed at influencing the decision-making prerogatives of Congress and its members.
Republic of the Philippines
The Rules of the Senate itself contains a provision on Unparliamentary Acts and Language that enjoins a Senator SUPREME COURT
from using, under any circumstance, "offensive or improper language against another Senator or against any Manila
public institution."19 But as to Senator Santiago’s unparliamentary remarks, the Senate President had not
apparently called her to order, let alone referred the matter to the Senate Ethics Committee for appropriate
EN BANC
disciplinary action, as the Rules dictates under such circumstance. 20 The lady senator clearly violated the rules of
her own chamber. It is unfortunate that her peers bent backwards and avoided imposing their own rules on her.

Finally, the lady senator questions Pobre’s motives in filing his complaint, stating that disciplinary proceedings
must be undertaken solely for the public welfare. We cannot agree with her more. We cannot overstress that the
senator’s use of intemperate language to demean and denigrate the highest court of the land is a clear violation G.R. No. 89914 November 20, 1991
of the duty of respect lawyers owe to the courts. 21
JOSE F.S. BENGZON JR., ABELARDO TERMULO, JOSE MANTECON, VICENTE MILLS JR., LEONARDO GAMBOA,
Finally, the Senator asserts that complainant Pobre has failed to prove that she in fact made the statements in KURT BACHMANN JR., JOSE V.E. JIMENEZ, ERNESTO CALUYA, AGERICO UNGSON, SUSAN ROXAS, ELVIE
question. Suffice it to say in this regard that, although she has not categorically denied making such statements, CASTILLO, and CYNTHIA SABIDO LIMJAP, petitioners,
vs.

32
THE SENATE BLUE RIBBON COMMITTEE AND ITS MEMBERS, represented by and through the CHAIRMAN, HON.
WIGBERTO TAÑADA, respondents, JOSE S. SANDEJAS, intervenor.
Bengzon, Zarraga, Narciso, Cudala, Pecson & Bengson for petitioners.
Balgos & Perez for intervening petitioner.
Eddie Tamondong and Antonio T. Tagaro for respondents.
PADILLA, J.:
This is a petition for prohibition with prayer for the issuance of a temporary restraining order and/or injuective
relief, to enjoin the respondent Senate Blue Ribbon committee from requiring the petitioners to testify and
produce evidence at its inquiry into the alleged sale of the equity of Benjamin "Kokoy" Romualdez to the Lopa
Group in thirty-six (36) or thirty-nine (39) corporations.
On 30 July 1987, the Republic of the Philippines, represented by the Presidential Commission on Good
Government (PCGG), assisted by the Solicitor General, filed with the Sandiganbayan Civil Case No. 0035 (PCGG
Case No. 35) entitled "Republic of the Philippines vs. Benjamin "Kokoy" Romualdez, et al.", for reconveyance,
reversion, accounting, restitution and damages.
The complaint was amended several times by impleading new defendants and/or amplifying the allegations
therein. Under the Second Amended Complaint, 1 the herein petitioners were impleaded as party defendants.
The complaint insofar as pertinent to herein petitioners, as defendants, alleges among others that:
14. Defendants Benjamin (Kokoy) Romualdez and Juliette Gomez Romualdez, acting by themselves
and/or in unlawful concert with Defendants Ferdinand E. Marcos and Imelda R. Marcos, and taking
undue advantage of their relationship, influence and connection with the latter Defendant spouses,
engaged in devices, schemes and strategems to unjuestly enrigh themselves at the expense of Plaintiff
and the Filipino people, among others:
(a) Obatained, with the active collaboration of Defendants Sene J. Gabaldon, Mario D.
Camacho, Mamerto Nepomuceno, Carlos J. Valdez, Cesar C. Zalamea and Francisco Tantuico,
Atty. Jose Bengzon, Jr. and his law partners, namely: Edilberto S. Narciso, Jr., Jose Vicente E.
Jimenez, Amando V. Faustino, Jr., and Leonardo C. Cruz; Jose S. Sandejas and his fellow senior
managers of FMMC/PNI Holdings groups of companies such as Leonardo Gamboa, Vicente T.
Mills, Jr., Jose M. Mantecon, Abelardo S. Termulo, Rex C. Drilon II and Kurt Bachmann, Jr.,
control of some of the biggest business enterprises in the Philippines, such as the Manila
Corporation (MERALCO), Benguet Consolidated and the Philippine Commercial International
Bank (PCI Bank) by employing devious financial schemes and techniques calculated to require
32
the massive infusion and hemorrhage of government funds with minimum or negligible
"cashout" from Defendant Benjamin Romualdez...
xxx xxx xxx
(m) manipulated, with the support, assistance and collaboration of Philgurantee officials led
by chairman Cesar E.A. Virata and the Senior managers of FMMC/PNI Holdings, Inc. led by
Jose S. Sandejas, Jr., Jose M. Mantecom and Kurt S. Bachmann, Jr., among others, the
formation of Erectors Holdings, Inc. without infusing additional capital solely for the purpose
of Erectors Incorporated with Philguarantee in the amount of P527,387,440.71 with
insufficient securities/collaterals just to enable Erectors Inc, to appear viable and to borrow
more capitals, so much so that its obligation with Philgurantee has reached a total of more
than P2 Billion as of June 30, 1987.
(n) at the onset of the present Administration and/or within the week following the February
1986 People's Revolution, in conspiracy with, supoort, assistance and collaboration of the
abovenamed lawyers of the Bengzon Law Offices, or specifically Defendants Jose F.S.
Bengzon, Jr., V.E. Jimenez, Amando V. Faustino, Jr., and Edilberto S. Narciso, Jr., manipulated,
shcemed, and/or executed a series of devices intended to conceal and place, and/or for the
purpose of concealing and placing, beyond the inquiry and jurisdiction of the Presidential
Commission on Good Government (PCGG) herein Defendant's individual and collective funds,
properties, and assets subject of and/or suited int he instant Complaint.
(o) manuevered, with the technical know-how and legalitic talents of the FMMC senior
manager and some of the Bengzon law partners, such as Attys. Jose F.S. Bengzon, Jr.,
Edilberto S. Narciso, Jr., Amando V. Faustino, Jose Vicente E. Jimenez and Leonardo C. Cruz,
the purported sale of defendant Benjamin Romualdez's interests in the (i) Professional
Managers, (ii) A & E International Corporation (A & E), (iii) First Manila Managerment
Corporation (FMMC), (iv) Philippine World Travel Inc. (PWTI) and its subsidiaries consisting of
36 corporations in all, to PNI Holdings, Inc. (wjose purported incorporations are all members
of Atty. Jose F.S. Bengzon's law firm) for only P5 million on March 3, 1986 or three days after
the creation of the Presidential Commission on Good Government on February 28, 1986, for
the sole purpose of deceiving and preempting the Government, particularly the PCGG, and
making it appear that defendant Benjamin Romualdez had already divested himself of his
ownership of the same when in truth and in fact, his interests are well intact and being
protected by Atty. Jose F.S. Bengzon, Jr. and some of his law partners, together with the
FMMC senior managers who still control and run the affiars of said corporations, and in order
to entice the PCGG to approve the said fictitious sale, the above-named defendants offered
P20 million as "donation" to the Government;
(p) misused, with the connivance, support and technical assitance of the Bengzon law firm
represented by Atty. Jose F.S. Bengzon, Jr. as legal counsel, together with defendants Cesar
Zalamea, Antonio Ozaeta, Mario D. Camacho amd Senen J. Gabaldon as members of the
Board of Directors of the Philippine Commercial International bank (PCIB), the Meralco
 On 13 September 1988, the Senate Minority Floor Leader, Hon. Juan Ponce Enrile delivered a speech "on a matter of personal privilege" before the Senate on the alleged "take-
Pension Fund (Fund, for short) in the amount of P25 million by cuasing it to be invested in the
over personal privilege" before the Senate on the alleged "take-over of SOLOIL Incorporated, the flaship of the First Manila Management of Companies (FMMC) by Ricardo Lopa"
PCIB and through the Bank's TSG, assigned to PCI Development and PCI Equity at 50% each,
and called upon "the Senate to look into the possible violation of the law in the case, particularly with regard to Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act." 4
the Fund's (a) 8,028.011 common shares in the Bank and (b) "Deposit in Subscription" in the
amount of P4,929.972.50 but of the agreed consideration of P28 million for the said
assignment, PCI Development and PCI Equity were able to pay only P5,500.00 downpayment On motion of Senator Orlando Mercado, the matter was referred by the Senate to the Committee on Accountability of Public Officers (Blue Ribbon

and the first amortization of P3,937,500.00 thus prompting the Fund to rescind its Committee). 5
Thereafter, the Senate Blue Ribbon Committee started its investigation on the matter.
assignment, and the consequent reversion of the assigned brought the total shareholding of Petitioners and Ricardo Lopa were subpoenaed by the Committee to appear before it and testify on
the Fund to 11,470,555 voting shares or 36.8% of the voting stock of the PCIB, and this "what they know" regarding the "sale of thirty-six (36) corporations belonging to Benjamin "Kokoy"
development (which the defendants themselves orchestrated or allowed to happen) was Romualdez."
used by them as an excuse for the unlawful dismantling or cancellation of the Fund's 10
million shares for allegedly exceeding the 30-percent ceiling prescribed by Section 12-B of the
At the hearing held on 23 May 1989, Ricardo Lopa declined to testify on the ground that his testimony
General Banking Act, although they know for a fact that what the law declares as unlawful
may "unduly prejudice" the defendants in Civil Case No. 0035 before the Sandiganbayan. Petitioner
and void ab initio are the subscriptions in excess of the 30% ceiling "to the extent of the
Jose F.S. Bengzon, Jr. likewise refused to testify involing his constitutional right to due process, and
excess over any of the ceilings prescribed ..." and not the whole or entire stockholding which
averring that the publicity generated by respondents Committee's inquiry could adversely affect his
they allowed to stay for six years (from June 30, 1980 to March 24, 1986);
rights as well as those of the other petitioners who are his co-defendants in Civil Case No. 0035 before
the Sandiganbayan.
(q) cleverly hid behind the veil of corporate entity, through the use of the names and
managerial expertise of the FMMC senior manager and lawyers identified as Jose B. Sandejas,
The Senate Blue Ribbon Committee, thereupon, suspended its inquiry and directed the petitioners to
Leonardo Gamboa, Vicente T. Mills, Abelardo S, Termulo, Edilberto S. Narciso, Jr., Jose M.
file their memorandum on the constitutional issues raised, after which, it issued a resolution 6 dated 5
Mantecon, Rex C. Drilon II, Kurt Bachmann, Jr. together with the legal talents of corporate
June 1989 rejecting the petitioner's plea to be excused from testifying, and the Committee voted to
lawyers, such as Attys. Jose F.S. Bengzon, Jr., Jose V.E. Jimenez, Amando V. Faustino, Jr., and
pursue and continue its investigation of the matter. Senator Neptali Gonzales dissented. 7
Leonardo C. Cruz, the ill-gotten wealth of Benjamin T. Romualdez including, among others,
the 6,229,177 shares in PCIB registered in the names of Trans Middle East Phils. Equities, Inc.
and Edilberto S. Narciso, Jr. which they refused to surrender to PCGG despite their disclosure
as they tried and continue to exert efforts in getting hold of the same as well as the shares in Claiming that the Senate Blue Ribbon Committee is poised to subpoena them and required their attendance and testimony in proceedings before the Committee, in excess of its

Benguet registered in the names of Palm Avenue Holdings and Palm Avenue Realty jurisdiction and legislative purpose, in clear and blatant disregard of their constitutional rights, and to their grave and irreparable damager, prejudice and injury, and that there is

Development Corp. purportedly to be applied as payment for the claim of P70 million of a no appeal nor any other plain, speedy and adequate remedy in the ordinary course of law, the petitioners filed the present petition for prohibition with a prayer for temporary

"merger company of the First Manila Managerment Corp. group" supposedly owned by them restraning order and/or injunctive relief.

although the truth is that all the said firms are still beneficially owned by defendants
Benjamin Romualdez.

xxx xxx xxx
On 28 September 1988, petitioner (as defendants) filed their respective answers. 2 Meanwhile, from 2
to 6 August 1988, conflicting reports on the disposition by the PCGG of the "Romualdez corporations"
were carried in various metropolitan newspapers. Thus, one newspaper reported that the Romuladez
firms had not been sequestered because of the opposition of certain PCGG officials who "had worked
prviously as lawyers of the Marcos crony firms." Another daily reported otherwise, while others
declared that on 3 March 1986, or shortly after the EDSA February 1986 revolution, the Romualdez
companies" were sold for P5 million, without PCGG approval, to a holding company controlled by
Romualdez, and that Ricardo Lopa, the President's brother-in-law, had effectively taken over the firms,
even pending negotiations for the purchase of the corporations, for the same price of P5 million which
was reportedly way below the fair value of their assets. 3
Meanwhile, one of the defendants in Civil Case No. 0035 before the Sandiganbayan, Jose S. Sandejas, filed with the Court of motion for intervention, 8
which the Court
granted in the resolution 9 of 21 December 1989, and required the respondent Senate Blue Ribbon
Committee to comment on the petition in intervention. In compliance, therewith, respondent Senate
Blue Ribbon Committee filed its comment 10 thereon.
Before discussing the issues raised by petitioner and intervenor, we will first tackle the jurisdictional
question raised by the respondent Committee.
In its comment, respondent Committee claims that this court cannot properly inquire into the motives
of the lawmakers in conducting legislative investigations, much less cna it enjoin the Congress or any its
regular and special commitees — like what petitioners seek — from making inquiries in aid of
legislation, under the doctrine of separation of powers, which obtaines in our present system of
government.

32
The contention is untenable. In Angara vs. Electoral Commission, 11 the Court held:
The separation of powers is a fundamental principle in our system of government. It obtains
not hrough express provision but by actual division in our Constitution. Each department of
the government has exclusive cognizance of matters wihtin its jurisdiction, and is supreme
within its own sphere. But it does not follow from the fact that the three powers are to be
kept separate and distinct that the Constitution intended them to be absolutely unrestrained
and independent of each other. The Constitution has provided for an elaborate system of
checks and balances to secure coordination in the workings of the various departments of the
government...
xxx xxx xxx
But in the main, the Constitution has blocked out with deft strokes and in bold lines,
allotment of power to the executive, the legislative and the judicial departments of the
government. The ovelapping and interlacing of funcstions and duties between the several
deaprtments, however, sometimes makes it hard to say just where the political excitement,
the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely
obliterated, in cases of conflict, the judicial departments is the only constitutional organ
which can be called upon to determine the proper allocation of powers between the several
departments and among the integral or constituent units thereof.
xxx xxx xxx
The Constitution is a definition of the powers of government. Who is to determine the
nature, scope and extent of such powers? The Constitution itself has provided for the
instrumentality of the judiciary as the rational way. And when the judiciary mediates to
allocate constitutional boundaries; it does not assert any superiority over the other
departments; it does not inr eality nullify or invalidate an act of the legislature, but only
asserts the solemn and sacred obligation assigned to it by tyhe Constitution to determine
conflicting claims of authority under the Constitution and to established for the parties in an
actual controversy the rights which that instrument secures and guarantess to them. This is in
thruth all that is involved in what is termed "judicial supremacy" which properly is the power
of judicial review under the Constitution. Even the, this power of judicial review is limited to
actual cases and controversies to be exercised after full opportunity of argument by the
parties, and limited further to the constitutional question raised or the very lis
mota presented. Any attempt at abstraction could only lead to dialectics and barren legal
questions and to sterile conclusions unrelated to actualities. Narrowed as its function is in this
manner, the judiciary does not pass upon questions of wisdom, justice or expediency of
legislation. More thatn that, courts accord the presumption of constitutionality to legislative
enactments, not only because the legislature is presumed to abide by the Constitution but
also becuase the judiciary in the determination of actual cases and controversies must reflect
the wisdom and justice of the people as expressed through their representatives in the
executive and legislative departments of the government.
32
The "allocation of constituional boundaries" is a task that this Court must perfomr under the
Constitution. Moreowever, as held in a recent case, 12 "(t)he political question doctrine neither
interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit
constitutional boundaries has been given to this Court. It cannot abdicate that obligation mandated by
the 1987 Constitution, although said provision by no means does away with kthe applicability of the
principle in appropriate cases." 13
The Court is thus of the considered view that it has jurisdiction over the present controversy for the purpose of determining the scope and extent of the power of the Senate Blue
Ribbon Committee to conduct inquiries into private affirs in purported aid of legislation.
Coming to the specific issues raised in this case, petitioners contend that (1) the Senate Blue Ribbon Committee's inquiry has no valid legislative purpose, i.e., it is not done in aid of
legislation; (2) the sale or disposition of hte Romualdez corporations is a "purely private transaction" which is beyond the power of the Senate Blue Ribbon Committee to inquire
into; and (3) the inquiry violates their right to due process.
The 1987 Constition expressly recognizes the power of both houses of Congress to conduct inquiries in aid of legislation. 14
Thus, Section 21, Article VI
thereof provides:
The Senate or the House of Representatives or any of its respective committee may conduct
inquiries in aid of legislation in accordance with its duly published rules of procedure. The
rights of persons appearing in or affected by such inquiries shall be respected. 15
The power of both houses of Congress to conduct inquiries in aid of legislation is not, therefore, absolute or unlimited. Its exercise is circumscribed by the afore-quoted provision
of the Constitution. Thus, as provided therein, the investigation must be "in aid of legislation in accordance with its duly published rules of procedure" and that "the rights of
persons appearing in or affected by such inquiries shall be respected." It follows then that the rights of persons under the Bill of Rights must be respected, including the right to
due process and the right not to be compelled to testify against one's self.
The power to conduct formal inquiries or investigations in specifically provided for in Sec. 1 of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation. Such inquiries
may refer to the implementation or re-examination of any law or in connection with any proposed legislation or the formulation of future legislation. They may also extend to any
and all matters vested by the Constitution in Congress and/or in the Seante alone.
As held in Jean L. Arnault vs. Leon Nazareno, et al., 16
the inquiry, to be within the jurisdiction of the legislative body making
it, must be material or necessary to the exervise of a power in it vested by the Constitution, such as to
legislate or to expel a member.
Under Sec. 4 of the aforementioned Rules, the Senate may refer to any committee or committees any
speech or resolution filed by any Senator which in tis judgment requires an appropriate inquiry in aid of
legislation. In order therefore to ascertain the character or nature of an inquiry, resort must be had to
the speech or resolution under which such an inquiry is proposed to be made.
A perusal of the speech of Senator Enrile reveals that he (Senator Enrile) made a statement which was
published in various newspapers on 2 September 1988 accusing Mr. Ricardo "Baby" Lopa of "having
taken over the FMMC Group of Companies." As a consequence thereof, Mr. Lopa wrote a letter to
Senator Enrile on 4 September 1988 categorically denying that he had "taken over " the FMMC Group
of Companies; that former PCGG Chairman Ramon Diaz himself categorically stated in a telecast
interview by Mr. Luis Beltran on Channel 7 on 31 August 1988 that there has been no takeover by him
(Lopa); and that theses repeated allegations of a "takeover" on his (Lopa's) part of FMMC are baseless
as they are malicious.
The Lopa reply prompted Senator Enrile, during the session of the Senate on 13 September 1988, to
avail of the privilege hour, 17 so that he could repond to the said Lopa letter, and also to vindicate his
reputation as a Member of the Senate of the Philippines, considering the claim of Mr. Lopa that his
(Enrile's) charges that he (Lopa) had taken over the FMMC Group of Companies are "baseless" and
"malicious." Thus, in his speech, 18Senator Enrile said, among others, as follows:
Mr. President, I rise this afternnon on a matter of personal privilege; the privilege being that I
received, Mr. President, a letter dated September 4, 1988, signed by Mr. ricardo A. Lopa,
a.k.a. or Baby Lopa, wherein he denied categorically that he has taken over the First Manila
Management Group of Companies which includes SOLOIL Incorporated.
xxx xxxx xxx
In answer to Mr. Lopa, I will quote pertinent portions from an Official Memorandum to the
Presidential Commission of Good Government written and signed by former Governor, now
Congressman Jose Ramirez, in his capacity as head of the PCGG Task Force for Region VIII. In
his memorandum dated July 3, 1986, then Governor Ramirez stated that when he and the
members of his task force sought to serve a sequestration order on the management of
SOLOIL in Tanauan, Leyte, management officials assured him that relatives of the President of
the Philippines were personally discussing and representing SOLOIL so that the order of
sequestration would be lifted and that the new owner was Mr. Ricardo A. Lopa.
I will quote the pertinent portions in the Ramire's memorandum.
The first paragraph of the memorandum reads as follows and I quote, Mr. President:
"Our sequestration work of SOLOIL in Tanauan, Leyte was not heeded by
management because they said another representation was being made to this
Commission for the ventual lifting of our sequestrationorder. They even assured us
that Mr. Ricardo Lopa and Peping Cojunangco were personally discussing and
representing SOLOIL, so the order of sequestration will finally be lifted. While we
attempted to carry on our order, management refused to cooperate and
32
vehemently turned down our request to make available to us the records of the
company. In fact it was obviously clear that they will meet us with forcethe moment
we insist on doing normally our assigned task. In view of the impending threat, and
to avoid any untoward incident we decided to temporarily suspend our work until
there is a more categorical stand of this Commission in view of the seemingly
influential represetation being made by SOLOIL for us not to continue our work."
Another pertinent portion of the same memorandum is paragraph five, which reads as
follows, and I quote Mr. President:
"The President, Mr. Gamboa, this is, I understand, the President of SOLOIL, and the
Plant Superintendent, Mr. Jimenez including their chief counsel, Atty. Mandong
Mendiola are now saying that there have been divestment, and that the new owner
is now Mr. Ricardo Lopa who according to them, is the brother-in-law of the
President. They even went further by telling us that even Peping Cojuangco who we
know is the brother of her excellency is also interested in the ownership and
management of SOLOIL. When he demanded for supporting papers which will
indicate aforesaid divestment, Messrs. Gamboa, Jimenez and Mendiola refused
vehemently to submit these papers to us, instead they said it will be submitted
directly to this Commission. To our mind their continuous dropping of names is not
good for this Commission and even to the President if our dersire is to achieve
respectability and stability of the government."
The contents of the memorandum of then Governor and now Congressman Jose Ramirez
were personally confirmed by him in a news interview last September 7, 1988.
xxx xxxx xxx
Also relevant to this case, Mr. President, is a letter of Mr. Ricardo Lopa himself in August 11,
1988 issue of the newspaper Malaya headlined "On Alleged Takeover of Romualdez Firms."
Mr. Lopa states in the last paragraph of the published letter and I quote him:
12. As of this writing, the sales agreement is under review by the PCGG solely to
determine the appropriate price. The sale of these companies and our prior rigtht
to requires them have never been at issue.
Perhaps I could not make it any clearer to Mr. Lopa that I was not really making baseless and
malicious statements.
Senator Enrile concluded his privilege speech in the following tenor:
 Mr. President, it may be worthwhile for the Senate to look into the possible violation of the
law in the case particularly with regard to Republic Act No. 3019, the Anti-Graft and Corrupt
Practices Act, Section 5 of which reads as follows and I quote:
Sec. 5. Prohibition on certain relatives. — It shall be unlawful for the spouse or for
nay relative, by consanguinity or affinity, within the third civil degree, of the
President of the Philippines, the Vice-President of the Philippines, the President of
the Senate, or the Speaker of the House of Representatives, to intervene directly or
indirectly, in any business, transaction, contract or application with the
Government: Provided, that this section shall not apply to any person who prior to
the assumption of office of any of the above officials to whom he is related, has
been already dealing with the Government along the same line of business, nor to
any transaction, contract or application filed by him for approval of which is not
discretionary on the part of the officials concerned but depends upon compliance
with requisites provided by law, nor to any act lawfully performed in an official
capacity or in the exercise of a profession.
Mr. President, I have done duty to this Senate and to myself. I leave it to this august Body to
make its own conclusion.
Verily, the speech of Senator Enrile contained no suggestion of contemplated legislation; he merely
called upon the Senate to look into a possible violation of Sec. 5 of RA No. 3019, otherwise known as
"The Anti-Graft and Corrupt Practices Act." I other words, the purpose of the inquiry to be conducted
by respondent Blue Ribbon commitee was to find out whether or not the relatives of President Aquino,
particularly Mr. ricardo Lopa, had violated the law in connection with the alleged sale of the 36 or 39
corporations belonging to Benjamin "Kokoy" Romualdez to the Lopaa Group. There appears to be,
therefore, no intended legislation involved.
The Court is also not impressed with the respondent Committee's argument that the questioned
inquiry is to be conducted pursuant to Senate Resolution No. 212. The said resolution was introduced
by Senator Jose D. Lina in view of the representaions made by leaders of school youth, community
groups and youth of non-governmental organizations to the Senate Committee on Youth and Sports
Development, to look into the charges against the PCGG filed by three (3) stockholders of Oriental
petroleum, i.e., that it has adopted a "get-rich-quick scheme" for its nominee-directors in a sequestered
oil exploration firm.The pertinent portion of Senate Resolution No. 212 reads as follows:
xxx xxx xxx
WHEREAS, recent developments have shown that no less than the Solicitor-General has
stated that the PCGG Chairman and at least three Commissioners should resign and that the
agency should rid itself of "ineptness, incompetence and corruption" and that the
Sandiganbayan has reportedly ordered the PCGG to answer charges filed by three
stockholders of Oriental Petroleum that it has adopted a "get-rich-quick scheme" for its
nominee-directors in a sequestered oil exploration firm;
32
WHEREAS, leaders of school youth, community groups and youth of non-governmental
organization had made representations to the Senate Committee on Youth and Sports
Development to look into the charges against the PCGG since said agency is a symbol of the
changes expected by the people when the EDSA revolution took place and that the ill-gotten
wealth to be recovered will fund priority projects which will benefit our people such as CARP,
free education in the elementary and secondary levels reforestration, and employment
generation for rural and urban workers;
WHEREAS, the government and the present leadeship must demonstrate in their public and
private lives integrity, honor and efficient management of government services lest our youth
become disillusioned and lose hope and return to an Idelogy and form of government which
is repugnant to true freedom, democratic participation and human rights: Now, therefore, be
it.
Resolved by the Senate, That the activities of the Presidential Commission on Good
Government be investigated by the appropriate Committee in connection with the
implementation of Section 26, Article XVIII of the Constitution. 19
Thus, the inquiry under Senate Resolution No. 212 is to look into the charges against the PCGG filed by the three (3) stockholders of Oriental Petroleum in connection with the
implementation of Section 26, Article XVIII of the Constitution.
It cannot, therefore, be said that the contemplated inquiry on the subject of the privilege speech of Senator Juan Ponce Enrile, i.e., the alleged sale of the 36 (or 39) corporations
belonging to Benjamin "Kokoy" Romualdez to the Lopa Group is to be conducted pursuant to Senate Resolution No. 212 because, firstly, Senator Enrile did not indict the PCGG,
and, secondly, neither Mr. Ricardo Lopa nor the herein petitioners are connected with the government but are private citizens.
It appeals, therefore, that the contemplated inquiry by respondent Committee is not really "in aid of legislation" becuase it is not related to a purpose within the jurisdiction of
Congress, since the aim of the investigation is to find out whether or not the ralatives of the President or Mr. Ricardo Lopa had violated Section 5 RA No. 3019, the "Anti-Graft and
Corrupt Practices Act", a matter that appears more within the province of the courts rather than of the legislature. Besides, the Court may take judicial notice that Mr. Ricardo Lopa
died during the pendency of this case. In John T. Watkins vs. United States, 20
it was held held:
... The power of congress to conduct investigations in inherent in the legislative process. That
power is broad. it encompasses inquiries concerning the administration of existing laws as
well as proposed, or possibly needed statutes. It includes surveys of defects in our
social,economic, or political system for the purpose of enabling Congress to remedy them. It
comprehends probes into departments of the Federal Government to expose corruption,
inefficiency or waste. But broad asis this power of inquiry, it is not unlimited. There is no
general authority to expose the private affairs ofindividuals without justification in terms of
the functions of congress. This was freely conceded by Solicitor General in his argument in this
case. Nor is the Congress a law enforcement or trial agency. These are functions of the
executive and judicial departments of government. No inquiry is an end in itself; it must be
 One of the basic rights guaranteed by the Constitution to an individual is the right against self-incrimination. 24
related to and in furtherance of a legitimate task of Congress. Investigations conducted soly Thir right constured as the right to
for the personal aggrandizement of the investigators or to "punish" those investigated are remain completely silent may be availed of by the accused in a criminal case; but kit may be invoked by
indefensible. (emphasis supplied) other witnesses only as questions are asked of them.

It can not be overlooked that when respondent Committee decide to conduct its investigation of the This distinction was enunciated by the Court in Romeo Chavez vs. The Honorable Court of Appeals, et
petitioners, the complaint in Civil No. 0035 had already been filed with the Sandiganbayan. A perusal of al. 25thus —
that complaint shows that one of its principal causes of action against herein petitioners, as defendants
therein, is the alleged sale of the 36 (or 39) corporations belonging to Benjamin "Kokoy" Romualdez. Petitioner, as accused, occupies a different tier of protection from an ordinary witness.
Since the issues in said complaint had long been joined by the filing of petitioner's respective answers Whereas an ordinary witness may be compelled to take the witness stand and claim the
thereto, the issue sought to be investigated by the respondent Commitee is one over which jurisdiction privilege as each question requiring an incriminating answer is hot at him, an accused may
had been acquired by the Sandiganbayan. In short, the issue had been pre-empted by that court. To altother refuse to take the witness stand and refuse to answer any all questions.
allow the respondent Committee to conduct its own investigation of an issue already before the
Sandiganbayan would not only pose the possibility of conflicting judgments betweena legislative
Moreover, this right of the accused is extended to respondents in administrative investigations but only
commitee and a judicial tribunal, but if the Committee's judgment were to be reached before that of
if they partake of the nature of a criminal proceeding or analogous to a criminal proceeding. In Galman
the Sandiganbayan, the possibility of its influence being made to bear on the ultimate judgment of the
vs. Pamaran,26 the Court reiterated the doctrine in Cabal vs. Kapuanan (6 SCRA 1059) to illustrate the
Sandiganbayan can not be discounted.
right of witnesses to invoke the right against self-incrimination not only in criminal proceedings but also
in all other types of suit
In fine, for the rspondent Committee to probe and inquire into the same justiciable controversy already
before the Sandiganbayan, would be an encroachment into the exclusive domain of judicial jurisdiction
It was held that:
that had much earlier set in. In Baremblatt vs. United States, 21 it was held that:

We did not therein state that since he is not an accused and the case is not a criminal case,
Broad as it is, the power is not, howevern, without limitations. Since congress may only
Cabal cannot refuse to take the witness stand and testify, and that he can invoke his right
investigate into those areas in which it may potentially legislate or appropriate, it cannot
against self-incrimination only when a question which tends to elicit an answer that will
inquire into matters which are within the exclusive province of one of the other branches of
incriminate him is propounded to him. Clearly then, it is not the characeter of the suit
the government. Lacking the judicial power given to the Judiciary, it cannot inquire into
involved but the nature of the proceedings that controls. The privilege has consistenly been
mattes that are exclusively the concern of the Judiciary. Neither can it suplant the Executive in
held to extend to all proceedings sanctioned by law and to all cases in which punishment is
what exclusively belongs to the Executive. ...
sought to be visited upon a witness, whether a party or not.

Now to another matter. It has been held that "a congressional committee's right to inquire is 'subject to
We do not here modify these doctrines. If we presently rule that petitioners may not be compelled by
all relevant limitations placed by the Constitution on governmental action,' including "'the relevant
the respondent Committee to appear, testify and produce evidenc before it, it is only becuase we hold
limitations of the Bill of Rights'." 22
that the questioned inquiry is not in aid of legislation and, if pursued, would be violative of the principle
of separation of powers between the legislative and the judicial departments of government, ordained
by the Constitution.
In another case —

... the mere semblance of legislative purpose would not justify an inquiry in the face of the Bill of Rights. The critical element is the exeistence of, and the weight
to be ascribed to, the interest of the Congress in demanding disclosures from an unwilling witness. We cannot simply assume, however, that every congressional
investigation is justified by a public need that over-balances any private rights affected. To do so would be to abdicate the responsibility placed by the Constitution
WHEREFORE, the petition is GRANTED. The Court holds that, under the facts, including the circumtance
that petitioners are presently impleaded as defendants in a case before the Sandiganbayan, which
involves issues intimately related to the subject of contemplated inquiry before the respondet
Committee, the respondent Senate Blue Ribbon Committee is hereby enjoined from compelling the
petitioners and intervenor to testify before it and produce evidence at the said inquiry.

upon the judiciary to insure that the Congress does not unjustifiably encroah upon an individual's right to privacy nor abridge his liberty of speech, press, religion SO ORDERED.
or assembly. 23

32
 SUPREME COURT
Manila

EN BANC

G.R. No. 115455 August 25, 1994

ARTURO M. TOLENTINO, petitioner,

vs.
THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE, respondents.

