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Political Law Constitutional Law Separation of Powers Fund Realignment

Constitutionality of the Disbursement Acceleration Program

Power of the Purse Executive Impoundment

When President Benigno Aquino III took office, his administration noticed the
sluggish growth of the economy. The World Bank advised that the economy needed
a stimulus plan. Budget Secretary Florencio Butch Abad then came up with a
program called the Disbursement Acceleration Program (DAP).

The DAP was seen as a remedy to speed up the funding of government projects. DAP
enables the Executive to realign funds from slow moving projects to priority
projects instead of waiting for next years appropriation. So what happens under the
DAP was that if a certain government project is being undertaken slowly by a
certain executive agency, the funds allotted therefor will be withdrawn by the
Executive. Once withdrawn, these funds are declared as savings by the Executive
and said funds will then be reallotted to other priority projects. The DAP program
did work to stimulate the economy as economic growth was in fact reported and
portion of such growth was attributed to the DAP (as noted by the Supreme Court).
Other sources of the DAP include the unprogrammed funds from the General
Appropriations Act (GAA). Unprogrammed funds are standby appropriations made
by Congress in the GAA.

Meanwhile, in September 2013, Senator Jinggoy Estrada made an expos claiming

that he, and other Senators, received Php50M from the President as an incentive for
voting in favor of the impeachment of then Chief Justice Renato Corona. Secretary
Abad claimed that the money was taken from the DAP but was disbursed upon the
request of the Senators.

This apparently opened a can of worms as it turns out that the DAP does not only
realign funds within the Executive. It turns out that some non-Executive projects
were also funded; to name a few: Php1.5B for the CPLA (Cordillera Peoples
Liberation Army), Php1.8B for the MNLF (Moro National Liberation Front), P700M
for the Quezon Province, P50-P100M for certain Senators each, P10B for Relocation
Projects, etc.

This prompted Maria Carolina Araullo, Chairperson of the Bagong Alyansang

Makabayan, and several other concerned citizens to file various petitions with the
Supreme Court questioning the validity of the DAP. Among their contentions was:
DAP is unconstitutional because it violates the constitutional rule which provides
that no money shall be paid out of the Treasury except in pursuance of an
appropriation made by law.

Secretary Abad argued that the DAP is based on certain laws particularly the GAA
(savings and augmentation provisions thereof), Sec. 25(5), Art. VI of the
Constitution (power of the President to augment), Secs. 38 and 49 of Executive
Order 292 (power of the President to suspend expenditures and authority to use
savings, respectively).

I. Whether or not the DAP violates the principle no money shall be paid out of the
Treasury except in pursuance of an appropriation made by law (Sec. 29(1), Art. VI,
II. Whether or not the DAP realignments can be considered as impoundments by the
III. Whether or not the DAP realignments/transfers are constitutional.
IV. Whether or not the sourcing of unprogrammed funds to the DAP is
V. Whether or not the Doctrine of Operative Fact is applicable.

I. No, the DAP did not violate Section 29(1), Art. VI of the Constitution. DAP
was merely a program by the Executive and is not a fund nor is it an
appropriation. It is a program for prioritizing government spending. As
such, it did not violate the Constitutional provision cited in Section 29(1),
Art. VI of the Constitution. In DAP no additional funds were withdrawn
from the Treasury otherwise, an appropriation made by law would have
been required. Funds, which were already appropriated for by the GAA,
were merely being realigned via the DAP.

II. No, there is no executive impoundment in the DAP. Impoundment of

funds refers to the Presidents power to refuse to spend appropriations or
to retain or deduct appropriations for whatever reason. Impoundment is
actually prohibited by the GAA unless there will be an unmanageable
national government budget deficit (which did not
happen). Nevertheless, theres no impoundment in the case at bar
because whats involved in the DAP was the transfer of funds.

