ON THE ISSUE OF THE CONSTITUTIONALITY OF THE PROVISIONS ON

THE BAYANIHAN 1 & 2 WITH REGARD TO THE DELEGATED POWER OF

FUND REALIGNMENT AND AUGMENTATION OF THE PRESIDENT FOR
COVID 19 SUPPORT AND RESPONSE MEASURES VIS-À-VIS THE ISSUE
ON “DOUBLE APPROPRIATION” IN THE 2020 AND 2021 GAA.

ARTICLE VI OF THE CONSTITUTION

SECTION 23. (1) The Congress, by a vote of two-thirds of both Houses in joint
session assembled, voting separately, shall have the sole power to declare the
existence of a state of war.

(2) In times of war or other national emergency, the Congress may, by law,
authorize the President, for a limited period and subject to such restrictions as it
may prescribe, to exercise powers necessary and proper to carry out a declared
national policy. Unless sooner withdrawn by resolution of the Congress, such
powers shall cease upon the next adjournment thereof.
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COMMENT: This was the Constitutional provision which served as legal basis in
delegating special powers to the President to address the COVID-19 outbreak in
the country.

In David v. Macapagal-Arroyo, G.R. Nos. 171396, 171409, 171485, 171483,

171400, 171489 & 171424, [May 3, 2006], 522 PHIL 705-854), the Supreme
Court discussed the nature of the emergency powers and its requisites, to wit:

Generally, Congress is the repository of emergency powers. This is

evident in the tenor of Section 23 (2), Article VI authorizing it to delegate
such powers to the President. Certainly, a body cannot delegate a
power not reposed upon it. However, knowing that during grave
emergencies, it may not be possible or practicable for Congress to meet
and exercise its powers, the Framers of our Constitution deemed it wise to
allow Congress to grant emergency powers to the President, subject to
certain conditions, thus:

(1) There must be a war or other emergency.

(2) The delegation must be for a limited period only.
(3) The delegation must be subject to such restrictions as the
Congress may prescribe.
(4) The emergency powers must be exercised to carry out a
national policy declared by Congress. 

The declared national policy of Congress as expressed in the Bayanihan Act

include the need to mitigate the spread of the virus, to ease the burden on the
healthcare system, to mobilize the provision of basic necessities to communities
affected by the Community Quarantine and to expedite the procurement of
medical resources and equipment.

The current COVID-19 outbreak declared by the World Health Organization as a

“global pandemic” falls under the phrase “other emergency” as basis for the grant
of emergency power which includes rebellion, economic crisis, pestilence or
epidemic, typhoon, flood, or other similar catastrophe of nationwide proportions
or effect.
ARTICLE VI OF THE CONSTITUTION

SECTION 25. (1) The Congress may not increase the appropriations
recommended by the President for the operation of the Government as specified
in the budget. The form, content, and manner of preparation of the budget shall
be prescribed by law.

(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.

COMMENT: This is the relevant Constitutional provision with regard to fund

realignment and augmentation.

RA 11469 - BAYANIHAN 1 (BAYANIHAN TO HEAL AS ONE ACT)

SECTION 4. Authorized Powers. Pursuant to Article VI, Section 23 (2) of the

Constitution, the President is hereby authorized to exercise powers that are
necessary and proper to carry out the declared national policy. The President
shall have the power to adopt the following temporary emergency measures to
respond to crisis brought by the pandemic:
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(v) Notwithstanding any law to the contrary, direct the discontinuance of
appropriated programs, projects or activities (P/A/P) of any agency of the
Executive Department, including government-owned or controlled corporations
(GOCCs), in the FYs 2019 and 2020 General Appropriations Act (GAA) whether
released or unreleased, the allotments for which remain unobligated, and
utilize the savings generated therefrom to augment the allocation for any item
directly related to support operations and response measures, which are
necessary or beneficial in order to address the COVID-19 emergency, consistent
with the herein declared national policy; Provided, however, That the following
items in the budget shall be prioritized for augmentation:

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(10) Quick Response Funds xxx

Notwithstanding the provisions of this Act, the discontinued program, activity

or project may be revived at any time after the national emergency has
ceased, and notwithstanding Section 67 of Republic Act No. 11645 or the
“General Appropriations Act of 2020”, may be revived and proposed for
funding within the next two (2) fiscal years;