G.R. No. 115525 August 25, 1994

JUAN T. DAVID, petitioner,

vs.
TEOFISTO T. GUINGONA, JR., as Executive Secretary; ROBERTO DE OCAMPO, as Secretary of Finance;
LIWAYWAY VINZONS-CHATO, as Commissioner of Internal Revenue; and their AUTHORIZED AGENTS OR
REPRESENTATIVES, respondents.

G.R. No. 115543 August 25, 1994

32
RAUL S. ROCO and the INTEGRATED BAR OF THE PHILIPPINES, petitioners, GUINGONA, JR., in his capacity as Executive Secretary, and HON. ROBERTO B. DE OCAMPO, in his capacity as
vs. Secretary of Finance, respondents.
THE SECRETARY OF THE DEPARTMENT OF FINANCE; THE COMMISSIONERS OF THE BUREAU OF INTERNAL
REVENUE AND BUREAU OF CUSTOMS, respondents. G.R. No. 115931 August 25, 1994

G.R. No. 115544 August 25, 1994 PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION, INC., and ASSOCIATION OF PHILIPPINE BOOK-
SELLERS, petitioners,
PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO., INC.; PUBLISHING CORPORATION; PHILIPPINE vs.
JOURNALISTS, INC.; JOSE L. PAVIA; and OFELIA L. DIMALANTA, petitioners, HON. ROBERTO B. DE OCAMPO, as the Secretary of Finance; HON. LIWAYWAY V. CHATO, as the Commissioner
vs. of Internal Revenue and HON. GUILLERMO PARAYNO, JR., in his capacity as the Commissioner of
HON. LIWAYWAY V. CHATO, in her capacity as Commissioner of Internal Revenue; HON. TEOFISTO T. Customs, respondents.
GUINGONA, JR., in his capacity as Executive Secretary; and HON. ROBERTO B. DE OCAMPO, in his capacity as
Secretary of Finance, respondents. Arturo M. Tolentino for and in his behalf.

G.R. No. 115754 August 25, 1994 Donna Celeste D. Feliciano and Juan T. David for petitioners in G.R. No. 115525.

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC., (CREBA), petitioner, Roco, Bunag, Kapunan, Migallos and Jardeleza for petitioner R.S. Roco.
vs.
THE COMMISSIONER OF INTERNAL REVENUE, respondent.
Villaranza and Cruz for petitioners in G.R. No. 115544.

G.R. No. 115781 August 25, 1994

Carlos A. Raneses and Manuel M. Serrano for petitioner in G.R. No. 115754.

KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T.
Salonga, Hernandez & Allado for Freedon From Debts Coalition, Inc. & Phil. Bible Society.
APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL
G. FERNANDO, RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, MOVEMENT OF ATTORNEYS FOR
BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. ("MABINI"), FREEDOM FROM DEBT COALITION, INC., Estelito P. Mendoza for petitioner in G.R. No. 115852.
PHILIPPINE BIBLE SOCIETY, INC., and WIGBERTO TAÑADA, petitioners,
vs. Panganiban, Benitez, Parlade, Africa & Barinaga Law Offices for petitioners in G.R. No. 115873.
THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE, THE COMMISSIONER OF INTERNAL REVENUE and THE
COMMISSIONER OF CUSTOMS, respondents. R.B. Rodriguez & Associates for petitioners in G.R. No. 115931.

G.R. No. 115852 August 25, 1994 Reve A.V. Saguisag for MABINI.

PHILIPPINE AIRLINES, INC., petitioner,

vs.
THE SECRETARY OF FINANCE, and COMMISSIONER OF INTERNAL REVENUE, respondents.
MENDOZA, J.:

G.R. No. 115873 August 25, 1994

The value-added tax (VAT) is levied on the sale, barter or exchange of goods and properties as well as on the sale
or exchange of services. It is equivalent to 10% of the gross selling price or gross value in money of goods or
COOPERATIVE UNION OF THE PHILIPPINES, petitioners, properties sold, bartered or exchanged or of the gross receipts from the sale or exchange of services. Republic
vs. Act No. 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending
HON. LIWAYWAY V. CHATO, in her capacity as the Commissioner of Internal Revenue, HON. TEOFISTO T. the National Internal Revenue Code.

32
These are various suits for certiorari and prohibition, challenging the constitutionality of Republic Act No. 7716
on various grounds summarized in the resolution of July 6, 1994 of this Court, as follows:
I. Procedural Issues:
A. Does Republic Act No. 7716 violate Art. VI, § 24 of the Constitution?
B. Does it violate Art. VI, § 26(2) of the Constitution?
C. What is the extent of the power of the Bicameral Conference Committee?
II. Substantive Issues:
A. Does the law violate the following provisions in the Bill of Rights (Art. III)?
1. §1
2. § 4
3. § 5
4. § 10
B. Does the law violate the following other provisions of the Constitution?
1. Art. VI, § 28(1)
2. Art. VI, § 28(3)
These questions will be dealt in the order they are stated above. As will presently be explained not all of these
questions are judicially cognizable, because not all provisions of the Constitution are self executing and,
therefore, judicially enforceable. The other departments of the government are equally charged with the
enforcement of the Constitution, especially the provisions relating to them.
I. PROCEDURAL ISSUES
The contention of petitioners is that in enacting Republic Act No. 7716, or the Expanded Value-Added Tax Law,
Congress violated the Constitution because, although H. No. 11197 had originated in the House of
Representatives, it was not passed by the Senate but was simply consolidated with the Senate version (S. No.
1630) in the Conference Committee to produce the bill which the President signed into law. The following
32
provisions of the Constitution are cited in support of the proposition that because Republic Act No. 7716 was
passed in this manner, it did not originate in the House of Representatives and it has not thereby become a law:
Art. VI, § 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.
Id., § 26(2): No bill passed by either House shall become a law unless it has passed three
readings on separate days, and printed copies thereof in its final form have been distributed
to its Members three days before its passage, except when the President certifies to the
necessity of its immediate enactment to meet a public calamity or emergency. Upon the last
reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken
immediately thereafter, and the yeas and nays entered in the Journal.
It appears that on various dates between July 22, 1992 and August 31, 1993, several bills 1 were introduced in the
House of Representatives seeking to amend certain provisions of the National Internal Revenue Code relative to
the value-added tax or VAT. These bills were referred to the House Ways and Means Committee which
recommended for approval a substitute measure, H. No. 11197, entitled
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM TO WIDEN ITS TAX BASE AND
ENHANCE ITS ADMINISTRATION, AMENDING FOR THESE PURPOSES SECTIONS 99, 100, 102,
103, 104, 105, 106, 107, 108 AND 110 OF TITLE IV, 112, 115 AND 116 OF TITLE V, AND 236,
237 AND 238 OF TITLE IX, AND REPEALING SECTIONS 113 AND 114 OF TITLE V, ALL OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED
The bill (H. No. 11197) was considered on second reading starting November 6, 1993 and, on November 17,
1993, it was approved by the House of Representatives after third and final reading.
It was sent to the Senate on November 23, 1993 and later referred by that body to its Committee on Ways and
Means.
On February 7, 1994, the Senate Committee submitted its report recommending approval of S. No. 1630, entitled
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM TO WIDEN ITS TAX BASE AND
ENHANCE ITS ADMINISTRATION, AMENDING FOR THESE PURPOSES SECTIONS 99, 100, 102,
103, 104, 105, 107, 108, AND 110 OF TITLE IV, 112 OF TITLE V, AND 236, 237, AND 238 OF
TITLE IX, AND REPEALING SECTIONS 113, 114 and 116 OF TITLE V, ALL OF THE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES
It was stated that the bill was being submitted "in substitution of Senate Bill No. 1129, taking into consideration
P.S. Res. No. 734 and H.B. No. 11197."
On February 8, 1994, the Senate began consideration of the bill (S. No. 1630). It finished debates on the bill and
approved it on second reading on March 24, 1994. On the same day, it approved the bill on third reading by the
affirmative votes of 13 of its members, with one abstention.
H. No. 11197 and its Senate version (S. No. 1630) were then referred to a conference committee which, after
meeting four times (April 13, 19, 21 and 25, 1994), recommended that "House Bill No. 11197, in consolidation
with Senate Bill No. 1630, be approved in accordance with the attached copy of the bill as reconciled and
approved by the conferees."
The Conference Committee bill, entitled "AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM,
WIDENING ITS TAX BASE AND ENHANCING ITS ADMINISTRATION AND FOR THESE PURPOSES AMENDING AND
REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR
OTHER PURPOSES," was thereafter approved by the House of Representatives on April 27, 1994 and by the
Senate on May 2, 1994. The enrolled bill was then presented to the President of the Philippines who, on May 5,
1994, signed it. It became Republic Act No. 7716. On May 12, 1994, Republic Act No. 7716 was published in two
newspapers of general circulation and, on May 28, 1994, it took effect, although its implementation was
suspended until June 30, 1994 to allow time for the registration of business entities. It would have been enforced
on July 1, 1994 but its enforcement was stopped because the Court, by the vote of 11 to 4 of its members,
granted a temporary restraining order on June 30, 1994.
First. Petitioners' contention is that Republic Act No. 7716 did not "originate exclusively" in the House of
Representatives as required by Art. VI, §24 of the Constitution, because it is in fact the result of the consolidation
of two distinct bills, H. No. 11197 and S. No. 1630. In this connection, petitioners point out that although Art. VI,
SS 24 was adopted from the American Federal Constitution, 2 it is notable in two respects: the verb "shall
originate" is qualified in the Philippine Constitution by the word "exclusively" and the phrase "as on other bills" in
the American version is omitted. This means, according to them, that to be considered as having originated in the
House, Republic Act No. 7716 must retain the essence of H. No. 11197.
This argument will not bear analysis. To begin with, it is not the law — but the revenue bill — which is required by
the Constitution to "originate exclusively" in the House of Representatives. It is important to emphasize this,
because a bill originating in the House may undergo such extensive changes in the Senate that the result may be
a rewriting of the whole. The possibility of a third version by the conference committee will be discussed later. At
this point, what is important to note is that, as a result of the Senate action, a distinct bill may be produced. To
insist that a revenue statute — and not only the bill which initiated the legislative process culminating in the
enactment of the law — must substantially be the same as the House bill would be to deny the Senate's power
not only to "concur with amendments" but also to "propose amendments." It would be to violate the coequality
of legislative power of the two houses of Congress and in fact make the House superior to the Senate.
The contention that the constitutional design is to limit the Senate's power in respect of revenue bills in order to
compensate for the grant to the Senate of the treaty-ratifying power 3 and thereby equalize its powers and those
of the House overlooks the fact that the powers being compared are different. We are dealing here with the
legislative power which under the Constitution is vested not in any particular chamber but in the Congress of the
Philippines, consisting of "a Senate and a House of Representatives." 4 The exercise of the treaty-ratifying power
is not the exercise of legislative power. It is the exercise of a check on the executive power. There is, therefore, no
32
justification for comparing the legislative powers of the House and of the Senate on the basis of the possession of
such nonlegislative power by the Senate. The possession of a similar power by the U.S. Senate 5 has never been
thought of as giving it more legislative powers than the House of Representatives.
In the United States, the validity of a provision (§ 37) imposing an ad valorem tax based on the weight of vessels,
which the U.S. Senate had inserted in the Tariff Act of 1909, was upheld against the claim that the provision was a
revenue bill which originated in the Senate in contravention of Art. I, § 7 of the U.S. Constitution. 6 Nor is the
power to amend limited to adding a provision or two in a revenue bill emanating from the House. The U.S. Senate
has gone so far as changing the whole of bills following the enacting clause and substituting its own versions. In
1883, for example, it struck out everything after the enacting clause of a tariff bill and wrote in its place its own
measure, and the House subsequently accepted the amendment. The U.S. Senate likewise added 847
amendments to what later became the Payne-Aldrich Tariff Act of 1909; it dictated the schedules of the Tariff Act
of 1921; it rewrote an extensive tax revision bill in the same year and recast most of the tariff bill of 1922. 7 Given,
then, the power of the Senate to propose amendments, the Senate can propose its own version even with
respect to bills which are required by the Constitution to originate in the House.
It is insisted, however, that S. No. 1630 was passed not in substitution of H. No. 11197 but of another Senate bill
(S. No. 1129) earlier filed and that what the Senate did was merely to "take [H. No. 11197] into consideration" in
enacting S. No. 1630. There is really no difference between the Senate preserving H. No. 11197 up to the
enacting clause and then writing its own version following the enacting clause (which, it would seem, petitioners
admit is an amendment by substitution), and, on the other hand, separately presenting a bill of its own on the
same subject matter. In either case the result are two bills on the same subject.
Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff, or tax bills, bills
authorizing an increase of the public debt, private bills and bills of local application must come from the House of
Representatives on the theory that, elected as they are from the districts, the members of the House can be
expected to be more sensitive to the local needs and problems. On the other hand, the senators, who are elected
at large, are expected to approach the same problems from the national perspective. Both views are thereby
made to bear on the enactment of such laws.
Nor does the Constitution prohibit the filing in the Senate of a substitute bill in anticipation of its receipt of the
bill from the House, so long as action by the Senate as a body is withheld pending receipt of the House bill. The
Court cannot, therefore, understand the alarm expressed over the fact that on March 1, 1993, eight months
before the House passed H. No. 11197, S. No. 1129 had been filed in the Senate. After all it does not appear that
the Senate ever considered it. It was only after the Senate had received H. No. 11197 on November 23, 1993 that
the process of legislation in respect of it began with the referral to the Senate Committee on Ways and Means of
H. No. 11197 and the submission by the Committee on February 7, 1994 of S. No. 1630. For that matter, if the
question were simply the priority in the time of filing of bills, the fact is that it was in the House that a bill (H. No.
253) to amend the VAT law was first filed on July 22, 1992. Several other bills had been filed in the House before
S. No. 1129 was filed in the Senate, and H. No. 11197 was only a substitute of those earlier bills.
Second. Enough has been said to show that it was within the power of the Senate to propose S. No. 1630. We
now pass to the next argument of petitioners that S. No. 1630 did not pass three readings on separate days as
required by the Constitution 8 because the second and third readings were done on the same day, March 24,
1994. But this was because on February 24, 1994 9 and again on March 22, 1994, 10 the President had certified S.
No. 1630 as urgent. The presidential certification dispensed with the requirement not only of printing but also
that of reading the bill on separate days. The phrase "except when the President certifies to the necessity of its
immediate enactment, etc." in Art. VI, § 26(2) qualifies the two stated conditions before a bill can become a law:
(i) the bill has passed three readings on separate days and (ii) it has been printed in its final form and distributed
three days before it is finally approved.
In other words, the "unless" clause must be read in relation to the "except" clause, because the two are really
coordinate clauses of the same sentence. To construe the "except" clause as simply dispensing with the second
requirement in the "unless" clause (i.e., printing and distribution three days before final approval) would not only
violate the rules of grammar. It would also negate the very premise of the "except" clause: the necessity of
securing the immediate enactment of a bill which is certified in order to meet a public calamity or emergency. For
if it is only the printing that is dispensed with by presidential certification, the time saved would be so negligible
as to be of any use in insuring immediate enactment. It may well be doubted whether doing away with the
necessity of printing and distributing copies of the bill three days before the third reading would insure speedy
enactment of a law in the face of an emergency requiring the calling of a special election for President and Vice-
President. Under the Constitution such a law is required to be made within seven days of the convening of
Congress in emergency session. 11
That upon the certification of a bill by the President the requirement of three readings on separate days and of
printing and distribution can be dispensed with is supported by the weight of legislative practice. For example,
the bill defining the certiorari jurisdiction of this Court which, in consolidation with the Senate version, became
Republic Act No. 5440, was passed on second and third readings in the House of Representatives on the same
day (May 14, 1968) after the bill had been certified by the President as urgent. 12
There is, therefore, no merit in the contention that presidential certification dispenses only with the requirement
for the printing of the bill and its distribution three days before its passage but not with the requirement of three
readings on separate days, also.
It is nonetheless urged that the certification of the bill in this case was invalid because there was no emergency,
the condition stated in the certification of a "growing budget deficit" not being an unusual condition in this
country.
It is noteworthy that no member of the Senate saw fit to controvert the reality of the factual basis of the
certification. To the contrary, by passing S. No. 1630 on second and third readings on March 24, 1994, the Senate
accepted the President's certification. Should such certification be now reviewed by this Court, especially when
no evidence has been shown that, because S. No. 1630 was taken up on second and third readings on the same
day, the members of the Senate were deprived of the time needed for the study of a vital piece of legislation?
The sufficiency of the factual basis of the suspension of the writ of habeas corpus or declaration of martial law
under Art. VII, § 18, or the existence of a national emergency justifying the delegation of extraordinary powers to
the President under Art. VI, § 23(2), is subject to judicial review because basic rights of individuals may be at
hazard. But the factual basis of presidential certification of bills, which involves doing away with procedural
32
requirements designed to insure that bills are duly considered by members of Congress, certainly should elicit a
different standard of review.
Petitioners also invite attention to the fact that the President certified S. No. 1630 and not H. No. 11197. That is
because S. No. 1630 was what the Senate was considering. When the matter was before the House, the President
likewise certified H. No. 9210 the pending in the House.
Third. Finally it is contended that the bill which became Republic Act No. 7716 is the bill which the Conference
Committee prepared by consolidating H. No. 11197 and S. No. 1630. It is claimed that the Conference Committee
report included provisions not found in either the House bill or the Senate bill and that these provisions were
"surreptitiously" inserted by the Conference Committee. Much is made of the fact that in the last two days of its
session on April 21 and 25, 1994 the Committee met behind closed doors. We are not told, however, whether the
provisions were not the result of the give and take that often mark the proceedings of conference committees.
Nor is there anything unusual or extraordinary about the fact that the Conference Committee met in executive
sessions. Often the only way to reach agreement on conflicting provisions is to meet behind closed doors, with
only the conferees present. Otherwise, no compromise is likely to be made. The Court is not about to take the
suggestion of a cabal or sinister motive attributed to the conferees on the basis solely of their "secret meetings"
on April 21 and 25, 1994, nor read anything into the incomplete remarks of the members, marked in the
transcript of stenographic notes by ellipses. The incomplete sentences are probably due to the stenographer's
own limitations or to the incoherence that sometimes characterize conversations. William Safire noted some
such lapses in recorded talks even by recent past Presidents of the United States.
In any event, in the United States conference committees had been customarily held in executive sessions with
only the conferees and their staffs in attendance. 13 Only in November 1975 was a new rule adopted requiring
open sessions. Even then a majority of either chamber's conferees may vote in public to close the meetings. 14
As to the possibility of an entirely new bill emerging out of a Conference Committee, it has been explained:
Under congressional rules of procedure, conference committees are not expected to make
any material change in the measure at issue, either by deleting provisions to which both
houses have already agreed or by inserting new provisions. But this is a difficult provision to
enforce. Note the problem when one house amends a proposal originating in either house by
striking out everything following the enacting clause and substituting provisions which make
it an entirely new bill. The versions are now altogether different, permitting a conference
committee to draft essentially a new bill. . . . 15
The result is a third version, which is considered an "amendment in the nature of a substitute," the only
requirement for which being that the third version be germane to the subject of the House and Senate bills. 16
Indeed, this Court recently held that it is within the power of a conference committee to include in its report an
entirely new provision that is not found either in the House bill or in the Senate bill. 17 If the committee can
propose an amendment consisting of one or two provisions, there is no reason why it cannot propose several
provisions, collectively considered as an "amendment in the nature of a substitute," so long as such amendment
is germane to the subject of the bills before the committee. After all, its report was not final but needed the
approval of both houses of Congress to become valid as an act of the legislative department. The charge that in
this case the Conference Committee acted as a third legislative chamber is thus without any basis. 18
Nonetheless, it is argued that under the respective Rules of the Senate and the House of Representatives a
conference committee can only act on the differing provisions of a Senate bill and a House bill, and that contrary
to these Rules the Conference Committee inserted provisions not found in the bills submitted to it. The following
provisions are cited in support of this contention:
Rules of the Senate
Rule XII:
§ 26. In the event that the Senate does not agree with the House of Representatives on the
provision of any bill or joint resolution, the differences shall be settled by a conference
committee of both Houses which shall meet within ten days after their composition.
The President shall designate the members of the conference committee in accordance with
subparagraph (c), Section 3 of Rule III.
Each Conference Committee Report shall contain a detailed and sufficiently explicit statement
of the changes in or amendments to the subject measure, and shall be signed by the
conferees.
The consideration of such report shall not be in order unless the report has been filed with
the Secretary of the Senate and copies thereof have been distributed to the Members.
(Emphasis added)
Rules of the House of Representatives
Rule XIV:
§ 85. Conference Committee Reports. — In the event that the House does not agree with the
Senate on the amendments to any bill or joint resolution, the differences may be settled by
conference committees of both Chambers.
The consideration of conference committee reports shall always be in order, except when the
journal is being read, while the roll is being called or the House is dividing on any question.
Each of the pages of such reports shall be signed by the conferees. Each report shall contain a
detailed, sufficiently explicit statement of the changes in or amendments to the subject
measure.
32
The consideration of such report shall not be in order unless copies thereof are distributed to
the Members: Provided, That in the last fifteen days of each session period it shall be deemed
sufficient that three copies of the report, signed as above provided, are deposited in the
office of the Secretary General.
(Emphasis added)
To be sure, nothing in the Rules limits a conference committee to a consideration of conflicting provisions. But
Rule XLIV, § 112 of the Rules of the Senate is cited to the effect that "If there is no Rule applicable to a specific
case the precedents of the Legislative Department of the Philippines shall be resorted to, and as a supplement of
these, the Rules contained in Jefferson's Manual." The following is then quoted from the Jefferson's Manual:
The managers of a conference must confine themselves to the differences committed to
them. . . and may not include subjects not within disagreements, even though germane to a
question in issue.
Note that, according to Rule XLIX, § 112, in case there is no specific rule applicable, resort must be to the
legislative practice. The Jefferson's Manual is resorted to only as supplement. It is common place in Congress that
conference committee reports include new matters which, though germane, have not been committed to the
committee. This practice was admitted by Senator Raul S. Roco, petitioner in G.R. No. 115543, during the oral
argument in these cases. Whatever, then, may be provided in the Jefferson's Manual must be considered to have
been modified by the legislative practice. If a change is desired in the practice it must be sought in Congress since
this question is not covered by any constitutional provision but is only an internal rule of each house. Thus, Art.
VI, § 16(3) of the Constitution provides that "Each House may determine the rules of its proceedings. . . ."
This observation applies to the other contention that the Rules of the two chambers were likewise disregarded in
the preparation of the Conference Committee Report because the Report did not contain a "detailed and
sufficiently explicit statement of changes in, or amendments to, the subject measure." The Report used brackets
and capital letters to indicate the changes. This is a standard practice in bill-drafting. We cannot say that in using
these marks and symbols the Committee violated the Rules of the Senate and the House. Moreover, this Court is
not the proper forum for the enforcement of these internal Rules. To the contrary, as we have already ruled,
"parliamentary rules are merely procedural and with their observance the courts have no concern." 19 Our
concern is with the procedural requirements of the Constitution for the enactment of laws. As far as these
requirements are concerned, we are satisfied that they have been faithfully observed in these cases.
Nor is there any reason for requiring that the Committee's Report in these cases must have undergone three
readings in each of the two houses. If that be the case, there would be no end to negotiation since each house
may seek modifications of the compromise bill. The nature of the bill, therefore, requires that it be acted upon by
each house on a "take it or leave it" basis, with the only alternative that if it is not approved by both houses,
another conference committee must be appointed. But then again the result would still be a compromise
measure that may not be wholly satisfying to both houses.
Art. VI, § 26(2) must, therefore, be construed as referring only to bills introduced for the first time in either house
of Congress, not to the conference committee report. For if the purpose of requiring three readings is to give
members of Congress time to study bills, it cannot be gainsaid that H. No. 11197 was passed in the House after
three readings; that in the Senate it was considered on first reading and then referred to a committee of that
body; that although the Senate committee did not report out the House bill, it submitted a version (S. No. 1630)
which it had prepared by "taking into consideration" the House bill; that for its part the Conference Committee
consolidated the two bills and prepared a compromise version; that the Conference Committee Report was
thereafter approved by the House and the Senate, presumably after appropriate study by their members. We
cannot say that, as a matter of fact, the members of Congress were not fully informed of the provisions of the
bill. The allegation that the Conference Committee usurped the legislative power of Congress is, in our view,
without warrant in fact and in law.
Fourth. Whatever doubts there may be as to the formal validity of Republic Act No. 7716 must be resolved in its
favor. Our cases 20 manifest firm adherence to the rule that an enrolled copy of a bill is conclusive not only of its
provisions but also of its due enactment. Not even claims that a proposed constitutional amendment was invalid
because the requisite votes for its approval had not been obtained 21 or that certain provisions of a statute had
been "smuggled" in the printing of the bill 22 have moved or persuaded us to look behind the proceedings of a
coequal branch of the government. There is no reason now to depart from this rule.
No claim is here made that the "enrolled bill" rule is absolute. In fact in one case 23 we "went behind" an enrolled
bill and consulted the Journal to determine whether certain provisions of a statute had been approved by the
Senate in view of the fact that the President of the Senate himself, who had signed the enrolled bill, admitted a
mistake and withdrew his signature, so that in effect there was no longer an enrolled bill to consider.
But where allegations that the constitutional procedures for the passage of bills have not been observed have no
more basis than another allegation that the Conference Committee "surreptitiously" inserted provisions into a bill
which it had prepared, we should decline the invitation to go behind the enrolled copy of the bill. To disregard
the "enrolled bill" rule in such cases would be to disregard the respect due the other two departments of our
government.
Fifth. An additional attack on the formal validity of Republic Act No. 7716 is made by the Philippine Airlines, Inc.,
petitioner in G.R. No. 11582, namely, that it violates Art. VI, § 26(1) which provides that "Every bill passed by
Congress shall embrace only one subject which shall be expressed in the title thereof." It is contended that
neither H. No. 11197 nor S. No. 1630 provided for removal of exemption of PAL transactions from the payment of
the VAT and that this was made only in the Conference Committee bill which became Republic Act No. 7716
without reflecting this fact in its title.
The title of Republic Act No. 7716 is:
AN ACT RESTRUCTURING THE VALUE- ADDED TAX (VAT) SYSTEM, WIDENING ITS TAX BASE
AND ENHANCING ITS ADMINISTRATION, AND FOR THESE PURPOSES AMENDING AND
REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES.
Among the provisions of the NIRC amended is § 103, which originally read:
32
§ 103. Exempt transactions. — The following shall be exempt from the value-added tax:
....
(q) Transactions which are exempt under special laws or international agreements to which
the Philippines is a signatory. Among the transactions exempted from the VAT were those of
PAL because it was exempted under its franchise (P.D. No. 1590) from the payment of all
"other taxes . . . now or in the near future," in consideration of the payment by it either of the
corporate income tax or a franchise tax of 2%.
As a result of its amendment by Republic Act No. 7716, § 103 of the NIRC now provides:
§ 103. Exempt transactions. — The following shall be exempt from the value-added tax:
....
(q) Transactions which are exempt under special laws, except those granted under
Presidential Decree Nos. 66, 529, 972, 1491, 1590. . . .
The effect of the amendment is to remove the exemption granted to PAL, as far as the VAT is concerned.
The question is whether this amendment of § 103 of the NIRC is fairly embraced in the title of Republic Act No.
7716, although no mention is made therein of P.D. No. 1590 as among those which the statute amends. We think
it is, since the title states that the purpose of the statute is to expand the VAT system, and one way of doing this is
to widen its base by withdrawing some of the exemptions granted before. To insist that P.D. No. 1590 be
mentioned in the title of the law, in addition to § 103 of the NIRC, in which it is specifically referred to, would be
to insist that the title of a bill should be a complete index of its content.
The constitutional requirement that every bill passed by Congress shall embrace only one subject which shall be
expressed in its title is intended to prevent surprise upon the members of Congress and to inform the people of
pending legislation so that, if they wish to, they can be heard regarding it. If, in the case at bar, petitioner did not
know before that its exemption had been withdrawn, it is not because of any defect in the title but perhaps for
the same reason other statutes, although published, pass unnoticed until some event somehow calls attention to
their existence. Indeed, the title of Republic Act No. 7716 is not any more general than the title of PAL's own
franchise under P.D. No. 1590, and yet no mention is made of its tax exemption. The title of P.D. No. 1590 is:
AN ACT GRANTING A NEW FRANCHISE TO PHILIPPINE AIRLINES, INC. TO ESTABLISH, OPERATE,
AND MAINTAIN AIR-TRANSPORT SERVICES IN THE PHILIPPINES AND BETWEEN THE
PHILIPPINES AND OTHER COUNTRIES.
The trend in our cases is to construe the constitutional requirement in such a manner that courts do not unduly
interfere with the enactment of necessary legislation and to consider it sufficient if the title expresses the general
subject of the statute and all its provisions are germane to the general subject thus expressed. 24
It is further contended that amendment of petitioner's franchise may only be made by special law, in view of § 24
of P.D. No. 1590 which provides:
This franchise, as amended, or any section or provision hereof may only be modified,
amended, or repealed expressly by a special law or decree that shall specifically modify,
amend, or repeal this franchise or any section or provision thereof.
This provision is evidently intended to prevent the amendment of the franchise by mere implication resulting
from the enactment of a later inconsistent statute, in consideration of the fact that a franchise is a contract which
can be altered only by consent of the parties. Thus in Manila Railroad Co. v.
Rafferty, 25 it was held that an Act of the U.S. Congress, which provided for the payment of tax on certain goods
and articles imported into the Philippines, did not amend the franchise of plaintiff, which exempted it from all
taxes except those mentioned in its franchise. It was held that a special law cannot be amended by a general law.
In contrast, in the case at bar, Republic Act No. 7716 expressly amends PAL's franchise (P.D. No. 1590) by
specifically excepting from the grant of exemptions from the VAT PAL's exemption under P.D. No. 1590. This is
within the power of Congress to do under Art. XII, § 11 of the Constitution, which provides that the grant of a
franchise for the operation of a public utility is subject to amendment, alteration or repeal by Congress when the
common good so requires.
II. SUBSTANTIVE ISSUES
A. Claims of Press Freedom, Freedom of Thought and
Religious Freedom
The Philippine Press Institute (PPI), petitioner in G.R. No. 115544, is a nonprofit organization of newspaper
publishers established for the improvement of journalism in the Philippines. On the other hand, petitioner in G.R.
No. 115781, the Philippine Bible Society (PBS), is a nonprofit organization engaged in the printing and distribution
of bibles and other religious articles. Both petitioners claim violations of their rights under § § 4 and 5 of the Bill
of Rights as a result of the enactment of the VAT Law.
The PPI questions the law insofar as it has withdrawn the exemption previously granted to the press under § 103
(f) of the NIRC. Although the exemption was subsequently restored by administrative regulation with respect to
the circulation income of newspapers, the PPI presses its claim because of the possibility that the exemption may
still be removed by mere revocation of the regulation of the Secretary of Finance. On the other hand, the PBS
goes so far as to question the Secretary's power to grant exemption for two reasons: (1) The Secretary of Finance
has no power to grant tax exemption because this is vested in Congress and requires for its exercise the vote of a
majority of all its members 26 and (2) the Secretary's duty is to execute the law.
§ 103 of the NIRC contains a list of transactions exempted from VAT. Among the transactions previously granted
exemption were:
32
(f) Printing, publication, importation or sale of books and any newspaper, magazine, review,
or bulletin which appears at regular intervals with fixed prices for subscription and sale and
which is devoted principally to the publication of advertisements.
Republic Act No. 7716 amended § 103 by deleting ¶ (f) with the result that print media became subject to the
VAT with respect to all aspects of their operations. Later, however, based on a memorandum of the Secretary of
Justice, respondent Secretary of Finance issued Revenue Regulations No. 11-94, dated June 27, 1994, exempting
the "circulation income of print media pursuant to § 4 Article III of the 1987 Philippine Constitution guaranteeing
against abridgment of freedom of the press, among others." The exemption of "circulation income" has left
income from advertisements still subject to the VAT.
It is unnecessary to pass upon the contention that the exemption granted is beyond the authority of the
Secretary of Finance to give, in view of PPI's contention that even with the exemption of the circulation revenue
of print media there is still an unconstitutional abridgment of press freedom because of the imposition of the VAT
on the gross receipts of newspapers from advertisements and on their acquisition of paper, ink and services for
publication. Even on the assumption that no exemption has effectively been granted to print media transactions,
we find no violation of press freedom in these cases.
To be sure, we are not dealing here with a statute that on its face operates in the area of press freedom. The PPI's
claim is simply that, as applied to newspapers, the law abridges press freedom. Even with due recognition of its
high estate and its importance in a democratic society, however, the press is not immune from general regulation
by the State. It has been held:
The publisher of a newspaper has no immunity from the application of general laws. He has
no special privilege to invade the rights and liberties of others. He must answer for libel. He
may be punished for contempt of court. . . . Like others, he must pay equitable and
nondiscriminatory taxes on his business. . . . 27
The PPI does not dispute this point, either.
What it contends is that by withdrawing the exemption previously granted to print media transactions involving
printing, publication, importation or sale of newspapers, Republic Act No. 7716 has singled out the press for
discriminatory treatment and that within the class of mass media the law discriminates against print media by
giving broadcast media favored treatment. We have carefully examined this argument, but we are unable to find
a differential treatment of the press by the law, much less any censorial motivation for its enactment. If the press
is now required to pay a value-added tax on its transactions, it is not because it is being singled out, much less
targeted, for special treatment but only because of the removal of the exemption previously granted to it by law.
The withdrawal of exemption is all that is involved in these cases. Other transactions, likewise previously granted
exemption, have been delisted as part of the scheme to expand the base and the scope of the VAT system. The
law would perhaps be open to the charge of discriminatory treatment if the only privilege withdrawn had been
that granted to the press. But that is not the case.
The situation in the case at bar is indeed a far cry from those cited by the PPI in support of its claim that Republic
Act No. 7716 subjects the press to discriminatory taxation. In the cases cited, the discriminatory purpose was
clear either from the background of the law or from its operation. For example, in Grosjean v. American Press
Co., 28 the law imposed a license tax equivalent to 2% of the gross receipts derived from advertisements only on
newspapers which had a circulation of more than 20,000 copies per week. Because the tax was not based on the
volume of advertisement alone but was measured by the extent of its circulation as well, the law applied only to
the thirteen large newspapers in Louisiana, leaving untaxed four papers with circulation of only slightly less than
20,000 copies a week and 120 weekly newspapers which were in serious competition with the thirteen
newspapers in question. It was well known that the thirteen newspapers had been critical of Senator Huey Long,
and the Long-dominated legislature of Louisiana respondent by taxing what Long described as the "lying
newspapers" by imposing on them "a tax on lying." The effect of the tax was to curtail both their revenue and
their circulation. As the U.S. Supreme Court noted, the tax was "a deliberate and calculated device in the guise of
a tax to limit the circulation of information to which the public is entitled in virtue of the constitutional
guaranties." 29 The case is a classic illustration of the warning that the power to tax is the power to destroy.
In the other case 30 invoked by the PPI, the press was also found to have been singled out because everything was
exempt from the "use tax" on ink and paper, except the press. Minnesota imposed a tax on the sales of goods in
that state. To protect the sales tax, it enacted a complementary tax on the privilege of "using, storing or
consuming in that state tangible personal property" by eliminating the residents' incentive to get goods from
outside states where the sales tax might be lower. The Minnesota Star Tribune was exempted from both taxes
from 1967 to 1971. In 1971, however, the state legislature amended the tax scheme by imposing the "use tax" on
the cost of paper and ink used for publication. The law was held to have singled out the press because (1) there
was no reason for imposing the "use tax" since the press was exempt from the sales tax and (2) the "use tax" was
laid on an "intermediate transaction rather than the ultimate retail sale." Minnesota had a heavy burden of
justifying the differential treatment and it failed to do so. In addition, the U.S. Supreme Court found the law to be
discriminatory because the legislature, by again amending the law so as to exempt the first $100,000 of paper
and ink used, further narrowed the coverage of the tax so that "only a handful of publishers pay any tax at all and
even fewer pay any significant amount of tax." 31 The discriminatory purpose was thus very clear.
More recently, in Arkansas Writers' Project, Inc. v. Ragland, 32 it was held that a law which taxed general interest
magazines but not newspapers and religious, professional, trade and sports journals was discriminatory because
while the tax did not single out the press as a whole, it targeted a small group within the press. What is more, by
differentiating on the basis of contents (i.e., between general interest and special interests such as religion or
sports) the law became "entirely incompatible with the First Amendment's guarantee of freedom of the press."
These cases come down to this: that unless justified, the differential treatment of the press creates risks of
suppression of expression. In contrast, in the cases at bar, the statute applies to a wide range of goods and
services. The argument that, by imposing the VAT only on print media whose gross sales exceeds P480,000 but
not more than P750,000, the law discriminates 33 is without merit since it has not been shown that as a result the
class subject to tax has been unreasonably narrowed. The fact is that this limitation does not apply to the press
along but to all sales. Nor is impermissible motive shown by the fact that print media and broadcast media are
treated differently. The press is taxed on its transactions involving printing and publication, which are different
from the transactions of broadcast media. There is thus a reasonable basis for the classification.
The cases canvassed, it must be stressed, eschew any suggestion that "owners of newspapers are immune from
any forms of ordinary taxation." The license tax in the Grosjean case was declared invalid because it was "one
single in kind, with a long history of hostile misuse against the freedom of the
32
press." 34 On the other hand, Minneapolis Star acknowledged that "The First Amendment does not prohibit all
regulation of the press [and that] the States and the Federal Government can subject newspapers to generally
applicable economic regulations without creating constitutional problems." 35
What has been said above also disposes of the allegations of the PBS that the removal of the exemption of
printing, publication or importation of books and religious articles, as well as their printing and publication,
likewise violates freedom of thought and of conscience. For as the U.S. Supreme Court unanimously held
in Jimmy Swaggart Ministries v. Board of Equalization, 36 the Free Exercise of Religion Clause does not prohibit
imposing a generally applicable sales and use tax on the sale of religious materials by a religious organization.
This brings us to the question whether the registration provision of the law, 37 although of general applicability,
nonetheless is invalid when applied to the press because it lays a prior restraint on its essential freedom. The
case of American Bible Society v. City of Manila 38 is cited by both the PBS and the PPI in support of their
contention that the law imposes censorship. There, this Court held that an ordinance of the City of Manila, which
imposed a license fee on those engaged in the business of general merchandise, could not be applied to the
appellant's sale of bibles and other religious literature. This Court relied on Murdock v. Pennsylvania, 39 in which it
was held that, as a license fee is fixed in amount and unrelated to the receipts of the taxpayer, the license fee,
when applied to a religious sect, was actually being imposed as a condition for the exercise of the sect's right
under the Constitution. For that reason, it was held, the license fee "restrains in advance those constitutional
liberties of press and religion and inevitably tends to suppress their exercise." 40
But, in this case, the fee in § 107, although a fixed amount (P1,000), is not imposed for the exercise of a privilege
but only for the purpose of defraying part of the cost of registration. The registration requirement is a central
feature of the VAT system. It is designed to provide a record of tax credits because any person who is subject to
the payment of the VAT pays an input tax, even as he collects an output tax on sales made or services rendered.
The registration fee is thus a mere administrative fee, one not imposed on the exercise of a privilege, much less a
constitutional right.
For the foregoing reasons, we find the attack on Republic Act No. 7716 on the ground that it offends the free
speech, press and freedom of religion guarantees of the Constitution to be without merit. For the same reasons,
we find the claim of the Philippine Educational Publishers Association (PEPA) in G.R. No. 115931 that the increase
in the price of books and other educational materials as a result of the VAT would violate the constitutional
mandate to the government to give priority to education, science and technology (Art. II, § 17) to be untenable.
B. Claims of Regressivity, Denial of Due Process, Equal
Protection, and Impairment
of Contracts
There is basis for passing upon claims that on its face the statute violates the guarantees of freedom of speech,
press and religion. The possible "chilling effect" which it may have on the essential freedom of the mind and
conscience and the need to assure that the channels of communication are open and operating importunately
demand the exercise of this Court's power of review.
There is, however, no justification for passing upon the claims that the law also violates the rule that taxation
must be progressive and that it denies petitioners' right to due process and that equal protection of the laws. The
reason for this different treatment has been cogently stated by an eminent authority on constitutional law thus:
"[W]hen freedom of the mind is imperiled by law, it is freedom that commands a momentum of respect; when
property is imperiled it is the lawmakers' judgment that commands respect. This dual standard may not precisely
reverse the presumption of constitutionality in civil liberties cases, but obviously it does set up a hierarchy of
values within the due process clause." 41
Indeed, the absence of threat of immediate harm makes the need for judicial intervention less evident and
underscores the essential nature of petitioners' attack on the law on the grounds of regressivity, denial of due
process and equal protection and impairment of contracts as a mere academic discussion of the merits of the
law. For the fact is that there have even been no notices of assessments issued to petitioners and no
determinations at the administrative levels of their claims so as to illuminate the actual operation of the law and
enable us to reach sound judgment regarding so fundamental questions as those raised in these suits.
Thus, the broad argument against the VAT is that it is regressive and that it violates the requirement that "The
rule of taxation shall be uniform and equitable [and] Congress shall evolve a progressive system of
taxation." 42 Petitioners in G.R. No. 115781 quote from a paper, entitled "VAT Policy Issues: Structure, Regressivity,
Inflation and Exports" by Alan A. Tait of the International Monetary Fund, that "VAT payment by low-income
households will be a higher proportion of their incomes (and expenditures) than payments by higher-income
households. That is, the VAT will be regressive." Petitioners contend that as a result of the uniform 10% VAT, the
tax on consumption goods of those who are in the higher-income bracket, which before were taxed at a rate
higher than 10%, has been reduced, while basic commodities, which before were taxed at rates ranging from 3%
to 5%, are now taxed at a higher rate.
Just as vigorously as it is asserted that the law is regressive, the opposite claim is pressed by respondents that in
fact it distributes the tax burden to as many goods and services as possible particularly to those which are within
the reach of higher-income groups, even as the law exempts basic goods and services. It is thus equitable. The
goods and properties subject to the VAT are those used or consumed by higher-income groups. These include
real properties held primarily for sale to customers or held for lease in the ordinary course of business, the right
or privilege to use industrial, commercial or scientific equipment, hotels, restaurants and similar places, tourist
buses, and the like. On the other hand, small business establishments, with annual gross sales of less than
P500,000, are exempted. This, according to respondents, removes from the coverage of the law some 30,000
business establishments. On the other hand, an occasional paper 43 of the Center for Research and
Communication cities a NEDA study that the VAT has minimal impact on inflation and income distribution and
that while additional expenditure for the lowest income class is only P301 or 1.49% a year, that for a family
earning P500,000 a year or more is P8,340 or 2.2%.
Lacking empirical data on which to base any conclusion regarding these arguments, any discussion whether the
VAT is regressive in the sense that it will hit the "poor" and middle-income group in society harder than it will the
"rich," as the Cooperative Union of the Philippines (CUP) claims in G.R. No. 115873, is largely an academic
exercise. On the other hand, the CUP's contention that Congress' withdrawal of exemption of producers
cooperatives, marketing cooperatives, and service cooperatives, while maintaining that granted to electric
cooperatives, not only goes against the constitutional policy to promote cooperatives as instruments of social
justice (Art. XII, § 15) but also denies such cooperatives the equal protection of the law is actually a policy
32
argument. The legislature is not required to adhere to a policy of "all or none" in choosing the subject of
taxation. 44
Nor is the contention of the Chamber of Real Estate and Builders Association (CREBA), petitioner in G.R. 115754,
that the VAT will reduce the mark up of its members by as much as 85% to 90% any more concrete. It is a mere
allegation. On the other hand, the claim of the Philippine Press Institute, petitioner in G.R. No. 115544, that the
VAT will drive some of its members out of circulation because their profits from advertisements will not be
enough to pay for their tax liability, while purporting to be based on the financial statements of the newspapers
in question, still falls short of the establishment of facts by evidence so necessary for adjudicating the question
whether the tax is oppressive and confiscatory.
Indeed, regressivity is not a negative standard for courts to enforce. What Congress is required by the
Constitution to do is to "evolve a progressive system of taxation." This is a directive to Congress, just like the
directive to it to give priority to the enactment of laws for the enhancement of human dignity and the reduction
of social, economic and political inequalities (Art. XIII, § 1), or for the promotion of the right to "quality
education" (Art. XIV, § 1). These provisions are put in the Constitution as moral incentives to legislation, not as
judicially enforceable rights.
At all events, our 1988 decision in Kapatiran 45 should have laid to rest the questions now raised against the VAT.
There similar arguments made against the original VAT Law (Executive Order No. 273) were held to be
hypothetical, with no more basis than newspaper articles which this Court found to be "hearsay and [without]
evidentiary value." As Republic Act No. 7716 merely expands the base of the VAT system and its coverage as
provided in the original VAT Law, further debate on the desirability and wisdom of the law should have shifted to
Congress.
Only slightly less abstract but nonetheless hypothetical is the contention of CREBA that the imposition of the VAT
on the sales and leases of real estate by virtue of contracts entered into prior to the effectivity of the law would
violate the constitutional provision that "No law impairing the obligation of contracts shall be passed." It is
enough to say that the parties to a contract cannot, through the exercise of prophetic discernment, fetter the
exercise of the taxing power of the State. For not only are existing laws read into contracts in order to fix
obligations as between parties, but the reservation of essential attributes of sovereign power is also read into
contracts as a basic postulate of the legal order. The policy of protecting contracts against impairment
presupposes the maintenance of a government which retains adequate authority to secure the peace and good
order of society. 46
In truth, the Contract Clause has never been thought as a limitation on the exercise of the State's power of
taxation save only where a tax exemption has been granted for a valid consideration. 47 Such is not the case of PAL
in G.R. No. 115852, and we do not understand it to make this claim. Rather, its position, as discussed above, is
that the removal of its tax exemption cannot be made by a general, but only by a specific, law.
The substantive issues raised in some of the cases are presented in abstract, hypothetical form because of the
lack of a concrete record. We accept that this Court does not only adjudicate private cases; that public actions by
"non-Hohfeldian" 48 or ideological plaintiffs are now cognizable provided they meet the standing requirement of
the Constitution; that under Art. VIII, § 1, ¶ 2 the Court has a "special function" of vindicating constitutional
rights. Nonetheless the feeling cannot be escaped that we do not have before us in these cases a fully developed _______________________________
factual record that alone can impart to our adjudication the impact of actuality 49 to insure that decision-making
is informed and well grounded. Needless to say, we do not have power to render advisory opinions or even In the preceeding pages we have endeavored to discuss, within limits, the validity of Republic Act No. 7716 in its
jurisdiction over petitions for declaratory judgment. In effect we are being asked to do what the Conference formal and substantive aspects as this has been raised in the various cases before us. To sum up, we hold:
Committee is precisely accused of having done in these cases — to sit as a third legislative chamber to review
legislation.
(1) That the procedural requirements of the Constitution have been complied with by Congress in the enactment
of the statute;
We are told, however, that the power of judicial review is not so much power as it is duty imposed on this Court
by the Constitution and that we would be remiss in the performance of that duty if we decline to look behind the
(2) That judicial inquiry whether the formal requirements for the enactment of statutes — beyond those
barriers set by the principle of separation of powers. Art. VIII, § 1, ¶ 2 is cited in support of this view:
prescribed by the Constitution — have been observed is precluded by the principle of separation of powers;

