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G.R. No. 208566 November 19, 2013 G.R. No.

208493 SJS filed a Petition


BELGICA vs. HONORABLE EXECUTIVE for Prohibition seeking that the "Pork
SECRETARY PAQUITO N. OCHOA JR, Barrel System" be declared
et al, Respondents unconstitutional, and a writ of prohibition
be issued permanently
G.R. No. 208566 November 19, G.R. No. 208566 - Belgica, et al filed an
2013 Urgent Petition For Certiorari and
GRECO ANTONIOUS BEDA B. BELGICA Prohibition With Prayer For The
JOSE M. VILLEGAS JR. JOSE L. Immediate Issuance of Temporary
GONZALEZ REUBEN M. ABANTE and Restraining Order and/or Writ of
QUINTIN PAREDES SAN Preliminary Injunction seeking that the
DIEGO, Petitioners, annual "Pork Barrel System," presently
vs. embodied in the provisions of the GAA of
HONORABLE EXECUTIVE SECRETARY 2013 which provided for the 2013 PDAF,
PAQUITO N. OCHOA JR, et al, and the Executives lump-sum,
Respondents discretionary funds, such as the
PERLAS-BERNABE, J.: Malampaya Funds and the Presidential
Social Fund, be declared unconstitutional
NATURE: and null and void for being acts
These are consolidated petitions taken constituting grave abuse of
under Rule 65 of the Rules of Court, all of discretion. Also, they pray that the Court
which assail the constitutionality of the issue a TRO against respondents
Pork Barrel System.
UDK-14951 A Petition filed seeking
FACTS: that the PDAF be declared
The NBI Investigation was spawned by unconstitutional, and a cease and desist
sworn affidavits of six (6) whistle-blowers order be issued restraining President
who declared that JLN Corporation (Janet Benigno Simeon S. Aquino III (President
Lim Napoles) had swindled billions of Aquino) and Secretary Abad from
pesos from the public coffers for "ghost releasing such funds to Members of
projects" using dummy NGOs. Thus, Congress
Criminal complaints were filed before the
Office of the Ombudsman, charging five ISSUES:
(5) lawmakers for Plunder, and three (3) 1. Whether or not the 2013 PDAF
other lawmakers for Malversation, Direct Article and all other Congressional Pork
Bribery, and Violation of the Anti-Graft Barrel Laws similar thereto are
and Corrupt Practices Act. Also unconstitutional considering that they
recommended to be charged in the violate the principles of/constitutional
complaints are some of the lawmakers provisions on (a) separation of powers;
chiefs -of-staff or representatives, the (b) non-delegability of legislative power;
heads and other officials of three (3) (c) checks and balances; (d)
implementing agencies, and the several accountability; (e) political dynasties;
presidents of the NGOs set up by Napoles. and (f) local autonomy.
Whistle-blowers alleged that" at 2. Whether or not the phrases (under
least P900 Million from royalties in the Section 8 of PD 910,116 relating to the
operation of the Malampaya gas project Malampaya Funds, and under Section 12
off Palawan province intended for of PD 1869, as amended by PD 1993,
agrarian reform beneficiaries has gone relating to the Presidential Social Fund,
into a dummy NGO. Several petitions are unconstitutional insofar as they
were lodged before the Court similarly constitute undue delegations of
seeking that the "Pork Barrel System" be legislative power.
declared unconstitutional
HELD:
1. Yes, the PDAF article is RESTORATION PURPOSES WHICH ARISE
unconstitutional. The post-enactment FROM CALAMITIES.
measures which govern the areas of
project identification, fund release and (b) and to finance the restoration of
fund realignment are not related to damaged or destroyed facilities due to
functions of congressional oversight and, calamities, as may be directed and
hence, allow legislators to intervene authorized by the Office of the President
and/or assume duties that properly of the Philippines was declared
belong to the sphere of budget execution. unconstitutional.IT GIVES THE
This violates the principle of separation of PRESIDENT CARTE BLANCHE AUTHORITY
powers. Congressrole must be confined TO USE THE SAME FUND FOR ANY
to mere oversight that must be confined INFRASTRUCTURE PROJECT HE MAY SO
to: (1) scrutiny and (2) investigation and DETERMINE AS A PRIORITY. VERILY,
monitoring of the implementation of laws. THE LAW DOES NOT SUPPLY A
Any action or step beyond that will DEFINITION OF PRIORITY
undermine the separation of powers INFRASTRUCTURE DEVELOPMENT
guaranteed by the constitution. PROJECTS AND HENCE, LEAVES THE
PRESIDENT WITHOUT ANY GUIDELINE
Thus, the court declares the 2013 pdaf TO CONSTRUE THE SAME.