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RA 11494 - BAYANIHAN 2 (BAYANIHAN TO RECOVER AS ONE ACT)

SECTION 4. COVID-19 Response and Recovery Interventions. – Pursuant to

Article VI, Section 23 (2) of the Constitution, the President is hereby authorized to
exercise powers that are necessary and proper to undertake and implement the
following COVID-19 response and recovery interventions:
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(pp) Notwithstanding any law to the contrary, directing the discontinuance of

appropriated programs, activities or projects (P/A/Ps) of any agency of the
Exective Department, including GOCCs, in the fiscal years (FYs) 2019 and 2020
General Appropriations Act (GAA), which cannot be utilized effectively as a result
of theCOVID-19 outbreak, whether released or unreleased, the allotments for
which remain unobligated, and utilize the savings generated therefrom to
augment the allocation for any item needed to address the COVID-19 pandemic
consistent with the herein declared national policy. The P/A/Ps that may be
discontinued shall include discretionary foreign travel, representation, mass
events and those identified by government agencies prior to the effectivity of this
Act; Provided, That such discontinued P/A/Ps do not support the objectives of
economic stimulus and recovery for having low labor intensity or low multiplier
effects: Provided, further, That infrastructure, having the highest multiplier
effect can only be discontinued when all other funds, including unobligated
allotments and unreleased appropriations, have been exhausted : Provided,
furthermore, That the following items in the budget shall be prioritized for
augmentation:

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(10) Under allocations xxx

Notwithstanding the provisions of this Act, the discontinued P/A/P may be

revived at any time after the COVID-19 pandemic has ceased, and
notwithstanding Section 67 of Republic Act No. 11465 or the “General
Appropriations Act of 2020”, may be revived and proposed for funding within
the next two (2) fiscal years.

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On the issue of the Constitutionality of Sections 4(v) of Bayanihan 1 and 4(pp) of

Bayanihan 2 -

In Araullo v. Aquino III, G.R. Nos. 209287, 209135, 209136, 209155, 209164,
209260, 209442, 209517 & 209569, [July 1, 2014], 752 PHIL 716-893, the
Supreme Court discussed the requirements to be met for there to be a valid
transfer of funds, to wit:

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. 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.
 The transfer of appropriated funds, to be valid under Section 25
(5), supra, must be made upon a concurrence of the following requisites,
namely:
(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.

FIRST LEGAL ISSUE: Whether or not unreleased appropriations and

unobligated are savings that can be validly utilized to augment allocations
for any item needed to address the COVID-19 pandemic as provided under
Section 4(v) of Bayanihan 1 and Section 4(pp) of Bayanihan 2

In Araullo v. Aquino III, G.R. Nos. 209287, 209135, 209136, 209155, 209164,
209260, 209442, 209517 & 209569, [July 1, 2014], 752 PHIL 716-893, the
Supreme Court ruled that unreleased appropriations and unobligated
allotments are not savings, to wit:

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.  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. 

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. 

SECOND LEGAL ISSUE: Whether or not the discontinued PAPs in the 2020
GAA may be duplicated and/or re-appropriated in the 2021 GAA, all in the
budget of the DPWH

Congressmen Veloso and Rodriguez questioned the “double appropriation” in the

2020 and 2021 GAA, all in the budget of the DPWH, citing the same as
unconstitutional. The Undersecretary of the DPWH, on the other hand, used the
last provision in Section 4(v) of Bayanihan 1 & the last provision of Section 4(pp)
of Bayanihan 2 as its legal basis, to wit:

xxx
Notwithstanding the provisions of this Act, the discontinued program,
activity or project may be revived at any time after the national
emergency has ceased, and notwithstanding Section 67 of Republic Act
 No. 11645 or the “General Appropriations Act of 2020”, may be revived
and proposed for funding within the next two (2) fiscal years;
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In my very humble opinion (since I cannot find any jurisprudence on the matter
hehe), and based on the above-mentioned provision, any discontinued PAPs in
the 2020 budget may be REVIVED AND PROPOSED FOR FUNDING within the
next 2 fiscal years.

It DID NOT, in any way, imply that the discontinued PAPs may be re-
appropriated and included in the next 2 fiscal years’ GAAs because that would
really be sanctioned upon considering that the same was already appropriated
and included in the previous 2020 GAA.

Simply stated, what the provision merely implies is that the discontinued PAPs
may be prioritized for funding in the next 2 years.