Judicial power includes the duty of the courts of justice to settle actual controversies
(3) That the law does not abridge freedom of speech, expression or the press, nor interfere with the free exercise
involving rights which are legally demandable and enforceable, and to determine whether or
of religion, nor deny to any of the parties the right to an education; and
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government.
(4) That, in view of the absence of a factual foundation of record, claims that the law is regressive, oppressive and
confiscatory and that it violates vested rights protected under the Contract Clause are prematurely raised and do
To view the judicial power of review as a duty is nothing new. Chief Justice Marshall said so in 1803, to justify the
not justify the grant of prospective relief by writ of prohibition. WHEREFORE, the petitions in these cases are
assertion of this power in Marbury v. Madison:
DISMISSED.

It is emphatically the province and duty of the judicial department to say what the law is.
Republic of the Philippines
Those who apply the rule to particular cases must of necessity expound and interpret that
SUPREME COURT
rule. If two laws conflict with each other, the courts must decide on the operation of each. 50
Manila

Justice Laurel echoed this justification in 1936 in Angara v. Electoral Commission:

EN BANC

And when the judiciary mediates to allocate constitutional boundaries, it does not assert any
G.R. No. 209287 July 1, 2014
superiority over the other departments; it does not in reality nullify or invalidate an act of the
legislature, but only asserts the solemn and sacred obligation assigned to it by the
Constitution to determine conflicting claims of authority under the Constitution and to MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG MAKABAYAN; JUDY M. TAGUIWALO,
establish for the parties in an actual controversy the rights which that instrument secures and PROFESSOR, UNIVERSITY OF THE PHILIPPINES DILIMAN, CO-CHAIRPERSON, PAGBABAGO; HENRI KAHN,
guarantees to them. 51 CONCERNED CITIZENS MOVEMENT; REP. LUZ ILAGAN, GABRIELA WOMEN'S PARTY REPRESENTATIVE; REP.
CARLOS ISAGANI ZARATE, BAY AN MUNA PARTY-LIST REPRESENTATIVE; RENATO M. REYES, JR., SECRETARY
GENERAL OF BAYAN; MANUEL K. DAYRIT, CHAIRMAN, ANG KAPATIRAN PARTY; VENCER MARI E. CRISOSTOMO,
This conception of the judicial power has been affirmed in several
CHAIRPERSON, ANAKBAYAN; VICTOR VILLANUEVA, CONVENOR, YOUTH ACT NOW, Petitioners,
cases 52 of this Court following Angara.
vs.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO N. OCHOA, JR.,
It does not add anything, therefore, to invoke this "duty" to justify this Court's intervention in what is essentially a EXECUTIVE SECRETARY; AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND
case that at best is not ripe for adjudication. That duty must still be performed in the context of a concrete case MANAGEMENT, Respondents.
or controversy, as Art. VIII, § 5(2) clearly defines our jurisdiction in terms of "cases," and nothing but "cases." That
the other departments of the government may have committed a grave abuse of discretion is not an
x-----------------------x
independent ground for exercising our power. Disregard of the essential limits imposed by the case and
controversy requirement can in the long run only result in undermining our authority as a court of law. For, as
judges, what we are called upon to render is judgment according to law, not according to what may appear to be G.R. No. 209135
the opinion of the day.

32
AUGUSTO L. SY JUCO JR., Ph.D., Petitioner, x-----------------------x
vs.
FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT OF BUDGET AND MANAGEMENT; G.R. No. 209442
AND HON. FRANKLIN MAGTUNAO DRILON, IN HIS CAP A CITY AS THE SENATE PRESIDENT OF THE
PHILIPPINES, Respondents.
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN MABANTE AND REV. JOSE L. GONZALEZ,Petitioners,
vs.
x-----------------------x PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF THE PHILIPPINES, REPRESENTED BY SENATE
PRESIDENT FRANKLIN M. DRILON; THE HOUSE OF REPRESENTATIVES, REPRESENTED BY SPEAKER FELICIANO
G.R. No. 209136 BELMONTE, JR.; THE EXECUTIVE OFFICE, REPRESENTED BY EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; THE
DEPARTMENT OF BUDGET AND MANAGEMENT, REPRESENTED BY SECRETARY FLORENCIO ABAD; THE
MANUELITO R. LUNA, Petitioner, DEPARTMENT OF FINANCE, REPRESENTED BY SECRETARY CESAR V. PURISIMA; AND THE BUREAU OF TREASURY,
vs. REPRESENTED BY ROSALIA V. DE LEON, Respondents.
SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE DEPARTMENT OF BUDGET AND
MANAGEMENT; AND EXECUTIVE SECRETARY PAQUITO OCHOA, IN HIS OFFICIAL CAPACITY AS ALTER EGO OF x-----------------------x
THE PRESIDENT, Respondents.
G.R. No. 209517
x-----------------------x
CONFEDERATION FOR UNITY, RECOGNITION AND ADV AN CEMENT OF GOVERNMENT EMPLOYEES (COURAGE),
G.R. No. 209155 REPRESENTED BY ITS 1ST VICE PRESIDENT, SANTIAGO DASMARINAS, JR.; ROSALINDA NARTATES, FOR HERSELF
AND AS NATIONAL PRESIDENT OF THE CONSOLIDATED UNION OF EMPLOYEES NATIONAL HOUSING AUTHORITY
ATTY. JOSE MALV AR VILLEGAS, JR., Petitioner, (CUENHA); MANUEL BACLAGON, FOR HIMSELF AND AS PRESIDENT OF THE SOCIAL WELFARE EMPLOYEES
vs. ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT CENTRAL OFFICE
THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE SECRETARY OF BUDGET AND (SWEAP-DSWD CO); ANTONIA PASCUAL, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE DEPARTMENT OF
MANAGEMENT FLORENCIO B. ABAD, Respondents. AGRARIAN REFORM EMPLOYEES ASSOCIATION (DAREA); ALBERT MAGALANG, FOR HIMSELF AND AS
PRESIDENT OF THE ENVIRONMENT AND MANAGEMENT BUREAU EMPLOYEES UNION (EMBEU); AND MARCIAL
ARABA, FOR HIMSELF AND AS PRESIDENT OF THE KAPISANAN PARA SA KAGALINGAN NG MGA KAW ANI NG
x-----------------------x
MMDA (KKKMMDA), Petitioners,
vs.
G.R. No. 209164 BENIGNO SIMEON C. AQUINO Ill, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO OCHOA, JR.,
EXECUTIVE SECRETARY; AND HON. FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN FROILAN M. BACUNGAN, MANAGEMENT, Respondents.
BENJAMIN E. DIOKNO AND LEONOR M. BRIONES, Petitioners,
vs. x-----------------------x
DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B. ABAD, Respondents.
G.R. No. 209569
x-----------------------x
VOLUNTEERS AGAINST CRIME AND CORRUPTION (VACC), REPRESENTED BY DANTE L. JIMENEZ,Petitioner,
G.R. No. 209260 vs.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF
INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner, BUDGET AND MANAGEMENT, Respondents.
vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM),Respondent. DECISION

32
BERSAMIN, J.:
For resolution are the consolidated petitions assailing the constitutionality of the Disbursement Acceleration
Program(DAP), National Budget Circular (NBC) No. 541, and related issuances of the Department of Budget and
Management (DBM) implementing the DAP.
At the core of the controversy is Section 29(1) of Article VI of the 1987 Constitution, a provision of the
fundamental law that firmly ordains that "[n]o money shall be paid out of the Treasury except in pursuance of an
appropriation made by law." The tenor and context of the challenges posed by the petitioners against the DAP
indicate that the DAP contravened this provision by allowing the Executive to allocate public money pooled from
programmed and unprogrammed funds of its various agencies in the guise of the President exercising his
constitutional authority under Section 25(5) of the 1987 Constitution to transfer funds out of savings to augment
the appropriations of offices within the Executive Branch of the Government. But the challenges are further
complicated by the interjection of allegations of transfer of funds to agencies or offices outside of the Executive.
Antecedents
What has precipitated the controversy?
On September 25, 2013, Sen. Jinggoy Ejercito Estrada delivered a privilege speech in the Senate of the Philippines
to reveal that some Senators, including himself, had been allotted an additional ₱50 Million each as "incentive"
for voting in favor of the impeachment of Chief Justice Renato C. Corona.
Responding to Sen. Estrada’s revelation, Secretary Florencio Abad of the DBM issued a public statement entitled
Abad: Releases to Senators Part of Spending Acceleration Program, 1 explaining that the funds released to the
Senators had been part of the DAP, a program designed by the DBM to ramp up spending to accelerate economic
expansion. He clarified that the funds had been released to the Senators based on their letters of request for
funding; and that it was not the first time that releases from the DAP had been made because the DAP had
already been instituted in 2011 to ramp up spending after sluggish disbursements had caused the growth of the
gross domestic product (GDP) to slow down. He explained that the funds under the DAP were usually taken from
(1) unreleased appropriations under Personnel Services; 2 (2) unprogrammed funds; (3) carry-over appropriations
unreleased from the previous year; and (4) budgets for slow-moving items or projects that had been realigned to
support faster-disbursing projects.
The DBM soon came out to claim in its website 3 that the DAP releases had been sourced from savings generated
by the Government, and from unprogrammed funds; and that the savings had been derived from (1) the pooling
of unreleased appropriations, like unreleased Personnel Services 4 appropriations that would lapse at the end of
the year, unreleased appropriations of slow-moving projects and discontinued projects per zero based budgeting
findings;5 and (2) the withdrawal of unobligated allotments also for slow-moving programs and projects that had
been earlier released to the agencies of the National Government.
The DBM listed the following as the legal bases for the DAP’s use of savings, 6 namely: (1) Section 25(5), Article VI
of the 1987 Constitution, which granted to the President the authority to augment an item for his office in the
general appropriations law; (2) Section 49 (Authority to Use Savings for Certain Purposes) and Section 38
32
(Suspension of Expenditure Appropriations), Chapter 5, Book VI of Executive Order (EO) No. 292 (Administrative
Code of 1987); and (3) the General Appropriations Acts (GAAs) of 2011, 2012 and 2013, particularly their
provisions on the (a) use of savings; (b) meanings of savings and augmentation; and (c) priority in the use of
savings.
As for the use of unprogrammed funds under the DAP, the DBM cited as legal bases the special provisions on
unprogrammed fund contained in the GAAs of 2011, 2012 and 2013.
The revelation of Sen. Estrada and the reactions of Sec. Abad and the DBM brought the DAP to the consciousness
of the Nation for the first time, and made this present controversy inevitable. That the issues against the DAP
came at a time when the Nation was still seething in anger over Congressional pork barrel – "an appropriation of
government spending meant for localized projects and secured solely or primarily to bring money to a
representative’s district"7 – excited the Nation as heatedly as the pork barrel controversy.
Nine petitions assailing the constitutionality of the DAP and the issuances relating to the DAP were filed within
days of each other, as follows: G.R. No. 209135 (Syjuco), on October 7, 2013; G.R. No. 209136 (Luna), on October
7, 2013; G.R. No. 209155 (Villegas),8 on October 16, 2013; G.R. No. 209164 (PHILCONSA), on October 8, 2013;
G.R. No. 209260 (IBP), on October 16, 2013; G.R. No. 209287 (Araullo), on October 17, 2013; G.R. No. 209442
(Belgica), on October 29, 2013; G.R. No. 209517 (COURAGE), on November6, 2013; and G.R. No. 209569 (VACC),
on November 8, 2013.
In G.R. No. 209287 (Araullo), the petitioners brought to the Court’s attention NBC No. 541 (Adoption of
Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012), alleging
that NBC No. 541, which was issued to implement the DAP, directed the withdrawal of unobligated allotments as
of June 30, 2012 of government agencies and offices with low levels of obligations, both for continuing and
current allotments.
In due time, the respondents filed their Consolidated Comment through the Office of the Solicitor General (OSG).
The Court directed the holding of oral arguments on the significant issues raised and joined.
Issues
Under the Advisory issued on November 14, 2013, the presentations of the parties during the oral arguments
were limited to the following, to wit:
Procedural Issue:
A. Whether or not certiorari, prohibition, and mandamus are proper remedies to assail the constitutionality and
validity of the Disbursement Acceleration Program (DAP), National Budget Circular (NBC) No. 541, and all other
executive issuances allegedly implementing the DAP. Subsumed in this issue are whether there is a controversy
ripe for judicial determination, and the standing of petitioners.
Substantive Issues:
B. Whether or not the DAP violates Sec. 29, Art. VI of the 1987 Constitution, which provides: "No money shall be
paid out of the Treasury except in pursuance of an appropriation made by law."
C. Whether or not the DAP, NBC No. 541, and all other executive issuances allegedly implementing the DAP
violate Sec. 25(5), Art. VI of the 1987 Constitution insofar as:
(a)They treat the unreleased appropriations and unobligated allotments withdrawn from
government agencies as "savings" as the term is used in Sec. 25(5), in relation to the
provisions of the GAAs of 2011, 2012 and 2013;
(b)They authorize the disbursement of funds for projects or programs not provided in the
GAAs for the Executive Department; and
(c)They "augment" discretionary lump sum appropriations in the GAAs.
D. Whether or not the DAP violates: (1) the Equal Protection Clause, (2) the system of checks and balances, and
(3) the principle of public accountability enshrined in the 1987 Constitution considering that it authorizes the
release of funds upon the request of legislators.
E. Whether or not factual and legal justification exists to issue a temporary restraining order to restrain the
implementation of the DAP, NBC No. 541, and all other executive issuances allegedly implementing the DAP.
In its Consolidated Comment, the OSG raised the matter of unprogrammed funds in order to support its
argument regarding the President’s power to spend. During the oral arguments, the propriety of releasing
unprogrammed funds to support projects under the DAP was considerably discussed. The petitioners in G.R. No.
209287 (Araullo) and G.R. No. 209442 (Belgica) dwelled on unprogrammed funds in their respective memoranda.
Hence, an additional issue for the oral arguments is stated as follows:
F. Whether or not the release of unprogrammed funds under the DAP was in accord with the GAAs.
During the oral arguments held on November 19, 2013, the Court directed Sec. Abad to submit a list of savings
brought under the DAP that had been sourced from (a) completed programs; (b) discontinued or abandoned
programs; (c) unpaid appropriations for compensation; (d) a certified copy of the President’s directive dated June
27, 2012 referred to in NBC No. 541; and (e) all circulars or orders issued in relation to the DAP. 9
In compliance, the OSG submitted several documents, as follows:
(1) A certified copy of the Memorandum for the President dated June 25, 2012 (Omnibus Authority to
Consolidate Savings/Unutilized Balances and their Realignment); 10
32
(2) Circulars and orders, which the respondents identified as related to the DAP, namely:
a. NBC No. 528 dated January 3, 2011 (Guidelines on the Release of Funds for FY 2011);
b. NBC No. 535 dated December 29, 2011 (Guidelines on the Release of Funds for FY 2012);
c. NBC No. 541 dated July 18, 2012 (Adoption of Operational Efficiency Measure – Withdrawal
of Agencies’ Unobligated Allotments as of June 30, 2012);
d. NBC No. 545 dated January 2, 2013 (Guidelines on the Release of Funds for FY 2013);
e. DBM Circular Letter No. 2004-2 dated January 26, 2004 (Budgetary Treatment of
Commitments/Obligations of the National Government);
f. COA-DBM Joint Circular No. 2013-1 dated March 15, 2013 (Revised Guidelines on the
Submission of Quarterly Accountability Reports on Appropriations, Allotments, Obligations
and Disbursements);
g. NBC No. 440 dated January 30, 1995 (Adoption of a Simplified Fund Release System in the
Government).
(3) A breakdown of the sources of savings, including savings from discontinued projects and unpaid
appropriations for compensation from 2011 to 2013
On January 28, 2014, the OSG, to comply with the Resolution issued on January 21, 2014 directing the
respondents to submit the documents not yet submitted in compliance with the directives of the Court or its
Members, submitted several evidence packets to aid the Court in understanding the factual bases of the DAP, to
wit:
(1) First Evidence Packet11 – containing seven memoranda issued by the DBM through Sec. Abad,
inclusive of annexes, listing in detail the 116 DAP identified projects approved and duly signed by the
President, as follows:
a. Memorandum for the President dated October 12, 2011 (FY 2011 Proposed Disbursement
Acceleration Program (Projects and Sources of Funds);
b. Memorandum for the President dated December 12, 2011 (Omnibus Authority to
Consolidate Savings/Unutilized Balances and its Realignment);
c. Memorandum for the President dated June 25, 2012 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and their Realignment);
 d. Memorandum for the President dated September 4, 2012 (Release of funds for other RULING
priority projects and expenditures of the Government);
I.
e. Memorandum for the President dated December 19, 2012 (Proposed Priority Projects and
Expenditures of the Government); Procedural Issue:

f. Memorandum for the President dated May 20, 2013 (Omnibus Authority to Consolidate a) The petitions under Rule 65 are proper remedies
Savings/Unutilized Balances and their Realignment to Fund the Quarterly Disbursement
Acceleration Program); and
All the petitions are filed under Rule 65 of the Rules of Court, and include applications for the issuance of writs of
preliminary prohibitory injunction or temporary restraining orders. More specifically, the nature of the petitions
g. Memorandum for the President dated September 25, 2013 (Funding for the Task Force is individually set forth hereunder, to wit:
Pablo Rehabilitation Plan).