article as well as all other provisions of
law which similarly allow legislators to
wield any form of post-enactment MARIA CAROLINA ARAULLO VS
authority in the implementation or BENIGNO AQUINO III
enforcement of the budget, unrelated to GR No. 209287
congressional oversight, as violative of July 1, 2014
the separation of powers principle and
thus unconstitutional. When President Benigno Aquino III took
office, his administration noticed the
sluggish growth of the economy. The
2. Yes. Sec 8 of PD 910- the phrase World Bank advised that the economy
and for such other purposes as may be needed a stimulus plan. Budget Secretary
hereafter directed by the President Florencio Butch Abad then came up with
constitutes an undue delegation of a program called the Disbursement
legislative power insofar as it does not lay Acceleration Program (DAP).
down a sufficient standard to adequately The DAP was seen as a remedy to speed
determine the limits of the Presidents up the funding of government projects.
authority with respect to the purpose for DAP enables the Executive to realign
which the Malampaya Funds may be funds from slow moving projects to
used. It gives the President wide latitude priority projects instead of waiting for
to use the Malampaya Funds for any other next years appropriation. So what
purpose he may direct and, in effect, happens under the DAP was that if a
allows him to unilaterally appropriate certain government project is being
public funds beyond the purview of the undertaken slowly by a certain executive
law. agency, the funds allotted therefor will be
withdrawn by the Executive. Once
Section 12 of PD 1869, as amended by PD withdrawn, these funds are declared as
1993- the phrases: savings by the Executive and said funds
will then be reallotted to other priority
(b) "to finance the priority infrastructure projects. The DAP program did work to
development projects was declared stimulate the economy as economic
constitutional. IT INDICATED PURPOSE growth was in fact reported and portion
ADEQUATELY CURTAILS THE AUTHORITY of such growth was attributed to the DAP
OF THE PRESIDENT TO SPEND THE (as noted by the Supreme Court).
PRESIDENTIAL SOCIAL FUND ONLY FOR
Other sources of the DAP include the II. Whether or not the DAP realignments
unprogrammed funds from the General can be considered as impoundments by
Appropriations Act (GAA). the executive.
Unprogrammed funds are standby III. Whether or not the DAP
appropriations made by Congress in the realignments/transfers are constitutional.
GAA. IV. Whether or not the sourcing of
Meanwhile, in September 2013, Senator unprogrammed funds to the DAP is
Jinggoy Estrada made an expos claiming constitutional.
that he, and other Senators, received V. Whether or not the Doctrine of
Php50M from the President as an Operative Fact is applicable.
incentive for voting in favor of the
impeachment of then Chief Justice HELD:
Renato Corona. Secretary Abad claimed I. No, the DAP did not violate Section
that the money was taken from the DAP 29(1), Art. VI of the Constitution. DAP
but was disbursed upon the request of the was merely a program by the Executive
Senators. and is not a fund nor is it an
This apparently opened a can of worms as appropriation. It is a program for
it turns out that the DAP does not only prioritizing government spending. As
realign funds within the Executive. It such, it did not violate the Constitutional
turns out that some non-Executive provision cited in Section 29(1), Art. VI of
projects were also funded; to name a the Constitution. In DAP no additional
few: Php1.5B for the CPLA (Cordillera funds were withdrawn from the Treasury
Peoples Liberation Army), Php1.8B for otherwise, an appropriation made by law
the MNLF (Moro National Liberation would have been required. Funds, which
Front), P700M for the Quezon Province, were already appropriated for by the
P50-P100M for certain Senators each, GAA, were merely being realigned via the
P10B for Relocation Projects, etc. DAP.