III. No, the transfers made through the DAP were unconstitutional. It is true
that the President (and even the heads of the other branches of the
government) are allowed by the Constitution to make realignment of
funds, however, such transfer or realignment should only be made
within their respective offices. Thus, no cross-border
transfers/augmentations may be allowed. But under the DAP, this was
violated because funds appropriated by the GAA for the Executive were
being transferred to the Legislative and other non-Executive agencies.

Further, transfers within their respective offices also contemplate

realignment of funds to an existing project in the GAA. Under the DAP,
even though some projects were within the Executive, these projects are
non-existent insofar as the GAA is concerned because no funds were
appropriated to them in the GAA. Although some of these projects may be
legitimate, they are still non-existent under the GAA because they were
not provided for by the GAA. As such, transfer to such projects is
unconstitutional and is without legal basis.

On the issue of what are savings

These DAP transfers are not savings contrary to what was being
declared by the Executive. Under the definition of savings in the GAA,
savings only occur, among other instances, when there is an excess in the
funding of a certain project once it is completed, finally discontinued, or
finally abandoned. The GAA does not refer to savings as funds
withdrawn from a slow moving project. Thus, since the statutory
definition of savings was not complied with under the DAP, there is no
basis at all for the transfers. Further, savings should only be declared at
the end of the fiscal year. But under the DAP, funds are already being
withdrawn from certain projects in the middle of the year and then being
declared as savings by the Executive particularly by the DBM.

IV. No. Unprogrammed funds from the GAA cannot be used as money source
for the DAP because under the law, such funds may only be used if there
is a certification from the National Treasurer to the effect that the
revenue collections have exceeded the revenue targets. In this case, no
such certification was secured before unprogrammed funds were used.

V. Yes. The Doctrine of Operative Fact, which recognizes the legal effects of
an act prior to it being declared as unconstitutional by the Supreme
Court, is applicable. The DAP has definitely helped stimulate the
economy. It has funded numerous projects. If the Executive is ordered to
reverse all actions under the DAP, then it may cause more harm than
good. The DAP effects can no longer be undone. The beneficiaries of the
DAP cannot be asked to return what they received especially so that they
relied on the validity of the DAP. However, the Doctrine of Operative Fact
may not be applicable to the authors, implementers, and proponents of
the DAP if it is so found in the appropriate tribunals (civil, criminal, or
administrative) that they have not acted in good faith.
Re: COA Opinion on the Computation of the Appraised Value of the Properties
Purchased by theRetired Chief/Associate Justices of the Supreme Court.
A.M. No. 11-7-10-SC, July 31, 2012, PER CURIAM.

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 an opinion issued by the Legal Services Sector, Office of the General Counsel of
the Commission on Audit (COA), it shows that the scheme in the judiciary allowing
the sale of their personal properties to retired justices after their incumbency
resulted to an underpayment amounting to P221,021.50. This under payment was
attributed to the erroneous appraisal of the value of the property involved using the
Constitutional Fiscal Autonomy Group (CFAG) Joint Resolution No. 35 and its
guidelines. Acting on this Opinion, Atty. Eden T. Candelaria, Deputy Clerk of Court
and Chief Administrative Officer, Office of Administrative Services, to the Office of
the Chief Justice, submitted Memorandum to the SC praying that the Court advise
the COA to respect the scheme existing in the Judiciary pursuant to the recognize
fiscal autonomy of the Judicial Branch.

Whether the post-audit examination conducted by COA violated the Judiciarys fiscal

The COAs authority to conduct post-audit examinations on constitutional bodies
granted fiscal autonomy as provided under Section 2(1), Article IX-D of the 1987
Constitution must be read not only in light of the Courts fiscal autonomy, but also in
relation with the constitutional provisions on judicial independence and the existing
jurisprudence and Court rulings on these matters. The Constitution mandates that
the judiciary shall enjoy fiscal autonomy, and grants the Supreme Court
administrative supervision over all courts and judicial personnel. 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.