(2) Second Evidence Packet12 – consisting of 15 applications of the DAP, with their corresponding Special G.R. No. 209135 (Syjuco) Certiorari, Prohibition and Mandamus
Allotment Release Orders (SAROs) and appropriation covers; G.R. No. 209136 (Luna) Certiorariand Prohibition

(3) Third Evidence Packet13 – containing a list and descriptions of 12 projects under the DAP; G.R. No. 209155 (Villegas) Certiorariand Prohibition

G.R. No. 209164 (PHILCONSA) Certiorariand Prohibition

(4) Fourth Evidence Packet14 – identifying the DAP-related portions of the Annual Financial Report (AFR)
of the Commission on Audit for 2011 and 2012; G.R. No. 209260 (IBP) Prohibition

G.R. No. 209287 (Araullo) Certiorariand Prohibition

(5) Fifth Evidence Packet15 – containing a letter of Department of Transportation and
Communications(DOTC) Sec. Joseph Abaya addressed to Sec. Abad recommending the withdrawal of G.R. No. 209442 (Belgica) Certiorari
funds from his agency, inclusive of annexes; and
G.R. No. 209517 (COURAGE) Certiorari and Prohibition

(6) Sixth Evidence Packet16 – a print-out of the Solicitor General’s visual presentation for the January 28,
2014 oral arguments.
On February 5, 2014,17 the OSG forwarded the Seventh Evidence Packet,18 which listed the sources of funds
brought under the DAP, the uses of such funds per project or activity pursuant to DAP, and the legal bases
thereof.
On February 14, 2014, the OSG submitted another set of documents in further compliance with the Resolution
dated January 28, 2014, viz:
(1) Certified copies of the certifications issued by the Bureau of Treasury to the effect that the revenue collections
exceeded the original revenue targets for the years 2011, 2012 and 2013, including collections arising from
sources not considered in the original revenue targets, which certifications were required for the release of the
unprogrammed funds as provided in Special Provision No. 1 of Article XLV, Article XVI, and Article XLV of the 2011,
2012 and 2013 GAAs; and (2) A report on releases of savings of the Executive Department for the use of the
Constitutional Commissions and other branches of the Government, as well as the fund releases to the Senate
and the Commission on Elections (COMELEC).
G.R. No. 209569 (VACC) Certiorari and Prohibition
The respondents submit that there is no actual controversy that is ripe for adjudication in the absence of adverse
claims between the parties;19 that the petitioners lacked legal standing to sue because no allegations were made
to the effect that they had suffered any injury as a result of the adoption of the DAP and issuance of NBC No. 541;
that their being taxpayers did not immediately confer upon the petitioners the legal standing to sue considering
that the adoption and implementation of the DAP and the issuance of NBC No. 541 were not in the exercise of
the taxing or spending power of Congress; 20 and that even if the petitioners had suffered injury, there were plain,
speedy and adequate remedies in the ordinary course of law available to them, like assailing the regularity of the
DAP and related issuances before the Commission on Audit (COA) or in the trial courts. 21
The respondents aver that the special civil actions of certiorari and prohibition are not proper actions for directly
assailing the constitutionality and validity of the DAP, NBC No. 541, and the other executive issuances
implementing the DAP.22
In their memorandum, the respondents further contend that there is no authorized proceeding under the
Constitution and the Rules of Court for questioning the validity of any law unless there is an actual case or

32
controversy the resolution of which requires the determination of the constitutional question; that the
jurisdiction of the Court is largely appellate; that for a court of law to pass upon the constitutionality of a law or
any act of the Government when there is no case or controversy is for that court to set itself up as a reviewer of
the acts of Congress and of the President in violation of the principle of separation of powers; and that, in the
absence of a pending case or controversy involving the DAP and NBC No. 541, any decision herein could amount
to a mere advisory opinion that no court can validly render. 23
The respondents argue that it is the application of the DAP to actual situations that the petitioners can question
either in the trial courts or in the COA; that if the petitioners are dissatisfied with the ruling either of the trial
courts or of the COA, they can appeal the decision of the trial courts by petition for review on certiorari, or assail
the decision or final order of the COA by special civil action for certiorari under Rule 64 of the Rules of Court. 24
The respondents’ arguments and submissions on the procedural issue are bereft of merit.
Section 1, Article VIII of the 1987 Constitution expressly provides:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
Thus, the Constitution vests judicial power in the Court and in such lower courts as may be established by law. In
creating a lower court, Congress concomitantly determines the jurisdiction of that court, and that court, upon its
creation, becomes by operation of the Constitution one of the repositories of judicial power. 25 However, only the
Court is a constitutionally created court, the rest being created by Congress in its exercise of the legislative power.
The Constitution states that judicial power includes the duty of the courts of justice not only "to settle actual
controversies involving rights which are legally demandable and enforceable" but also "to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." It has thereby expanded the concept of judicial power, which up
to then was confined to its traditional ambit of settling actual controversies involving rights that were legally
demandable and enforceable.
The background and rationale of the expansion of judicial power under the 1987 Constitution were laid out
during the deliberations of the 1986 Constitutional Commission by Commissioner Roberto R. Concepcion (a
former Chief Justice of the Philippines) in his sponsorship of the proposed provisions on the Judiciary, where he
said:–
The Supreme Court, like all other courts, has one main function: to settle actual controversies involving conflicts
of rights which are demandable and enforceable. There are rights which are guaranteed by law but cannot be
enforced by a judicial party. In a decided case, a husband complained that his wife was unwilling to perform her
32
duties as a wife. The Court said: "We can tell your wife what her duties as such are and that she is bound to
comply with them, but we cannot force her physically to discharge her main marital duty to her husband. There
are some rights guaranteed by law, but they are so personal that to enforce them by actual compulsion would be
highly derogatory to human dignity." This is why the first part of the second paragraph of Section 1 provides that:
Judicial power includes the duty of courts to settle actual controversies involving rights which are legally
demandable or enforceable…
The courts, therefore, cannot entertain, much less decide, hypothetical questions. In a presidential system of
government, the Supreme Court has, also, another important function. The powers of government are generally
considered divided into three branches: the Legislative, the Executive and the Judiciary. Each one is supreme
within its own sphere and independent of the others. Because of that supremacy power to determine whether a
given law is valid or not is vested in courts of justice.
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the government as
well as those of its officers. In other words, the judiciary is the final arbiter on the question whether or not a
branch of government or any of its officials has acted without jurisdiction or in excess of jurisdiction, or so
capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction or lack of jurisdiction. This
is not only a judicial power but a duty to pass judgmenton matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter evade the duty
to settle matters of this nature, by claiming that such matters constitute a political question. (Bold emphasis
supplied)26
Upon interpellation by Commissioner Nolledo, Commissioner Concepcion clarified the scope of judicial power in
the following manner:–
MR. NOLLEDO. x x x
The second paragraph of Section 1 states: "Judicial power includes the duty of courts of justice to settle actual
controversies…" The term "actual controversies" according to the Commissioner should refer to questions which
are political in nature and, therefore, the courts should not refuse to decide those political questions. But do I
understand it right that this is restrictive or only an example? I know there are cases which are not actual yet the
court can assume jurisdiction. An example is the petition for declaratory relief.
May I ask the Commissioner’s opinion about that?
MR. CONCEPCION. The Supreme Court has no jurisdiction to grant declaratory judgments.
MR. NOLLEDO. The Gentleman used the term "judicial power" but judicial power is not vested in the Supreme
Court alone but also in other lower courts as may be created by law.
MR. CONCEPCION. Yes.
MR. NOLLEDO. And so, is this only an example?
MR. CONCEPCION. No, I know this is not. The Gentleman seems to identify political questions with jurisdictional
questions. But there is a difference.
MR. NOLLEDO. Because of the expression "judicial power"?
MR. CONCEPCION. No. Judicial power, as I said, refers to ordinary cases but where there is a question as to
whether the government had authority or had abused its authority to the extent of lacking jurisdiction or excess
of jurisdiction, that is not a political question. Therefore, the court has the duty to decide. 27
Our previous Constitutions equally recognized the extent of the power of judicial review and the great
responsibility of the Judiciary in maintaining the allocation of powers among the three great branches of
Government. Speaking for the Court in Angara v. Electoral Commission, 28 Justice Jose P. Laurel intoned:
x x x In times of social disquietude or political excitement, the great landmarks of the Constitution are apt to be
forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial department is the only
constitutional organ which can be called upon to determine the proper allocation of powers between the several
department and among the integral or constituent units thereof.
xxxx
The Constitution is a definition of the powers of government. Who is to determine the nature, scope and extent
of such powers? The Constitution itself has provided for the instrumentality of the judiciary as the rational way.
And when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the
other department; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn
and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the
Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in what is termed "judicial supremacy" which properly is
the power of judicial review under the Constitution. x x x29
What are the remedies by which the grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the Government may be determined under the Constitution?
The present Rules of Court uses two special civil actions for determining and correcting grave abuse of discretion
amounting to lack or excess of jurisdiction. These are the special civil actions for certiorari and prohibition, and
both are governed by Rule 65. A similar remedy of certiorari exists under Rule 64, but the remedy is expressly
applicable only to the judgments and final orders or resolutions of the Commission on Elections and the
Commission on Audit.
The ordinary nature and function of the writ of certiorari in our present system are aptly explained in Delos
Santos v. Metropolitan Bank and Trust Company:30
32
In the common law, from which the remedy of certiorari evolved, the writ of certiorari was issued out of
Chancery, or the King’s Bench, commanding agents or officers of the inferior courts to return the record of a
cause pending before them, so as to give the party more sure and speedy justice, for the writ would enable the
superior court to determine from an inspection of the record whether the inferior court’s judgment was
rendered without authority. The errors were of such a nature that, if allowed to stand, they would result in a
substantial injury to the petitioner to whom no other remedy was available. If the inferior court acted without
authority, the record was then revised and corrected in matters of law. The writ of certiorari was limited to cases
in which the inferior court was said to be exceeding its jurisdiction or was not proceeding according to essential
requirements of law and would lie only to review judicial or quasi-judicial acts.
The concept of the remedy of certiorari in our judicial system remains much the same as it has been in the
common law. In this jurisdiction, however, the exercise of the power to issue the writ of certiorari is largely
regulated by laying down the instances or situations in the Rules of Court in which a superior court may issue the
writ of certiorari to an inferior court or officer. Section 1, Rule 65 of the Rules of Court compellingly provides the
requirements for that purpose, viz:
xxxx
The sole office of the writ of certiorari is the correction of errors of jurisdiction, which includes the commission of
grave abuse of discretion amounting to lack of jurisdiction. In this regard, mere abuse of discretion is not enough
to warrant the issuance of the writ. The abuse of discretion must be grave, which means either that the judicial
or quasi-judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal
hostility, or that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform
the duty enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising judicial
or quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction. 31
Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to be distinguished
from prohibition by the fact that it is a corrective remedy used for the re-examination of some action of an
inferior tribunal, and is directed to the cause or proceeding in the lower court and not to the court itself, while
prohibition is a preventative remedy issuing to restrain future action, and is directed to the court itself. 32 The
Court expounded on the nature and function of the writ of prohibition in Holy Spirit Homeowners Association,
Inc. v. Defensor:33
A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a quasi-legislative
function. Prohibition is an extraordinary writ directed against any tribunal, corporation, board, officer or person,
whether exercising judicial, quasi-judicial or ministerial functions, ordering said entity or person to desist from
further proceedings when said proceedings are without or in excess of said entity’s or person’s jurisdiction, or are
accompanied with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate
remedy in the ordinary course of law. Prohibition lies against judicial or ministerial functions, but not against
legislative or quasi-legislative functions. Generally, the purpose of a writ of prohibition is to keep a lower court
within the limits of its jurisdiction in order to maintain the administration of justice in orderly channels.
Prohibition is the proper remedy to afford relief against usurpation of jurisdiction or power by an inferior court,
or when, in the exercise of jurisdiction in handling matters clearly within its cognizance the inferior court
transgresses the bounds prescribed to it by the law, or where there is no adequate remedy available in the
ordinary course of law by which such relief can be obtained. Where the principal relief sought is to invalidate an
IRR, petitioners’ remedy is an ordinary action for its nullification, an action which properly falls under the
jurisdiction of the Regional Trial Court. In any case, petitioners’ allegation that "respondents are performing or
threatening to perform functions without or in excess of their jurisdiction" may appropriately be enjoined by the
trial court through a writ of injunction or a temporary restraining order.
With respect to the Court, however, the remedies of certiorari and prohibition are necessarily broader in scope
and reach, and the writ of certiorari or prohibition may be issued to correct errors of jurisdiction committed not
only by a tribunal, corporation, board or officer exercising judicial, quasi-judicial or ministerial functions but also
to set right, undo and restrain any act of grave abuse of discretion amounting to lack or excess of jurisdiction by
any branch or instrumentality of the Government, even if the latter does not exercise judicial, quasi-judicial or
ministerial functions. This application is expressly authorized by the text of the second paragraph of Section 1,
supra.
Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues and to review
and/or prohibit or nullify the acts of legislative and executive officials. 34
Necessarily, in discharging its duty under Section 1, supra, to set right and undo any act of grave abuse of
discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of the Government, the
Court is not at all precluded from making the inquiry provided the challenge was properly brought by interested
or affected parties. The Court has been thereby entrusted expressly or by necessary implication with both the
duty and the obligation of determining, in appropriate cases, the validity of any assailed legislative or executive
action. This entrustment is consistent with the republican system of checks and balances. 35
Following our recent dispositions concerning the congressional pork barrel, the Court has become more alert to
discharge its constitutional duty. We will not now refrain from exercising our expanded judicial power in order to
review and determine, with authority, the limitations on the Chief Executive’s spending power.
b) Requisites for the exercise of the
power of judicial review were
complied with
The requisites for the exercise of the power of judicial review are the following, namely: (1) there must bean
actual case or justiciable controversy before the Court; (2) the question before the Court must be ripe for
adjudication; (3) the person challenging the act must be a proper party; and (4) the issue of constitutionality
must be raised at the earliest opportunity and must be the very litis mota of the case. 36
The first requisite demands that there be an actual case calling for the exercise of judicial power by the
Court.37 An actual case or controversy, in the words of Belgica v. Executive Secretary Ochoa: 38
x x x is one which involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial
resolution as distinguished from a hypothetical or abstract difference or dispute. In other words, "[t]here must be
a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence."
Related to the requirement of an actual case or controversy is the requirement of "ripeness," meaning that the
32
questions raised for constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication
when the act being challenged has had a direct adverse effect on the individual challenging it. It is a prerequisite
that something had then been accomplished or performed by either branch before a court may come into the
picture, and the petitioner must allege the existence of an immediate or threatened injury to itself as a result of
the challenged action." "Withal, courts will decline to pass upon constitutional issues through advisory opinions,
bereft as they are of authority to resolve hypothetical or moot questions."
An actual and justiciable controversy exists in these consolidated cases. The incompatibility of the perspectives of
the parties on the constitutionality of the DAP and its relevant issuances satisfy the requirement for a conflict
between legal rights. The issues being raised herein meet the requisite ripeness considering that the challenged
executive acts were already being implemented by the DBM, and there are averments by the petitioners that
such implementation was repugnant to the letter and spirit of the Constitution. Moreover, the implementation of
the DAP entailed the allocation and expenditure of huge sums of public funds. The fact that public funds have
been allocated, disbursed or utilized by reason or on account of such challenged executive acts gave rise,
therefore, to an actual controversy that is ripe for adjudication by the Court.
It is true that Sec. Abad manifested during the January 28, 2014 oral arguments that the DAP as a program had
been meanwhile discontinued because it had fully served its purpose, saying: "In conclusion, Your Honors, may I
inform the Court that because the DAP has already fully served its purpose, the Administration’s economic
managers have recommended its termination to the President. x x x." 39
The Solicitor General then quickly confirmed the termination of the DAP as a program, and urged that its
termination had already mooted the challenges to the DAP’s constitutionality, viz:
DAP as a program, no longer exists, thereby mooting these present cases brought to challenge its
constitutionality. Any constitutional challenge should no longer be at the level of the program, which is now
extinct, but at the level of its prior applications or the specific disbursements under the now defunct policy. We
challenge the petitioners to pick and choose which among the 116 DAP projects they wish to nullify, the full
details we will have provided by February 5. We urge this Court to be cautious in limiting the constitutional
authority of the President and the Legislature to respond to the dynamic needs of the country and the evolving
demands of governance, lest we end up straight jacketing our elected representatives in ways not consistent with
our constitutional structure and democratic principles.40
A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events,
so that a declaration thereon would be of no practical use or value. 41
The Court cannot agree that the termination of the DAP as a program was a supervening event that effectively
mooted these consolidated cases. Verily, the Court had in the past exercised its power of judicial review despite
the cases being rendered moot and academic by supervening events, like: (1) when there was a grave violation of
the Constitution; (2) when the case involved a situation of exceptional character and was of paramount public
interest; (3) when the constitutional issue raised required the formulation of controlling principles to guide the
Bench, the Bar and the public; and (4) when the case was capable of repetition yet evading review. 42
Assuming that the petitioners’ several submissions against the DAP were ultimately sustained by the Court here,
these cases would definitely come under all the exceptions. Hence, the Court should not abstain from exercising
its power of judicial review.
Did the petitioners have the legal standing to sue?
Legal standing, as a requisite for the exercise of judicial review, refers to "a right of appearance in a court of
justice on a given question."43 The concept of legal standing, or locus standi, was particularly discussed in De
Castro v. Judicial and Bar Council,44 where the Court said:
In public or constitutional litigations, the Court is often burdened with the determination of the locus standi of
the petitioners due to the ever-present need to regulate the invocation of the intervention of the Court to correct
any official action or policy in order to avoid obstructing the efficient functioning of public officials and offices
involved in public service. It is required, therefore, that the petitioner must have a personal stake in the outcome
of the controversy, for, as indicated in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:
The question on legal standing is whether such parties have "alleged such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the
court so largely depends for illumination of difficult constitutional questions." Accordingly, it has been held that
the interest of a person assailing the constitutionality of a statute must be direct and personal. He must be able
to show, not only that the law or any government act is invalid, but also that he sustained or is in imminent
danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in
some indefinite way. It must appear that the person complaining has been or is about to be denied some right or
privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by
reason of the statute or act complained of.
It is true that as early as in 1937, in People v. Vera, the Court adopted the direct injury test for determining
whether a petitioner in a public action had locus standi. There, the Court held that the person who would assail
the validity of a statute must have "a personal and substantial interest in the case such that he has sustained, or
will sustain direct injury as a result." Vera was followed in Custodio v. President of the Senate, Manila Race Horse
Trainers’ Association v. De la Fuente, Anti-Chinese League of the Philippines v. Felix, and Pascual v. Secretary of
Public Works.
Yet, the Court has also held that the requirement of locus standi, being a mere procedural technicality, can be
waived by the Court in the exercise of its discretion. For instance, in 1949, in Araneta v. Dinglasan, the Court
liberalized the approach when the cases had "transcendental importance." Some notable controversies whose
petitioners did not pass the direct injury test were allowed to be treated in the same way as in Araneta v.
Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this Court decided to resolve the issues raised by the
petition due to their "far reaching implications," even if the petitioner had no personality to file the suit. The
liberal approach of Aquino v. Commission on Elections has been adopted in several notable cases, permitting
ordinary citizens, legislators, and civic organizations to bring their suits involving the constitutionality or validity
of laws, regulations, and rulings.
32
However, the assertion of a public right as a predicate for challenging a supposedly illegal or unconstitutional
executive or legislative action rests on the theory that the petitioner represents the public in general. Although
such petitioner may not be as adversely affected by the action complained against as are others, it is enough that
he sufficiently demonstrates in his petition that he is entitled to protection or relief from the Court in the
vindication of a public right.
Quite often, as here, the petitioner in a public action sues as a citizen or taxpayer to gain locus standi. That is not
surprising, for even if the issue may appear to concern only the public in general, such capacities nonetheless
equip the petitioner with adequate interest to sue. In David v. Macapagal-Arroyo, the Court aptly explains why:
Case law in most jurisdiction snow allows both "citizen" and "taxpayer" standing in public actions. The distinction
was first laid down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayer’s suit is in a different
category from the plaintiff in a citizen’s suit. In the former, the plaintiff is affected by the expenditure of public
funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York Supreme
Court in People ex rel Case v. Collins: "In matter of mere public right, however…the people are the real parties…It
is at least the right, if not the duty, of every citizen to interfere and see that a public offence be properly pursued
and punished, and that a public grievance be remedied." With respect to taxpayer’s suits, Terr v. Jordan held that
"the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to
his injury cannot be denied."45
The Court has cogently observed in Agan, Jr. v. Philippine International Air Terminals Co., Inc. 46 that "[s]tanding is
a peculiar concept in constitutional law because in some cases, suits are not brought by parties who have been
personally injured by the operation of a law or any other government act but by concerned citizens, taxpayers or
voters who actually sue in the public interest."
Except for PHILCONSA, a petitioner in G.R. No. 209164, the petitioners have invoked their capacities as taxpayers
who, by averring that the issuance and implementation of the DAP and its relevant issuances involved the illegal
disbursements of public funds, have an interest in preventing the further dissipation of public funds. The
petitioners in G.R. No. 209287 (Araullo) and G.R. No. 209442 (Belgica) also assert their right as citizens to sue for
the enforcement and observance of the constitutional limitations on the political branches of the Government. 47
On its part, PHILCONSA simply reminds that the Court has long recognized its legal standing to bring cases upon
constitutional issues.48 Luna, the petitioner in G.R. No. 209136, cites his additional capacity as a lawyer. The IBP,
the petitioner in G.R. No. 209260, stands by "its avowed duty to work for the rule of law and of paramount
importance of the question in this action, not to mention its civic duty as the official association of all lawyers in
this country."49
Under their respective circumstances, each of the petitioners has established sufficient interest in the outcome of
the controversy as to confer locus standi on each of them.
In addition, considering that the issues center on the extent of the power of the Chief Executive to disburse and
allocate public funds, whether appropriated by Congress or not, these cases pose issues that are of
transcendental importance to the entire Nation, the petitioners included. As such, the determination of such
important issues call for the Court’s exercise of its broad and wise discretion "to waive the requirement and so citizenry can determine the adequacy of the budget actions taken, authorized or proposed, as well as the true
remove the impediment to its addressing and resolving the serious constitutional questions raised." 50 financial position of the Government. 59

II. b) Evolution of the Philippine Budget System

Substantive Issues
The budget process in the Philippines evolved from the early years of the American Regime up to the passage of
1. the Jones Law in 1916. A Budget Office was created within the Department of Finance by the Jones Law to
Overview of the Budget System discharge the budgeting function, and was given the responsibility to assist in the preparation of an executive
budget for submission to the Philippine Legislature. 60
An understanding of the Budget System of the Philippines will aid the Court in properly appreciating and justly
resolving the substantive issues. As early as under the 1935 Constitution, a budget policy and a budget procedure were established, and
subsequently strengthened through the enactment of laws and executive acts. 61 EO No. 25, issued by President
a) Origin of the Budget System Manuel L. Quezon on April 25, 1936, created the Budget Commission to serve as the agency that carried out the
President’s responsibility of preparing the budget. 62 CA No. 246, the first budget law, went into effect on January
1, 1938 and established the Philippine budget process. The law also provided a line-item budget as the
The term "budget" originated from the Middle English word bouget that had derived from the Latin word bulga
framework of the Government’s budgeting system,63 with emphasis on the observance of a "balanced budget" to
(which means bag or purse).51
tie up proposed expenditures with existing revenues.

In the Philippine setting, Commonwealth Act (CA) No. 246 (Budget Act) defined "budget" as the financial program
CA No. 246 governed the budget process until the passage on June 4, 1954 of Republic Act (RA) No. 992,whereby
of the National Government for a designated fiscal year, consisting of the statements of estimated receipts and
Congress introduced performance-budgeting to give importance to functions, projects and activities in terms of
expenditures for the fiscal year for which it was intended to be effective based on the results of operations during
expected results.64 RA No. 992 also enhanced the role of the Budget Commission as the fiscal arm of the
the preceding fiscal years. The term was given a different meaning under Republic Act No. 992 (Revised Budget
Government.65
Act) by describing the budget as the delineation of the services and products, or benefits that would accrue to
the public together with the estimated unit cost of each type of service, product or benefit. 52 For a forthright
definition, budget should simply be identified as the financial plan of the Government, 53 or "the master plan of The 1973 Constitution and various presidential decrees directed a series of budgetary reforms that culminated in
government."54 the enactment of PD No. 1177 that President Marcos issued on July30, 1977, and of PD No. 1405, issued on June
11, 1978. The latter decree converted the Budget Commission into the Ministry of Budget, and gave its head the
rank of a Cabinet member.
The concept of budgeting has not been the product of recent economies. In reality, financing public goals and
activities was an idea that existed from the creation of the State. 55 To protect the people, the territory and
sovereignty of the State, its government must perform vital functions that required public expenditures. At the The Ministry of Budget was later renamed the Office of Budget and Management (OBM) under EO No. 711. The
beginning, enormous public expenditures were spent for war activities, preservation of peace and order, security, OBM became the DBM pursuant to EO No. 292 effective on November 24, 1989.
administration of justice, religion, and supply of limited goods and services. 56 In order to finance those
expenditures, the State raised revenues through taxes and impositions. 57 Thus, budgeting became necessary to c) The Philippine Budget Cycle66
allocate public revenues for specific government functions. 58 The State’s budgeting mechanism eventually
developed through the years with the growing functions of its government and changes in its market economy. Four phases comprise the Philippine budget process, specifically: (1) Budget Preparation; (2) Budget Legislation;
(3) Budget Execution; and (4) Accountability. Each phase is distinctly separate from the others but they overlap in
The Philippine Budget System has been greatly influenced by western public financial institutions. This is because the implementation of the budget during the budget year.
of the country’s past as a colony successively of Spain and the United States for a long period of time. Many
aspects of the country’s public fiscal administration, including its Budget System, have been naturally patterned c.1.Budget Preparation67
after the practices and experiences of the western public financial institutions. At any rate, the Philippine Budget
System is presently guided by two principal objectives that are vital to the development of a progressive
The budget preparation phase is commenced through the issuance of a Budget Call by the DBM. The Budget Call
democratic government, namely: (1) to carry on all government activities under a comprehensive fiscal plan
contains budget parameters earlier set by the Development Budget Coordination Committee (DBCC) as well as
developed, authorized and executed in accordance with the Constitution, prevailing statutes and the principles of
policy guidelines and procedures to aid government agencies in the preparation and submission of their budget
sound public management; and (2) to provide for the periodic review and disclosure of the budgetary status of
proposals. The Budget Call is of two kinds, namely: (1) a National Budget Call, which is addressed to all agencies,
the Government in such detail so that persons entrusted by law with the responsibility as well as the enlightened
32
including state universities and colleges; and (2) a Corporate Budget Call, which is addressed to all government- Public expenditures may further be classified according to the nature of funds, i.e., general fund, special fund or
owned and -controlled corporations (GOCCs) and government financial institutions (GFIs). bond fund.76

Following the issuance of the Budget Call, the various departments and agencies submit their respective Agency On the other hand, public revenues complement public expenditures and cover all income or receipts of the
Budget Proposals to the DBM. To boost citizen participation, the current administration has tasked the various government treasury used to support government expenditures. 77
departments and agencies to partner with civil society organizations and other citizen-stakeholders in the
preparation of the Agency Budget Proposals, which proposals are then presented before a technical panel of the Classical economist Adam Smith categorized public revenues based on two principal sources, stating: "The
DBM in scheduled budget hearings wherein the various departments and agencies are given the opportunity to revenue which must defray…the necessary expenses of government may be drawn either, first from some fund
defend their budget proposals. DBM bureaus thereafter review the Agency Budget Proposals and come up with which peculiarly belongs to the sovereign or commonwealth, and which is independent of the revenue of the
recommendations for the Executive Review Board, comprised by the DBM Secretary and the DBM’s senior people, or, secondly, from the revenue of the people."78 Adam Smith’s classification relied on the two aspects of
officials. The discussions of the Executive Review Board cover the prioritization of programs and their the nature of the State: first, the State as a juristic person with an artificial personality, and, second, the State as a
corresponding support vis-à-vis the priority agenda of the National Government, and their implementation. sovereign or entity possessing supreme power. Under the first aspect, the State could hold property and engage
in trade, thereby deriving what is called its quasi private income or revenues, and which "peculiarly belonged to
The DBM next consolidates the recommended agency budgets into the National Expenditure Program (NEP)and a the sovereign." Under the second aspect, the State could collect by imposing charges on the revenues of its
Budget of Expenditures and Sources of Financing (BESF). The NEP provides the details of spending for each subjects in the form of taxes.79
department and agency by program, activity or project (PAP), and is submitted in the form of a proposed GAA.
The Details of Selected Programs and Projects is the more detailed disaggregation of key PAPs in the NEP, In the Philippines, public revenues are generally derived from the following sources, to wit: (1) tax revenues(i.e.,
especially those in line with the National Government’s development plan. The Staffing Summary provides the compulsory contributions to finance government activities); 80 (2) capital revenues(i.e., proceeds from sales of
staffing complement of each department and agency, including the number of positions and amounts allocated. fixed capital assets or scrap thereof and public domain, and gains on such sales like sale of public lands, buildings
and other structures, equipment, and other properties recorded as fixed assets); 81 (3) grants(i.e., voluntary
The NEP and BESF are thereafter presented by the DBM and the DBCC to the President and the Cabinet for contributions and aids given to the Government for its operation on specific purposes in the form of money
further refinements or reprioritization. Once the NEP and the BESF are approved by the President and the and/or materials, and do not require any monetary commitment on the part of the recipient); 82 (4) extraordinary
Cabinet, the DBM prepares the budget documents for submission to Congress. The budget documents consist of: income(i.e., repayment of loans and advances made by government corporations and local governments and the
(1) the President’s Budget Message, through which the President explains the policy framework and budget receipts and shares in income of the Banko Sentral ng Pilipinas, and other receipts); 83 and (5) public
priorities; (2) the BESF, mandated by Section 22, Article VII of the Constitution, 68 which contains the borrowings(i.e., proceeds of repayable obligations generally with interest from domestic and foreign creditors of
macroeconomic assumptions, public sector context, breakdown of the expenditures and funding sources for the the Government in general, including the National Government and its political subdivisions). 84
fiscal year and the two previous years; and (3) the NEP.
More specifically, public revenues are classified as follows: 85
Public or government expenditures are generally classified into two categories, specifically: (1) capital
expenditures or outlays; and (2) current operating expenditures. Capital expenditures are the expenses whose
General Income Specific Income
usefulness lasts for more than one year, and which add to the assets of the Government, including investments in
the capital of government-owned or controlled corporations and their subsidiaries. 69 Current operating Subsidy Income from National Income Taxes
expenditures are the purchases of goods and services in current consumption the benefit of which does not Government Property Taxes
extend beyond the fiscal year.70 The two components of current expenditures are those for personal services (PS), Subsidy from Central Office Taxes on Goods and Services
and those for maintenance and other operating expenses(MOOE). Subsidy from Regional Taxes on International Trade and
Office/Staff Bureaus Transactions
Public expenditures are also broadly grouped according to their functions into: (1) economic development Income from Government
expenditures (i.e., expenditures on agriculture and natural resources, transportation and communications, Other Taxes 6.Fines and Penalties-Tax Revenue
Services
commerce and industry, and other economic development efforts); 71 (2) social services or social development Other Specific Income
expenditures (i.e., government outlay on education, public health and medicare, labor and welfare and Income from Government
others);72 (3) general government or general public services expenditures (i.e., expenditures for the general Business Operations
government, legislative services, the administration of justice, and for pensions and gratuities); 73 (4) national Sales Revenue
defense expenditures (i.e., sub-divided into national security expenditures and expenditures for the maintenance Rent Income
of peace and order);74 and (5) public debt.75
Insurance Income

32
Dividend Income If, by the end of any fiscal year, the Congress shall have failed to pass the GAB for the ensuing fiscal year, the GAA
for the preceding fiscal year shall be deemed re-enacted and shall remain in force and effect until the GAB is
Interest Income
passed by the Congress. 92
Sale of Confiscated Goods and
Properties
c.3. Budget Execution93
Foreign Exchange (FOREX)
Gains
With the GAA now in full force and effect, the next step is the implementation of the budget. The Budget
Miscellaneous Operating and Execution Phase is primarily the function of the DBM, which is tasked to perform the following procedures,
Service Income namely: (1) to issue the programs and guidelines for the release of funds; (2) to prepare an Allotment and Cash
Fines and Penalties-Government Release Program; (3) to release allotments; and (4) to issue disbursement authorities.
Services and Business Operations
Income from Grants and The implementation of the GAA is directed by the guidelines issued by the DBM. Prior to this, the various
Donations 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.

c.2. Budget Legislation86
The Budget Legislation Phase covers the period commencing from the time Congress receives the President’s
Budget, which is inclusive of the NEPand the BESF, up to the President’s approval of the GAA. This phase is also
known as the Budget Authorization Phase, and involves the significant participation of the Legislative through its
deliberations.
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), 94 or, individually, by SARO.95

Initially, the President’s Budget is assigned to the House of Representatives’ Appropriations Committee on First
Reading. The Appropriations Committee and its various Sub-Committees schedule and conduct budget hearings Armed with either the ABM or the SARO, agencies become authorized to incur obligations 96 on behalf of the
to examine the PAPs of the departments and agencies. Thereafter, the House of Representatives drafts the Government in order to implement their PAPs. Obligations may be incurred in various ways, like hiring of
General Appropriations Bill (GAB).87 personnel, entering into contracts for the supply of goods and services, and using utilities.