This prompted Maria Carolina Araullo, II. No, there is no executive
Chairperson of the Bagong Alyansang impoundment in the DAP. Impoundment
Makabayan, and several other concerned of funds refers to the Presidents power to
citizens to file various petitions with the refuse to spend appropriations or to
Supreme Court questioning the validity of retain or deduct appropriations for
the DAP. Among their contentions was: whatever reason. Impoundment is
DAP is unconstitutional because it actually prohibited by the GAA unless
violates the constitutional rule which there will be an unmanageable national
provides that no money shall be paid out government budget deficit (which did not
of the Treasury except in pursuance of an happen). Nevertheless, theres no
appropriation made by law. impoundment in the case at bar because
Secretary Abad argued that the DAP is whats involved in the DAP was the
based on certain laws particularly the transfer of funds.
GAA (savings and augmentation III. No, the transfers made through the
provisions thereof), Sec. 25(5), Art. VI of DAP were unconstitutional. It is true that
the Constitution (power of the President the President (and even the heads of the
to augment), Secs. 38 and 49 of other branches of the government) are
Executive Order 292 (power of the allowed by the Constitution to make
President to suspend expenditures and realignment of funds, however, such
authority to use savings, respectively). transfer or realignment should only be
made within their respective offices.
Issues: Thus, no cross-border
I. Whether or not the DAP violates the transfers/augmentations may be allowed.
principle no money shall be paid out of But under the DAP, this was violated
the Treasury except in pursuance of an because funds appropriated by the GAA
appropriation made by law (Sec. 29(1), for the Executive were being transferred
Art. VI, Constitution).
to the Legislative and other non- DAP, then it may cause more harm than
Executive agencies. good. The DAP effects can no longer be
Further, transfers within their respective undone. The beneficiaries of the DAP
offices also contemplate realignment of cannot be asked to return what they
funds to an existing project in the GAA. received especially so that they relied on
Under the DAP, even though some the validity of the DAP. However, the
projects were within the Executive, these Doctrine of Operative Fact may not be
projects are non-existent insofar as the applicable to the authors, implementers,
GAA is concerned because no funds were and proponents of the DAP if it is so found
appropriated to them in the GAA. in the appropriate tribunals (civil,
Although some of these projects may be criminal, or administrative) that they
legitimate, they are still non-existent have not acted in good faith.
under the GAA because they were not
provided for by the GAA. As such, transfer Angara v. Electoral Commission, G.R. No. L-
to such projects is unconstitutional and is 45081, July 15, 1936
without legal basis.
On the issue of what are savings LAUREL, J.:
These DAP transfers are not savings
contrary to what was being declared by I. THE FACTS
the Executive. Under the definition of
Petitioner Jose Angara was proclaimed winner
savings in the GAA, savings only occur,
and took his oath of office as member of the
among other instances, when there is an
National Assembly of the Commonwealth
excess in the funding of a certain project Government. On December 3, 1935, the
once it is completed, finally discontinued, National Assembly passed a resolution
or finally abandoned. The GAA does not confirming the election of those who have not
refer to savings as funds withdrawn been subject of an election protest prior to the
from a slow moving project. Thus, since adoption of the said resolution.
the statutory definition of savings was not
complied with under the DAP, there is no On December 8, 1935, however, private
basis at all for the transfers. Further, respondent Pedro Ynsua filed an election
savings should only be declared at the protest against the petitioner before the
end of the fiscal year. But under the DAP, Electoral Commission of the National
funds are already being withdrawn from Assembly. The following day, December 9,
certain projects in the middle of the year 1935, the Electoral Commission adopted its
and then being declared as savings by own resolution providing that it will not consider
the Executive particularly by the DBM. any election protest that was not submitted on
IV. No. Unprogrammed funds from the or before December 9, 1935.
GAA cannot be used as money source for
Citing among others the earlier resolution of the
the DAP because under the law, such
National Assembly, the petitioner sought the
funds may only be used if there is a
dismissal of respondents protest. The Electoral
certification from the National Treasurer Commission however denied his motion.
to the effect that the revenue collections
have exceeded the revenue targets. In
this case, no such certification was II. THE ISSUE
secured before unprogrammed funds
were used. Did the Electoral Commission act without or in
V. Yes. The Doctrine of Operative Fact, excess of its jurisdiction in taking cognizance of
which recognizes the legal effects of an the protest filed against the election of the
act prior to it being declared as petitioner notwithstanding the previous
unconstitutional by the Supreme Court, is confirmation of such election by resolution of
applicable. The DAP has definitely helped the National Assembly?