The Judiciarys fiscal autonomy is realized through the actions of the Chief Justice, as
its head, and of the Supreme Court En Banc, in the exercise of administrative control
and supervision of the courts and its personnel. Thus, under the guarantees of the
Judiciarys fiscal autonomy and its independence, the Chief Justice and the Court En
Banc determine and decide the who, what, where, when and how of the privileges
and benefits they extend to justices, judges, court officials and court personnel
within the parameters of the Courts granted power; they determine the terms,
conditions and restrictions of the grant as grantor.

The Chief Justice, as the head of the Judiciary, possesses the full and sole authority
and responsibility to divest and dispose of the properties and assets of the Judiciary;
as Head of Office, he determines the manner and the conditions of disposition, which
in this case relate to a benefit. As the usual practice of the Court, this authority is
exercised by the Chief Justice in consultation with the Court En Banc. However,
whether exercised by the Chief Justice or by the Supreme Court En Banc, the grant of
such authority and discretion is unequivocal and leaves no room for interpretations
and insertions.

A.M. No. 13-09-08-SC October 1, 2013

A Memorandum dated September 18, 2013 from Atty. Eden T. Candelaria, Deputy
Clerk of Court and Chief Administrative Officer, Office of Administrative Services of
the Supreme Court, requesting guidance/clarification on the applicability to the
Judiciary of Section 7, Rule III of the Implementing Rules and Regulations of
Republic Act No. (RA) 101541 which states:

Section 7. Notice of Pendency of Case. The retiring employee shall seek Clearance of
Pendency/Non-Pendency of Administrative Case from his/her employer agency, Civil
Service Commission (CSC), Office of the Ombudsman, or in case of presidential
appointees, from the Office of the President.

Whether or not retiring Judiciary employees should secure a prior clearance of
pendency/non-pendency of administrative case/s from the CSC

No., retiring employees of the Judiciary shouldnt secure a prior clearance of
pendency/non-pendency of administrative cases from the CSC. To deem it
otherwise would disregard the Courts constitutionally-enshrined power of
administrative supervision over its personnel. Tetiring court personnel are already
required to secure a prior clearance of the pendency/non-pendency of
administrative case/s from the Court which makes the CSC clearance a superfluous
and non-expeditious requirement contrary to the declared state policy of RA 10154.

Since the Constitution only accords the Judiciary administrative supervision over its
personnel, a different treatment of the clearance requirement obtains with respect
to criminal cases. As such, a clearance requirement which pertains to criminal cases
may be imposed by the appropriate government agency, i.e., the Office of the
Ombudsman, on retiring court personnel as it is a matter beyond the ambit of the
Judiciarys power of administrative supervision.
145143, 21 January 2015, En Banc, Leonen, J.

There can be no justiciable controversy involving the constitutionality of a

proposed bill.

Rolly Mijares prays for the issuance of a writ of mandamus in order to compel the
Supreme Court to exercise its judicial independence and fiscal autonomy against the
perceived hostility of Congress which was raised through a letter addressed to the
Supreme Court. The letter implied that certain acts of members of Congress and the
President shows a threat to judicial independence. Two house bills were filed which
would require the court to remit its Judiciary Development Fund to the national
treasury and one to create a Judicial Support Fund under the National Treasury to
repeal PD 1949.

Whether or not the court should exercise its powers to revoke/abrogate and
expunge whatever irreconcilable contravention of existing laws affecting the judicial
independence and fiscal autonomy as mandated under the Constitution to better
serve public interest and general welfare of the people.

No. Petitioner must comply with all the requisites for judicial review before the
Supreme Court may take cognizance of the case. The requisites are: (1) there must
be an actual case or controversies calling for the exercise of judicial power (2) the
person challenging the act must have the standing to question the validity of the
subject act or issuance; otherwise stated, he must have a personal and substantial
interest in the case such that he has sustained, or will sustain, direct injury as a
result of its enforcement; (3) the question of constitutionality must be raised at the
earliest opportunity; and (4) the issue of constitutionality must be the very lis mota
of the case.

Petitioners failure to comply with the first two requisites warrants the outright
dismissal of this petition. The petition does not comply with the requisites of judicial
review. No actual case or controversy