The GABis sponsored, presented and defended by the House of Representatives’ Appropriations Committee and
Sub-Committees in plenary session. As with other laws, the GAB is approved on Third Reading before the House
of Representatives’ version is transmitted to the Senate.88
After transmission, the Senate conducts its own committee hearings on the GAB. To expedite proceedings, the
Senate may conduct its committee hearings simultaneously with the House of Representatives’ deliberations. The
Senate’s Finance Committee and its Sub-Committees may submit the proposed amendments to the GAB to the
plenary of the Senate only after the House of Representatives has formally transmitted its version to the Senate.
The Senate version of the GAB is likewise approved on Third Reading. 89
The House of Representatives and the Senate then constitute a panel each to sit in the Bicameral Conference
Committee for the purpose of discussing and harmonizing the conflicting provisions of their versions of the GAB.
The "harmonized" version of the GAB is next presented to the President for approval. 90 The President reviews the
GAB, and prepares the Veto Message where budget items are subjected to direct veto, 91 or are identified for
conditional implementation.
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),97 which issuance is based upon an agency’s 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 which disbursements chargeable against the
National Treasury are coursed through the government servicing banks.
c.4. Accountability98

32
Accountability is a significant phase of the budget cycle because it ensures that the government funds have been
effectively and efficiently utilized to achieve the State’s socio-economic goals. It also allows the DBM to assess the
performance of agencies during the fiscal year for the purpose of implementing reforms and establishing new
policies.
An agency’s accountability may be examined and evaluated through (1) performance targets and outcomes; (2)
budget accountability reports; (3) review of agency performance; and (4) audit conducted by the Commission on
Audit(COA).
11.8% year on year while infrastructure spending rebounded from a 29% contraction to a 34% growth as of
September 2013.111
The DAP thus proved to be a demonstration that expenditure was a policy instrument that the Government could
use to direct the economies towards growth and development. 112 The Government, by spending on public
infrastructure, would signify its commitment of ensuring profitability for prospective investors. 113 The PAPs
funded under the DAP were chosen for this reason based on their: (1) multiplier impact on the economy and
infrastructure development; (2) beneficial effect on the poor; and (3) translation into disbursements. 114

2. b. History of the implementation of

the DAP, and sources of funds
Nature of the DAP as a fiscal plan under the DAP

a. DAP was a program designed to How the Administration’s economic managers conceptualized and developed the DAP, and finally presented it to
promote economic growth the President remains unknown because the relevant documents appear to be scarce.

Policy is always a part of every budget and fiscal decision of any Administration. 99 The national budget the
Executive prepares and presents to Congress represents the Administration’s "blueprint for public policy" and
reflects the Government’s goals and strategies. 100 As such, the national budget becomes a tangible representation
of the programs of the Government in monetary terms, specifying therein the PAPs and services for which
specific amounts of public funds are proposed and allocated. 101 Embodied in every national budget is government
spending.102
The earliest available document relating to the genesis of the DAP was the memorandum of October 12,2011
from Sec. Abad seeking the approval of the President to implement the proposed DAP. The memorandum, which
contained a list of the funding sources for ₱72.11 billion and of the proposed priority projects to be
funded,115 reads:
MEMORANDUM FOR THE PRESIDENT

When he assumed office in the middle of 2010, President Aquino made efficiency and transparency in xxxx
government spending a significant focus of his Administration. Yet, although such focus resulted in an improved
fiscal deficit of 0.5% in the gross domestic product (GDP) from January to July of 2011, it also unfortunately SUBJECT: FY 2011 PROPOSED DISBURSEMENT ACCELERATION PROGRAM (PROJECTS AND SOURCES OF FUNDS)
decelerated government project implementation and payment schedules. 103 The World Bank observed that the
Philippines’ economic growth could be reduced, and potential growth could be weakened should the
DATE: OCTOBER 12, 2011
Government continue with its underspending and fail to address the large deficiencies in infrastructure. 104 The
economic situation prevailing in the middle of 2011 thus paved the way for the development and implementation
of the DAP as a stimulus package intended to fast-track public spending and to push economic growth by Mr. President, this is to formally confirm your approval of the Disbursement Acceleration Program totaling ₱72.11
investing on high-impact budgetary PAPs to be funded from the "savings" generated during the year as well as billion. We are already working with all the agencies concerned for the immediate execution of the projects
from unprogrammed funds.105 In that respect, the DAP was the product of "plain executive policy-making" to therein.
stimulate the economy by way of accelerated spending. 106The Administration would thereby accelerate
government spending by: (1) streamlining the implementation process through the clustering of infrastructure A. Fund Sources for the Acceleration Program
projects of the Department of Public Works and Highways (DPWH) and the Department of Education (DepEd),and
(2) front loading PPP-related projects107 due for implementation in the following year. 108
Amount
Action
Did the stimulus package work? Fund Sources (In million Description
Requested
Php)
The March 2012 report of the World Bank,109 released after the initial implementation of the DAP, revealed that
the DAP was partially successful. The disbursements under the DAP contributed 1.3 percentage points to GDP FY 2011 30,000 Unreleased Personnel Declare as
growth by the fourth quarter of 2011.110 The continued implementation of the DAP strengthened growth by Unreleased Services (PS) savings and

32
 B. Projects in the Disbursement Acceleration Program
Personal appropriations which approve/
Services (PS) will lapse at the end of authorize its use
(Descriptions of projects attached as Annex A)
Appropriations FY 2011 but may be for the 2011
pooled as savings and Disbursement
realigned for priority Acceleration GOCCs and GFIs
programs that require Program
immediate funding Agency/Project Allotment
(SARO and NCA Release) (in Million Php)
FY 2011 482 Unreleased
Unreleased appropriations (slow 1. LRTA: Rehabilitation of LRT 1 and 2 1,868
Appropriations moving projects and
programs for 2. NHA: 11,050
discontinuance)
a. Resettlement of North Triangle residents to 450
FY 2010 12,336 Supported by the GFI Approve and Camarin A7
Unprogrammed Dividends authorize its use b. Housing for BFP/BJMP 500
Fund for the 2011 c. On-site development for families living 10,000
Disbursement along dangerous
Acceleration d. Relocation sites for informal settlers 100
Program along Iloilo River and its tributaries

3. PHIL. HEART CENTER: Upgrading of 357

FY 2010 21,544 Unreleased With prior
ageing physical plant and medical equipment
Carryover appropriations (slow approval from
Appropriation moving projects and the President in
4. CREDIT INFO CORP: Establishment of 75
programs for November 2010
centralized credit information system
discontinuance) and to declare as
savings from Zero-based Budgeting savings and with
5. PIDS: purchase of land to relocate the PIDS 100
Initiative authority to use
office and building construction
for priority
projects 6. HGC: Equity infusion for credit insurance 400
and mortgage guaranty operations of HGC
FY 2011 Budget 7,748 FY 2011 Agency For information
items for Budget items that can 7. PHIC: Obligations incurred (premium 1,496
realignment be realigned within the subsidy for indigent families) in January-June
agency to fund new fast 2010, booked for payment in Jul[y] – Dec
disbursing projects 2010. The delay in payment is due to the
DPWH-3.981 Billion delay in the certification of the LGU
DA – 2.497 Billion counterpart. Without it, the NG is obliged to
DOT – 1.000 Billion pay the full amount.
DepEd – 270 Million
8. Philpost: Purchase of foreclosed property. 644
TOTAL 72.110 Payment of Mandatory Obligations, (GSIS,
PhilHealth, ECC), Franking Privilege

32
9. BSP: First equity infusion out of Php 40B 10,000 c. NIA Agno River Integrated
capitalization under the BSP Law Irrigation Project 411 411

10. PCMC: Capital and Equipment Renovation 280 17. DAR: 1,293 1,293
a. Agrarian Reform
11. LCOP: 105 Communities Project 2 1,293 132
a. Pediatric Pulmonary Program b. Landowners Compensation 5,432
b. Bio-regenerative Technology Program 35
(Stem-Cell Research – subject to legal 18. DBM: Conduct of National
review and presentation) 70 Survey of
Farmers/Fisherfolks/Ips 625 625
12. TIDCORP: NG Equity infusion 570
19. DOJ: Operating requirements
TOTAL 26,945 of 50 investigation agents and
15 state attorneys 11 11

20. DOT: Preservation of the Cine

NGAs/LGUs Corregidor Complex 25 25

Agency/Project Allotment 21. OPAPP: Activities for Peace

(SARO) Cash Process (PAMANA- Project
(In Million Requirement details: budget breakdown,
Php) (NCA) implementation plan, and
conditions on fund release
13. DOF-BIR: NPSTAR attached as Annex B) 1,819 1,819
centralization of data
processing and others (To be 22. DOST 425 425
synchronized with GFMIS a. Establishment of National
activities) 758 758 Meterological and Climate
Center 275 275
14. COA: IT infrastructure b. Enhancement of Doppler
program and hiring of Radar Network for National
additional litigational experts 144 144 Weather Watch, Accurate
Forecasting and Flood Early
15. DND-PAF: On Base Housing Warning 190 190
Facilities and Communication
Equipment 30 30 23. DOF-BOC: To settle the
principal obligations with
16. DA: 2,959 2,223 PDIC consistent with the
a. Irrigation, FMRs and agreement with the CISS and
Integrated Community Based Multi-Species SGS 2,800 2,800
Hatchery and Aquasilvi
Farming 1,629 1,629 24. OEO-FDCP: Establishment of
b. Mindanao Rural the National Film Archive and
Development Project 919 183 local cinematheques, and other

32
 local activities 20 20 Php) 2011

25. DPWH: Various infrastructure Total 72,110 72,110 70,895

projects 5,500 5,500
GOCCs 26,895 26,895
26. DepEd/ERDT/DOST: Thin
Client Cloud Computing NGAs/LGUs 45,165 44,000
Project 270 270

27. DOH: Hiring of nurses and For His Excellency’s Consideration

midwives 294 294
(Sgd.) FLORENCIO B. ABAD
28. TESDA: Training Program in
partnership with BPO industry
[/] APPROVED
and other sectors 1,100 1,100

29. DILG: Performance Challenge [ ] DISAPPROVED

Fund (People Empowered
Community Driven (Sgd.) H.E. BENIGNO S. AQUINO, III
Development with DSWD and
NAPC) 250 50 OCT 12, 2011
30. ARMM: Comprehensive Peace
and Development Intervention 8,592 8,592 The memorandum of October 12, 2011 was followed by another memorandum for the President dated
December 12, 2011116 requesting omnibus authority to consolidate the savings and unutilized balances for fiscal
31. DOTC-MRT: Purchase of year 2011. Pertinent portions of the memorandum of December 12, 2011 read:
additional MRT cars 4,500 -
MEMORANDUM FOR THE PRESIDENT
32. LGU Support Fund 6,500 6,500
xxxx
33. Various Other Local Projects 6,500 6,500

34. Development Assistance to the SUBJECT: Omnibus Authority to Consolidate Savings/Unutilized Balances and its Realignment
Province of Quezon 750 750
DATE: December 12, 2011
TOTAL 45,165 44,000
This is to respectfully request for the grant of Omnibus Authority to consolidate savings/unutilized balances in FY
2011 corresponding to completed or discontinued projects which may be pooled to fund additional projects or
C. Summary expenditures.

Fund Sources In addition, Mr. President, this measure will allow us to undertake projects even if their implementation carries
Identified for Allotments Cash over to 2012 without necessarily impacting on our budget deficit cap next year.
Approval for Release Requirements for
(In Million Release in FY BACKGROUND

32
 1.0 The DBM, during the course of performance reviews conducted on the agencies’
operations, particularly on the implementation of their projects/activities, including expenses
incurred in undertaking the same, have identified savings out of the 2011 General
Appropriations Act. Said savings correspond to completed or discontinued projects under
certain departments/agencies which may be pooled, for the following:
1.1 to provide for new activities which have not been anticipated during
preparation of the budget;
1.2 to augment additional requirements of on-going priority projects; and
1.3 to provide for deficiencies under the Special Purpose Funds, e.g., PDAF,
Calamity Fund, Contingent Fund
1.4 to cover for the modifications of the original allotment class allocation as a
result of on-going priority projects and implementation of new activities
2.0 x x x x
2.1 x x x
2.2 x x x
ON THE UTILIZATION OF POOLED SAVINGS
3.0 It may be recalled that the President approved our request for omnibus authority to pool
savings/unutilized balances in FY 2010 last November 25, 2010.
4.0 It is understood that in the utilization of the pooled savings, the DBM shall secure the
corresponding approval/confirmation of the President. Furthermore, it is assured that the
proposed realignments shall be within the authorized Expenditure level.
5.0 Relative thereto, we have identified some expenditure items that may be sourced from
the said pooled appropriations in FY 2010 that will expire on December 31, 2011 and
appropriations in FY 2011 that may be declared as savings to fund additional expenditures.
5.1 The 2010 Continuing Appropriations (pooled savings) is proposed to be spent
for the projects that we have identified to be immediate actual disbursements
considering that this same fund source will expire on December 31, 2011.
5.2 With respect to the proposed expenditure items to be funded from the FY 2011
Unreleased Appropriations, most of these are the same projects for which the DBM
32
is directed by the Office of the President, thru the Executive Secretary, to source
funds.
6.0 Among others, the following are such proposed additional projects that have been chosen
given their multiplier impact on economy and infrastructure development, their beneficial
effect on the poor, and their translation into disbursements. Please note that we have
classified the list of proposed projects as follows:
7.0 x x x
FOR THE PRESIDENT’S APPROVAL
8.0 Foregoing considered, may we respectfully request for the President’s approval for the
following:
8.1 Grant of omnibus authority to consolidate FY 2011 savings/unutilized balances
and its realignment; and
8.2 The proposed additional projects identified for funding.
For His Excellency’s consideration and approval.
(Sgd.)
[/] APPROVED
[ ] DISAPPROVED
(Sgd.) H.E. BENIGNO S. AQUINO, III
DEC 21, 2011
Substantially identical requests for authority to pool savings and to fund proposed projects were contained in
various other memoranda from Sec. Abad dated June 25, 2012,117 September 4, 2012,118 December 19,
2012,119 May 20, 2013,120 and September 25, 2013.121 The President apparently approved all the requests,
withholding approval only of the proposed projects contained in the June 25, 2012 memorandum, as borne out
by his marginal note therein to the effect that the proposed projects should still be "subject to further
discussions."122
In order to implement the June25, 2012 memorandum, Sec. Abad issued NBC No. 541 (Adoption of Operational
Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012), 123 reproduced herein
as follows:
NATIONAL BUDGET CIRCULAR No. 541
July 18, 2012
TO: All Heads of Departments/Agencies/State Universities and Colleges and other Offices of the National
Government, Budget and Planning Officers; Heads of Accounting Units and All Others Concerned
SUBJECT : Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of
June 30, 2012
1.0 Rationale
The DBM, as mandated by Executive Order (EO) No. 292 (Administrative Code of 1987), periodically reviews and
evaluates the departments/agencies’ efficiency and effectiveness in utilizing budgeted funds for the delivery of
services and production of goods, consistent with the government priorities.
In the event that a measure is necessary to further improve the operational efficiency of the government, the
President is authorized to suspend or stop further use of funds allotted for any agency or expenditure authorized
in the General Appropriations Act. Withdrawal and pooling of unutilized allotment releases can be effected by
DBM based on authority of the President, as mandated under Sections 38 and 39, Chapter 5, Book VI of EO 292.
For the first five months of 2012, the National Government has not met its spending targets. In order to
accelerate spending and sustain the fiscal targets during the year, expenditure measures have to be implemented
to optimize the utilization of available resources.
Departments/agencies have registered low spending levels, in terms of obligations and disbursements per initial
review of their 2012 performance. To enhance agencies’ performance, the DBM conducts continuous
consultation meetings and/or send call-up letters, requesting them to identify slow-moving programs/projects
and the factors/issues affecting their performance (both pertaining to internal systems and those which are
outside the agencies’ spheres of control). Also, they are asked to formulate strategies and improvement plans for
the rest of 2012.
Notwithstanding these initiatives, some departments/agencies have continued to post low obligation levels as of
end of first semester, thus resulting to substantial unobligated allotments.
In line with this, the President, per directive dated June 27, 2012 authorized the withdrawal of unobligated
allotments of agencies with low levels of obligations as of June 30, 2012, both for continuing and current
allotments. This measure will allow the maximum utilization of available allotments to fund and undertake other
priority expenditures of the national government.
2.0 Purpose
32
2.1 To provide the conditions and parameters on the withdrawal of unobligated allotments of
agencies as of June 30, 2012 to fund priority and/or fast-moving programs/projects of the
national government;
2.2 To prescribe the reports and documents to be used as bases on the withdrawal of said
unobligated allotments; and
2.3 To provide guidelines in the utilization or reallocation of the withdrawn allotments.
3.0 Coverage
3.1 These guidelines shall cover the withdrawal of unobligated allotments as of June 30, 2012
of all national government agencies (NGAs) charged against FY 2011 Continuing
Appropriation (R.A. No.10147) and FY 2012 Current Appropriation (R.A. No. 10155),
pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the
implementation of programs and projects, as well as capitalized MOOE; and
3.1.3 Personal Services corresponding to unutilized pension benefits declared as
savings by the agencies concerned based on their updated/validated list of
pensioners.
3.2 The withdrawal of unobligated allotments may cover the identified programs, projects
and activities of the departments/agencies reflected in the DBM list shown as Annex A or
specific programs and projects as may be identified by the agencies.
4.0 Exemption
These guidelines shall not apply to the following:
4.1 NGAs
4.1.1 Constitutional Offices/Fiscal Autonomy Group, granted fiscal autonomy under
the Philippine Constitution; and
4.1.2 State Universities and Colleges, adopting the Normative Funding allocation
scheme i.e., distribution of a predetermined budget ceiling.
4.2 Fund Sources
 4.2.1 Personal Services other than pension benefits;
4.2.2 MOOE items earmarked for specific purposes or subject to realignment
conditions per General Provisions of the GAA:
• Confidential and Intelligence Fund;
• Savings from Traveling, Communication, Transportation and Delivery,
Repair and Maintenance, Supplies and Materials and Utility which shall be
used for the grant of Collective Negotiation Agreement incentive benefit;
• Savings from mandatory expenditures which can be realigned only in
the last quarter after taking into consideration the agency’s full year
requirements, i.e., Petroleum, Oil and Lubricants, Water, Illumination,
Power Services, Telephone, other Communication Services and Rent.
4.2.3 Foreign-Assisted Projects (loan proceeds and peso counterpart);
4.2.4 Special Purpose Funds such as: E-Government Fund, International
Commitments Fund, PAMANA, Priority Development Assistance Fund, Calamity
Fund, Budgetary Support to GOCCs and Allocation to LGUs, among others;
4.2.5 Quick Response Funds; and
4.2.6 Automatic Appropriations i.e., Retirement Life Insurance Premium and Special
Accounts in the General Fund.
5.0 Guidelines
5.1 National government agencies shall continue to undertake procurement activities
notwithstanding the implementation of the policy of withdrawal of unobligated allotments
until the end of the third quarter, FY 2012. Even without the allotments, the agency shall
proceed in undertaking the procurement processes (i.e., procurement planning up to the
conduct of bidding but short of awarding of contract) pursuant to GPPB Circular Nos. 02-2008
and 01-2009 and DBM Circular Letter No. 2010-9.
5.2 For the purpose of determining the amount of unobligated allotments that shall be
withdrawn, all departments/agencies/operating units (OUs) shall submit to DBM not later
than July 30, 2012, the following budget accountability reports as of June 30, 2012;
• Statement of Allotments, Obligations and Balances (SAOB);
32
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the
agency’s latest report available shall be used by DBM as basis for withdrawal of allotment.
The DBM shall compute/approximate the agency’s obligation level as of June 30 to derive its
unobligated allotments as of same period. Example: If the March 31 SAOB or FRO reflects
actual obligations of P 800M then the June 30 obligation level shall approximate to ₱1,600 M
(i.e., ₱800 M x 2 quarters).
5.4 All released allotments in FY 2011 charged against R.A. No. 10147 which remained
unobligated as of June 30, 2012 shall be immediately considered for withdrawal. This policy is
based on the following considerations:
5.4.1 The departments/agencies’ approved priority programs and projects are
assumed to be implementation-ready and doable during the given fiscal year; and
5.4.2 The practice of having substantial carryover appropriations may imply that the
agency has a slower-than-programmed implementation capacity or agency tends to
implement projects within a two-year timeframe.
5.5. Consistent with the President’s directive, the DBM shall, based on evaluation of the
reports cited above and results of consultations with the departments/agencies, withdraw
the unobligated allotments as of June 30, 2012 through issuance of negative Special
Allotment Release Orders (SAROs).
5.6 DBM shall prepare and submit to the President, a report on the magnitude of withdrawn
allotments. The report shall highlight the agencies which failed to submit the June 30 reports
required under this Circular.
5.7 The withdrawn allotments may be:
5.7.1 Reissued for the original programs and projects of the agencies/OUs
concerned, from which the allotments were withdrawn;
5.7.2 Realigned to cover additional funding for other existing programs and projects
of the agency/OU; or
5.7.3 Used to augment existing programs and projects of any agency and to fund
priority programs and projects not considered in the 2012 budget but expected to
be started or implemented during the current year.
 5.8 For items 5.7.1 and 5.7.2 above, agencies/OUs concerned may submit to DBM a Special
Budget Request (SBR), supported with the following:
5.8.1 Physical and Financial Plan (PFP);
5.8.2 Monthly Cash Program (MCP); and
5.8.3 Proof that the project/activity has started the procurement processes i.e.,
Proof of Posting and/or Advertisement of the Invitation to Bid.
5.9 The deadline for submission of request/s pertaining to these categories shall be until the
end of the third quarter i.e., September 30, 2012. After said cut-off date, the withdrawn
allotments shall be pooled and form part of the overall savings of the national government.
5.10 Utilization of the consolidated withdrawn allotments for other priority programs and
projects as cited under item 5.7.3 of this Circular, shall be subject to approval of the
President. Based on the approval of the President, DBM shall issue the SARO to cover the
approved priority expenditures subject to submission by the agency/OU concerned of the
SBR and supported with PFP and MCP.
5.11 It is understood that all releases to be made out of the withdrawn allotments (both 2011
and 2012 unobligated allotments) shall be within the approved Expenditure Program level of
the national government for the current year. The SAROs to be issued shall properly disclose
the appropriation source of the release to determine the extent of allotment validity, as
follows:
• For charges under R.A. 10147 – allotments shall be valid up to December 31,
2012; and
• For charges under R.A. 10155 – allotments shall be valid up to December 31,
2013.
5.12 Timely compliance with the submission of existing BARs and other reportorial
requirements is reiterated for monitoring purposes.
6.0 Effectivity
This circular shall take effect immediately.
(Sgd.) FLORENCIO B. ABAD
Secretary
32
As can be seen, NBC No. 541 specified that the unobligated allotments of all agencies and departments as of June
30, 2012 that were charged against the continuing appropriations for fiscal year 2011 and the 2012 GAA (R.A. No.
10155) were subject to withdrawal through the issuance of negative SAROs, but such allotments could be either:
(1) reissued for the original PAPs of the concerned agencies from which they were withdrawn; or (2) realigned to
cover additional funding for other existing PAPs of the concerned agencies; or (3) used to augment existing PAPs
of any agency and to fund priority PAPs not considered in the 2012 budget but expected to be started or
implemented in 2012. Financing the other priority PAPs was made subject to the approval of the President. Note
here that NBC No. 541 used terminologies like "realignment" and "augmentation" in the application of the
withdrawn unobligated allotments.
Taken together, all the issuances showed how the DAP was to be implemented and funded, that is — (1) by
declaring "savings" coming from the various departments and agencies derived from pooling unobligated
allotments and withdrawing unreleased appropriations; (2) releasing unprogrammed funds; and (3) applying the
"savings" and unprogrammed funds to augment existing PAPs or to support other priority PAPs.
c. DAP was not an appropriation
measure; hence, no appropriation
law was required to adopt or to
implement it
Petitioners Syjuco, Luna, Villegas and PHILCONSA state that Congress did not enact a law to establish the DAP, or
to authorize the disbursement and release of public funds to implement the DAP. Villegas, PHILCONSA, IBP,
Araullo, and COURAGE observe that the appropriations funded under the DAP were not included in the 2011,
2012 and 2013 GAAs. To petitioners IBP, Araullo, and COURAGE, the DAP, being actually an appropriation that set
aside public funds for public use, should require an enabling law for its validity. VACC maintains that the DAP,
because it involved huge allocations that were separate and distinct from the GAAs, circumvented and duplicated
the GAAs without congressional authorization and control.
The petitioners contend in unison that based on how it was developed and implemented the DAP violated the
mandate of Section 29(1), Article VI of the 1987 Constitution that "[n]o money shall be paid out of the Treasury
except in pursuance of an appropriation made by law."
The OSG posits, however, that no law was necessary for the adoption and implementation of the DAP because of
its being neither a fund nor an appropriation, but a program or an administrative system of prioritizing spending;
and that the adoption of the DAP was by virtue of the authority of the President as the Chief Executive to ensure
that laws were faithfully executed.
We agree with the OSG’s position.
The DAP was a government policy or strategy designed to stimulate the economy through accelerated spending.
In the context of the DAP’s adoption and implementation being a function pertaining to the Executive as the main
actor during the Budget Execution Stage under its constitutional mandate to faithfully execute the laws, including
the GAAs, Congress did not need to legislate to adopt or to implement the DAP. Congress could appropriate but
would have nothing more to do during the Budget Execution Stage. 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 governmental expenditure, or to some individual
purchase or expense."124 As pointed out in Gonzales v. Raquiza:125 ‘"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.’"126
On the other hand, the President, in keeping with his duty to faithfully execute the laws, had sufficient discretion
during the execution of the budget to adapt the budget to changes in the country’s economic situation. 127 He
could adopt a plan like the DAP for the purpose. He could pool the savings and identify the PAPs to be funded
under the DAP. The pooling of savings pursuant to the DAP, and the identification of the PAPs to be funded under
the DAP did not involve appropriation in the strict sense because the money had been already set apart from the
public treasury by Congress through the GAAs. In such actions, the Executive did not usurp the power vested in
Congress under Section 29(1), Article VI of the Constitution.
3.
Unreleased appropriations and withdrawn
unobligated allotments under the DAP
were not savings, and the use of such
appropriations contravened Section 25(5),
Article VI of the 1987 Constitution.
Notwithstanding our appreciation of the DAP as a plan or strategy validly adopted by the Executive to ramp up
spending to accelerate economic growth, the challenges posed by the petitioners constrain us to dissect the
mechanics of the actual execution of the DAP. The management and utilization of the public wealth inevitably
demands a most careful scrutiny of whether the Executive’s implementation of the DAP was consistent with the
Constitution, the relevant GAAs and other existing laws.
a. Although executive discretion
and flexibility are necessary in
the execution of the budget, any
transfer of appropriated funds
should conform to Section 25(5),
Article VI of the Constitution
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 of offices, particularly the
President, require flexibility in their operations under performance budgeting to enable them to make whatever
adjustments are needed to meet established work goals under changing conditions. 128 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 PAPs set by Congress in the GAA.
32
Congress has traditionally allowed much flexibility to the President in allocating funds pursuant to the
GAAs,129particularly when the funds are grouped to form lump sum accounts. 130 It is assumed that the agencies of
the Government enjoy more flexibility when the GAAs provide broader appropriation items. 131 This flexibility
comes in the form of policies that the Executive may adopt during the budget execution phase. The DAP – 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,132 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.
xxxx
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.
In contrast, by allowing to the heads of offices some power to transfer funds within their respective offices, the
Constitution itself ensures the fiscal autonomy of their offices, and at the same time maintains the separation of
powers among the three main branches of the Government. The Court has recognized this, and emphasized so in
Bengzon v. Drilon,133 viz:
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 case of the President, the power to transfer funds from one item to another within the Executive has not
been the mere offshoot of established usage, but has emanated from law itself. It has existed since the time of
the American Governors-General.134 Act No. 1902 (An Act authorizing the Governor-General to direct any
unexpended balances of appropriations be returned to the general fund of the Insular Treasury and to transfer
from the general fund moneys which have been returned thereto), passed on May 18, 1909 by the First
Philippine Legislature, 135 was the first enabling law that granted statutory authority to the President to transfer
funds. The authority was without any limitation, for the Act explicitly empowered the Governor-General to
transfer any unexpended balance of appropriations for any bureau or office to another, and to spend such
balance as if it had originally been appropriated for that bureau or office.
From 1916 until 1920, the appropriations laws set a cap on the amounts of funds that could be transferred,
thereby limiting the power to transfer funds. Only 10% of the amounts appropriated for contingent or
miscellaneous expenses could be transferred to a bureau or office, and the transferred funds were to be used to
cover deficiencies in the appropriations also for miscellaneous expenses of said bureau or office.
In 1921, the ceiling on the amounts of funds to be transferred from items under miscellaneous expenses to any
other item of a certain bureau or office was removed.
During the Commonwealth period, the power of the President to transfer funds continued to be governed by the
GAAs despite the enactment of the Constitution in 1935. It is notable that the 1935 Constitution did not include a
provision on the power to transfer funds. At any rate, a shift in the extent of the President’s power to transfer
funds was again experienced during this era, with the President being given more flexibility in implementing the
budget. The GAAs provided that the power to transfer all or portions of the appropriations in the Executive
Department could be made in the "interest of the public, as the President may determine." 136
In its time, the 1971 Constitutional Convention wanted to curtail the President’s seemingly unbounded discretion
in transferring funds.137 Its Committee on the Budget and Appropriation proposed to prohibit the transfer of
funds among the separate branches of the Government and the independent constitutional bodies, but to allow
instead their respective heads to augment items of appropriations from savings in their respective budgets under
certain limitations.138 The clear intention of the Convention was to further restrict, not to liberalize, the power to
transfer appropriations. 139 Thus, the Committee on the Budget and Appropriation initially considered setting
stringent limitations on the power to augment, and suggested that the augmentation of an item of appropriation
could be made "by not more than ten percent if the original item of appropriation to be augmented does not
exceed one million pesos, or by not more than five percent if the original item of appropriation to be augmented
exceeds one million pesos."140 But two members of the Committee objected to the ₱1,000,000.00 threshold,
saying that the amount was arbitrary and might not be reasonable in the future. The Committee agreed to
eliminate the ₱1,000,000.00 threshold, and settled on the ten percent limitation. 141
In the end, the ten percent limitation was discarded during the plenary of the Convention, which adopted the
following final version under Section 16, Article VIII of the 1973 Constitution, to wit:
(5) No law shall be passed authorizing any transfer of appropriations; however, the President, the Prime Minister,
the Speaker, 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.
The 1973 Constitution explicitly and categorically prohibited the transfer of funds from one item to another,
unless Congress enacted a law authorizing the President, the Prime Minister, the Speaker, the Chief Justice of the
32
Supreme Court, and the heads of the Constitutional omissions to transfer funds for the purpose of augmenting
any item from savings in another item in the GAA of their respective offices. The leeway was limited to
augmentation only, and was further constricted by the condition that the funds to be transferred should come
from savings from another item in the appropriation of the office. 142
On July 30, 1977, President Marcos issued PD No. 1177, providing in its Section 44 that:
Section 44. Authority to Approve Fund Transfers. The President shall have the authority to transfer any fund
appropriated for the different departments, bureaus, offices and agencies of the Executive Department which are
included in the General Appropriations Act, to any program, project, or activity of any department, bureau or
office included in the General Appropriations Act or approved after its enactment.
The President shall, likewise, have the authority to augment any appropriation of the Executive Department in
the General Appropriations Act, from savings in the appropriations of another department, bureau, office or
agency within the Executive Branch, pursuant to the provisions of Article VIII, Section 16 (5) of the Constitution.
In Demetria v. Alba, however, the Court struck down the first paragraph of Section 44 for contravening Section
16(5)of the 1973 Constitution, ruling:
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the privilege granted under said Section 16. It
empowers the President to indiscriminately transfer funds from one department, bureau, office or agency of the
Executive Department to any program, project or activity of any department, bureau or office included in the
General Appropriations Act or approved after its enactment, without regard as to whether or not the funds to be
transferred are actually savings in the item from which the same are to be taken, or whether or not the transfer is
for the purpose of augmenting the item to which said transfer is to be made. It does not only completely
disregard the standards set in the fundamental law, thereby amounting to an undue delegation of legislative
powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities render the provision
in question null and void.143
It is significant that Demetria was promulgated 25 days after the ratification by the people of the 1987
Constitution, whose Section 25(5) of Article VI is identical to Section 16(5), Article VIII of the 1973 Constitution, to
wit:
Section 25. x x x
xxxx
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.
xxxx
The foregoing history makes it evident that the Constitutional Commission included Section 25(5), supra, to keep
a tight rein on the exercise of the power to transfer funds appropriated by Congress by the President and the
other high officials of the Government named therein. The Court stated in Nazareth v. Villar: 144
In the funding of current activities, projects, and programs, the general rule should still be that the budgetary
amount contained in the appropriations bill is the extent Congress will determine as sufficient for the budgetary
allocation for the proponent agency. The only exception is found in Section 25 (5), Article VI of the Constitution,
by which 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 are authorized to transfer
appropriations to augmentany item in the GAA for their respective offices from the savings in other items of their
respective appropriations. The plain language of the constitutional restriction leaves no room for the petitioner’s
posture, which we should now dispose of as untenable.
It bears emphasizing that the exception in favor of the high officials named in Section 25(5), Article VI of the
Constitution limiting the authority to transfer savings only to augment another item in the GAA is strictly but
reasonably construed as exclusive. As the Court has expounded in Lokin, Jr. v. Commission on Elections:
When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are
strictly but reasonably construed. The exceptions extend only as far as their language fairly warrants, and all
doubts should be resolved in favor of the general provision rather than the exceptions. Where the general rule is
established by a statute with exceptions, none but the enacting authority can curtail the former. Not even the
courts may add to the latter by implication, and it is a rule that an express exception excludes all others, although
it is always proper in determining the applicability of the rule to inquire whether, in a particular case, it accords
with reason and justice.
The appropriate and natural office of the exception is to exempt something from the scope of the general words
of a statute, which is otherwise within the scope and meaning of such general words. Consequently, the
existence of an exception in a statute clarifies the intent that the statute shall apply to all cases not excepted.
Exceptions are subject to the rule of strict construction; hence, any doubt will be resolved in favor of the general
provision and against the exception. Indeed, the liberal construction of a statute will seem to require in many
circumstances that the exception, by which the operation of the statute is limited or abridged, should receive a
restricted construction.
Accordingly, we should interpret Section 25(5), supra, in the context of a limitation on the President’s discretion
over the appropriations during the Budget Execution Phase.
b. Requisites for the valid transfer of
appropriated funds under Section
25(5), Article VI of the 1987
Constitution
The transfer of appropriated funds, to be valid under Section 25(5), supra, must be made upon a concurrence of
the following requisites, namely:
32
(1) There is a law authorizing 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 to transfer funds within their respective offices;
(2) The funds to be transferred are savings generated from the appropriations for their respective
offices; and (3) The purpose of the transfer is to augment an item in the general appropriations law for
their respective offices.
b.1. First Requisite–GAAs of 2011 and
2012 lacked valid provisions to
authorize transfers of funds under
the DAP; hence, transfers under the
DAP were unconstitutional
Section 25(5), supra, not being a self-executing provision of the Constitution, must have an implementing law for
it to be operative. That law, generally, is the GAA of a given fiscal year. To comply with the first requisite, the GAAs
should expressly authorize the transfer of funds.
Did the GAAs expressly authorize the transfer of funds?
In the 2011 GAA, the provision that gave the President and the other high officials the authority to transfer funds
was Section 59, as follows:
Section 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 in this Act from savings in other
items of their respective appropriations.
In the 2012 GAA, the empowering provision was Section 53, to wit:
Section 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.
In fact, the foregoing provisions of the 2011 and 2012 GAAs were cited by the DBM as justification for the use of
savings under the DAP.145
A reading shows, however, that the aforequoted provisions of the GAAs of 2011 and 2012 were textually
unfaithful to the Constitution for not carrying the phrase "for their respective offices" contained in Section 25(5),
supra. The impact of the phrase "for their respective offices" was to authorize only transfers of funds within their
offices (i.e., in the case of the President, the transfer was to an item of appropriation within the Executive). The
provisions carried a different phrase ("to augment any item in this Act"), and the effect was that the 2011 and
2012 GAAs thereby literally allowed the transfer of funds from savings to augment any item in the GAAs even if
the item belonged to an office outside the Executive. To that extent did the 2011 and 2012 GAAs contravene the
Constitution. At the very least, the aforequoted provisions cannot be used to claim authority to transfer
appropriations from the Executive to another branch, or to a constitutional commission.
Apparently realizing the problem, Congress inserted the omitted phrase in the counterpart provision in the 2013
GAA, to wit:
Section 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 their respective appropriations to
augment actual deficiencies incurred for the current year in any item of their respective appropriations.
Even had a valid law authorizing the transfer of funds pursuant to Section 25(5), supra, existed, there still
remained two other requisites to be met, namely: that the source of funds to be transferred were savings from
appropriations within the respective offices; and that the transfer must be for the purpose of augmenting an item
of appropriation within the respective offices.
b.2. Second Requisite – There were
no savings from which funds
could be sourced for the DAP
Were the funds used in the DAP actually savings?
The petitioners claim that the funds used in the DAP — the unreleased appropriations and withdrawn
unobligated allotments — were not actual savings within the context of Section 25(5), supra, and the relevant
provisions of the GAAs. Belgica argues that "savings" should be understood to refer to the excess money after the
items that needed to be funded have been funded, or those that needed to be paid have been paid pursuant to
the budget.146 The petitioners posit that there could be savings only when the PAPs for which the funds had been
appropriated were actually implemented and completed, or finally discontinued or abandoned. They insist that
savings could not be realized with certainty in the middle of the fiscal year; and that the funds for "slow-moving"
PAPs could not be considered as savings because such PAPs had not actually been abandoned or discontinued
yet.147 They stress that NBC No. 541, by allowing the withdrawn funds to be reissued to the "original program or
project from which it was withdrawn," conceded that the PAPs from which the supposed savings were taken had
not been completed, abandoned or discontinued. 148
The OSG represents that "savings" were "appropriations balances," being the difference between the
appropriation authorized by Congress and the actual amount allotted for the appropriation; that the definition of
"savings" in the GAAs set only the parameters for determining when savings occurred; that it was still the
President (as well as the other officers vested by the Constitution with the authority to augment) who ultimately
determined when savings actually existed because savings could be determined only during the stage of budget
execution; that the President must be given a wide discretion to accomplish his tasks; and that the withdrawn
unobligated allotments were savings inasmuch as they were clearly "portions or balances of any programmed
appropriation…free from any obligation or encumbrances which are (i) still available after the completion or final
discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized…"
32
We partially find for the petitioners.
In ascertaining the meaning of savings, certain principles should be borne in mind. The first principle is that
Congress wields the power of the purse. Congress decides how the budget will be spent; what PAPs to fund; and
the amounts of money to be spent for each PAP. The second principle is that the Executive, as the department of
the Government tasked to enforce the laws, is expected to faithfully execute the GAA and to spend the budget in
accordance with the provisions of the GAA.149 The Executive is expected to faithfully implement the PAPs for
which Congress allocated funds, and to limit the expenditures within the allocations, unless exigencies result to
deficiencies for which augmentation is authorized, subject to the conditions provided by law. The third principle
is that in making the President’s power to augment operative under the GAA, Congress recognizes the need for
flexibility in budget execution. In so doing, Congress diminishes its own power of the purse, for it delegates a
fraction of its power to the Executive. But Congress does not thereby allow the Executive to override its authority
over the purse as to let the Executive exceed its delegated authority. And the fourth principle is that savings
should be actual. "Actual" denotes something that is real or substantial, or something that exists presently in fact,
as opposed to something that is merely theoretical, possible, potential or hypothetical. 150
The foregoing principles caution us to construe savings strictly against expanding the scope of the power to
augment. It is then indubitable that the power to augment was to be used only when the purpose for which the
funds had been allocated were already satisfied, or the need for such funds had ceased to exist, for only then
could savings be properly realized. This interpretation prevents the Executive from unduly transgressing
Congress’ power of the purse.
The definition of "savings" in the GAAs, particularly for 2011, 2012 and 2013, reflected this interpretation and
made it operational, viz:
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.
The three instances listed in the GAAs’ aforequoted definition were a sure indication that savings could be
generated only upon the purpose of the appropriation being fulfilled, or upon the need for the appropriation
being no longer existent.
The phrase "free from any obligation or encumbrance" in the definition of savings in the GAAs conveyed the
notion that the appropriation was at that stage when the appropriation was already obligated and the
appropriation was already released. This interpretation was reinforced by the enumeration of the three instances
for savings to arise, which showed that the appropriation referred to had reached the agency level. It could not
be otherwise, considering that only when the appropriation had reached the agency level could it be determined
whether (a) the PAP for which the appropriation had been authorized was completed, finally discontinued, or
abandoned; or (b) there were vacant positions and leaves of absence without pay; or (c) the required or planned
targets, programs and services were realized at a lesser cost because of the implementation of measures
resulting in improved systems and efficiencies.
The DBM declares that part of the savings brought under the DAP came from "pooling of unreleased
appropriations such as unreleased Personnel Services appropriations which will lapse at the end of the year,
unreleased appropriations of slow moving projects and discontinued projects per Zero-Based Budgeting
findings."
The declaration of the DBM by itself does not state the clear legal basis for the treatment of unreleased or
unalloted appropriations as savings.
The fact alone that the appropriations are unreleased or unalloted is a mere description of the status of the items
as unalloted or unreleased. They have not yet ripened into categories of items from which savings can be
generated. Appropriations have been considered "released" if there has already been an allotment or
authorization to incur obligations and disbursement authority. This means that the DBM has issued either an
ABM (for those not needing clearance), or a SARO (for those needing clearance), and consequently an NCA, NCAA
or CDC, as the case may be. Appropriations remain unreleased, for instance, because of noncompliance with
documentary requirements (like the Special Budget Request), or simply because of the unavailability of funds.
But the appropriations do not actually reach the agencies to which they were allocated under the GAAs, and have
remained with the DBM technically speaking. Ergo, unreleased appropriations refer to appropriations with
allotments but without disbursement authority.
For us to consider unreleased appropriations as savings, unless these met the statutory definition of savings,
would seriously undercut the congressional power of the purse, because such appropriations had not even
reached and been used by the agency concerned vis-à-vis the PAPs for which Congress had allocated them.
However, if an agency has unfilled positions in its plantilla and did not receive an allotment and NCA for such
vacancies, appropriations for such positions, although unreleased, may already constitute savings for that agency
under the second instance.
Unobligated allotments, on the other hand, were encompassed by the first part of the definition of "savings" in
the GAA, that is, as "portions or balances of any programmed appropriation in this Act free from any obligation or
encumbrance." But the first part of the definition was further qualified by the three enumerated instances of
when savings would be realized. As such, unobligated allotments could not be indiscriminately declared as
savings without first determining whether any of the three instances existed. This signified that the DBM’s
withdrawal of unobligated allotments had disregarded the definition of savings under the GAAs.
Justice Carpio has validly observed in his Separate Concurring Opinion that MOOE appropriations are deemed
divided into twelve monthly allocations within the fiscal year; hence, savings could be generated monthly from
the excess or unused MOOE appropriations other than the Mandatory Expenditures and Expenditures for
Business-type Activities because of the physical impossibility to obligate and spend such funds as MOOE for a
period that already lapsed. Following this observation, MOOE for future months are not savings and cannot be
transferred.
The DBM’s Memorandum for the President dated June 25, 2012 (which became the basis of NBC No. 541) stated:
32
ON THE AUTHORITY TO WITHDRAW UNOBLIGATED ALLOTMENTS
5.0 The DBM, during the course of performance reviews conducted on the agencies’ operations,
particularly on the implementation of their projects/activities, including expenses incurred in
undertaking the same, have been continuously calling the attention of all National Government
agencies (NGAs) with low levels of obligations as of end of the first quarter to speedup the
implementation of their programs and projects in the second quarter.
6.0 Said reminders were made in a series of consultation meetings with the concerned agencies and
with call-up letters sent.
7.0 Despite said reminders and the availability of funds at the department’s disposal, the level of
financial performance of some departments registered below program, with the targeted
obligations/disbursements for the first semester still not being met.
8.0 In order to maximize the use of the available allotment, all unobligated balances as of June 30,
2012, both for continuing and current allotments shall be withdrawn and pooled to fund fast moving
programs/projects.
9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of slow moving
projects to be identified by the agencies and their catch up plans to be evaluated by the DBM.
It is apparent from the foregoing text that the withdrawal of unobligated allotments would be based on whether
the allotments pertained to slow-moving projects, or not. However, NBC No. 541 did not set in clear terms the
criteria for the withdrawal of unobligated allotments, viz:
3.1. These guidelines shall cover the withdrawal of unobligated allotments as of June 30, 2012 ofall
national government agencies (NGAs) charged against FY 2011 Continuing Appropriation (R.A. No.
10147) and FY 2012 Current Appropriation (R.A. No. 10155), pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the implementation of
programs and projects, as well as capitalized MOOE; and
3.1.3 Personal Services corresponding to unutilized pension benefits declared as savings by
the agencies concerned based on their undated/validated list of pensioners.
A perusal of its various provisions reveals that NBC No. 541 targeted the "withdrawal of unobligated allotments
of agencies with low levels of obligations" 151 "to fund priority and/or fast-moving programs/projects." 152 But the
fact that the withdrawn allotments could be "[r]eissued for the original programs and projects of the
agencies/OUs concerned, from which the allotments were withdrawn" 153 supported the conclusion that the PAPs
had not yet been finally discontinued or abandoned. Thus, the purpose for which the withdrawn funds had been
appropriated was not yet fulfilled, or did not yet cease to exist, rendering the declaration of the funds as savings
impossible.
Worse, NBC No. 541 immediately considered for withdrawal all released allotments in 2011 charged against the
2011 GAA that had remained unobligated based on the following considerations, to wit:
5.4.1 The departments/agencies’ approved priority programs and projects are assumed to be
implementation-ready and doable during the given fiscal year; and
5.4.2 The practice of having substantial carryover appropriations may imply that the agency has a
slower-than-programmed implementation capacity or agency tends to implement projects within a
two-year timeframe.
Such withdrawals pursuant to NBC No. 541, the circular that affected the unobligated allotments for continuing
and current appropriations as of June 30, 2012, disregarded the 2-year period of availability of the appropriations
for MOOE and capital outlay extended under Section 65, General Provisions of the 2011 GAA, viz:
Section 65. Availability of Appropriations. — Appropriations for MOOE and capital outlays authorized in this Act
shall be available for release and obligation for the purpose specified, and under the same special provisions
applicable thereto, for a period extending to one fiscal year after the end of the year in which such items were
appropriated: PROVIDED, That appropriations for MOOE and capital outlays under R.A. No. 9970 shall be made
available up to the end of FY 2011: PROVIDED, FURTHER, That a report on these releases and obligations shall be
submitted to the Senate Committee on Finance and the House Committee on Appropriations.
and Section 63 General Provisions of the 2012 GAA, viz:
Section 63. Availability of Appropriations. — Appropriations for MOOE and capital outlays authorized in this Act
shall be available for release and obligation for the purpose specified, and under the same special provisions
applicable thereto, for a period extending to one fiscal year after the end of the year in which such items were
appropriated: PROVIDED, That a report on these releases and obligations shall be submitted to the Senate
Committee on Finance and the House Committee on Appropriations, either in printed form or by way of
electronic document.154
Thus, another alleged area of constitutional infirmity was that the DAP and its relevant issuances shortened the
period of availability of the appropriations for MOOE and capital outlays.
Congress provided a one-year period of availability of the funds for all allotment classes in the 2013 GAA (R.A.
No. 10352), to wit:
Section 63. Availability of Appropriations.— All appropriations authorized in this Act shall be available for release
and obligation for the purposes specified, and under the same special provisions applicable thereto, until the end
of FY 2013: PROVIDED, That a report on these releases and obligations shall be submitted to the Senate
32
Committee on Finance and House Committee on Appropriations, either in printed form or by way of electronic
document.
Yet, in his memorandum for the President dated May 20, 2013, Sec. Abad sought omnibus authority to
consolidate savings and unutilized balances to fund the DAP on a quarterly basis, viz:
7.0 If the level of financial performance of some department will register below program, even with the
availability of funds at their disposal, the targeted obligations/disbursements for each quarter will not
be met. It is important to note that these funds will lapse at the end of the fiscal year if these remain
unobligated.
8.0 To maximize the use of the available allotment, all unobligated balances at the end of every quarter,
both for continuing and current allotments shall be withdrawn and pooled to fund fast moving
programs/projects.
9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of slow moving
projects to be identified by the agencies and their catch up plans to be evaluated by the DBM.
The validity period of the affected appropriations, already given the brief Lifes pan of one year, was further
shortened to only a quarter of a year under the DBM’s memorandum dated May 20, 2013.
The petitioners accuse the respondents of forcing the generation of savings in order to have a larger fund
available for discretionary spending. They aver that the respondents, by withdrawing unobligated allotments in
the middle of the fiscal year, in effect deprived funding for PAPs with existing appropriations under the GAAs. 155
The respondents belie the accusation, insisting that the unobligated allotments were being withdrawn upon the
instance of the implementing agencies based on their own assessment that they could not obligate those
allotments pursuant to the President’s directive for them to spend their appropriations as quickly as they could in
order to ramp up the economy.156
We agree with the petitioners.
Contrary to the respondents’ insistence, the withdrawals were upon the initiative of the DBM itself. The text of
NBC No. 541 bears this out, to wit:
5.2 For the purpose of determining the amount of unobligated allotments that shall be withdrawn, all
departments/agencies/operating units (OUs) shall submit to DBM not later than July 30, 2012, the following
budget accountability reports as of June 30, 2012;
• Statement of Allotments, Obligation and Balances (SAOB);
• Financial Report of Operations (FRO); and
 • Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the agency’s latest report
available shall be used by DBM as basis for withdrawal of allotment. The DBM shall compute/approximate the
agency’s obligation level as of June 30 to derive its unobligated allotments as of same period. Example: If the
March 31 SAOB or FRO reflects actual obligations of P 800M then the June 30 obligation level shall approximate
to ₱1,600 M (i.e., ₱800 M x 2 quarters).
Unmanageable national government budget deficit as used in this section shall be construed to mean that (i) the
actual national government budget deficit has exceeded the quarterly budget deficit targets consistent with the
full-year target deficit as indicated in the FY 2011 Budget of
Expenditures and Sources of Financing submitted by the President and approved by Congress pursuant to Section
22, Article VII of the Constitution, or (ii) there are clear economic indications of an impending occurrence of such
condition, as determined by the Development Budget Coordinating Committee and approved by the President.