stimulate the economy. It has funded
numerous projects. If the Executive is III. THE RULING
ordered to reverse all actions under the
[The Court DENIED the petition.] Cocofed vs Republic
Case Digest GR 177857-58 Jan 24 2012
NO, the Electoral Commission did not act
without or in excess of its jurisdiction in taking Facts:
cognizance of the protest filed against the In 1971, RA 6260 created the Coconut
election of the petitioner notwithstanding the Investment Company (CIC) to administer the
previous confirmation of such election by Coconut Investment Fund, a fund to be sourced
resolution of the National Assembly. from levy on the sale of copra. The copra seller
was, or ought to be, issued COCOFUND
The Electoral Commission acted within the receipts. The fund was placed at the disposition
legitimate exercise of its constitutional of COCOFED, the national association of
prerogative in assuming to take cognizance of coconut producers having the largest
the protest filed by the respondent Ynsua membership.
against the election of the petitioner Angara, When martial law started in 1972, several
and that the earlier resolution of the National presidential decrees were issued to improve the
Assembly cannot in any manner toll the time for coconut industry through the collection and use
filing election protests against members of the of the coconut levy fund:
National Assembly, nor prevent the filing of a PD 276 established the Coconut Consumers
protest within such time as the rules of the Stabilization Fund (CCSF) and declared the
Electoral Commission might prescribe. proceeds of the CCSF levy as trust fund, to be
utilized to subsidize the sale of coconut-based
The grant of power to the Electoral Commission products, thus stabilizing the price of edible oil.
to judge all contests relating to the election, PD 582 created the Coconut Industry
returns and qualifications of members of the Development Fund (CIDF) to finance the
National Assembly, is intended to be as operation of a hybrid coconut seed farm.
complete and unimpaired as if it had remained In 1973, PD 232 created the Philippine Coconut
originally in the legislature. The express lodging Authority (PCA) to accelerate the growth and
of that power in the Electoral Commission is an development of the coconut and palm oil
implied denial of the exercise of that power by industry.
the National Assembly. xxx. Then came P.D. No. 755 in July 1975, providing
under its Section 1 the policy to provide readily
[T]he creation of the Electoral Commission available credit facilities to the coconut farmers
carried with it ex necesitate rei the power at preferential rates. Towards achieving this,
regulative in character to limit the time with Section 2 of PD 755 authorized PCA to utilize
which protests intrusted to its cognizance the CCSF and the CIDF collections to acquire a
should be filed. [W]here a general power is commercial bank and deposit the CCSF levy
conferred or duty enjoined, every particular collections in said bank, interest free, the
power necessary for the exercise of the one or deposit withdrawable only when the bank has
the performance of the other is also conferred. attained a certain level of sufficiency in its equity
In the absence of any further constitutional capital. It also decreed that all levies PCA is
provision relating to the procedure to be authorized to collect shall not be considered
followed in filing protests before the Electoral as special and/or fiduciary funds or form
Commission, therefore, the incidental power to part of the general funds of the government.
promulgate such rules necessary for the proper Both P.D. Nos. 961 and 1468 also provide that
exercise of its exclusive power to judge all the CCSF shall not be construed by any law as
contests relating to the election, returns and a special and/or trust fund, the stated intention
qualifications of members of the National being that actual ownership of the said fund
Assembly, must be deemed by necessary shall pertain to coconut farmers in their
implication to have been lodged also in the private capacities.