The petitioners assert that no law had authorized the withdrawal and transfer of unobligated allotments and the The 2012 and 2013 GAAs contained similar provisions.
pooling of unreleased appropriations; and that the unbridled withdrawal of unobligated allotments and the
retention of appropriated funds were akin to the impoundment of appropriations that could be allowed only in The withdrawal of unobligated allotments under the DAP should not be regarded as impoundment because it
case of "unmanageable national government budget deficit" under the GAAs, 157 thus violating the provisions of entailed only the transfer of funds, not the retention or deduction of appropriations.
the GAAs of 2011, 2012 and 2013 prohibiting the retention or deduction of allotments. 158
Nor could Section 68 of the 2011 GAA (and the similar provisions of the 2012 and 2013 GAAs) be applicable. They
In contrast, the respondents emphasize that NBC No. 541 adopted a spending, not saving, policy as a last-ditch uniformly stated:
effort of the Executive to push agencies into actually spending their appropriations; that such policy did not
amount to an impoundment scheme, because impoundment referred to the decision of the Executive to refuse
Section 68. Prohibition Against Retention/Deduction of Allotment. Fund releases from appropriations provided in
to spend funds for political or ideological reasons; and that the withdrawal of allotments under NBC No. 541 was
this Act shall be transmitted intact or in full to the office or agency concerned. No retention or deduction as
made pursuant to Section 38, Chapter 5, Book VI of the Administrative Code, by which the President was granted
reserves or overhead shall be made, except as authorized by law, or upon direction of the President of the
the authority to suspend or otherwise stop further expenditure of funds allotted to any agency whenever in his
Philippines. The COA shall ensure compliance with this provision to the extent that sub-allotments by agencies to
judgment the public interest so required.
their subordinate offices are in conformity with the release documents issued by the DBM.

The assertions of the petitioners are upheld. The withdrawal and transfer of unobligated allotments and the
The provision obviously pertained to the retention or deduction of allotments upon their release from the DBM,
pooling of unreleased appropriations were invalid for being bereft of legal support. Nonetheless, such withdrawal
which was a different matter altogether. The Court should not expand the meaning of the provision by applying it
of unobligated allotments and the retention of appropriated funds cannot be considered as impoundment.
to the withdrawal of allotments.

According to Philippine Constitution Association v. Enriquez:159 "Impoundment refers to a refusal by the

The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to justify the
President, for whatever reason, to spend funds made available by Congress. It is the failure to spend or obligate
withdrawal of unobligated allotments. But the provision authorized only the suspension or stoppage of further
budget authority of any type." Impoundment under the GAA is understood to mean the retention or deduction of
expenditures, not the withdrawal of unobligated allotments, to wit:
appropriations. The 2011 GAA authorized impoundment only in case of unmanageable National Government
budget deficit, to wit:
Section 38. Suspension of Expenditure of Appropriations.- Except as otherwise provided in the General
Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to
Section 66. Prohibition Against Impoundment of Appropriations. No appropriations authorized under this Act
the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for
shall be impounded through retention or deduction, unless in accordance with the rules and regulations to be
any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services
issued by the DBM: PROVIDED, That all the funds appropriated for the purposes, programs, projects and activities
appropriations used for permanent officials and employees.
authorized under this Act, except those covered under the Unprogrammed Fund, shall be released pursuant to
Section 33 (3), Chapter 5, Book VI of E.O. No. 292.
Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38, supra, but
instead transferred the funds to other PAPs.
Section 67. Unmanageable National Government Budget Deficit. Retention or deduction of appropriations
authorized in this Act shall be effected only in cases where there is an unmanageable national government
budget deficit. It is relevant to remind at this juncture that the balances of appropriations that remained unexpended at the end
of the fiscal year were to be reverted to the General Fund.1âwphi1 This was the mandate of Section 28, Chapter
IV, Book VI of the Administrative Code, to wit:

32
Section 28. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations.- Unexpended Of this amount ₱82.5 billion were released in 2011 and ₱54.8 billion in 2012. 162 Sec. Abad has reported that 9% of
balances of appropriations authorized in the General Appropriation Act shall revert to the unappropriated surplus the total DAP releases were applied to the PAPs identified by the legislators. 163
of the General Fund at the end of the fiscal year and shall not thereafter be available for expenditure except by
subsequent legislative enactment: Provided, that appropriations for capital outlays shall remain valid until fully The petitioners disagree, however, and insist that the DAP supported the following PAPs that had not been
spent or reverted: provided, further, that continuing appropriations for current operating expenditures may be covered with appropriations in the respective GAAs, namely:
specifically recommended and approved as such in support of projects whose effective implementation calls for
multi-year expenditure commitments: provided, finally, that the President may authorize the use of savings
(i) ₱1.5 billion for the Cordillera People’s Liberation Army;
realized by an agency during given year to meet non-recurring expenditures in a subsequent year.

(ii) ₱1.8 billion for the Moro National Liberation Front;

The balances of continuing appropriations shall be reviewed as part of the annual budget preparation process
and the preparation process and the President may approve upon recommendation of the Secretary, the
reversion of funds no longer needed in connection with the activities funded by said continuing appropriations. (iii) ₱700 million for assistance to Quezon Province; 164

The Executive could not circumvent this provision by declaring unreleased appropriations and unobligated (iv) ₱50 million to ₱100 (million) each to certain senators; 165
allotments as savings prior to the end of the fiscal year.
(v) ₱10 billion for the relocation of families living along dangerous zones under the National Housing
b.3. Third Requisite – No funds from Authority;
savings could be transferred under
the DAP to augment deficient items (vi) ₱10 billion and ₱20 billion equity infusion under the Bangko Sentral;
not provided in the GAA
(vii) ₱5.4 billion landowners’ compensation under the Department of Agrarian Reform;
The third requisite for a valid transfer of funds is that the purpose of the transfer should be "to augment an item
in the general appropriations law for the respective offices." The term "augment" means to enlarge or increase in (viii) ₱8.6 billion for the ARMM comprehensive peace and development program;
size, amount, or degree.160

(ix) ₱6.5 billion augmentation of LGU internal revenue allotments

The GAAs for 2011, 2012 and 2013 set as a condition for augmentation that the appropriation for the PAP item to
be augmented must be deficient, to wit: –
(x) ₱5 billion for crucial projects like tourism road construction under the Department of Tourism and
the Department of Public Works and Highways;
x x x Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which
upon implementation, or subsequent evaluation of needed resources, is determined to be deficient. In no case
shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of (xi) ₱1.8 billion for the DAR-DPWH Tulay ng Pangulo;
appropriations otherwise authorized in this Act.
(xii) ₱1.96 billion for the DOH-DPWH rehabilitation of regional health units; and
In other words, an appropriation for any PAP must first be determined to be deficient before it could be
augmented from savings. Note is taken of the fact that the 2013 GAA already made this quite clear, thus: (xiii) ₱4 billion for the DepEd-PPP school infrastructure projects. 166

Section 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 their respective appropriations to
augment actual deficiencies incurred for the current year in any item of their respective appropriations.
As of 2013, a total of ₱144.4 billion worth of PAPs were implemented through the DAP. 161
In refutation, the OSG argues that a total of 116 DAP-financed PAPs were implemented, had appropriation covers,
and could properly be accounted for because the funds were released following and pursuant to the standard
practices adopted by the DBM.167 In support of its argument, the OSG has submitted seven evidence packets
containing memoranda, SAROs, and other pertinent documents relative to the implementation and fund
transfers under the DAP.168

32
Upon careful review of the documents contained in the seven evidence packets, we conclude that the "savings" priority areas identified as strategic to National Development, the Executive allotted funds for personnel services
pooled under the DAP were allocated to PAPs that were not covered by any appropriations in the pertinent GAAs. 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 that became the basis of the
For example, the SARO issued on December 22, 2011 for the highly vaunted Disaster Risk, Exposure, Assessment 2011 GAA.170
and Mitigation (DREAM) project under the Department of Science and Technology (DOST) covered the amount of
₱1.6 Billion,169 broken down as follows: 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
APPROPRIATION PARTICULARS AMOUNT fund the PAP. The consequence was that any PAP requiring expenditure that did not receive any appropriation
CODE AUTHORIZED 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. That happened in some instances under the DAP.
A.03.a.01.a Generation of new knowledge and technologies and research
capability building in priority areas identified as strategic to
In relation to the December 22, 2011 SARO issued to the Philippine Council for Industry, Energy and Emerging
National Development
Personnel Services Technology Research and Development (DOST-PCIEETRD) 171 for Establishment of the Advanced Failure
Maintenance and Other Operating Expenses P 43,504,024 Analysis Laboratory, which reads:
Capital Outlays 1,164,517,589
391,978,387
APPROPRIATION PARTICULARS AMOUNT
P 1,600,000,000
CODE AUTHORIZED

Development, integration and coordination of the National Research System

the pertinent provision of the 2011 GAA (R.A. No. 10147) showed that Congress had appropriated only A.02.a for Industry, Energy and Emerging Technology and Related Fields
₱537,910,000 for MOOE, but nothing for personnel services and capital outlays, to wit: Capital Outlays P 300,000,000

Personnel Maintenance Capital TOTAL the appropriation code and the particulars appearing in the SARO did not correspond to the program specified in
Services and Other Outlays the GAA, whose particulars were Research and Management Services(inclusive of the following activities: (1)
Operating Technological and Economic Assessment for Industry, Energy and Utilities; (2) Dissemination of Science and
Expenditures Technology Information; and (3) Management of PCIERD Information System for Industry, Energy and Utilities.
III. Operations Even assuming that Development, integration and coordination of the National Research System for Industry,
Energy and Emerging Technology and Related Fields– the particulars stated in the SARO – could fall under the
a. Funding Assistance to Science 177,406,000 1,887,365,000 49,090,000 2,113,861,000 broad program description of Research and Management Services– as appearing in the SARO, it would
and Technology Activities nonetheless remain a new activity by reason of its not being specifically stated in the GAA. As such, the DBM,
sans legislative authorization, could not validly fund and implement such PAP under the DAP.
1. Central Office 1,554,238,000 1,554,238,000

a. Generation of new In defending the disbursements, however, the OSG contends that the Executive enjoyed sound discretion in
knowledge and implementing the budget given the generality in the language and the broad policy objectives identified under
technologies and research the GAAs;172 and that the President enjoyed unlimited authority to spend the initial appropriations under his
capability building in authority to declare and utilize savings, 173 and in keeping with his duty to faithfully execute the laws.
priority areas identified as
strategic to National Although the OSG rightly contends that the Executive was authorized to spend in line with its mandate to
Development 537,910,000 537,910,000 faithfully execute the laws (which included the GAAs), such authority did not translate to unfettered discretion
that allowed the President to substitute his own will for that of Congress. He was still required to remain faithful
to the provisions of the GAAs, given that his power to spend pursuant to the GAAs was but a delegation to him
Aside from this transfer under the DAP to the DREAM project exceeding by almost 300% the appropriation by
from Congress. Verily, the power to spend the public wealth resided in Congress, not in the
Congress for the program Generation of new knowledge and technologies and research capability building in

32
Executive.174 Moreover, leaving the spending power of the Executive unrestricted would threaten to undo the
principle of separation of powers.175
Congress acts as the guardian of the public treasury in faithful discharge of its power of the purse whenever it
deliberates and acts on the budget proposal submitted by the Executive. 176 Its power of the purse is touted as the
very foundation of its institutional strength,177 and underpins "all other legislative decisions and regulating the
balance of influence between the legislative and executive branches of government." 178 Such enormous power
encompasses the capacity to generate money for the Government, to appropriate public funds, and to spend the
money.179 Pertinently, when it exercises its power of the purse, Congress wields control by specifying the PAPs for
which public money should be spent.
It is the President who proposes the budget but it is Congress that has the final say on matters of
appropriations.180For this purpose, appropriation involves two governing principles, namely: (1) "a Principle of the
Public Fisc, asserting that all monies received from whatever source by any part of the government are public
funds;" and (2) "a Principle of Appropriations Control, prohibiting expenditure of any public money without
legislative authorization."181To conform with the governing principles, the Executive cannot circumvent the
prohibition by Congress of an expenditure for a PAP by resorting to either public or private funds. 182 Nor could the
Executive transfer appropriated funds resulting in an increase in the budget for one PAP, for by so doing the
appropriation for another PAP is necessarily decreased. The terms of both appropriations will thereby be
violated.
b.4 Third Requisite – Cross-border
augmentations from savings were
prohibited by the Constitution
By providing that 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 be authorized to
augment any item in the GAA "for their respective offices," Section 25(5), supra, has delineated borders between
their offices, such that funds appropriated for one office are prohibited from crossing over to another office even
in the guise of augmentation of a deficient item or items. Thus, we call such transfers of funds cross-border
transfers or cross-border augmentations.
To be sure, the phrase "respective offices" used in Section 25(5), supra, refers to the entire Executive, with
respect to the President; the Senate, with respect to the Senate President; the House of Representatives, with
respect to the Speaker; the Judiciary, with respect to the Chief Justice; the Constitutional Commissions, with
respect to their respective Chairpersons.
Did any cross-border transfers or augmentations transpire?
During the oral arguments on January 28, 2014, Sec. Abad admitted making some cross-border augmentations, to
wit:
JUSTICE BERSAMIN:
32
Alright, the whole time that you have been Secretary of Department of Budget and Management, did the
Executive Department ever redirect any part of savings of the National Government under your control cross
border to another department?
SECRETARY ABAD:
Well, in the Memos that we submitted to you, such an instance, Your Honor
JUSTICE BERSAMIN:
Can you tell me two instances? I don’t recall having read your material.
SECRETARY ABAD:
Well, the first instance had to do with a request from the House of Representatives. They started building their e-
library in 2010 and they had a budget for about 207 Million but they lack about 43 Million to complete its 250
Million requirements. Prior to that, the COA, in an audit observation informed the Speaker that they had to
continue with that construction otherwise the whole building, as well as the equipments therein may suffer from
serious deterioration. And at that time, since the budget of the House of Representatives was not enough to
complete 250 Million, they wrote to the President requesting for an augmentation of that particular item, which
was granted, Your Honor. The second instance in the Memos is a request from the Commission on Audit. At the
time they were pushing very strongly the good governance programs of the government and therefore, part of
that is a requirement to conduct audits as well as review financial reports of many agencies. And in the
performance of that function, the Commission on Audit needed information technology equipment as well as
hire consultants and litigators to help them with their audit work and for that they requested funds from the
Executive and the President saw that it was important for the Commission to be provided with those IT
equipments and litigators and consultants and the request was granted, Your Honor.
JUSTICE BERSAMIN:
These cross border examples, cross border augmentations were not supported by appropriations…
SECRETARY ABAD:
They were, we were augmenting existing items within their… (interrupted)
JUSTICE BERSAMIN:
No, appropriations before you augmented because this is a cross border and the tenor or text of the Constitution
is quite clear as far as I am concerned. It says here, "The power to augment may only be made to increase any
item in the General Appropriations Law for their respective offices." Did you not feel constricted by this
provision?
 SECRETARY ABAD: The respondents further stated in their memorandum that the President "made available" to the "Commission
on Elections the savings of his department upon [its] request for funds…" 187 This was another instance of a cross-
Well, as the Constitution provides, the prohibition we felt was on the transfer of appropriations, Your Honor. border augmentation.
What we thought we did was to transfer savings which was needed by the Commission to address deficiency in
an existing item in both the Commission as well as in the House of Representatives; that’s how we saw… The respondents justified all the cross-border transfers thusly:
(interrupted)
99. The Constitution does not prevent the President from transferring savings of his department to another
JUSTICE BERSAMIN: department upon the latter’s request, provided it is the recipient department that uses such funds to augment its
own appropriation. In such a case, the President merely gives the other department access to public funds but he
So your position as Secretary of Budget is that you could do that? cannot dictate how they shall be applied by that department whose fiscal autonomy is guaranteed by the
Constitution.188
SECRETARY ABAD:
In the oral arguments held on February 18, 2014, Justice Vicente V. Mendoza, representing Congress, announced
a different characterization of the cross-border transfers of funds as in the nature of "aid" instead of
In an extreme instances because…(interrupted)
"augmentation," viz:

JUSTICE BERSAMIN:
HONORABLE MENDOZA:

No, no, in all instances, extreme or not extreme, you could do that, that’s your feeling.
The cross-border transfers, if Your Honors please, is not an application of the DAP. What were these cross-border
transfers? They are transfers of savings as defined in the various General Appropriations Act. So, that makes it
SECRETARY ABAD: similar to the DAP, the use of savings. There was a cross-border which appears to be in violation of Section 25,
paragraph 5 of Article VI, in the sense that the border was crossed. But never has it been claimed that the
Well, in that particular situation when the request was made by the Commission and the House of purpose was to augment a deficient item in another department of the government or agency of the
Representatives, we felt that we needed to respond because we felt…(interrupted). 183 government. The cross-border transfers, if Your Honors please, were in the nature of [aid] rather than
augmentations. Here is a government entity separate and independent from the Executive Department solely in
The records show, indeed, that funds amounting to ₱143,700,000.00 and ₱250,000,000.00 were transferred need of public funds. The President is there 24 hours a day, 7 days a week. He’s in charge of the whole operation
under the DAP respectively to the COA184 and the House of Representatives.185 Those transfers of funds, which although six or seven heads of government offices are given the power to augment. Only the President stationed
constituted cross-border augmentations for being from the Executive to the COA and the House of there and in effect in-charge and has the responsibility for the failure of any part of the government. You have
Representatives, are graphed as follows:186 election, for one reason or another, the money is not enough to hold election. There would be chaos if no money
is given as an aid, not to augment, but as an aid to a department like COA. The President is responsible in a way
that the other heads, given the power to augment, are not. So, he cannot very well allow this, if Your Honor
please.189
AMOUNT
DATE (In thousand pesos) JUSTICE LEONEN:
OFFICE PURPOSE
RELEASED Reserve Releases
Imposed May I move to another point, maybe just briefly. I am curious that the position now, I think, of government is that
some transfers of savings is now considered to be, if I’m not mistaken, aid not augmentation. Am I correct in my
Commission on IT Infrastructure Program and hiring of additional 11/11/11 143,700 hearing of your argument?
Audit litigation experts

Congress – Completion of the construction of the Legislative 07/23/12 207,034 250,000 HONORABLE MENDOZA:
House of Library and Archives Building/Congressional e-library (Savings of HOR)
Representatives That’s our submission, if Your Honor, please.

32
JUSTICE LEONEN: HONORABLE MENDOZA:

May I know, Justice, where can we situate this in the text of the Constitution? Where do we actually derive the
concepts that transfers of appropriation from one branch to the other or what happened in DAP can be
considered a said? What particular text in the Constitution can we situate this?
HONORABLE MENDOZA:
Yes, if Your Honor please.190
Regardless of the variant characterizations of the cross-border transfers of funds, the plain text of Section 25(5),
supra, disallowing cross border transfers was disobeyed. Cross-border transfers, whether as augmentation, or as
aid, were prohibited under Section 25(5), supra.

There is no particular provision or statutory provision for that matter, if Your Honor please. It is drawn from the 4.
fact that the Executive is the executive in-charge of the success of the government. Sourcing the DAP from unprogrammed
funds despite the original revenue targets
JUSTICE LEONEN: not having been exceeded was invalid

So, the residual powers labelled in Marcos v. Manglapus would be the basis for this theory of the government?
HONORABLE MENDOZA:
Funding under the DAP were also sourced from unprogrammed funds provided in the GAAs for 2011, 2012,and
2013. The respondents stress, however, that the unprogrammed funds were not brought under the DAP as
savings, but as separate sources of funds; and that, consequently, the release and use of unprogrammed funds
were not subject to the restrictions under Section 25(5), supra.

Yes, if Your Honor, please.

The documents contained in the Evidence Packets by the OSG have confirmed that the unprogrammed funds
were treated as separate sources of funds. Even so, the release and use of the unprogrammed funds were still
JUSTICE LEONEN: subject to restrictions, for, to start with, the GAAs precisely specified the instances when the unprogrammed
funds could be released and the purposes for which they could be used.
A while ago, Justice Carpio mentioned that the remedy is might be to go to Congress. That there are
opportunities and there have been opportunities of the President to actually go to Congress and ask for The petitioners point out that a condition for the release of the unprogrammed funds was that the revenue
supplemental budgets? collections must exceed revenue targets; and that the release of the unprogrammed funds was illegal because
such condition was not met.191
HONORABLE MENDOZA:
The respondents disagree, holding that the release and use of the unprogrammed funds under the DAP were in
If there is time to do that, I would say yes. accordance with the pertinent provisions of the GAAs. In particular, the DBM avers that the unprogrammed funds
could be availed of when any of the following three instances occur, to wit: (1) the revenue collections exceeded
JUSTICE LEONEN: the original revenue targets proposed in the BESFs submitted by the President to Congress; (2) new revenues
were collected or realized from sources not originally considered in the BESFs; or(3) newly-approved loans for
foreign assisted projects were secured, or when conditions were triggered for other sources of funds, such as
So, the theory of aid rather than augmentation applies in extra-ordinary situation? perfected loan agreements for foreign-assisted projects. 192 This view of the DBM was adopted by all the
respondents in their Consolidated Comment.193
HONORABLE MENDOZA:
The BESFs for 2011, 2012 and 2013 uniformly defined "unprogrammed appropriations" as appropriations that
Very extra-ordinary situations. provided standby authority to incur additional agency obligations for priority PAPs when revenue collections
exceeded targets, and when additional foreign funds are generated. 194 Contrary to the DBM’s averment that there
JUSTICE LEONEN: were three instances when unprogrammed funds could be released, the BESFs envisioned only two instances.
The third mentioned by the DBM – the collection of new revenues from sources not originally considered in the
BESFs – was not included. This meant that the collection of additional revenues from new sources did not
But Counsel, this would be new doctrine, in case?
warrant the release of the unprogrammed funds. Hence, even if the revenues not considered in the BESFs were

32
collected or generated, the basic condition that the revenue collections should exceed the revenue targets must
still be complied with in order to justify the release of the unprogrammed funds.
The view that there were only two instances when the unprogrammed funds could be released was bolstered by
the following texts of the Special Provisions of the 2011 and 2012 GAAs, to wit:
2011 GAA
1. Release of Fund. The amounts authorized herein shall be released only when the revenue collections exceed
the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22,
Article VII of the Constitution, including savings generated from programmed appropriations for the year:
PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets may be
used to cover releases from appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved
loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient
basis for the issuance of a SARO covering the loan proceeds: PROVIDED, FURTHERMORE, That if there are savings
generated from the programmed appropriations for the first two quarters of the year, the DBM may, subject to
the approval of the President, release the pertinent appropriations under the Unprogrammed Fund
corresponding to only fifty percent (50%) of the said savings net of revenue shortfall: PROVIDED, FINALLY, That
the release of the balance of the total savings from programmed appropriations for the year shall be subject to
fiscal programming and approval of the President.
2012 GAA
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, Article VII of the Constitution: PROVIDED, That collections arising from sources not considered in the
aforesaid original revenue targets may be used to cover releases from appropriations in this Fund: PROVIDED,
FURTHER, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected loan
agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds.
As can be noted, the provisos in both provisions to the effect that "collections arising from sources not
considered in the aforesaid original revenue targets may be used to cover releases from appropriations in this
Fund" gave the authority to use such additional revenues for appropriations funded from the unprogrammed
funds. They did not at all waive compliance with the basic requirement that revenue collections must still exceed
the original revenue targets.
In contrast, the texts of the provisos with regard to additional revenues generated from newly-approved foreign
loans were clear to the effect that the perfected loan agreement would be in itself "sufficient basis" for the
issuance of a SARO to release the funds but only to the extent of the amount of the loan. In such instance, the
revenue collections need not exceed the revenue targets to warrant the release of the loan proceeds, and the
mere perfection of the loan agreement would suffice.
It can be inferred from the foregoing that under these provisions of the GAAs the additional revenues from
sources not considered in the BESFs must be taken into account in determining if the revenue collections
32
exceeded the revenue targets. The text of the relevant provision of the 2013 GAA, which was substantially similar
to those of the GAAs for 2011 and 2012, already made this explicit, thus:
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, Article VII of the Constitution, including collections arising from sources not considered in the aforesaid
original revenue target, 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.
Consequently, that there were additional revenues from sources not considered in the revenue target would not
be enough. The total revenue collections must still exceed the original revenue targets to justify the release of
the unprogrammed funds (other than those from newly-approved foreign loans).
The present controversy on the unprogrammed funds was rooted in the correct interpretation of the phrase
"revenue collections should exceed the original revenue targets." The petitioners take the phrase to mean that
the total revenue collections must exceed the total revenue target stated in the BESF, but the respondents
understand the phrase to refer only to the collections for each source of revenue as enumerated in the BESF, with
the condition being deemed complied with once the revenue collections from a particular source already
exceeded the stated target.
The BESF provided for the following sources of revenue, with the corresponding revenue target stated for each
source of revenue, to wit:
TAX REVENUES
Taxes on Net Income and Profits
Taxes on Property
Taxes on Domestic Goods and Services
General Sales, Turnover or VAT
Selected Excises on Goods
Selected Taxes on Services
Taxes on the Use of Goods or Property or Permission to Perform Activities
Other Taxes
Taxes on International Trade and Transactions
NON-TAX REVENUES
Fees and Charges
BTR Income
 Government Services This is to certify that the actual dividend collections remitted to the National Government for the period January
Interest on NG Deposits to May 2013 amounted to ₱12.438 billion compared to the full year program of ₱10.0 198 billion for 2013.
Interest on Advances to Government Corporations
Income from Investments Moreover, the National Government accounted for the sale of the right to build and operate the NAIA
expressway amounting to ₱11.0 billion in June 2013.199
Interest on Bond Holdings
The certifications reflected that by collecting dividends amounting to ₱23.8 billion in 2011, ₱19.419 billion in
Guarantee Fee 2012, and ₱12.438 billion in 2013 the BTr had exceeded only the ₱5.5 billion in target revenues in the form of
Gain on Foreign Exchange dividends from stocks in each of 2011 and 2012, and only the ₱10 billion in target revenues in the form of
NG Income Collected by BTr dividends from stocks in 2013.

Dividends on Stocks However, the requirement that revenue collections exceed the original revenue targets was to be construed in
NG Share from Airport Terminal Fee light of the purpose for which the unprogrammed funds were incorporated in the GAAs as standby
NG Share from PAGCOR Income appropriations to support additional expenditures for certain priority PAPs should the revenue collections exceed
NG Share from MIAA Profit the resource targets assumed in the budget or when additional foreign project loan proceeds were realized. The
unprogrammed funds were included in the GAAs to provide ready cover so as not to delay the implementation of
Privatization the PAPs should new or additional revenue sources be realized during the year. 200 Given the tenor of the
Foreign Grants certifications, the unprogrammed funds were thus not yet supported by the corresponding resources. 201

Thus, when the Court required the respondents to submit a certification from the Bureau of Treasury (BTr) to the
effect that the revenue collections had exceeded the original revenue targets, 195 they complied by submitting
certifications from the BTr and Department of Finance (DOF) pertaining to only one identified source of revenue –
the dividends from the shares of stock held by the Government in government-owned and controlled
corporations.
To justify the release of the unprogrammed funds for 2011, the OSG presented the certification dated March 4,
2011 issued by DOF Undersecretary Gil S. Beltran, as follows:
The revenue targets stated in the BESF were intended to address the funding requirements of the proposed
programmed appropriations. In contrast, the unprogrammed funds, as standby appropriations, were to be
released only when there were revenues in excess of what the programmed appropriations required. As such, the
revenue targets should be considered as a whole, not individually; otherwise, we would be dealing with artificial
revenue surpluses. The requirement that revenue collections must exceed revenue target should be understood
to mean that the revenue collections must exceed the total of the revenue targets stated in the BESF. Moreover,
to release the unprogrammed funds simply because there was an excess revenue as to one source of revenue
would be an unsound fiscal management measure because it would disregard the budget plan and foster budget
deficits, in contravention of the Government’s surplus budget policy. 202

This is to certify that under the Budget for Expenditures and Sources of Financing for 2011, the programmed
We cannot, therefore, subscribe to the respondents’ view.
income from dividends from shares of stock in government-owned and controlled corporations is 5.5 billion.

5.
This is to certify further that based on the records of the Bureau of Treasury, the National Government has
Equal protection, checks and balances,
recorded dividend income amounting to ₱23.8 billion as of 31 January 2011. 196
and public accountability challenges

For 2012, the OSG submitted the certification dated April 26, 2012 issued by National Treasurer Roberto B. Tan,
The DAP is further challenged as violative of the Equal Protection Clause, the system of checks and balances, and
viz:
the principle of public accountability.

This is to certify that the actual dividend collections remitted to the National Government for the period January
to March 2012 amounted to ₱19.419 billion compared to the full year program of ₱5.5 billion for 2012. 197
And, finally, for 2013, the OSG presented the certification dated July 3, 2013 issued by National Treasurer Rosalia
V. De Leon, to wit:
With respect to the challenge against the DAP under the Equal Protection Clause, 203 Luna argues that the
implementation of the DAP was "unfair as it [was] selective" because the funds released under the DAP was not
made available to all the legislators, with some of them refusing to avail themselves of the DAP funds, and others
being unaware of the availability of such funds. Thus, the DAP practised "undue favoritism" in favor of select
legislators in contravention of the Equal Protection Clause.

32
Similarly, COURAGE contends that the DAP violated the Equal Protection Clause because no reasonable
classification was used in distributing the funds under the DAP; and that the Senators who supposedly availed
themselves of said funds were differently treated as to the amounts they respectively received.
Anent the petitioners’ theory that the DAP violated the system of checks and balances, Luna submits that the
grant of the funds under the DAP to some legislators forced their silence about the issues and anomalies
surrounding the DAP. Meanwhile, Belgica stresses that the DAP, by allowing the legislators to identify PAPs,
authorized them to take part in the implementation and execution of the GAAs, a function that exclusively
belonged to the Executive; that such situation constituted undue and unjustified legislative encroachment in the
functions of the Executive; and that the President arrogated unto himself the power of appropriation vested in
Congress because NBC No. 541 authorized the use of the funds under the DAP for PAPs not considered in the
2012 budget.
Finally, the petitioners insist that the DAP was repugnant to the principle of public accountability enshrined in the
Constitution,204 because the legislators relinquished the power of appropriation to the Executive, and exhibited a
reluctance to inquire into the legality of the DAP.
The OSG counters the challenges, stating that the supposed discrimination in the release of funds under the DAP
could be raised only by the affected Members of Congress themselves, and if the challenge based on the
violation of the Equal Protection Clause was really against the constitutionality of the DAP, the arguments of the
petitioners should be directed to the entitlement of the legislators to the funds, not to the proposition that all of
the legislators should have been given such entitlement.
The challenge based on the contravention of the Equal Protection Clause, which focuses on the release of funds
under the DAP to legislators, lacks factual and legal basis. The allegations about Senators and Congressmen being
unaware of the existence and implementation of the DAP, and about some of them having refused to accept such
funds were unsupported with relevant data. Also, the claim that the Executive discriminated against some
legislators on the ground alone of their receiving less than the others could not of itself warrant a finding of
contravention of the Equal Protection Clause. The denial of equal protection of any law should be an issue to be
raised only by parties who supposedly suffer it, and, in these cases, such parties would be the few legislators
claimed to have been discriminated against in the releases of funds under the DAP. The reason for the
requirement is that only such affected legislators could properly and fully bring to the fore when and how the
denial of equal protection occurred, and explain why there was a denial in their situation. The requirement was
not met here. Consequently, the Court was not put in the position to determine if there was a denial of equal
protection. To have the Court do so despite the inadequacy of the showing of factual and legal support would be
to compel it to speculate, and the outcome would not do justice to those for whose supposed benefit the claim
of denial of equal protection has been made.
The argument that the release of funds under the DAP effectively stayed the hands of the legislators from
conducting congressional inquiries into the legality and propriety of the DAP is speculative. That deficiency
eliminated any need to consider and resolve the argument, for it is fundamental that speculation would not
support any proper judicial determination of an issue simply because nothing concrete can thereby be gained. In
order to sustain their constitutional challenges against official acts of the Government, the petitioners must
32
discharge the basic burden of proving that the constitutional infirmities actually existed. 205 Simply put, guesswork
and speculation cannot overcome the presumption of the constitutionality of the assailed executive act.
We do not need to discuss whether or not the DAP and its implementation through the various circulars and
memoranda of the DBM transgressed the system of checks and balances in place in our constitutional system.
Our earlier expositions on the DAP and its implementing issuances infringing the doctrine of separation of
powers effectively addressed this particular concern.
Anent the principle of public accountability being transgressed because the adoption and implementation of the
DAP constituted an assumption by the Executive of Congress’ power of appropriation, we have already held that
the DAP and its implementing issuances were policies and acts that the Executive could properly adopt and do in
the execution of the GAAs to the extent that they sought to implement strategies to ramp up or accelerate the
economy of the country.
6.
Doctrine of operative fact was applicable
After declaring the DAP and its implementing issuances constitutionally infirm, we must now deal with the
consequences of the declaration.
Article 7 of the Civil Code provides:
Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused
by disuse, or custom or practice to the contrary.
When the courts declared a law to be inconsistent with the Constitution, the former shall be void and the latter
shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws
or the Constitution.
A legislative or executive act that is declared void for being unconstitutional cannot give rise to any right or
obligation.206 However, the generality of the rule makes us ponder whether rigidly applying the rule may at times
be impracticable or wasteful. Should we not recognize the need to except from the rigid application of the rule
the instances in which the void law or executive act produced an almost irreversible result?
The need is answered by the doctrine of operative fact. The doctrine, definitely not a novel one, has been
exhaustively explained in De Agbayani v. Philippine National Bank: 207
The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter an executive
order or a municipal ordinance likewise suffering from that infirmity, cannot be the source of any legal rights or
duties. Nor can it justify any official act taken under it. Its repugnancy to the fundamental law once judicially
declared results in its being to all intents and purposes a mere scrap of paper. As the new Civil Code puts it:
‘When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter
shall govern.’ Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws of the Constitution. It is understandable why it should be so, the Constitution being supreme
and paramount. Any legislative or executive act contrary to its terms cannot survive.
Such a view has support in logic and possesses the merit of simplicity. It may not however be sufficiently realistic.
It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must
have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case,
declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have
changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what
has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It
is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is
merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say
on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can
exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its
quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: ‘The actual existence of a statute, prior to such a
determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be
ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects, with respect to particular relations, individual and
corporate, and particular conduct, private and official.’"
The doctrine of operative fact recognizes the existence of the law or executive act prior to the determination of
its unconstitutionality as an operative fact that produced consequences that cannot always be erased, ignored or
disregarded. In short, it nullifies the void law or executive act but sustains its effects. It provides an exception to
the general rule that a void or unconstitutional law produces no effect. 208 But its use must be subjected to great
scrutiny and circumspection, and it cannot be invoked to validate an unconstitutional law or executive act, but is
resorted to only as a matter of equity and fair play.209 It applies only to cases where extraordinary circumstances
exist, and only when the extraordinary circumstances have met the stringent conditions that will permit its
application.
We find the doctrine of operative fact applicable to the adoption and implementation of the DAP. Its application
to the DAP proceeds from equity and fair play. The consequences resulting from the DAP and its related issuances
could not be ignored or could no longer be undone.
To be clear, the doctrine of operative fact extends to a void or unconstitutional executive act. The term executive
act is broad enough to include any and all acts of the Executive, including those that are quasi legislative and
quasi-judicial in nature. The Court held so in Hacienda Luisita, Inc. v. Presidential Agrarian Reform Council: 210
Nonetheless, the minority is of the persistent view that the applicability of the operative fact doctrine should be
limited to statutes and rules and regulations issued by the executive department that are accorded the same
status as that of a statute or those which are quasi-legislative in nature. Thus, the minority concludes that the
phrase ‘executive act’ used in the case of De Agbayani v. Philippine National Bank refers only to acts, orders, and
32
rules and regulations that have the force and effect of law. The minority also made mention of the Concurring
Opinion of Justice Enrique Fernando in Municipality of Malabang v. Benito, where it was supposedly made
explicit that the operative fact doctrine applies to executive acts, which are ultimately quasi-legislative in nature.
We disagree. For one, neither the De Agbayani case nor the Municipality of Malabang case elaborates what
‘executive act’ mean. Moreover, while orders, rules and regulations issued by the President or the executive
branch have fixed definitions and meaning in the Administrative Code and jurisprudence, the phrase ‘executive
act’ does not have such specific definition under existing laws. It should be noted that in the cases cited by the
minority, nowhere can it be found that the term ‘executive act’ is confined to the foregoing. Contrarily, the term
‘executive act’ is broad enough to encompass decisions of administrative bodies and agencies under the
executive department which are subsequently revoked by the agency in question or nullified by the Court.
A case in point is the concurrent appointment of Magdangal B. Elma (Elma) as Chairman of the Presidential
Commission on Good Government (PCGG) and as Chief Presidential Legal Counsel (CPLC) which was declared
unconstitutional by this Court in Public Interest Center, Inc. v. Elma. In said case, this Court ruled that the
concurrent appointment of Elma to these offices is in violation of Section 7, par. 2, Article IX-B of the 1987
Constitution, since these are incompatible offices. Notably, the appointment of Elma as Chairman of the PCGG
and as CPLC is, without a question, an executive act. Prior to the declaration of unconstitutionality of the said
executive act, certain acts or transactions were made in good faith and in reliance of the appointment of Elma
which cannot just be set aside or invalidated by its subsequent invalidation.
In Tan v. Barrios, this Court, in applying the operative fact doctrine, held that despite the invalidity of the
jurisdiction of the military courts over civilians, certain operative facts must be acknowledged to have existed so
as not to trample upon the rights of the accused therein. Relevant thereto, in Olaguer v. Military Commission No.
34, it was ruled that ‘military tribunals pertain to the Executive Department of the Government and are simply
instrumentalities of the executive power, provided by the legislature for the President as Commander-in-Chief to
aid him in properly commanding the army and navy and enforcing discipline therein, and utilized under his orders
or those of his authorized military representatives.’
Evidently, the operative fact doctrine is not confined to statutes and rules and regulations issued by the executive
department that are accorded the same status as that of a statute or those which are quasi-legislative in nature.
Even assuming that De Agbayani initially applied the operative fact doctrine only to executive issuances like
orders and rules and regulations, said principle can nonetheless be applied, by analogy, to decisions made by the
President or the agencies under the executive department. This doctrine, in the interest of justice and equity, can
be applied liberally and in a broad sense to encompass said decisions of the executive branch. In keeping with the
demands of equity, the Court can apply the operative fact doctrine to acts and consequences that resulted from
the reliance not only on a law or executive act which is quasi-legislative in nature but also on decisions or orders
of the executive branch which were later nullified. This Court is not unmindful that such acts and consequences
must be recognized in the higher interest of justice, equity and fairness.
Significantly, a decision made by the President or the administrative agencies has to be complied with because it
has the force and effect of law, springing from the powers of the President under the Constitution and existing
laws. Prior to the nullification or recall of said decision, it may have produced acts and consequences in
conformity to and in reliance of said decision, which must be respected. It is on this score that the operative fact
doctrine should be applied to acts and consequences that resulted from the implementation of the PARC
Resolution approving the SDP of HLI. (Bold underscoring supplied for emphasis)
In Commissioner of Internal Revenue v. San Roque Power Corporation, 211 the Court likewise declared that "for the
operative fact doctrine to apply, there must be a ‘legislative or executive measure,’ meaning a law or executive
issuance." Thus, the Court opined there that the operative fact doctrine did not apply to a mere administrative
practice of the Bureau of Internal Revenue, viz:
Under Section 246, taxpayers may rely upon a rule or ruling issued by the Commissioner from the time the rule or
ruling is issued up to its reversal by the Commissioner or this Court. The reversal is not given retroactive effect.
This, in essence, is the doctrine of operative fact. There must, however, be a rule or ruling issued by the
Commissioner that is relied upon by the taxpayer in good faith. A mere administrative practice, not formalized
into a rule or ruling, will not suffice because such a mere administrative practice may not be uniformly and
consistently applied. An administrative practice, if not formalized as a rule or ruling, will not be known to the
general public and can be availed of only by those with informal contacts with the government agency.
It is clear from the foregoing that the adoption and the implementation of the DAP and its related issuances were
executive acts.1avvphi1 The DAP itself, as a policy, transcended a merely administrative practice especially after
the Executive, through the DBM, implemented it by issuing various memoranda and circulars. The pooling of
savings pursuant to the DAP from the allotments made available to the different agencies and departments was
consistently applied throughout the entire Executive. With the Executive, through the DBM, being in charge of
the third phase of the budget cycle – the budget execution phase, the President could legitimately adopt a policy
like the DAP by virtue of his primary responsibility as the Chief Executive of directing the national economy
towards growth and development. This is simply because savings could and should be determined only during
the budget execution phase.
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative fact does not
always apply, and is not always the consequence of every declaration of constitutional invalidity. It can be invoked
only in situations where the nullification of the effects of what used to be a valid law would result in inequity and
injustice;212but where no such result would ensue, the general rule that an unconstitutional law is totally
ineffective should apply.
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the PAPs that can no
longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the
authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor
by the proper tribunals determining their criminal, civil, administrative and other liabilities.
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and DECLARES the
following acts and practices under the Disbursement Acceleration Program, National Budget Circular No. 541 and
related executive issuances UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the 1987
Constitution and the doctrine of separation of powers, namely:
(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of
the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the
fiscal year and without complying with the statutory definition of savings contained in the General
Appropriations Acts;
(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other
offices outside the Executive; and
(c) The funding of projects, activities and programs that were not covered by any appropriation in the
General Appropriations Act.

As already mentioned, the implementation of the DAP resulted into the use of savings pooled by the Executive to
The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a certification by the
finance the PAPs that were not covered in the GAA, or that did not have proper appropriation covers, as well as
National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the
to augment items pertaining to other departments of the Government in clear violation of the Constitution. To
conditions provided in the relevant General Appropriations Acts.
declare the implementation of the DAP unconstitutional without recognizing that its prior implementation
constituted an operative fact that produced consequences in the real as well as juristic worlds of the Government
and the Nation is to be impractical and unfair. Unless the doctrine is held to apply, the Executive as the disburser SO ORDERED.
and the offices under it and elsewhere as the recipients could be required to undo everything that they had
implemented in good faith under the DAP. That scenario would be enormously burdensome for the Government. LUCAS P. BERSAMIN
Equity alleviates such burden.

The other side of the coin is that it has been adequately shown as to be beyond debate that the implementation
of the DAP yielded undeniably positive results that enhanced the economic welfare of the country. To count the
positive results may be impossible, but the visible ones, like public infrastructure, could easily include roads,
bridges, homes for the homeless, hospitals, classrooms and the like. Not to apply the doctrine of operative fact to
the DAP could literally cause the physical undoing of such worthy results by destruction, and would result in most
undesirable wastefulness.

32
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 209287 February 3, 2015

MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG MAKABAYAN; JUDY M. TAGUIWALO,

PROFESSOR, UNIVERSITY OF THE PHILIPPINES DILIMAN, CO-CHAIRPERSON, PAGBABAGO; HENRI KAHN,
CONCERNED CITIZENS MOVEMENT; REP. LUZ ILAGAN, GABRIELA WOMEN'S PARTY REPRESENTATIVE; REP.
TERRY L. RIDON, KABATAAN PARTYLIST REPRESENTATIVE; REP. CARLOS ISAGANI ZARATE, BAYAN MUNA PARTY-
LIST REPRESENTATIVE; RENATO M. REYES, JR., SECRETARY GENERAL OF BAYAN; MANUEL K. DAYRIT, CHAIRMAN,
ANG KAPATIRAN PARTY; VENCER MARI E. CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; VICTOR VILLANUEVA,
CONVENOR, YOUTH ACT NOW, Petitioners,
vs.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO N. OCHOA, JR.,
EXECUTIVE SECRETARY; AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND
MANAGEMENT, Respondents.

x-----------------------x

G.R. No. 209135

AUGUSTO L. SYJUCO JR., Ph.D., Petitioner,

vs.
FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT OF BUDGET AND MANAGEMENT;
AND HON. FRANKLIN MAGTUNAO DRILON, IN HIS CAPACITY AS THE SENATE PRESIDENT OF THE
PHILIPPINES, Respondents.

x-----------------------x

32
G.R. No. 209136 BELMONTE, JR.; THE EXECUTIVE OFFICE, REPRESENTED BY EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; THE
DEPARTMENT OF BUDGET AND MANAGEMENT, REPRESENTED BY SECRETARY FLORENCIO ABAD; THE
MANUELITO R. LUNA, Petitioner, DEPARTMENT OF FINANCE, REPRESENTED BY SECRETARY CESAR V. PURISIMA; AND THE BUREAU OF TREASURY,
vs. REPRESENTED BY ROSALIA V. DE LEON, Respondents.
SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE DEPARTMENT OF BUDGET AND
MANAGEMENT; AND EXECUTIVE SECRETARY PAQUITO OCHOA, IN HIS OFFICIAL CAPACITY AS ALTER EGO OF x-----------------------x
THE PRESIDENT, Respondents.
G.R. No. 209517
x-----------------------x
CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE),
G.R. No. 209155 REPRESENTED BY ITS 1ST VICE PRESIDENT, SANTIAGO DASMARINAS, JR.; ROSALINDA NARTATES, FOR HERSELF
AND AS NATIONAL PRESIDENT OF THE CONSOLIDATED UNION OF EMPLOYEES NATIONAL HOUSING AUTHORITY
ATTY. JOSE MALVAR VILLEGAS, JR. Petitioner (CUE-NHA); MANUEL BACLAGON, FOR HIMSELF AND AS PRESIDENT OF THE SOCIAL WELFARE EMPLOYEES
vs. ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT CENTRAL OFFICE
THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE SECRETARY OF BUDGET AND (SWEAP-DSWD CO); ANTONIA PASCUAL, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE DEPARTMENT OF
MANAGEMENT FLORENCIO B. ABAD, Respondents. AGRARIAN REFORM EMPLOYEES ASSOCIATION (DAREA); ALBERT MAGALANG, FOR HIMSELF AND AS
PRESIDENT OF THE ENVIRONMENT AND MANAGEMENT BUREAU EMPLOYEES UNION (EMBEU); AND MARCIAL
ARABA, FOR HIMSELF AND AS PRESIDENT OF THE KAPISANAN PARA SA KAGALINGAN NG MGA KAW ANI NG
x-----------------------x
MMDA (KKK-MMDA), Petitioners,
vs.
G.R. No. 209164 BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO OCHOA, JR.,
EXECUTIVE SECRETARY; AND HON. FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN FROILAN M. BACUNGAN, MANAGEMENT, Respondents.
BENJAMIN E. DIOKNO AND LEONOR M. BRIONES, Petitioners,
vs. x-----------------------x
DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B. ABAD, Respondents.
G.R. No. 209569
x-----------------------x
VOLUNTEERS AGAINST CRIME AND CORRUPTION (V ACC), REPRESENTED BY DANTE L. JIMENEZ,Petitioner,
G.R. No. 209260 vs.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF
INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner, BUDGET AND MANAGEMENT, Respondents.
vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM),Respondent. RESOLUTION

x-----------------------x BERSAMIN, J.:

G.R. No. 209442
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN M. ABANTE AND REV. JOSE L. GONZALEZ,Petitioners,
vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF THE PHILIPPINES, REPRESENTED BY SENATE
PRESIDENT FRANKLIN M. DRILON; THE HOUSE OF REPRESENTATIVES, REPRESENTED BY SPEAKER FELICIANO
The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be
allowed to sap its strength nor greed for power debase its rectitude. 1
Before the Court are the Motion for Reconsideration2 filed by the respondents, and the Motion for Partial
Reconsideration3 filed by the petitioners in G.R. No. 209442.