Electoral Commission. Shortly before the issuance of PD 755 however,
PCA had already bought from Peping
Cojuangco 72.2% of the outstanding capital
stock of FUB / UCPB. In that contract, it was
also stipulated that Danding Cojuanco shall
receive equity in FUB amounting to 10%, or
7.22 % of the 72.2%, as consideration for PCAs
buy-out of what Danding Conjuanco claim as
his exclusive and personal option to buy the Even if the money is allocated for a special
FUB shares. purpose and raised by special means, it is still
The PCA appropriated, out of its own fund, an public in character.
amount for the purchase of the said 72.2% Accordingly, the presidential issuances which
equity. It later reimbursed itself from the authorized the PCA to distribute, for free, the
coconut levy fund. shares of stock of the bank it acquired to the
While the 64.98% (72.2 % 7.22%) portion of coconut farmers under such rules and
the option shares ostensibly pertained to the regulations the PCA may promulgate is
farmers, the corresponding stock certificates unconstitutional.
supposedly representing the farmers equity It is unconstitutional because first, it have
were in the name of and delivered to PCA. unduly delegated legislative power to the PCA,
There were, however, shares forming part of and second, it allowed the use of the CCSF to
the 64.98% portion, which ended up in the benefit directly private interest by the outright
hands of non-farmers. The remaining 27.8% of and unconditional grant of absolute ownership
the FUB capital stock were not covered by any of the FUB/UCPB shares paid for by PCA
of the agreements. entirely with the CCSF to the undefined
Through the years, a part of the coconut levy coconut farmers, which negated or
funds went directly or indirectly to various circumvented the national policy or public
projects and/or was converted into different purpose declared by P.D. No. 755.
assets or investments. Of particular relevance Hence, the so-called Farmers shares do not
to this was their use to acquire the FUB / UCPB, belong to the coconut farmers in their private
and the acquisition by UCPB, through the CIIF capacities, but to the Government. The coconut
and holding companies, of a large block of San levy funds are special public funds and any
Miguel Corporation (SMC) shares. property purchased by means of the coconut
Issue 1: W/N the mandate provided under PD levy funds should likewise be treated as public
755, 961 and 1468 that the CCSF shall not be funds or public property, subject to burdens and
construed by any law as a special and/or trust restrictions attached by law to such property. ##
fund is valid
No. The coconut levy funds can only be used
for the special purpose and the balance thereof
should revert back to the general fund.
Article VI, Section 29 (3) of the Constitution Tawang Multi-Purpose Cooperative
provides that all money collected on any tax
levied for a special purpose shall be treated vs. La Trinidad Water District [GR No.
as a special fund and paid out for such
purpose only, and if the purpose for which a
166471, March 22, 2011]
special fund was created has been fulfilled or
abandoned, the balance, if any, shall be
transferred to the general funds of the
Government. Here, the CCSF were sourced FACTS: Petitioner Tawang Multi-Purpose
from forced exactions with the end-goal of Cooperative is a cooperative organized to
developing the entire coconut industry. provide domestic water services in
Therefore, the subsequent reclassification of Barangay Tawang, La Trinidad, Benguet
the CCSF as a private fund to be owned by
while respondent La Trinidad Water
private individuals in their private capacities
under P.D. Nos. 755, 961 and 1468 is District is a local water utility created
unconstitutional. under Presidential Decree (PD) No. 198,
Not only is it unconstitutional, but the mandate as amended. La Trinidad Water District is
is contrary to the purpose or policy for which the authorized to supply water for domestic,
coco levy fund was created. industrial and commercial purposes
Issue 2:
W/N the coco levy fund may be owned by the within the municipality of La Trinidad,
coconut farmers in their private capacities Benguet. Tawang Multi-Purpose
No. The coconut levy funds are in the nature of Cooperative filed with the National Water
taxes and can only be used for public purpose. Resources Board an application for a
They cannot be used to purchase shares of certificate of public convenience (CPC) to
stocks to be given for free to private individuals.
operate and maintain a waterworks
system in Barangay Tawang. La Trinidad
Water District opposed Tawang Multi-
Purpoe Cooperative's application and
claimed that, under Section 47 of PD No.
198, as amended, its franchise is
exclusive.

ISSUE: Whether or not a public utility


franchise may be exclusive in character

RULING: No. The 1935, 1973, and 1987


Constitution expressly and clearly
prohibit thecreation of franchise that are
exclusive in character. The President,
Congress and the Court cannot create
indirectly franchises that are exclusive in
character by allowing the Board of
Directors of a water district and the Local
Water Utilities Administration to create
franchises that are exclusive in character.
Section 47 of PD No. 198, as amended,
allows the Board of Directors of La
Trinidad Water District and Local Water
Utilities Administration to create
franchises that are xclusive in character.
Clearly, Section 47 is patently
unconstitutional.