32
In their Motion for Reconsideration, the respondents assail the decision4 promulgated on July 1 2014 upon the ALL DAP APPLICATIONS HAVE APPROPRIATION COVER
following procedural and substantive errors, viz:
III
PROCEDURAL
THE PRESIDENT HAS AUTHORITY TO TRANSFER SAVINGS TO OTHER DEPARTMENTS PURSUANT TO HIS
I CONSTITUTIONAL POWERS

WITHOUT AN ACTUAL CASE OR CONTROVERSY, ALLEGATIONS OF GRAVE ABUSE OF DISCRETION ON THE PART OF IV
ANY INSTRUMENTALITY OF THE GOVERNMENT CANNOT CONFER ON THIS HONORABLE COURT THE POWER TO
DETERMINE THE CONSTITUTIONALITY OF THE DAP AND NBC NO. 541 THE 2011, 2012 AND 2013 GAAS ONLY REQUIRE THAT REVENUE COLLECTIONS FROM EACH SOURCE OF REVENUE
ENUMERATED IN THE BUDGET PROPOSAL MUST EXCEED THE CORRESPONDING REVENUE TARGET
II
V
PETITIONERS’ ACTIONS DO NOT PRESENT AN ACTUAL CASE OR CONTROVERSY AND THEREFORE THIS
HONORABLE COURT DID NOT ACQUIRE JURISDICTION THE OPERATIVE FACT DOCTRINE WAS WRONGLY APPLIED6

III The respondents maintain that the issues in these consolidated cases were mischaracterized and unnecessarily
constitutionalized; that the Court’s interpretation of savings can be overturned by legislation considering that
PETITIONERS HAVE NEITHER BEEN INJURED NOR THREATENED WITH INJURY AS A RESULT OF THE OPERATION OF savings is defined in the General Appropriations Act (GAA), hence making savings a statutory issue; 7 that the
THE DAP AND THEREFORE SHOULD HAVE BEEN HELD TO HAVE NO STANDING TO BRING THESE SUITS FOR withdrawn unobligated allotments and unreleased appropriations constitute savings and may be used for
CERTIORARI AND PROHIBITION augmentation;8 and that the Court should apply legally recognized norms and principles, most especially the
presumption of good faith, in resolving their motion. 9
IV
On their part, the petitioners in G.R. No. 209442 pray for the partial reconsideration of the decision on the
NOR CAN PETITIONERS’ STANDING BE SUSTAINED ON THE GROUND THAT THEY ARE BRINGING THESE SUITS AS ground that the Court thereby:
CITIZENS AND AS TAXPAYERS
FAILED TO DECLARE AS UNCONSTITUTIONAL AND ILLEGAL ALL MONEYS UNDER THE DISBURSEMENT
V ACCELERATION PROGRAM (DAP) USED FOR ALLEGED AUGMENTATION OF APPROPRIATION ITEMS THAT DID NOT
HAVE ACTUAL DEFICIENCIES10
THE DECISION OF THIS HONORABLE COURT IS NOT BASED ON A CONSIDERATION OF THE ACTUAL APPLICATIONS
OF THE DAP IN 116 CASES BUT SOLELY ON AN ABSTRACT CONSIDERATION OF NBC NO. 541 5 They submit that augmentation of items beyond the maximum amounts recommended by the President for the
programs, activities and projects (PAPs) contained in the budget submitted to Congress should be declared
unconstitutional.
SUBSTANTIVE

Ruling of the Court

I

We deny the motion for reconsideration of the petitioners in G.R. No. 209442, and partially grant the motion for
THE EXECUTIVE DEPARTMENT PROPERLY INTERPRETED "SAVINGS" UNDER THE RELEVANT PROVISIONS OF THE
reconsideration of the respondents.
GAA

The procedural challenges raised by the respondents, being a mere rehash of their earlier arguments herein, are
II
dismissed for being already passed upon in the assailed decision.

32
As to the substantive challenges, the Court discerns that the grounds are also reiterations of the arguments that
were already thoroughly discussed and passed upon in the assailed decision. However, certain declarations in our
July 1, 2014 Decision are modified in order to clarify certain matters and dispel further uncertainty.
1.
The Court’s power of judicial review
The respondents argue that the Executive has not violated the GAA because savings as a conceptis an ordinary
species of interpretation that calls for legislative, instead of judicial, determination. 11
This argument cannot stand.
The consolidated petitions distinctly raised the question of the constitutionality of the acts and practices under
the DAP, particularly their non-conformity with Section 25(5), Article VI of the Constitution and the principles of
separation of power and equal protection. Hence, the matter is still entirely within the Court’s competence, and
its determination does not pertain to Congress to the exclusion of the Court. Indeed, the interpretation of the
GAA and its definition of savings is a foremost judicial function. This is because the power of judicial review
vested in the Court is exclusive. As clarified in Endencia and Jugo v. David: 12
thus demanded the exercise by the Court of its aforedescribed power of judicial review as mandated by the
Constitution.
2.
Strict construction on the accumulation and utilization of savings
The decision of the Court has underscored that the exercise of the power to augment shall be strictly construed
by virtue of its being an exception to the general rule that the funding of PAPs shall be limited to the amount
fixed by Congress for the purpose. 14 Necessarily, savings, their utilization and their management will also be
strictly construed against expanding the scope of the power to augment. 15 Such a strict interpretation is essential
in order to keep the Executive and other budget implementors within the limits of their prerogatives during
budget execution, and to prevent them from unduly transgressing Congress’ power of the purse. 16 Hence,
regardless of the perceived beneficial purposes of the DAP, and regardless of whether the DAP is viewed as an
effective tool of stimulating the national economy, the acts and practices under the DAP and the relevant
provisions of NBC No. 541 cited in the Decision should remain illegal and unconstitutional as long as the funds
used to finance the projects mentioned therein are sourced from savings that deviated from the relevant
provisions of the GAA, as well as the limitation on the power to augment under Section 25(5), Article VI of the
Constitution. In a society governed by laws, even the best intentions must come within the parameters defined
and set by the Constitution and the law. Laudable purposes must be carried out through legal methods. 17

Under our system of constitutional government, the Legislative department is assigned the power to make and
Respondents contend, however, that withdrawn unobligated allotments and unreleased appropriations under the
enact laws. The Executive department is charged with the execution of carrying out of the provisions of said laws.
DAP are savings that may be used for augmentation, and that the withdrawal of unobligated allotments were
But the interpretation and application of said laws belong exclusively to the Judicial department. And this
made pursuant to Section 38 Chapter 5, Book VI of the Administrative Code; 18 that Section 38 and Section 39,
authority to interpret and apply the laws extends to the Constitution. Before the courts can determine whether a
Chapter 5, Book VI of the Administrative Code are consistent with Section 25(5), Article VI of the Constitution,
law is constitutional or not, it will have to interpret and ascertain the meaning not only of said law, but also of the
which, taken together, constitute "a framework for which economic managers of the nation may pull various
pertinent portion of the Constitution in order to decide whether there is a conflict between the two, because if
levers in the form of authorization from Congress to efficiently steer the economy towards the specific and
there is, then the law will have to give way and has to be declared invalid and unconstitutional.
general purposes of the GAA;"19 and that the President’s augmentation of deficient items is in accordance with
the standing authority issued by Congress through Section 39.
xxxx
Section 25(5), Article VI of the Constitution states:
We have already said that the Legislature under our form of government is assigned the task and the power to
make and enact laws, but not to interpret them. This is more true with regard to the interpretation of the basic
Section 25. x x x x x x x
law, the Constitution, which is not within the sphere of the Legislative department. If the Legislature may declare
what a law means, or what a specific portion of the Constitution means, especially after the courts have in actual
case ascertain its meaning by interpretation and applied it in a decision, this would surely cause confusion and 5) No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the
instability in judicial processes and court decisions. Under such a system, a final court determination of a case Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of
based on a judicial interpretation of the law of the Constitution may be undermined or even annulled by a Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for
subsequent and different interpretation of the law or of the Constitution by the Legislative department. That their respective offices from savings in other items of their respective appropriations.
would be neither wise nor desirable, besides being clearly violative of the fundamental, principles of our
constitutional system of government, particularly those governing the separation of powers. 13 xxxx

The respondents cannot also ignore the glaring fact that the petitions primarily and significantly alleged grave Section 38 and Section 39, Chapter 5, Book VI of the Administrative Code provide:
abuse of discretion on the part of the Executive in the implementation of the DAP. The resolution of the petitions

32
Section 38. Suspension of Expenditure of Appropriations. - Except as otherwise provided in the General
Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to
the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for
any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services
appropriations used for permanent officials and employees.
Section 39. Authority to Use Savings in Appropriations to Cover Deficits.—Except as otherwise provided in the
General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations
Act for programs and projects of any department, office or agency, may, with the approval of the President, be
used to cover a deficit in any other item of the regular appropriations: Provided, that the creation of new
positions or increase of salaries shall not be allowed to be funded from budgetary savings except when
specifically authorized by law: Provided, further, that whenever authorized positions are transferred from one
program or project to another within the same department, office or agency, the corresponding amounts
appropriated for personal services are also deemed transferred, without, however increasing the total outlay for
personal services of the department, office or agency concerned. (Bold underscoring supplied for emphasis)
In the Decision, we said that:
Unobligated allotments, on the other hand, were encompassed by the first part of the definition of "savings" in
the GAA, that is, as "portions or balances of any programmed appropriation in this Act free from any obligation or
encumbrance." But the first part of the definition was further qualified by the three enumerated instances of
when savings would be realized. As such, unobligated allotments could not be indiscriminately declared as
savings without first determining whether any of the three instances existed. This signified that the DBM’s
withdrawal of unobligated allotments had disregarded the definition of savings under the GAAs.
xxxx
The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to justify the
withdrawal of unobligated allotments. But the provision authorized only the suspension or stoppage of further
expenditures, not the withdrawal of unobligated allotments, to wit:
xxxx
Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38, supra, but
instead transferred the funds to other PAPs.20
We now clarify.
Section 38 refers to the authority of the President "to suspend or otherwise stop further expenditure of funds
allotted for any agency, or any other expenditure authorized in the General Appropriations Act." When the
President suspends or stops expenditure of funds, savings are not automatically generated until it has been
established that such funds or appropriations are free from any obligation or encumbrance, and that the work,
activity or purpose for which the appropriation is authorized has been completed, discontinued or abandoned.
32
It is necessary to reiterate that under Section 5.7 of NBC No. 541, the withdrawn unobligated allotments may be:
5.7.1 Reissued for the original programs and projects of the agencies/OUs concerned, from which the allotments
were withdrawn;
5.7.2 Realigned to cover additional funding for other existing programs and projects of the agency/OU; or
5.7.3 Used to augment existing programs and projects of any agency and to fund priority programs and projects
not considered in the 2012 budget but expected to be started or implemented during the current year.
Although the withdrawal of unobligated allotments may have effectively resulted in the suspension or stoppage
of expenditures through the issuance of negative Special Allotment Release Orders (SARO), the reissuance of
withdrawn allotments to the original programs and projects is a clear indication that the program or project from
which the allotments were withdrawn has not been discontinued or abandoned. Consequently, as we have
pointed out in the Decision, "the purpose for which the withdrawn funds had been appropriated was not yet
fulfilled, or did not yet cease to exist, rendering the declaration of the funds as savings impossible." 21 In this
regard, the withdrawal and transfer of unobligated allotments remain unconstitutional. But then, whether the
withdrawn allotments have actually been reissued to their original programs or projects is a factual matter
determinable by the proper tribunal.
Also, withdrawals of unobligated allotments pursuant to NBC No. 541 which shortened the availability of
appropriations for MOOE and capital outlays, and those which were transferred to PAPs that were not
determined to be deficient, are still constitutionally infirm and invalid.
At this point, it is likewise important to underscore that the reversion to the General Fund of unexpended
balances of appropriations – savings included – pursuant to Section 28 Chapter IV, Book VI of the Administrative
Code22 does not apply to the Constitutional Fiscal Autonomy Group (CFAG), which include the Judiciary, Civil
Service Commission, Commission on Audit, Commission on Elections, Commission on Human Rights, and the
Office of the Ombudsman. The reason for this is that the fiscal autonomy enjoyed by the CFAG –
x x x contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and
dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates
of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the
government and allocate and disburse such sums as may be provided by law or prescribed by them in the course
of the discharge of their functions.
Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100 typewriters but
DBM rules we need only 10 typewriters and sends its recommendations to Congress without even informing us,
the autonomy given by the Constitution becomes an empty and illusory platitude.
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility
needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the
manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is
anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as
regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our
constitutional system is based. x x x23
On the other hand, Section 39 is evidently in conflict with the plain text of Section 25(5), Article VI of the
Constitution because it allows the President to approve the use of any savings in the regular appropriations
authorized in the GAA for programs and projects of any department, office or agency to cover a deficit in any
other item of the regular appropriations. As such, Section 39 violates the mandate of Section 25(5) because the
latter expressly limits the authority of the President to augment an item in the GAA to only those in his own
Department out of the savings in other items of his own Department’s appropriations. Accordingly, Section 39
cannot serve as a valid authority to justify cross-border transfers under the DAP. Augmentations under the DAP
which are made by the Executive within its department shall, however, remain valid so long as the requisites
under Section 25(5) are complied with.
In this connection, the respondents must always be reminded that the Constitution is the basic law to which all
laws must conform. No act that conflicts with the Constitution can be valid. 24 In Mutuc v. Commission on
Elections,25therefore, we have emphasized the importance of recognizing and bowing to the supremacy of the
Constitution:
x x x The concept of the Constitution as the fundamental law, setting forth the criterion for the validity of any
public act whether proceeding from the highest official or the lowest functionary, is a postulate of our system of
government. That is to manifest fealty to the rule of law, with priority accorded to that which occupies the
topmost rung in the legal hierarchy. The three departments of government in the discharge of the functions with
which it is [sic] entrusted have no choice but to yield obedience to its commands. Whatever limits it imposes
must be observed. Congress in the enactment of statutes must ever be on guard lest the restrictions on its
authority, whether substantive or formal, be transcended. The Presidency in the execution of the laws cannot
ignore or disregard what it ordains. In its task of applying the law to the facts as found in deciding cases, the
judiciary is called upon to maintain inviolate what is decreed by the fundamental law. Even its power of judicial
review to pass upon the validity of the acts of the coordinate branches in the course of adjudication is a logical
corollary of this basic principle that the Constitution is paramount. It overrides any governmental measure that
fails to live up to its mandates. Thereby there is a recognition of its being the supreme law.
Also, in Biraogo v. Philippine Truth Commission of 2010, 26 we have reminded that: – The role of the Constitution
cannot be overlooked. It is through the Constitution that the fundamental powers of government are established,
limited and defined, and by which these powers are distributed among the several departments. The Constitution
is the basic and paramount law to which all other laws must conform and to which all persons, including the
highest officials of the land, must defer. Constitutional doctrines must remain steadfast no matter what may be
the tides of time. It cannot be simply made to sway and accommodate the call of situations and much more tailor
itself to the whims and caprices of government and the people who run it. 27
3.
The power to augment cannot be used to fund non-existent provisions in the GAA
32
The respondents posit that the Court has erroneously invalidated all the DAP-funded projects by overlooking the
difference between an item and an allotment class, and by concluding that they do not have appropriation cover;
and that such error may induce Congress and the Executive (through the DBM) to ensure that all items should
have at least ₱1 funding in order to allow augmentation by the President. 28
At the outset, we allay the respondents’ apprehension regarding the validity of the DAP funded projects. It is to
be emphatically indicated that the Decision did not declare the en masse invalidation of the 116 DAP-funded
projects. To be sure, the Court recognized the encouraging effects of the DAP on the country’s economy, 29 and
acknowledged its laudable purposes, most especially those directed towards infrastructure development and
efficient delivery of basic social services. 30 It bears repeating that the DAP is a policy instrument that the
Executive, by its own prerogative, may utilize to spur economic growth and development.
Nonetheless, the Decision did find doubtful those projects that appeared to have no appropriation cover under
the relevant GAAs on the basis that: (1) the DAP funded projects that originally did not contain any appropriation
for some of the expense categories (personnel, MOOE and capital outlay); and (2) the appropriation code and the
particulars appearing in the SARO did not correspond with the program specified in the GAA. The respondents
assert, however, that there is no constitutional requirement for Congress to create allotment classes within an
item. What is required is for Congress to create items to comply with the line-item veto of the President. 31
After a careful reexamination of existing laws and jurisprudence, we find merit in the respondents’ argument.
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, 32 we said that an item that is the distinct and several part
of the appropriation bill, in line with the item-veto 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:
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 notonly "general
provisions" which provide for parameters of appropriation.
Further, it is significant to point out that an item of appropriation must be an item characterized by singular
correspondence – meaning an allocation of a specified singular amount for a specified singular purpose,
otherwise known as a "line-item." This treatment not only allows the item to be consistent with its definition as a
"specific appropriation of money" but also ensures that the President may discernibly veto the same. Based on
the foregoing formulation, the existing Calamity Fund, Contingent Fund and the Intelligence Fund, being
appropriations which state a specified amount for a specific purpose, would then be considered as "line-item"
appropriations which are rightfully subject to item veto. Likewise, it must be observed that an appropriation may
be validly apportioned into component percentages or values; however, it is crucial that each percentage or value
must be allocated for its own corresponding purpose for such component to be considered as a proper line-item.
Moreover, as Justice Carpio correctly pointed out, a valid appropriation may even have several related purposes
that are by accounting and budgeting practice considered as one purpose, e.g., MOOE (maintenance and other
operating expenses), in which case the related purposes shall be deemed sufficiently specific for the exercise of
the President‘s item veto power. Finally, special purpose funds and discretionary funds would equally square with
the constitutional mechanism of item-veto for as long as they follow the rule on singular correspondence as
herein discussed. x x x (Emphasis supplied)33
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.
Further, in Nazareth v. Villar,34 we clarified that there must be an existing item, project or activity, purpose or
object of expenditure with an appropriation to which savings may be transferred for the purpose of
augmentation. Accordingly, so long as there is an item in the GAA for which Congress had set aside a specified
amount of public fund, savings may be transferred thereto for augmentation purposes. This interpretation is
consistent not only with the Constitution and the GAAs, but also with the degree of flexibility allowed to the
Executive during budget execution in responding to unforeseeable contingencies.
Nonetheless, this modified interpretation does not take away the cave at that only DAP projects found in the
appropriate GAAs may be the subject of augmentation by legally accumulated savings. Whether or not the 116
DAP-funded projects had appropriation cover and were validly augmented require factual determination that is
not within the scope of the present consolidated petitions under Rule 65.
4.
Cross-border transfers are constitutionally impermissible
The respondents assail the pronouncement of unconstitutionality of cross-border transfers made by the
President. They submit that Section 25(5), Article VI of the Constitution prohibits only the transfer of
appropriation, not savings. They relate that cross-border transfers have been the practice in the past, being
consistent with the President’s role as the Chief Executive. 35
In view of the clarity of the text of Section 25(5), however, the Court stands by its pronouncement, and will not
brook any strained interpretations.
5.
32
Unprogrammed funds may only be released upon proof that the total revenues exceeded the target
Based on the 2011, 2012 and 2013 GAAs, the respondents contend that each source of revenue in the budget
proposal must exceed the respective target to authorize release of unprogrammed funds. Accordingly, the Court’s
ruling thereon nullified the intention of the authors of the unprogrammed fund, and renders useless the special
provisions in the relevant GAAs.36
The respondents’ contentions are without merit.
To recall, the respondents justified the use of unprogrammed funds by submitting certifications from the Bureau
of Treasury and the Department of Finance (DOF) regarding the dividends derived from the shares of stock held
by the Government in government-owned and controlled corporations. 37 In the decision, the Court has held that
the requirement under the relevant GAAs should be construed in light of the purpose for which the
unprogrammed funds were denominated as "standby appropriations." Hence, revenue targets should be
considered as a whole, not individually; otherwise, we would be dealing with artificial revenue surpluses. We
have even cautioned that the release of unprogrammed funds based on the respondents’ position could be
unsound fiscal management for disregarding the budget plan and fostering budget deficits, contrary to the
Government’s surplus budget policy.38
While we maintain the position that aggregate revenue collection must first exceed aggregate revenue target as a
pre-requisite to the use of unprogrammed funds, we clarify the respondents’ notion that the release of
unprogrammed funds may only occur at the end of the fiscal year.
There must be consistent monitoring as a component of the budget accountability phase of every agency’s
performance in terms of the agency’s budget utilization as provided in Book VI, Chapter 6, Section 51 and Section
52 of the Administrative Code of 1987,which state:
SECTION 51. Evaluation of Agency Performance.—The President, through the Secretary shall evaluate on a
continuing basis the quantitative and qualitative measures of agency performance as reflected in the units of
work measurement and other indicators of agency performance, including the standard and actual costs per unit
of work.
SECTION 52. Budget Monitoring and Information System.—The Secretary of Budget shall determine accounting
and other items of information, financial or otherwise, needed to monitor budget performance and to assess
effectiveness of agencies’ operations and shall prescribe the forms, schedule of submission, and other
components of reporting systems, including the maintenance of subsidiary and other records which will enable
agencies to accomplish and submit said information requirements: Provided, that the Commission on Audit shall,
in coordination with the Secretary of Budget, issue rules and regulations that may be applicable when the
reporting requirements affect accounting functions of agencies: Provided, further, that the applicable rules and
regulations shall be issued by the Commission on Audit within a period of thirty (30) days after the Department
of Budget and Management prescribes the reporting requirements.
Pursuant to the foregoing, the Department of Budget and Management (DBM) and the Commission on Audit
(COA) require agencies under various joint circulars to submit budget and financial accountability reports (BFAR)
on a regular basis,39 one of which is the Quarterly Report of Income or Quarterly Report of Revenue and Other
Receipts.40 On the other hand, as Justice Carpio points out in his Separate Opinion, the Development Budget
Coordination Committee (DBCC) sets quarterly revenue targets for aspecific fiscal year. 41 Since information on
both actual revenue collections and targets are made available every quarter, or at such time as the DBM may
prescribe, actual revenue surplus may be determined accordingly and eleases from the unprogrammed fund may
take place even prior to the end of the fiscal year. 42
In fact, the eleventh special provision for unprogrammed funds in the 2011 GAA requires the DBM to submit
quarterly reports stating the details of the use and releases from the unprogrammed funds, viz:
11. Reportorial Requirement. The DBM shall submit to the House Committee on Appropriations and the Senate
Committee on Finance separate quarterly reports stating the releases from the Unprogrammed Fund, the
amounts released and purposes thereof, and the recipient departments, bureaus, agencies or offices, GOCCs and
GFIs, including the authority under which the funds are released under Special Provision No. 1 of the
Unprogrammed Fund.
Similar provisions are contained in the 2012 and 2013 GAAs. 43
However, the Court’s construction of the provision on unprogrammed funds is a statutory, not a constitutional,
interpretation of an ambiguous phrase. Thus, the construction should be given prospective effect. 44
6.
The presumption of good faith stands despite the obiter pronouncement
The remaining concern involves the application of the operative fact doctrine.
The respondents decry the misapplication of the operative fact doctrine, stating:
110. The doctrine of operative fact has nothing to do with the potential liability of persons who acted pursuant to
a then-constitutional statute, order, or practice. They are presumed to have acted in good faith and the court
cannot load the dice, so to speak, by disabling possible defenses in potential suits against so-called "authors,
proponents and implementors." The mere nullification are still deemed valid on the theory that judicial
nullification is a contingent or unforeseen event.
111. The cases before us are about the statutory and constitutional interpretations of so-called acts and practices
under a government program, DAP. These are not civil, administrative, or criminal actions against the public
officials responsible for DAP, and any statement about bad faith may be unfairly and maliciously exploited for
political ends. At the same time, any negation of the presumption of good faith, which is the unfortunate
implication of paragraphs 3 and 4 of page 90 of the Decision, violates the constitutional presumption of
innocence, and is inconsistent with the Honorable Court’s recognition that "the implementation of the DAP
yielded undeniably positive results that enhanced the economic welfare of the country."
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112. The policy behind the operative fact doctrine is consistent with the idea that regardless of the nullification of
certain acts and practices under the DAP and/or NBC No. 541, it does not operate to impute bad faith to authors,
proponents and implementors who continue to enjoy the presumption of innocence and regularity in the
performance of official functions and duties. Good faith is presumed, whereas bad faith requires the existence of
facts. To hold otherwise would send a chilling effect to all public officers whether of minimal or significant
discretion, the result of which would be a dangerous paralysis of bureaucratic activity. 45 (Emphasis supplied)
In the speech he delivered on July 14, 2014, President Aquino III also expressed the view that in applying the
doctrine of operative fact, the Court has already presumed the absence of good faith on the part of the authors,
proponents and implementors of the DAP, so that they would have to prove good faith during trial. 46
Hence, in their Motion for Reconsideration, the respondents now urge that the Court should extend the
presumption of good faith in favor of the President and his officials who co-authored, proposed or implemented
the DAP.47
The paragraphs 3 and 4 of page 90 of the Decision alluded to by the respondents read:
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative fact does not
always apply, and is not always the consequence of every declaration of constitutional invalidity. It can be invoked
only in situations where the nullification of the effects of what used to be a valid law would result in inequity and
injustice; but where no such result would ensue, the general rule that an unconstitutional law is totally ineffective
should apply.
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the PAPs that can no
longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the
authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor
by the proper tribunals determining their criminal, civil, administrative and other liabilities. 48 (Bold underscoring
is supplied)
The quoted text of paragraphs 3 and 4 shows that the Court has neither thrown out the presumption of good
faith nor imputed bad faith to the authors, proponents and implementors of the DAP. The contrary is true,
because the Court has still presumed their good faith by pointing out that "the doctrine of operative fact xxx
cannot apply to the authors, proponents and implementors of the DAP, unless there are concrete findings of
good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other
liabilities." Note that the proper tribunals can make "concrete findings of good faith in their favor" only after a full
hearing of all the parties in any given case, and such a hearing can begin to proceed only after according all the
presumptions, particularly that of good faith, by initially requiring the complainants, plaintiffs or accusers to first
establish their complaints or charges before the respondent authors, proponents and implementors of the DAP.
It is equally important to stress that the ascertainment of good faith, or the lack of it, and the determination of
whether or not due diligence and prudence were exercised, are questions of fact.49 The want of good faith is
thus better determined by tribunals other than this Court, which is not a trier of facts. 50
For sure, the Court cannot jettison the presumption of good faith in this or in any other case.1âwphi1 The
presumption is a matter of law. It has had a long history. Indeed, good faith has long been established as a legal
principle even in the heydays of the Roman Empire. 51In Soriano v. Marcelo,52 citing Collantes v. Marcelo,53 the
Court emphasizes the necessity of the presumption of good faith, thus:
Well-settled is the rule that good faith is always presumed and the Chapter on Human Relations of the Civil Code
directs every person, inter alia, to observe good faith which springs from the fountain of good conscience.
Specifically, a public officer is presumed to have acted in good faith in the performance of his duties. Mistakes
committed by a public officer are not actionable absent any clear showing that they were motivated by malice or
gross negligence amounting to bad faith. "Bad faith" does not simply connote bad moral judgment or negligence.
There must be some dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of a
sworn duty through some motive or intent or ill will. It partakes of the nature of fraud. It contemplates a state of
mind affirmatively operating with furtive design or some motive of self-interest or ill will for ulterior purposes.
The law also requires that the public officer’s action caused undue injury to any party, including the government,
or gave any private party unwarranted benefits, advantage or preference in the discharge of his functions. x x x
The Court has further explained in Philippine Agila Satellite, Inc. v. Trinidad-Lichauco: 54
We do not doubt the existence of the presumptions of "good faith" or "regular performance of official duty", yet
these presumptions are disputable and may be contradicted and overcome by other evidence. Many civil actions
are oriented towards overcoming any number of these presumptions, and a cause of action can certainly be
geared towards such effect. The very purpose of trial is to allow a party to present evidence to overcome the
disputable presumptions involved. Otherwise, if trial is deemed irrelevant or unnecessary, owing to the perceived
indisputability of the presumptions, the judicial exercise would be relegated to a mere ascertainment of what
presumptions apply in a given case, nothing more. Consequently, the entire Rules of Court is rendered as excess
verbiage, save perhaps for the provisions laying down the legal presumptions.
Relevantly, the authors, proponents and implementors of the DAP, being public officers, further enjoy the
presumption of regularity in the performance of their functions. This presumption is necessary because they are
clothed with some part of the sovereignty of the State, and because they act in the interest of the public as
required by law.55 However, the presumption may be disputed. 56
At any rate, the Court has agreed during its deliberations to extend to the proponents and implementors of the
DAP the benefit of the doctrine of operative fact. This is because they had nothing to do at all with the adoption
of the invalid acts and practices.
7.
The PAPs under the DAP remain effective under the operative fact doctrine
As a general rule, the nullification of an unconstitutional law or act carries with it the illegality of its effects.
However, in cases where nullification of the effects will result in inequity and injustice, the operative fact doctrine
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may apply.57In so ruling, the Court has essentially recognized the impact on the beneficiaries and the country as a
whole if its ruling would pave the way for the nullification of the ₱144.378 Billions 58 worth of infrastructure
projects, social and economic services funded through the DAP. Bearing in mind the disastrous impact of
nullifying these projects by virtue alone of the invalidation of certain acts and practices under the DAP, the Court
has upheld the efficacy of such DAP-funded projects by applying the operative fact doctrine. For this reason, we
cannot sustain the Motion for Partial Reconsideration of the petitioners in G.R. No. 209442.
IN VIEW OF THE FOREGOING, and SUBJECT TO THE FOREGOING CLARIFICATIONS, the Court PARTIALLY GRANTS
the Motion for Reconsideration filed by the respondents, and DENIES the Motion for Partial Reconsideration filed
by the petitioners in G.R. No. 209442 for lack of merit.
ACCORDINGLY, the dispositive portion of the Decision promulgated on July 1, 2014 is hereby MODIFIED as
follows:
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and DECLARES the
following acts and practices under the Disbursement Acceleration Program, National Budget Circular No. 541 and
related executive issuances UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the 1987
Constitution and the doctrine of separation of powers, namely:
(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of
the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the
fiscal year without complying with the statutory definition of savings contained in the General
Appropriations Acts; and
(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other
offices outside the Executive.
The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a certification by the
National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the
conditions provided in the relevant General Appropriations Acts.
SO ORDERED.
LUACAS P. BERSAMIN
Associate Justice